Question

Tempe LLC incurred the following costs during its first year: Legal fees for drafting the operating agreement $18,000 Syndication costs $19,000 Preopening advertising expenses $20,000 Accounting fees for tax advice of an organizational nature $15,000 Training costs for new employees before opening the business $12,000 The amount of Tempe's startup costs is?

Answer 1

Answer:

The start up cost of the Tempe amounts to $32,000

Explanation:

Startup cost is the cost or an expense which is incurred during the procedure of creating or establishing the new business. And the example of the start up costs or pre- opening cost are research expense, business plan and expense for technology. The Post- opening expense involve promotion, employee expense and advertising.

The start up costs of Tempe is computed as:

Start up costs = Pre- opening advertising expenses + New employees training costs before opening the business

where

Pre- opening advertising expenses is $20,000

New employees training costs before opening the business is $12,000

So, putting the values above:

Start up costs = $20,000 + $12,000

Start up costs = $32,000