Derik Inc., a calendar year, accrual basis corporation, accrued $278,000 vacation pay expense and a corresponding liability at the end of 2019. Derik paid $22,000 of the accrued liability to employees who took vacation between January 1 and March 15, 2020. How much of the accrued vacation pay expense is deductible in 2019?
A. $256,000.
B. The entire accrued expense is deductible in 2019.
C. None of the accrued expense is deductible in 2019.
D. $22,000.
Answer: D
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