[21] On July 1 of the current year, Leigh opened a business supply store. Prior to opening the business, she incurred the following costs: Purchase of fixtures Accounting fees related to creating the business Interest expense for funds borrowed prior to opening the store Conducted a market survey Costs to hire and train employees Travel expenses to secure prospective suppliers $ 600 1,000 300 500 2,000 2,500 What amount of the start-up expenditures may Leigh amortize for the current year if she elects to use the shortest amortization period allowed? A. $0 B. $33 C. $43 D. $600

[23] Xylo, a calendar-year C corporation, acquired the assets of Yerke, also a calendar-year C corporation, on March 1 of the current year. One of the assets acquired was a trademark to which Xylo properly allocated $1,200,000 of the purchase price. What is Xylos amortization deduction for the current year?

A. $30,000 B. $66,667 C. $80,000 D. $120,000

[24] Big John constructed a factory building for use in his business. The building cost $375,000. The construction started on April 1, Year 1, and is to be completed and the building placed in service by September 1, Year 2. During the construction period, Big John incurred and paid interest of $15,000 attributable to the construction. How should the $15,000 be handled for income tax purposes?

A. Capitalize the entire $15,000 as part of the building cost. B. Amortize over a 10-year period starting in Year 2. C. Amortize over a 10-year period starting in Year 1. D. Deduct as current operating expenses prorated between Year 1 and Year 2.

[26] Donny owns and leases a coal mine to Brian. The lease agreement states that Brian will pay Donny $4 per ton royalty on coal mined. What is Brians percentage depletion deduction for the current year from the information given below?

Gross income from coal Income from trucking coal Royalty paid Donny Taxable income on coal (excluding depletion)

Coal depletion rate

A. $20,000 B. $22,000 C. $24,000 D. $25,000