The Fallen Company Began Business Early in 2010, When Fallen

question 25

Multiple Choice

The Fallen Company began business early in 2010, when Fallen paid an initial fee of $100, 000 to purchase a franchise.In forming the company, Fallen also spent $11, 000 on legal fees and $4, 500 on accounting fees.During the year, Fallen spent $7, 500 on product development and paid $10, 000 in continuing franchise fees.What amount should Fallen capitalize for intangible assets in 2010?

• A)$100, 000
• B)$115, 500
• C)$123, 000
• D)$133, 000

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Definitions:

Business Entities

Structures established by one or more individuals to conduct business or engage in activities for profit, including corporations, partnerships, and sole proprietorships.

Sole Proprietorship

A business structure owned by a single individual, where there's no legal distinction between the owner and the business.

Liable

Legally responsible or obligated to face consequences, typically in the form of compensations or reparations.

Profits

Financial gains obtained after subtracting the costs, expenses, and taxes from a business's total revenue.