Hornbill Corporation, a Cash Basis and Calendar Year C Corporation

question 91

True/False

Hornbill Corporation, a cash basis and calendar year C corporation, was formed and began operations on May 1,2019. Hornbill incurred the following expenses during its first year of operations (May 1 - December 31, 2019): temporary directors meeting expenses of $10,500, state of incorporation fee of $5,000, stock certificate printing expenses of $1,200, and legal fees for drafting corporate charter and bylaws of $7,500. Wanting to deduct as much as possible in the current year, Hornbill Corporation's 2019 deduction for organizational expenditures is $5,800.

---

Definitions:

Break-even Point

The financial stage where total costs and total revenues are equal, meaning no net loss or gain has been achieved, often considered a minimum success point for a business venture.

Annual Sales

The total revenue generated from sales activities within a fiscal year, often used as a key performance indicator for businesses.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent or salaries.

Monopolizing

The practice of gaining exclusive control over a commodity or service in a particular market, limiting competition.