General accounting Mountain Enterprise, an S Corporation, had accumulatedearnings and profits of $150,000 at the beginning of 2022.James and Sarah each own 50% of the stock and have a basisin their stock of $75,000 on January 1, 2022. Mountain doesnot make any distributions during 2022 but had $180,000 ofordinary income. In 2023, ordinary income was $90,000, anddistributions were $100,000. What is Sarah's basis at January1, 2024?A) $115,000B) $165,000C) $210,000D) $255,000

Step 1: Definition of Stock Basis in an S CorporationStock basis in an S Corporation represents the…

Answered: Mountain Enterprise, an S Corporation,…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter13: Corporations: Earning & Profits And Distributions

Section: Chapter Questions

Problem 21P

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Can you please solve this financial accounting question?
On January 1, 2023, Kinney, Inc., an S corporation, reports $4,000 of accumulated E & P and a balance of $10,000 in AAA. Kinney has twor shareholders, Erin and Frank, each of whom owns 500 shares of Kinney's stock. Kinney's nonseparately stated ordinary income for the year is $5,000. Kinney distributes $6,000 to each shareholder on July 1, and it distributes another $3,000 to each shareholder on December 21. How are the shareholders taxed on the distributions? Ignore the 20% QBI deduction. Round any division to five decimal places. If required, round final answers to the nearest dollar. Erin and Frank each report December 21 distribution. Assuming tax-free 1,000 dividend income for the July 1 distribution and s X each for the that the shareholders have sufficient basis in their stock, Erin and Frank each receive a X distribution from AAA.
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Need help with this general accounting question
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XYZ Corporation (an S corporation) is owned by Jane and Rebecca, who are each 50 percent shareholders. At the beginning of the year, Jane's basis in her XYZ stock was $54,000. XYZ reported the following tax information for 2022. Description Amount Sales revenue $ 716,000 Cost of goods sold (214,000) Long-term capital gain 22,000 Dividend income 26,000 Tax-exempt interest 17,000 Salary to owners (134,000) Employee wages (64,000) Depreciation expenses (10,600) Miscellaneous expenses (13,500) Overall net income $ 344,900 What amount of ordinary business income is allocated to Jane?Hint: you might want to work on question b) first. Identify all separated items, then the remaining will be ordinary business income What is the amount and character of separately stated items allocated to Jane? What is Jane's basis in her XYZ Corporation stock at the end of the year? Please avoid answers in image format thank you
Suppose that at the beginning of 2021 Jamaal's basis in his S corporation stock is $1,000 and he has a $10,000 debt basis associated with a $10,000 loan he made to the S corporation. In 2021, Jamaal's share of S corporation income is $4,000, and he received a $7.000 distribution from the S corporation. How much total income does Jamaal report in 2021 from these transactions? Multiple Choice $0 $4,000 $6,000 $7,000 None of the choices are correct.
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Bravo, Incorporated, owns all of the stock of Echo, Incorporated. For 2024, Bravo reports Income (exclusive of any Investment Income) of $480,000. Bravo has 80,000 shares of common stock outstanding. It also has 5,000 shares of preferred stock outstanding that pay a dividend of $15,000 per year. Echo reports net income of $290,000 for the period with 80,000 shares of common stock outstanding. Echo also has a liability from its 10,000, $100 bonds that pay annual Interest of $8 per bond. Each of these bonds can be converted Into two shares of common stock. Bravo owns none of these bonds. Assume a tax rate of 21 percent. Required: What amount should Bravo report as diluted earnings per share? Note: Round your answer to 2 decimal places. Diluted earnings per share

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