Crimson Corporation, corporation, has two cash-method, calendar-year shareholders who are unrelated to each other. Sarah owns 40% of the stock, and Alex owns the remaining 60%. During the current year, Crimson paid a salary of $150,000 to each shareholder. On December 31, Crimson accrued a bonus of $30,000 for each shareholder. Assuming that the bonuses are paid to the shareholders on March 2 of the next year, compute Crimson Corporation's current year deduction for the above amounts. a calendar year, accrual method C a. $330,000 b. $300,000 c. $240,000 d. $180,000 e. None of the above
Crimson Corporation, corporation, has two cash-method, calendar-year shareholders who are unrelated to each other. Sarah owns 40% of the stock, and Alex owns the remaining 60%. During the current year, Crimson paid a salary of $150,000 to each shareholder. On December 31, Crimson accrued a bonus of $30,000 for each shareholder. Assuming that the bonuses are paid to the shareholders on March 2 of the next year, compute Crimson Corporation's current year deduction for the above amounts. a calendar year, accrual method C a. $330,000 b. $300,000 c. $240,000 d. $180,000 e. None of the above
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter5: Business Deductions
Section: Chapter Questions
Problem 17P
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Transcribed Image Text:Crimson Corporation,
corporation, has two cash-method, calendar-year shareholders
who are unrelated to each other. Sarah owns 40% of the stock,
and Alex owns the remaining 60%. During the current year,
Crimson paid a salary of $150,000 to each shareholder. On
December 31, Crimson accrued a bonus of $30,000 for each
shareholder. Assuming that the bonuses are paid to the
shareholders on March 2 of the next year, compute Crimson
Corporation's current year deduction for the above amounts.
a calendar year, accrual method C
a. $330,000
b. $300,000
c. $240,000
d. $180,000
e. None of the above
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