Powell Inc

question 98

Multiple Choice

Powell Inc.was incorporated and began operations on October 1 and adopted a calendar year for tax purposes.Powell paid $4,200 to the attorney who handled the corporate formation.Which of the following statements is true?

• A)If Powell capitalized the $4,200 payment for financial statement purposes,it must also capitalize it for tax purposes.
• B)Powell can deduct the $4,200 payment on its first tax return.
• C)For tax purposes,Powell must capitalize the $4,200 organizational cost and amortize it over 15 years.
• D)None of the above is true.

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Definitions:

Deity

A god or goddess in a polytheistic religion, considered divine and often worshipped.

Daedalus

A skilled craftsman and artist in Greek mythology, known for designing the Labyrinth for King Minos of Crete and creating wings for himself and his son Icarus to escape captivity.

Geometric Sculpture

Art that utilizes geometric forms and shapes in its construction, often associated with modern and abstract art movements.

Laocoön

An ancient sculpture that depicts the Trojan priest Laocoön and his sons being attacked by sea snakes, significant in the study of art history for its expression of suffering.