Question

Yuki Corporation, which began business in 2019, incurred the following costs in 2019 in connection with organizing the corporation: Printing of stock certificates $ 5,000 Underwriters’ commissions on sale of stock 100,000What portion of these costs qualifies as amortizable organizational expenditures? Group of answer choices $105,000 $100,000 $ 5,000 $0

Answer 1

The answer is: $0

Step-by-step explanation:

Organizational expenditures are the initial costs incurred in creating an organization, for example:

• Legal services
• Accounting services
• Fees paid for temporary directors and organizational meetings
• Registration fees

Organizational expenditures do not include the following:

• Fees associated with the issuance and sale of corporate stocks (e.g. printing fees, broker commissions, related professional fees)
• Expenses in connection with the transfer of assets to the corporation
• Fees for issuing debt