How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask JKCPA Your Own Question
Category: Tax
Satisfied Customers: 5883
Experience:  CPA with tax experience.
Type Your Tax Question Here...
JKCPA is online now
A new question is answered every 9 seconds

Prepaid Expenses. Pamello, Inc., an engineering consulting

Resolved Question:

Prepaid Expenses. Pamello, Inc., an engineering consulting firm, uses the cash method of
accounting. Compute the amount of Pamello's current year deductions for the following
a. On November 1 of the current year, it entered into a lease to rent some office space for
five years. The lease agreement states that the lease payments are $12,000 per year,
payable in advance each November 1 for the following 12-month period. Under the
terms of the lease, Pamello is required to pay a $5,000 deposit, refundable upon the
termination of the lease.
b. On December 1 of the current year, Pamello also renewed its malpractice insurance,
paying $18,000 for the three-year contract.
c. On December 31 of the current year, Pamello mailed out a check for $5,000 for drafting
services performed for it by an individual who lives in another city.
d. On December 31, the firm received a shipment of $700 worth of stationery and other
office supplies. Pamello has an open charge account with the office supply company which bills the firm monthly for charges made during the year.
e. Finally, on December 31, Pamello picked up some work that a local printing company
had done for it, which amounted to $1,000. The firm charged the $1,000 with its corporate
credit card.
Submitted: 6 years ago.
Category: Tax
Expert:  JKCPA replied 6 years ago.



Thanks for your question.


The answers are:


a. $2000.

Rent for 2 months @ $1000 per month is deductible. The refundable deposit is not a deductible expense.


b. $500

$18000/36. One month expense is currently deductible.


c. $5000


d. $0

The shipment was received but payment should have been already expensed when paid.


e. $1,000


Hope this helps,

Category: Tax
Satisfied Customers: 5883
Experience: CPA with tax experience.
JKCPA and other Tax Specialists are ready to help you

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Previous | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA

Meet The Experts:

  • Wallstreet Esq.

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    10 years experience
< Last | Next >
  • Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    10 years experience
  • Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • Richard's Avatar


    Tax Attorney

    Satisfied Customers:

    29 years of experience as a tax, real estate, and business attorney.
  • Robin D.'s Avatar

    Robin D.

    Senior Tax Advisor 4

    Satisfied Customers:

    15years with H & R Block. Divisional leader, Instructor
  • Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
  • jgordosea's Avatar


    Enrolled Agent

    Satisfied Customers:

    I've prepared all types of taxes since 1987.
  • R. Klein, EA's Avatar

    R. Klein, EA

    Enrolled Agent

    Satisfied Customers:

    Over 20 Years experience