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 55% of the stock, and Oscar owns the remaining 45%. During 2012, Ivory paid a salary of $200,000 to each shareholder. On December 31, 2012, Ivory accrued a bonus of $50,000 to each shareholder. Assuming that the bonuses are paid to the shareholders on February 1, 2013, compute Ivory Corporation's 2012 deduction for the above amounts.

A) $0.
B) $250,000.
C) $400,000.
D) $450,000.
E) $500,000.