Derik Inc., a calendar year, accrual basis corporation, accrued $278,000 vacation pay expense and a corresponding liability at the end of 2016. Derik paid $22,000 of the accrued liability to employees who took vacation between January 1 and March 15, 2017. How much of the accrued vacation pay expense is deductible in 2016?

Question

Quizplus · Accepted Answer

The Answer of Derik Inc., a calendar year, accrual basis corporation, accrued $278,000 vacation pay expense and a corresponding liability at the end of 2016. Derik paid $22,000 of the accrued liability to employees who took vacation between January 1 and March 15, 2017. How much of the accrued vacation pay expense is deductible in 2016?

Derik Inc, a Calendar Year, Accrual Basis Corporation, Accrued $278,000 Vacation