Emerald Corporation, a Calendar Year C Corporation, Was Formed and Began

question 131

Multiple Choice

Emerald Corporation, a calendar year C corporation, was formed and began operations on April 1, 2017.The following expenses were incurred during the first tax year (April 1 through December 31, 2017) of operations. $\begin{array}{lr}\text { Expenses of temporary directors and of organizational meetings } & \$ 27,000 \\\text { Fee paid to the state of incorporation } & 1,000 \\\text { Accounting services incident to organization } & 15,500 \\\text { Legal services for drafting the corporate charter and bylaws } & 9,500 \\\text { Expenses incident to the printing and sale of stock certificates } & 6,000\end{array}$ ? Assuming a § 248 election, what is the Emerald's deduction for organizational expenditures for 2017?

• A)$0
• B)$4,550
• C)$5,000
• D)$7,400
• E)None of the above

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Definitions:

Producing Units

Departments or entities within an organization responsible for the creation of goods or provision of services.

Marginal Revenue (MR)

The increase in revenue that results from the sale of one additional unit of a product or service.

Marginal Cost (MC)

The expense associated with the production of an extra unit of a product or service.

Total Production

The aggregate amount of goods or services produced by an entity during a specific period.