Question

KLP, a calendar year corporation, sponsored a contest for its customers with a grand prize of $100,000 cash. Contestants could enter the contest from June 1 through November 30. KLP selected the winner and announced her name on December 20.
However, it didn’t present a $100,000 check to the winner until January 13. In which year can KLP deduct the $100,000 payment assuming:
a. KLP uses the cash method of accounting?
b. KLP uses the accrual method of accounting?


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  • CreatedNovember 03, 2015
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