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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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In its first tax year, the Vasquez Estate generated $50,000 of taxable interest income and $30,000 of tax-exempt interest income
olasank [31]

Answer:

b)

i) Subtotal the income shown on lines 1 through 8 of Form 1041 and add the tax-exempt income from line 1 in “Other Information” on the back of the return to arrive at total income.

Total Income = Taxable income + Non-taxable income

= $50000 + $30000

= $80000

ii) Divide the total income by the total taxable income and multiply the results by the total fiduciary fees.

= ($80000/$50000)*8000

=$12800

iii) Take the deductible fees on line 12 and subtract the balance from the total tax-exempt income to arrive at the adjusted tax-exempt income.

= $30000 - ($12800-8000)

= $25200

Subtotal the income shown on lines 1 through 8 of Form 1041 and add the tax-exempt income from line 1 in “Other Information” on the back of the return to arrive at total income.

Divide the total income by the total taxable income and multiply the results by the total fiduciary fees.

Take the deductible fees on line 12 and subtract the balance from the total tax-exempt income to arrive at the adjusted tax-exempt income.

Place that number on Schedule B, line 2.

Explanation:

5 0
3 years ago
Over the last four years, a stock has had an arithmetic average return of 8.8 percent. Three of those four years produced return
m_a_m_a [10]

Answer:

Geometric Average return = 7.83%

Explanation:

First we need to find the missing value of data using Arithmetic mean formula

Arithmetic Mean = Sum of value / No of values

8.8% = Sum of Values / 4

Sum of Values = 8.8% x 4

Sum Values = 35.2%

Using Sum of Values we minus the remaining values in order to get the missing value of the data.

35.20% - 16.3% - 10.2%-(14.1%) = 22.80%

In order to get Geometric mean value we use geometric mean formula

G.M = 4 Sqrt(16.3% x 10.2% x -14.1% + 22.80%)

Geometric Mean = 7.83%

6 0
3 years ago
Tickets Now contracts with the producer of Riverdance to sell tickets online. Tickets Now charges each customer a fee of $4 per
gogolik [260]

Answer:

$14

Explanation:

Fee from customers = $4

Fee from producer = $10

Total Fee income received = 10+4 = $14

$14 should be recognized as income for each Riverdance ticket sold.

Ticket Now has sold the ticket (which is assumed to be nonrefundable) and it has performed what is required (to sale the tickets), so recognize the revenue of $14.

4 0
3 years ago
Calculation of Cost of Goods Sold: Periodic Inventory System with Sales Returns and Allowances
andrey2020 [161]

Answer:

 73,450  COGS

Explanation:

From the beginning inventory we add up purchase and freight cost and subtract the return made to the suplier and discount and allowance granted.

This will be the total cost available for sale.

Then we subtract the ending inventory to get the COGS

  27,000 beginning inventory

+ 78,000 purchases

+      350 freight-in

-   3,900 return and allowance

<u>-   6,000 </u>discount  

 95,450   good available for sale

<u>- 22,000 </u>ending inventory

 73,450  COGS

The sales return impact the sales revenue not the COGS

7 0
3 years ago
Upon graduating from college, you make an annual salary of $58,381. You set a goal to double it in the future. If your salary in
Fynjy0 [20]

Answer: 9.20

Explanation:

In finance there is a rule for calculating this called 'The Rule of 70'.

With The Rule of 70, you are able to calculate the amount of time it will take an investment to double if you divide 70 by the growth rate of the investment.

In this scenario, the investment is your salary and the growth rate is 7.61% pee year.

The amount of time it will take to double is therefore,

= 70 / 7.61

= 9.19842312746

= 9.20 years.

It will take 9.20 years to double.

7 0
3 years ago
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