1. Prasad Corporation is a calendar-year, accrual-method taxpayer. Prasad was formed and started its business activities on January 1, 2021. It reported the following information for 2021. Indicate Prasads deductible amount for 2021, if any, in each of the following alternative scenarios.

a. On November 1, 2021, Prasad acquired machinery from Ison Company. As part of the purchase, Prasad signed a warranty agreement with Ison so that Ison would warranty the machinery for two years (November 1, 2021 - October 31, 2023). The cost of the warranty was $5,400. Prasad paid Ison for the warranty on January 3, 2022.

b. Prasad hired Ison Company to repair another piece of equipment. On November 1, 2021, Prasad paid $3,400 for the repairs. He expects the repairs to be done late January 2022.

c. Prasad provides two-year warranties on products it sells to customers. For its 2021 sales, Prasad estimated and accrued $45,000 in warranty expense for financial accounting purposes. During 2021, Prasad spent $51,000 repairing its product under the warranty.

d. Prasad accrued an expense for $4,700 for amounts it anticipated it would be required to pay under the worker compensation act. During 2021, Prasad actually paid $4,100 for workers' compensationrelated liabilities.

e. In July 2021, one of Prasads employees, Mr. Shonhiwa, hit a customer with a golf club during a demonstration, injuring the customer. The customer sued Prasad for $200,000. The case has not been settled but Prasad anticipates that it will lose the case and accrued a $200,000 expense on its financial statements.

f. At the end of 2021, Prasad accrued $84,000 in wages payable and $64,000 in bonuses payable. Prasad paid the wages due January 10, 2022. It paid $16,000 of the bonuses by January 15^th, 2022, another $16,000 by February 15^th, another $16,000 by March 15^th, and the remaining $16,000 by April 15^th.

g. Prasads ending allowance for doubtful accounts was $23,000. Bad debt expense recorded on the income statement was $25,000.