Choice "A" is correct. Accumulated earnings and profits include all prior and current year earnings and profits at year-end. The key here is recognizing that the beginning accumulated earnings and profits is a deficit. Thus the calculation would be as follows:

Note: The examiners did not ask whether or not the accumulated earnings and profits at year-end was a deficit, rather they asked solely for the dollar amount.Choice "d" is incorrect. This choice does not take into consideration the amounts distributed during the year.
Choice "b" is incorrect. This choice does not take into account any of the current year activity that becomes part of accumulated earnings and profits at year-end.
Choice "c" is incorrect. This choice treats the distributions of $12,000 as an addition to the deficit, making it $57,000. It ignores the current year earnings and profits entirely.