Reference no: EM131799517

Question - Earl's Computers, Inc. is a cash basis taxpayer that uses the calendar year as its tax year. On October 2, Year 1, it borrowed $1,000 to pay a shipping charge and repaid $150 of that loan during the year. On December 10, Year 1, it paid a $100 utility bill by credit card. It did not pay that credit card charge until January 15, Year 2. On December 31, Year 1, it mailed a check for $200 to pay a printing charge, but the check was not received by the printer until January 2, Year 2. What amount of these expenses can Earl's Computers take into account for Year 1?