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mixas84 [53]
3 years ago
14

Martinez Corporation commenced operations in early 2020. The corporation incurred $48,500 of costs such as fees to underwriters,

legal fees, state fees, and promotional expenditures during its formation. Prepare journal entries to record the $48,500 expenditure and 2020 amortization, if any.
Business
1 answer:
igomit [66]3 years ago
7 0

Answer:

See below.

Explanation:

Since the expenses are related to the formation of the business, we first capitalize these expenses and record them in our balance sheet as,

Debit Intangible Assets (Formation) by $48,500

Credit Cash/Bank by $48,500

This records an asset for the year of operation.

We amortize or depreciate these type of capitalized costs over a defined period of time. Assuming that we write off the entire cost by the end of first year we will record amortization as,

Debit Amortization expense/Income statement by $48,500

Credit Intangible Assets (Formation) by $48,500

Hope that helps.

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Which of the following falls outside of the classification of business expenditures that fall into the category of variable cost
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The option that falls outside of the classification of business expenditures that fall into the category of variable costs is option C. costs of research and development. Read below about costs of research and development.

<h3>What is a costs of research and development?</h3>

These are costs taken to develop new products or processes that may or may not result in commercially viable items. The general rule is that research and development costs are to be expensed immediately when the costs are incurred.

Therefore, the correct answer is as given above.

learn more about costs of research and development: brainly.com/question/18685415

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4 0
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The monthly amounts spent for food by families of four receiving food stamps approximates a symmetrical, normal distribution. Th
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Answer:

The correct answer is D

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