Hornbill Corporation,a cash basis and calendar year C corporation,was formed and began operations on May 1,2017.Hornbill incurred the following expenses during its first year of operations (May 1 - December 31,2017): 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.Hornbill Corporation's 2017 deduction for organizational expenditures is $5,800.

Question

Quizplus · Accepted Answer

The total expenses incurred by Hornbill Corporation for organizational expenditures during its first year of operations (May 1 - December 31, 2017) are $24,200 ($10,500 + $5,000 + $1,200 + $7,500). However, the deduction allowed for organizational expenditures is limited to $5,800. Therefore, the answer is true.

Hornbill Corporation,a Cash Basis and Calendar Year C Corporation,was Formed