Question

Freitas Corporation was organized early in 2009. The following expenditures were made during the first few months of the year:

Attorneys' fees in connection with the organization of the corporation $12,000

State filing fees and other incorporation costs 3,000

Purchase of the patent 20,000

Legal and other fees for transfer of the patent 2,000

Purchase of furniture 30,000

Pre-opening salaries 40,000

total $107,000

Prepare a summary journal entry to record the $107,000 in cash expenditures.

Answer 1

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Answer 2

Organization cost expense 12,000+3,000) $15,000
Patent ($20,000 + 2,000) $22,000
Furniture $30,000
Pre-opening expenses $40,000
Cash 107,000