Maureen is a cash-basis calendar-year taxpayer and works as


Maureen is a cash-basis, calendar-year taxpayer and works as a sales manager for Teton Corporation, an accrual basis, calendar-year corporation. Teton's president and 100 percent owner, Tom, (also a cash-basis taxpayer) authorizes a $25,000 bonus for Maureen and a $100,000 bonus for himself on December 22, year 1. The company pays his bonus on February 2, but fails to pay Maureen's bonus until March 30, year 2. What is Teton's compensation deduction for the bonus in years 1 and 2? Question 4 options: 1) Year 1: $100,000 Year 2: $25,000 2) Year 1: $125,000 Year 2: $0 3) Year 1: $0 Year 2: $125,000 4) Year 1: $25,000 Year 2: $100,000

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Accounting Basics: Maureen is a cash-basis calendar-year taxpayer and works as
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