zorn conducted his professional practice through zorn, inc. the corporation uses

Question

zorn conducted his professional practice through zorn, inc. the corporation uses a fiscal year ending september 30 even though the business purpose test for a fiscal year cannot be satisfied. For the year ending September 30, 2013, the corporation paid Zorn a salary of $180,000 and during the period January through September 2013, the corporation paid him a salary of $150,000.

a. how much salary should Zorn receive during the period October 1 through December 31, 2013?

b. Assume that Zorn received only $24,000 salary during the period October 1 through December 31, 2013. What would be the consequences to Zorn, Inc.?

Note: Only awarding points for answer.

Explanation / Answer

Salary ending Sep 30,13 year = 180000

Salary ending Jan-Sep = 150000

So, salary from Oct - Dec = 30000

The income of Zoen INc. would get increased by 6000 $ because of decrease in its salary expense.

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