The following problem recognizes the tax accounting issues created by a fact set. A-Maze Corp is owned by 12 individuals and managed by two of the shareholders (Gus McGloin, and Woodrow Call). It has been in the sale and repair of computers and printers business for ten years. Its business has been rapidly expanding over the last few years; the owners have concentrated all their efforts on marketing and on technical training for A-Maze's growing number of employees. Cara Allen, Gus McGloin's girlfriend, has handled all financial matters including the bookkeeping and filing of all tax returns. A-Maze is a calendar year C Corporation for tax purposes. Clara has taken tax depreciation on A-Maze's office building (purchased in January 2012 for $600,000) on a straight line basis over 20 years. Clair has treated numerous personal expense amounting to over $60,000 per year for the last four years paid by A-Maze on behalf of its shareholders as business expenses because she does not want to pester the shareholders for expense reports. In doing so, she has estimated what expenses the shareholders incur and established a reserve account to which she added or subtracted ? what she believed the annual personal expenses?