Randall Company Uses the Calendar Year and the Cash Method

question 30

Essay

Randall Company uses the calendar year and the cash method of accounting.On December 31,2019,Randall made the following cash payments.To what extent can Randall deduct the payments in 2019?
a.$50,000 for a two-year warehouse lease beginning on March 1,2020.
$b.95,000 of inventory items held for sale to customers.
c.$1,800 to purchase a new refrigerator for the employees' lounge.The refrigerator was delivered on February 1,2020.
d.$5,000 compensation to a consultant who spent two weeks in January 2020 analyzing Randall's payroll system.
e.$22,000 property tax to the local government for the first six months of 2020.

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Definitions:

Canadian Human Rights Act

Legislation enacted in 1977 aimed at ensuring equal opportunity to individuals without discrimination on grounds such as race, nationality, color, religion, age, sex, sexual orientation, or disability, among others, in Canada.

Canada

A country in North America, known for its vast landscapes, multicultural communities, and strong economy.

Executive Vice President

A high-ranking corporate officer, typically just below the president or CEO, responsible for overseeing significant areas of a company's operations or divisions.

Human Resources Director

A senior-level executive responsible for overseeing the development and implementation of policies and strategies related to the management of an organization’s employees.