Candlewood LLC started business on September 1, 2016 and adopted a calendar year. During 2017,...


Candlewood LLC started business on September 1, 2016 and adopted a calendar year. During 2017, Candlewood incurred $6,500 in legal fees for drafting the LLC's operating agreement and $3,000 in accounting fees for tax advice of an organizational nature, for a total of $9,500 of organizational costs. Candlewood also incurred $30,000 of preopening advertising expenses and $24,500 of salaries and training costs for new employees before opening for business, for a total of $54,500 of startup costs.

The LLC wants to take the largest deduction available for these costs. If required, round any division to five decimal places and use in subsequent computations. Round your final answers to the nearest dollar.

In 2016, the LLC may deduct $__________ as organizational expenses and $__________ as startup expenses.

Startup expenses

Any expenses incurred for the start-up of the business are known as the startup expense which is related to the prior expense of business and will be approved after the incorporation.

Answer and Explanation: 1

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Calculation of organisation expenses and startup expenses
Particulars Calculations Amount

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Start-Up Budget: Definition & Example


Chapter 3 / Lesson 12

To begin operations, a company needs a start-up budget to identify how it will spend its capital and fund its initial expenses. Explore the definition and an example of a start-up budget and review other items to consider, such as licensing fees and employee expenses, to better understand how different types of businesses use start-up budgets.

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