Randall Company Uses the Calendar Year and the Cash Method

question 67

Essay

Randall Company uses the calendar year and the cash method of accounting.On December 31,2017,Randall made the following cash payments.To what extent can Randall deduct the payments in 2017?
a.$50,000 for a two-year warehouse lease beginning on March 1,2018.
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 1,2018.
d.$5,000 compensation to a consultant who spent two weeks in January 2018 analyzing Randall's payroll system.
e.$22,000 property tax to the local government for the first six months of 2018.

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Definitions:

Personality Change

Significant and enduring alterations in an individual's behavioral, emotional, and attitudinal patterns.

Young Adulthood

A developmental stage typically covering the period from the late teens through the twenties, characterized by exploration, independence, and the establishment of one's personal and professional identity.

Maturation

The process of becoming mature; the process of development in organisms or organizational structures.

Personality

The combination of characteristics or qualities that form an individual's distinctive character, often influencing behavior, thoughts, and feelings.