At the beginning of the current year, Brou Inc. sells all of its assets and pays its liabilities. Afterwards, the company has $350,000 in cash which is distributed to the sole shareholder, Mr.Daniel. Mr. Daniel purchased the shares from the former shareholder for $50,000. The Paid up capital of the shares is $10,000. The balance in the capital dividend account is $65,000, and the company makes all appropriate elections with respect to this balance. What is the amount of the deemed dividend to Mr. Daniel? A) $ 300,000. B) $ 340,000. C) $ 275,000. D) $ 65,000.
At the beginning of the current year, Brou Inc. sells all of its assets and pays its liabilities. Afterwards, the company has $350,000 in cash which is distributed to the sole shareholder, Mr.Daniel. Mr. Daniel purchased the shares from the former shareholder for $50,000. The Paid up capital of the shares is $10,000. The balance in the capital dividend account is $65,000, and the company makes all appropriate elections with respect to this balance. What is the amount of the deemed dividend to Mr. Daniel? A) $ 300,000. B) $ 340,000. C) $ 275,000. D) $ 65,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the beginning of the current year, Brou Inc. sells all of its assets and pays its liabilities. Afterwards, the company has $350,000 in cash which is distributed to the sole shareholder, Mr.Daniel. Mr. Daniel purchased the shares from the former shareholder for $50,000. The Paid up capital of the shares is $10,000. The balance in the capital dividend account is $65,000, and the company makes
all appropriate elections with respect to this balance. What is the amount of the deemed dividend to Mr. Daniel?
A) $ 300,000. B) $ 340,000. C) $ 275,000. D) $ 65,000.
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