Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 6, Problem 28AP
BZD, a calendar year corporation, made the following year-end accruals for 2019 financial statement purposes. In each case, determine how much of the accrued expense is deductible on BZD’s 2019 federal tax return.
- a. $55,000 expense and $55,000 liability for unpaid December salaries. BZD paid the entire liability to its employees before the end of January 2020.
- b. $40,000 expense and $40,000 liability for the CEO’s 2019 bonus. BZD paid $20,000 to the CEO on March 1, 2020, and the remaining $20,000 on May 1, 2020. BZD and the CEO are not related parties.
- c. $219,700 expense and $219,700 liability for accumulated vacation pay. No employees took vacation between January 1 and March 15, 2020.
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Principles Of Taxation For Business And Investment Planning 2020 Edition
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