Question
In: Accounting
Accounting for Organization Costs Perry Inc. was organized during 2019 and started operations on January 1,...
Accounting for Organization Costs
Perry Inc. was organized during 2019 and started operations on January 1, 2020. Cash expenditures during 2019 were the following.
| Professional fees (attorney fees) for articles of incorporation | $100,000 |
| Professional fees (accounting fees) to research tax status of organization | 75,000 |
| Meetings and promotional activities incidental to organization | 75,000 |
| Filing and related fees | 25,000 |
| Purchase of office equipment | 250,000 |
Required
Prepare a 2019 summary journal entry to record the cash expenditures related to the startup of the new company.
| Account Name | Dr. | Cr. |
|---|---|---|
| AnswerCashNote ReceivableDiscount on Note ReceivableEquipmentAccumulated DepreciationFranchiseGoodwillPatentSoftware Intangible AssetTrademarkNote PayableDiscount on Note PayableCommon StockPaid-in Capital in Excess of Par—Common StockSales RevenueAmortization ExpenseLegal ExpenseOrganization ExpenseResearch and Development ExpenseSoftware Amortization ExpenseSoftware Development ExpenseGain on saleImpairment LossN/A | Answer | Answer |
| AnswerCashNote ReceivableDiscount on Note ReceivableEquipmentAccumulated DepreciationFranchiseGoodwillPatentSoftware Intangible AssetTrademarkNote PayableDiscount on Note PayableCommon StockPaid-in Capital in Excess of Par—Common StockSales RevenueAmortization ExpenseLegal ExpenseOrganization ExpenseResearch and Development ExpenseSoftware Amortization ExpenseSoftware Development ExpenseGain on saleImpairment LossN/A | Answer | Answer |
| AnswerCashNote ReceivableDiscount on Note ReceivableEquipmentAccumulated DepreciationFranchiseGoodwillPatentSoftware Intangible AssetTrademarkNote PayableDiscount on Note PayableCommon StockPaid-in Capital in Excess of Par—Common StockSales RevenueAmortization ExpenseLegal ExpenseOrganization ExpenseResearch and Development ExpenseSoftware Amortization ExpenseSoftware Development ExpenseGain on saleImpairment LossN/A | Answer | Answer |
Solutions
Expert Solution
| Account Name | Dr. | Cr. |
| Organization Expense | 275000 | 0 |
| Equipment | 250000 | 0 |
| Cash | 0 | 525000 |
| Workings: | |
| Professional fees (attorney fees) for articles of incorporation | 100000 |
| Professional fees (accounting fees) to research tax status of organization | 75000 |
| Meetings and promotional activities incidental to organization | 75000 |
| Filing and related fees | 25000 |
| Organization Expense | 275000 |
ekkarill92 answered 2 years agoRelated Solutions
Keystone Manufacturing Company started operations on January 1, 2019. During 2019, the company engaged in the...
Keystone Manufacturing Company started operations on January 1,
2019. During 2019, the company engaged in the following
transactions: Issued common stock for $40,000. Paid $10,000 cash to
purchase raw materials used to make products. Transferred $9,000 of
raw materials to the production department. Paid $12,000 cash for
labor used to make products. Paid $18,000 cash for overhead costs
(assume actual and estimated overhead are the same). Finished work
on products that cost $35,000 to make. Sold products that cost
$31,500...
Keystone Manufacturing Company started operations on January 1, 2019. During 2019, the company engaged in the...
Keystone Manufacturing Company started operations on January 1,
2019. During 2019, the company engaged in the following
transactions:
Issued common stock for $40,000.
Paid $10,000 cash to purchase raw materials used to make
products.
Transferred $9,000 of raw materials to the production
department.
Paid $12,000 cash for labor used to make products.
Paid $18,000 cash for overhead costs (assume actual and
estimated overhead are the same).
Finished work on products that cost $35,000 to make.
Sold products that cost $31,500...
I. Hakodat Manufacturing Group was organized January 1, 2019. During 2019, it has used in its...
I.
Hakodat Manufacturing Group was organized January 1, 2019.
During 2019, it has used in its reports to management the
straight-line method of depreciating its plant assets.
On November 8, you are having a conference with Hakodat's
officers to discuss the depreciation method to be used for income
tax and shareholder reporting. Tao Chen, president of Hakodat, has
suggested the use of a new method, which he feels is more suitable
than the straight-line method for the needs of the...
an Agency organized on January 1, 2019. The following transactions occurred during the first month of...
an Agency organized on January 1, 2019. The following
transactions
occurred during the first month of its operation:
Jan. 1: Acquired its articles of incorporation from the company and
issued 10,000
shares of capital stock in exchange for cash Rs. 10, 00,000
Jan. 5: Purchased office building at Rs. 500,000 in cash. The
building is valued
Rs.200,000 and the remainder is assigned to the valuation of
land.
Jan. 7: Signed 2-year promissory note for Rs.500, 000
Jan. 10: Purchased office...
Tony started “Dream Consulting” on 1 July 2019. During the first month of operations, the business...
Tony started “Dream Consulting” on 1 July 2019. During the first
month of operations, the business completed the following
transactions.
1 July Tony invested $50,000 cash in the business.
1 July Paid office rent of $48,000 for two years.
1 July Paid $1,200 for fire insurance for one year.
3 July Purchased office supplies for $500 on account.
5 July Paid a downpayment of 40% of $10,000 for office furniture
from DH Furnishings. The remaining 60% to be paid upon...
Stuart Manufacturing Company started operations on January 1, Year 1. During Year 1, the company engaged...
Stuart Manufacturing Company started operations on January 1,
Year 1. During Year 1, the company engaged in the following
transactions.
Issued common stock for $84,000.
Paid $29,000 cash to purchase raw materials used to make
products.
Transferred $21,000 of raw materials to the production
department.
Paid $31,500 cash for labor used to make products.
Paid $51,000 cash for overhead costs (assume actual and
estimated overhead are the same).
Finished work on products that cost $79,000 to make.
Sold products that...
Gem Limited commences operations on 1 January 2019. During 2019 Gem Limited explores three areas and...
Gem Limited commences operations on 1 January 2019. During 2019
Gem Limited explores three areas and incurs the following costs:
Exploration and Evaluation expenditure ($) Desirable 25,000,000
Undesirable 20,000,000 Neutral 28,000,000 In 2020 oil is discovered
at Desirable Site. Undesirable Site is abandoned. Neutral Site has
not yet reach a stage that permits a reasonable assessment at the
existence or otherwise of economically recoverable reserves, and
active and significant operations in the area of interest are
continuing. In relation to...
Gem Limited commences operations on 1 January 2019. During 2019 Gem Limited explores three areas and...
Gem Limited commences operations on 1 January 2019. During 2019
Gem Limited explores three areas and incurs the following costs:
Exploration and Evaluation expenditure ($) Desirable 25,000,000
Undesirable 20,000,000 Neutral 28,000,000 In 2020 oil is discovered
at Desirable Site. Undesirable Site is abandoned. Neutral Site has
not yet reach a stage that permits a reasonable assessment at the
existence or otherwise of economically recoverable reserves, and
active and significant operations in the area of interest are
continuing. In relation to...
Q4. Exercise 14-02 Sunland Corporation was organized on January 1, 2019. During its first year, the...
Q4. Exercise 14-02 Sunland Corporation was organized on January
1, 2019. During its first year, the corporation issued 1,950 shares
of $50 par value preferred stock and 110,000 shares of $10 par
value common stock. At December 31, the company declared the
following cash dividends: 2019, $5,325; 2020, $13,800; and 2021,
$28,500.
a. Show the allocation of dividends to each class of stock,
assuming the preferred stock dividend is 7% and noncumulative.
b. Show the allocation of dividends to each...
Rose Company started its operations on January 1, 2018. The following transactions took place during the...
Rose Company started its operations
on January 1, 2018. The following transactions took place during
the first month of operations:
January 1: Rose invests $1,150,000
cash to start the business.
January 3: Purchased furniture for
$124,000, paying $24,000 in cash and sign a note for
the remaining balance.
January 7: Purchased office supplies
for $5,000 on credit.
January 11: Paid $11,000 cash for
January rent.
January 15: Paid $3,600 cash for
office supplies purchased on January 7.
January 20:...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Journal article summary on inter-group conflict Peer Reviewed Journal article from past 3 years. Please include...
- "Ethical Considerations" Please respond to the following: Reflect upon the responsibilities placed on auditors by the...
- A Japanese company has a bond outstanding that sells for 93 percent of its ¥100,000 par...
- What is the difference among the principles of modularization, abstraction, encapsulation, and separation of interface and...
- An investment project costs $20,100 and has annual cash flows of $4,400 for six years. ...
- PUT IN JAVA PROGRAMMING The StockB class: Design a class named StockB that contains the following...
- Draw a DFA for the following ( ∑ = {0,1}): Set of all strings with.
ADVERTISEMENT