Randall Company uses the calendar year and the cash method of accounting. On December 31, 2016, Randall made the following cash payments. To what extent can Randall deduct the payments in 2016?
a. $50,000 for a two-year warehouse lease beginning on March 1, 2017.
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, 2017.
d. $5,000 compensation to a consultant who spent two weeks in January 2017 analyzing Randall's payroll system.
e. $22,000 property tax to the local government for the first six months of 2017.

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The Answer of Randall Company uses the calendar year and the cash method of accounting. On December 31, 2016, Randall made the following cash payments. To what extent can Randall deduct the payments in 2016?
a. $50,000 for a two-year warehouse lease beginning on March 1, 2017.
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, 2017.
d. $5,000 compensation to a consultant who spent two weeks in January 2017 analyzing Randall's payroll system.
e. $22,000 property tax to the local government for the first six months of 2017.

Randall Company Uses the Calendar Year and the Cash Method