Ivory Corporation, a Calendar Year, Accrual Method C Corporation, Has

Multiple Choice

Ivory Corporation, a calendar year, accrual method C corporation, has two cash method, calendar year shareholders who are unrelated to each other. Craig owns 35% of the stock, and Oscar owns the remaining 65%. During 2016, Ivory paid a salary of $100,000 to each shareholder. On December 31, 2016, Ivory accrued a bonus of $25,000 to each shareholder. Assuming that the bonuses are paid to the shareholders on February 3, 2017, compute Ivory Corporation's 2016 deduction for the above amounts.

A) $250,000
B) $225,000
C) $200,000
D) $125,000
E) None of above