Question

Problem 5-17 (LO. 2, 3) Broadbill Corporation, a calendar year C corporation, has two unrelated cash method shareholders: Marcia owns 51% of the stock, and Zack owns the remaining 49%. Each shareholder is employed by the corporation at an annual salary of $240,000. During 2019, Broadbill paid each shareholder-employee $220,000 of his or her annual salary, with the remaining $20,000 paid in January 2020. Determine how much of the 2019 salaries for Marcia and Zack is deductible by Broadbill in 2019 if the corporation is (a) a cash method taxpayer and (b) an accrual method taxpayer. a. If a cash method taxpayer: In 2019, Broadbill can deduct $ b. If an accrual method taxpayer: In 2019, Broadbill can deduct $

Answer 1

Poto Answer @ Determine the amount of salariegothat are deductible in 2017 Amountd salaries deductible = Actual paymeat xa. - $ 880,000 x2 $440,000 risAmount of salaries that are deductible in 2019 = $440,000 Determine the amount to be deducted on the acerual methods Amount to be deducted = Amount paid to my Amount paid toz = $120100 072401000 = $460,000 of mount to be deducted on the acernal method=$460,000