Holbrook, a calendar year S corporation, distributes $150,400 cash to its only shareholder, Cody, on December 31. Cody's basis in his stock is $180,480, Holbrook's AAA balance is $67,680, and Holbrook has $22,560 AEP before the distribution. According to the distribution ordering rules, complete the chart below to indicate how much of the $150,400 is from AAA and AEP as well as how Cody's stock basis is affected. If an amount is zero, enter "0". Distribution from Effect on Basis in Stock Account Stock Basis Beginning stock basis $180,480 From AAA account From AEP account From Cody's stock basis Ending stock basis

Holbrook, a calendar year S corporation, distributes $150,400 cash to its only shareholder, Cody, on December 31. Cody's basis in his stock is $180,480, Holbrook's AAA balance is $67,680, and Holbrook has $22,560 AEP before the distribution. According to the distribution ordering rules, complete the chart below to indicate how much of the $150,400 is from AAA and AEP as well as how Cody's stock basis is affected. If an amount is zero, enter "0". Distribution from Effect on Basis in Stock Account Stock Basis Beginning stock basis $180,480 From AAA account From AEP account From Cody's stock basis Ending stock basis

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Rahul
On January 1 of the current year, Rhondell Corporation has accumulated E & P of $28,000. Current E & P for the year is $84,000, earned evenly throughout the year. Elizabeth and Jonathan are sole equal shareholders of Rhondell from January 1 to April 30. On May 1, Elizabeth sells all of her stock to Marshall. Rhondell makes two distributions to shareholders during the year: a total of $44,800 ($22,400 to Elizabeth and $22,400 to Jonathan) on April 30 and a total of $78,400 ($39,200 to Jonathan and $39,200 Marshall) on December 31. Determine the allocation of the distributions by completing the table below. Assume that the shareholders have sufficient basis in their stock for any amount that is treated as return of capital.
NSYNC Realty, Incorporated, has been operating for three years and is owned by three investors. JC Chasez owns 60 percent of the total outstanding stock of 9,090 shares and is the managing executive in charge. On December 31, current year, the following financial items for the entire year were determined: commissions earned and collected in cash, $152,900, plus $17,600 uncollected; rental service fees earned and collected, $21,900; salaries expense paid, $62,660; commissions expense paid, $35,130; payroll taxes paid, $2,400; rent paid for January through November, $2,530 (not including December rent yet to be paid); utilities expense paid, $2,000; promotion and advertising paid, $7,550; income taxes paid, $23,300; and miscellaneous expenses paid, $450. There were no other unpaid expenses at December 31. Also during the year, the company paid the owners “out-of-profit” cash dividends amounting to $11,900. Complete the following income statement: Revenues: Commissions earned Rental…
Brittney owns 30% of Orange Company, a C-Corporation. Orange Company has $600,000 in operating income during the year. Orange Company also makes a $10,000 cash dividend distribution to Brittney. How much income should Brittney include in gross income this year from Orange Company? Group of answer choices $10,000. $180,000. $190,000. $610,000.
Par Inc owns 77.11% of Sub Corp. During the year, Par sold inventory to Sub for $79,271. Exactly 47.83% of this inventory remained in Y's warehouse at year end. Sub sold inventory to Par for $39,636 of which 39.47% remained in X's warehouse at year end. Both companies are subject to a tax rate of 28.35%. The gross profit percentage on sales is 20% for both companies. What is the after-tax dollar value of Par's unrealized profits during the year on its sales to Sub? a. $5,433 b. $5,977 c. $5,705 d. $5,569 e. $5,841
The B/S and I/S for Company ABC are below. At the beginning of year 1, all B/S items are zero except for a Factory, that begins year 1 at 200,000. All inventory is sold by the end of each year (EOY), but some sales and some expenses are “on account”. EBT for tax purposes is the same as the EBT on the Income Statement. Corporate taxes are 21%, and are paid in cash at EOY. All cash the company has at EOY is paid as cash dividends to shareholders. Calculate the dividends issued by the company each of the four years. End Of Yr1 EOY 2 EOY 3 EOY 4 Balance Sheet (B/S) Accounts Receivable 5,000 15,000 15,000 10,000 Accounts Payable 4,000 6,000 8,000 10,000 Cash 0 0 0 0 Factory 175,000 150,000 125,000 100,000 Income Statement (I/S) Revenues 190,000 200,000 200,000 200,000 COGS + SG&A (110,000) (90,000) (70,000) (50,000) Depreciation…
Winkin, Blinkin, and Nod are equal shareholders in SleepEZ, an S corporation. In the conditions listed below, how much income should each report from SleepEZ for 2023 under both the daily allocation and the specific identification allocation methods? Refer to the following table for the timing of SleepEZ's income. Period January 1 through April 19 (109 days) April 20 through December 31 (256 days) January 1 through December 31, 2023 (365 days) Income $ 209,000 359,000 $ 568,000 Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. b. On April 19, 2023, Blinkin sells his shares to Nod. Income Reported Winkin $ Blinkin Nod Daily Allocation Method Specific Identification Method 189,333 $ 189.333 $ 69 69 69.667 309.000
On July 1, 2021, Tony and Suzie organize their new company as a corporation, Great Adventures Inc. The articles of incorporation state that the corporation will sell 37,000 shares of common stock for $1 each. Each share of stock represents a unit of ownership. Tony and Suzie will act as co-presidents of the company. The following transactions occur from July 1 through December 31. Jul. 1 Sell $18,500 of common stock to Suzie. Jul. 1 Sell $18,500 of common stock to Tony. Jul. 1 Purchase a one-year insurance policy for $4,920 ($410 per month) to cover injuries to participants during outdoor clinics. Jul. 2 Pay legal fees of $1,900 associated with incorporation. Jul. 4 Purchase office supplies of $1,700 on account. Jul. 7 Pay for advertising of $280 to a local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $50 on the day of the clinic. Jul. 8 Purchase 10 mountain bikes, paying $19,500 cash.…
The owner of SURIA Trading, a proprietorship business, Puan Alia, and her friend Encik Irfan formed a company named PINK Sdn. Bhd. and issued to themselves 5,000 ordinary shares each at par value RM1 for cash. The purpose of forming Pink Sdn. Bhd. is to buy over the business of SURIA Trading on 1 January 2021. PINK Sdn. Bhd. issued to Puan Alia 750,000 ordinary shares at a premium of 10% to satisfy the purchase of SURIA Trading. PINK Sdn. Bhd. paid the liquidation expenses of SURIA Trading which amounted to RM15,000. The formation expenses of PINK Sdn. Bhd. were RM2,500. The financial position of SURIA Trading on 1 January 2021 was as follows: RM RM Capital – Puan Alia 600,000 Current liabilities Trade payables 40,000 640,000 Non-current assets Office equipment (cost) 600,000 Accumulated depreciation (200,000) 400,000 Furniture and fittings (cost) 130,000…
Alpesh
Marvel Media, LLC, has three members: WLKT Partners, Madison Sanders, and Observer Newspaper, LLC. On January 1, 20Y2, the three members had equity of $200,000, $40,000,and $160,000, respectively. WLKT Partners contributed an additional $50,000 to Marvel Media, LLC, on June 1, 20Y2. Madison Sanders received an annual salary allowance of $55,000 during 20Y2. The members’ equity accounts are also credited with 10% intereston each member’s January 1 capital balance. Any remaining income is to be shared in the ratio of 4:3:3 among the three members. The revenues, expenses, and net income for Marvel Media, LLC, for 20Y2 were $1,260,000, $900,000, and $360,000, respectively. Amounts equal to the salary and interest allowances were withdrawn by the members.a. Determine the division of income among the three members.b. Prepare the journal entry to close the revenues, expenses, and withdrawals to the individual member equity accounts.c. Prepare a statement of members’ equity for 20Y2.d. What…
Brooks Company purchases debt investments as trading securities at a cost of $71,000 on December 27. This is its first and only purchase of such securities. At December 31, these securities had a fair value of $90,000. Brooks sells a portion of its trading securities (costing $35,500) for $40,250 cash. Analyze each transaction above by showing its effects on the accounting equation-specifically, identify the accounts and amounts (including + or -) for each transaction.