Thriller Corporation has one class of voting common stock, of which 1,000 shares are issued and outstanding. The shares are owned as follows: Joe Jackson 400 Mike Jackson (Joe’s son) 200 Jane Jackson (Joe’s daughter) 200 Vinnie Price (unrelated) 200 Total shares 1,000 Thriller Corporation has current E&P of $400,000 for this year and accumulated E&P at January 1 of this year of $60,000. During this year, the corporation made the following distributions to its shareholders: 03/31: Distributed $100 per share to each shareholder ($100,000 in total). 06/30: Distributed $100 per share to each shareholder ($100,000 in total). 09/30: Distributed $100 per share to each shareholder ($100,000 in total). 12/31: Redeemed all of Vinnie’s shares for $250,000 in cash. a. Determine the tax status of each distribution made this year. treatment distribution on 3/31 joe distribution on 6/30 vinnie distribution on 9/30 distribution on 12/31 b. Compute the corporation’s accumulated E&P at January 1 of next year. (Do not round intermediate calculations.) accumulated e&p at 1/1 of next year
Thriller Corporation has one class of voting common stock, of which 1,000 shares are issued and outstanding. The shares are owned as follows: Joe Jackson 400 Mike Jackson (Joe’s son) 200 Jane Jackson (Joe’s daughter) 200 Vinnie Price (unrelated) 200 Total shares 1,000 Thriller Corporation has current E&P of $400,000 for this year and accumulated E&P at January 1 of this year of $60,000. During this year, the corporation made the following distributions to its shareholders: 03/31: Distributed $100 per share to each shareholder ($100,000 in total). 06/30: Distributed $100 per share to each shareholder ($100,000 in total). 09/30: Distributed $100 per share to each shareholder ($100,000 in total). 12/31: Redeemed all of Vinnie’s shares for $250,000 in cash. a. Determine the tax status of each distribution made this year. treatment distribution on 3/31 joe distribution on 6/30 vinnie distribution on 9/30 distribution on 12/31 b. Compute the corporation’s accumulated E&P at January 1 of next year. (Do not round intermediate calculations.) accumulated e&p at 1/1 of next year
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Thriller Corporation has one class of voting common stock, of which 1,000 shares are issued and outstanding. The shares are owned as follows:
| Joe Jackson | 400 |
| Mike Jackson (Joe’s son) | 200 |
| Jane Jackson (Joe’s daughter) | 200 |
| Vinnie Price (unrelated) | 200 |
| Total shares | 1,000 |
|
|
Thriller Corporation has current E&P of $400,000 for this year and accumulated E&P at January 1 of this year of $60,000. During this year, the corporation made the following distributions to its shareholders:
03/31: Distributed $100 per share to each shareholder ($100,000 in total).
06/30: Distributed $100 per share to each shareholder ($100,000 in total).
09/30: Distributed $100 per share to each shareholder ($100,000 in total).
12/31: Redeemed all of Vinnie’s shares for $250,000 in cash.
a. Determine the tax status of each distribution made this year.
| treatment | ||
| distribution on 3/31 | ||
| joe | distribution on 6/30 | |
| vinnie | distribution on 9/30 | |
| distribution on 12/31 |
b. Compute the corporation’s accumulated E&P at January 1 of next year. (Do not round intermediate calculations.)
| accumulated e&p at 1/1 of next year |
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