Duck, an accrual basis corporation, sponsored a rock concert on December 29, 2018. Gross receipts were $300,000. The following expenses were incurred and paid as indicated:

Because the coliseum was not scheduled to be used again until January 15, the company with which Duck had contracted did not perform the cleanup until January 8-10, 2019.
a. Calculate Duck’s net income from the concert for tax purposes for 2018.
b. Using the present value tables in Appendix G, what is the true cost to Duck if it had to defer the $100,000 deduction for the performers until 2019? Assume a 5% discount rate and a 21% marginal tax rate in 2018 and 2019.

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Expense Payment Date December 21,2018 Rental of coliseum Cost of goods sold: Food Souvenirs $ 25,000 December 30,2018 December 30,2018 January 5,2019 February 1,2019 30,000 60,000 Performers Cleaning of coliseum 100,000 10,000