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Nicole organized a new corporation. The corporation began business on April 1 of year 1. She made the following expenditures associated with getting the corporation started: Expenses Date Amount
A. What is the total amount of the start-up costs and organizational expenditures for Nicole's corporation?
B. What amount of the start-up costs and organizational expenditures may the corporation immediately expense in year 1?
C. What amount can the corporation deduct as amortization expense for the organizational expenditures and for the start-up costs for year 1 (not including the amount it immediately expensed)?
D. What would be the allowable organizational expenditures, including immediate expensing and amortization, if Ingrid started a sole proprietorship instead?
Indicate the effect of each of these errors on working capital, current ratio (assume that the current ratio is greater than 1), retained earnings, and net income for the current year and the subsequent year.
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