On December $19,2024,$ Logo Incorporated, an accrual basis corporation, accrued $$50,000$ compensation expense for a routine year$-$end bonus payable to Mr$.$ Craig,

who is Logo's CFO. Logo paid the $$50,000$ to Mr$.$ Craig on April $25,2025.$ Which of the following statements is true?

Multiple Choice

If Mr$.$ Craig and Logo are not related parties, Logo can deduct the accrued expense in $2024.$

If Mr$.$ Craig and Logo are related parties, Mr$.$ Craig must include his $$50,000$ bonus in $2024$ gross income.

Regardless of whether Logo and Mr$.$ Craig are related parties, Logo can't deduct the accrued compensation expense in $2024.$

If Mr$.$ Craig and Logo are not related parties, Mr$.$ Craig can elect to include the $$50,000$ bonus in gross income in either $2024$ or $2025.$

Earl Company uses the accrual method of accounting. Here is a reconciliation of Earl's allowance for bad debts for the current year.

Beginning allowance for bad debts

Actual write$-$offs of accounts receivable during the year

Addition to allowance

Ending allowance for bad debts

Because of the difference between the GAAP rules and the tax rules for accounting for bad debts, Earl Company has a:

Multiple Choice

$$54,600$ permanent excess of book income over taxable income.

$$54,600$ permanent excess of taxable income over book income.

$$54,600$ temporary excess of taxable income over book income.