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An S Corp has a balance of 20 in AAA and 30 in AEP before considering distributions. If the S Corp makes a distribution of 50, which of the following is true? AAA becomes (30) and AEP remains 30. AAA becomes 0, AEP remains 30. O AAA becomes (30), AEP becomes 0. AAA becomes 0 AFP becomes 0

An S Corp has a balance of 20 in AAA and 30 in AEP before considering distributions. If the S Corp makes a distribution of 50, which of the following is true? AAA becomes (30) and AEP remains 30. AAA becomes 0, AEP remains 30. O AAA becomes (30), AEP becomes 0. AAA becomes 0 AFP becomes 0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An S Corp has a balance of 20 in AAA and 30 in AEP before considering distributions. If the S Corp makes a distribution of 50, which of the following is true? AAA becomes (30) and AEP remains 30. AAA becomes 0, AEP remains 30. AAA becomes (30), AEP becomes 0. AAA becomes 0, AEP becomes 0.
Transcribed Image Text:An S Corp has a balance of 20 in AAA and 30 in AEP before considering distributions. If the S Corp makes a distribution of 50, which of the following is true? AAA becomes (30) and AEP remains 30. AAA becomes 0, AEP remains 30. AAA becomes (30), AEP becomes 0. AAA becomes 0, AEP becomes 0.
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