Current E & P $400,000 an Accumulated E & P 200,000. During the year Zeta distribute 800,000 to shareholders(A & B-$400, 000 to each) A has a basis in his stock $50,000 ar 8 has a a basis of 200,000 Calculate the effect of the distribution on A and B

Current E & P $400,000 an Accumulated E & P 200,000. During the year Zeta distribute 800,000 to shareholders(A & B-$400, 000 to each) A has a basis in his stock $50,000 ar 8 has a a basis of 200,000 Calculate the effect of the distribution on A and B

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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Filing Federal Income Tax Return

A tax is the amount of money paid to the government on the revenue earned by the individual or business organization. It acts as an income for the government and an expense for the individual or business organization. There are different regulations regarding filing an income tax return in other countries.

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Problem4
Current E & P $400,000 an Accumulated E & P 200,000. During the year Zeta distributes
$800,000 to shareholders(A & B-$400, 000 to each) A has a basis in his stock $50,000 and
B has a a basis of 200,000 Calculate the effect of the distribution on A and B

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Problem 2: GRAPES Company provided the following data for the year: Sold 25,000 preference shares, 12%, P50 par, at P75 Sold 80,000 ordinary shares of P10, par at P45. Purchased and retired 10,000 preference shares at P60 Purchased 5,000 shares at P40 to be held as treasury Sold 3,000 treasury ordinary shares at P50 Share split up for ordinary shares, 2 for 1 Shareholders donated 10,000 ordinary shares. One half of these were sold for P20 Retired 500 treasury ordinary shares Net income for the year was P2,500,000 Appropriated retained earnings equal to the balance of treasury shares. Requirements: C. Prepare all necessary entries for the year. D. Compute or provide the answers for the following: 8. What is the balance of preference share capital at year-end? 9. What is the balance of ordinary share capital at year-end? 10. What is the total balance of treasury shares at year-end? 11. What is the total outstanding ordinary shares at year-end? 12. What is the total issued shares at…