Ivory Corporation, a Calendar Year, Accrual Method C Corporation, Has

question 32

Multiple Choice

Ivory Corporation, a calendar year, accrual method C corporation, has two cash method, calendar year shareholders who are unrelated to each other. Craig owns 35% of the stock, and Oscar owns the remaining 65%. During 2014, Ivory paid a salary of $100,000 to each shareholder. On December 31, 2014, Ivory accrued a bonus of $25,000 to each shareholder. Assuming that the bonuses are paid to the shareholders on February 3, 2015, compute Ivory Corporation's 2014 deduction for the above amounts.

• A) $250,000
• B) $225,000
• C) $200,000
• D) $125,000
• E) None of the above

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Definitions:

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