Mr. Gilly is the PFO of Petro Inc. This year, his compensation package was $765,000....
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Mr. Gilly is the PFO of Petro Inc. This year, his compensation package was $765,000. Petro paid him a $637,500 salary during the year and accrued an unfunded liability to pay him the $127,500 balance in the year he retires at age 60. Petro Inc. pays $127,500 deferred compensation to Mr. Gilly in 2025, the year of his retirement.
How much compensation income does Mr. Gilly recognize in 2025?
What is Petro's 2025 tax deduction for the payment to Mr. Gilly?
What is the effect of the payment on Petros 2025 book income and deferred taxes? Assume a 21 percent tax rate.
Required A Required B Required C How much compensation income does Mr. Gilly recognize in 2025? Compensation income
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