Color, Inc., is an accrual basis taxpayer. In December 2023, the company received from a customer a $500 claim for defective merchandise. Color paid the customer in January 2024. Also, in December 2023, the company received a bill of $800 for office supplies that had been purchased and used in November 2023. The bill was not paid until January 2024. In January 2024, the company received a claim for $600 for defective merchandise purchased in 2023. Color paid the customer the $600 in February 2024. Assuming that Color uses the recurring item exception to economic performance, the company's deduction for 2023 is:

Color, Inc., is an accrual basis taxpayer. In December 2023, the company received from a customer a $500 claim for defective merchandise. Color paid the customer in January 2024. Also, in December 2023, the company received a bill of $800 for office supplies that had been purchased and used in November 2023. The bill was not paid until January 2024. In January 2024, the company received a claim for $600 for defective merchandise purchased in 2023. Color paid the customer the $600 in February 2024. Assuming that Color uses the recurring item exception to economic performance, the company's deduction for 2023 is:

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