Falcon, Inc., paid salaries of $582,400 to its employees during its first year of operations. At the end of the year, Falcon had additional unpaid salaries of $58,240.

a. Calculate the salary deduction if Falcon is a cash basis taxpayer. $ ___

b. Calculate the salary deduction if Falcon is an accrual basis taxpayer. $ ________

2)

Vella owns and operates an illegal gambling establishment. In connection with this activity, he has the following expenses during the year:

Rent	$28,500
Bribes	42,750
Travel expenses	2,850
Utilities	17,100
Wages	374,250
Payroll taxes	14,250
Property insurance	1,425
Illegal kickbacks	25,650

Vella's total deductible expenses for tax purposes are $_______-

3) Stanford owns and operates two dry cleaning businesses. He travels to Boston to discuss acquiring a restaurant. Later in the month, he travels to New York to discuss acquiring a bakery. Stanford does not acquire the restaurant but does purchase the bakery on November 1, 2016.

Stanford incurred the following expenses:

Total investigation costs related to the restaurant	$47,250
Total investigation costs related to the bakery	52,500

If required, round any division to two decimal places and use in subsequent computation. Round your final answer to the nearest dollar.

What is the maximum amount Stanford can deduct in 2016 for investigation expenses? $_________