Mann Inc, a Calendar Year Taxpayer, Incurred $49,640 Start-Up Expenditures During

Multiple Choice

Mann Inc., a calendar year taxpayer, incurred $49,640 start-up expenditures during the preoperating phase of a new business venture. The business started operations in November. Mann expensed the $49,640 on its current-year financial statements. Which of the following statements is true?

A) The start-up expenditures resulted in a $49,640 unfavorable book/tax difference.
B) The start-up expenditures resulted in a $44,144 unfavorable book/tax difference.
C) The start-up expenditures resulted in a $49,640 favorable book/tax difference.
D) The start-up expenditures did not result in a book/tax difference.