River Walk, Inc. (River Walk) is an accrual based taxpayer which sells\ components for the electronics industry. They are a private company and use the\ accrual basis of accounting for book purposes. River Walk uses a calendar year\ end.\ During the year no employee received stock options nor did any employee receive\ more than $1 million.\ Any accrued salaries and wages were paid by January 3, 2023. The accrued\ salaries and wages for 2021 (paid by January 4, 2022) were $300,000 and for 2022\ were $400,000. Employees are not permitted to accrue vacation but must take it\ by December 31 each year or it is paid out to them at the end of the year, i.e.\ before December 31.\ River Walks experience with bad debts has resulted in accounting policy of\ providing a reserve for doubtful debts of 1% of sales for the year. This accounting\ policy commenced this year. This year the company wrote off accounts in the\ reserve of $45,000.\ There were fixed asset additions for the year of $2,000,000 and the company wants\ to take bonus depreciation for the 2022 year. The company takes the bonus\ depreciation each year.\ River Walk uses the full inclusion method for the sale of their inventory.\ Unearned revenue for the sales were $3,000,000 at December 31, 2021 and\ $2,000,000 at December 31, 2022. There is no IRC 263A adjustment required.\ All travel expenses and employee benefits are accounted for under an accountable\ plan.\ The meals and entertainment expenses have been reviewed and are considered\ ordinary, necessary and reasonable and meet all the substantiation requirements.\ River Walk has a policy that all meals must be provided in a restaurant.