Homework Help is Here – Start Your Trial Now!
Business
Accounting
On January 1 of the current year, Rhondell Corporation has accumulated E & P of $190,000. Current E & P for the year is $570,000, 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 $304,000 ($152,000 to Elizabeth and $152,000 to Jonathan) on April 30 and a total of $532,000 ($266,000 to Jonathan and $266,000 to 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. If an amount is zero, enter "0". If required, round any division to two decimal places and use in subsequent computations. Round final answers to the nearest dollar. April 30 distribution of $304,000 December 31 distribution of $532,000 From Current E & P From Accumulated E & P 304,000 X $ 532,000 X $ 190,000 X 0 X Treated as Return of Capital $ 76,000

On January 1 of the current year, Rhondell Corporation has accumulated E & P of $190,000. Current E & P for the year is $570,000, 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 $304,000 ($152,000 to Elizabeth and $152,000 to Jonathan) on April 30 and a total of $532,000 ($266,000 to Jonathan and $266,000 to 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. If an amount is zero, enter "0". If required, round any division to two decimal places and use in subsequent computations. Round final answers to the nearest dollar. April 30 distribution of $304,000 December 31 distribution of $532,000 From Current E & P From Accumulated E & P 304,000 X $ 532,000 X $ 190,000 X 0 X Treated as Return of Capital $ 76,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

A-3

On January 1 of the current year, Rhondell Corporation has accumulated E & P of $190,000. Current E & P for the year is $570,000, 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 $304,000 ($152,000 to Elizabeth and $152,000 to Jonathan) on April 30 and a total of $532,000 ($266,000 to Jonathan and $266,000 to 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. If an amount is zero, enter "0". If required, round any division to two decimal places and use in subsequent computations. Round final answers to the nearest dollar. April 30 distribution of $304,000 December 31 distribution of $532,000 From Current E & P From Accumulated E & P 304,000 X $ 532,000 X $ 190,000 X 0 X Treated as Return of Capital $ 76,000
Transcribed Image Text:On January 1 of the current year, Rhondell Corporation has accumulated E & P of $190,000. Current E & P for the year is $570,000, 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 $304,000 ($152,000 to Elizabeth and $152,000 to Jonathan) on April 30 and a total of $532,000 ($266,000 to Jonathan and $266,000 to 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. If an amount is zero, enter "0". If required, round any division to two decimal places and use in subsequent computations. Round final answers to the nearest dollar. April 30 distribution of $304,000 December 31 distribution of $532,000 From Current E & P From Accumulated E & P 304,000 X $ 532,000 X $ 190,000 X 0 X Treated as Return of Capital $ 76,000
Expert Solution
steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Corporate Distributions and Adjustments
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS