Question
Robert started an accounting firm in 2020 and organized as a partnership. Performance of services began on July 1, 2020. The following expenditures were associated
Robert started an accounting firm in 2020 and organized as a partnership. Performance of services began on July 1, 2020. The following expenditures were associated with the partnerships activities in 2020:
Expense | Date | Amount |
April 1-June 30 rent | March 1 | $15,000 |
June 1-June 30 wages | June 30 | $25,000 |
April 1-June 30 utilities | June 30 | $800 |
Legal fees for partnership agreements | June 25 | $12,500 |
July 1-Sept. 30 rent | July 1 | $15,000 |
July 1-July 31 wages | July 31 | $50,000 |
July 1-Sept. 30 utilities | Sept. 30 | $1,600 |
Assume that the total amount of start-up costs expenditure is $48,200 and the total amount of the organizational expenditure is $17,900. Also, assume that the company immediately expensed $5,000 of start-up costs and $5,000 organizational costs.
a/ The amount the partnership can deduct as amortization expense for the organizational expenditures in 2020 (not including the amount it immediately expensed) is $_______.
b/ The amount the partnership can deduct as amortization expense for the start-up costs in 2020 (not including the amount it immediately expensed) is $_______.
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