Teal Corporation Is Incorporated in November 2016

question 157

Multiple Choice

Teal Corporation is incorporated in November 2016.The following formation expenses are incurred in 2016:
Legal and accounting expenses incident to organization
$4,000
Expenses of temporary directors and organizational meetings of directors and shareholders
2,000
​
Expenditures connected with the transfer of assets to Teal
3,000
​
Except for the legal and accounting expenses which are paid in 2017,all other expenses are paid in 2016.If Teal Corporation uses the cash basis and adopts a calendar year for tax purposes,the amount of organizational expenditures it can elect to expense for 2016 is:

• A)$2,000.
• B)$5,000.
• C)$6,000.
• D)$9,000.
• E)None of the above.

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Definitions:

Midpoint

A point that is exactly in the middle between two other points.

19th Century

The period from 1801 to 1900, marked by significant political, cultural, and technological changes worldwide.

Foreign-Born

Individuals who were born outside the country in which they currently reside and have immigrated to that country.

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Densely populated areas that are the focal points of culture, commerce, and government within cities.