On December 31, 2016, Peregrine Corporation, an Accrual Method, Calendar

question 12

Multiple Choice

On December 31, 2016, Peregrine Corporation, an accrual method, calendar year taxpayer, accrued a performance bonus of $100,000 to Charles, a cash basis, calendar year taxpayer. Charles is president and sole shareholder of the corporation. When can Peregrine deduct the bonus?

• A)In 2016, if the bonus was authorized by the Board of Directors and payment was made on or before April 15, 2017.
• B)In 2017, if payment was made at any time during that year.
• C)In 2016, if payment was made on or before April 15, 2017.
• D)In 2017, but only if payment was made on or before April 15, 2017.
• E)None of the above.

---

Definitions:

Foster Competition

To encourage or promote a market environment where businesses compete freely with one another, aiming to improve efficiency and innovation.

Income Increase

A rise in the amount of earnings received over a given period of time, whether from wages, investments, or other sources.

Health Care Demanded

The total amount of health care services that consumers are willing to obtain, influenced by factors like price, income, and insurance coverage.

Patient Protection and Affordable Care Act (PPACA)

A United States federal statute aimed at decreasing the number of uninsured Americans and reducing the overall costs of healthcare.