Cary Company, a newly organized corporation, received a bill from its lawyers for $7,500 for time spent in organizing the company.
1. How should these costs be treated for federal income tax purposes?
2. How should they be treated in the company's financial statements?

Question

Quizplus · Accepted Answer

The Answer of Cary Company, a newly organized corporation, received a bill from its lawyers for $7,500 for time spent in organizing the company.
1. How should these costs be treated for federal income tax purposes?
2. How should they be treated in the company's financial statements?

Cary Company, a Newly Organized Corporation, Received a Bill from Its