Refer to the facts in the preceding problem Petro Inc
Refer to the facts in the preceding problem. Petro Inc. pays $125,000 deferred compensation to Mr. G in 2019, the year of his retirement.
a. How much compensation income does Mr. G recognize in 2019?
b. What is Petro’s tax deduction for the payment to Mr. G?
c. What is the effect of the payment on Petro’s book income and deferred taxes?
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