Duck, an accrual basis corporation, sponsored a rock concert on December 29, 2011. Gross receipts were $300,000. The following expenses were incurred and paid as indicated:
- Expenses Payment Date
- Rental of coliseum $25000 December 21, 2011
Cost of goods sold:
- Food $30000 December 30, 2011
- Souvenirs $60000 December 30, 2011
- Performers $100000 January 5, 2012
- Cleaning of coliseum $10000 February 1, 2012
Since the coliseum was not scheduled to be used again until January 15, the company with which Duck had contracted did not actually perform the cleanup until January 8-10, 2012.
Calculate Duck's net income from the concert for tax purposes for 2011.