Falcon Corporation Ended Its First Year of Operations with Taxable

question 19

Multiple Choice

Falcon Corporation ended its first year of operations with taxable income of $250,000. At the time of Falcon's formation, it incurred $50,000 of organizational expenses. In calculating its taxable income for the year, Falcon claimed an $8,000 deduction for the organizational expenses. What is Falcon's current E & P?

• A) $200,000
• B) $208,000
• C) $250,000
• D) $258,000
• E) None of the above

---

Definitions:

Oceanic Mud

Fine-grained sediments found on the ocean floor, composed of particles of rock, minerals, and organic matter.

Troposphere

The lowest layer of Earth's atmosphere, extending up to about 10 kilometers, where most weather phenomena occur and where the concentration of greenhouse gases is significant.

Photosynthesis

The process by which green plants and some other organisms use sunlight to synthesize nutrients from carbon dioxide and water, generating oxygen as a byproduct.

Species Diversity

The variety of different species of animals, plants, fungi, and microorganisms that exist within a particular ecological community or ecosystem.