McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 61

Golf Corp.(GC), a calendar-year accrual-method corporation, held its directors meeting on December 15 of year 1.During the meeting the board of directors authorized GC to pay a $75,000 charitable contribution to the Tiger Woods Foundation, a qualifying charity.a.If GC actually pays $50,000 of this contribution on January 15 of year 2 and the remaining $25,000 on March 15 of year 2, what book-tax difference will it report associated with the contribution in year 1 (assume the 10 percent limitation does not apply)? Is it favorable or unfavorable? Is it permanent or temporary?
b.Assuming the same facts as in part a. what book-tax difference will GC report in year 2 (assuming the 10 percent limitation does not apply)? Is it favorable or unfavorable?
c.If GC actually pays $50,000 of this contribution on January 15 of year 2 and the remaining $25,000 on April 15 of year 2, what book-tax difference will it report associated with the contribution in year 1 (assume the 10 percent limitation does not apply)? Is it favorable or unfavorable? Is it permanent or temporary?
d.Assuming the same facts as in part c. what book-tax difference will GC report in year 2 (assuming the 10% limitation does not apply)? Is it favorable or unfavorable?