DONAT Company reported taxable income of $500,000 in 2020. This amount does not include a $5,000 nondeductible (for tax purposes) entertainment expense. If you start with taxable income of $500,000 what adjustment will be necessary for the $5,000 entertainment expense for purposes of calculating E&P? a.

a $5,000 addition.

b. a $5,000 deduction.

c. no adjustment.

d. none of the above.