XYZ Inc., was a C corporation through the end of year 6. Starting at the beginning of year 7, XYZ Inc., elected S corporation status. At the end of year 6, XYZ had accumulated earnings and profits (E & P) of $53,700. At the end of year 7, XYZ had a balance of $32,000 in its accumulated adjustments account (AAA). During year 8, XYZ had ordinary income of $15,300 and made distributions of $100,000. What amount of the distribution will be a taxable dividend to the shareholders of XYZ at the end of year 8? a.$1,000 b.$47,300 c.$52,700 d.$53,700

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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XYZ Inc., was a C corporation through the end of year 6. Starting at the beginning of year 7, XYZ Inc., elected S corporation status. At the end of year 6, XYZ had accumulated earnings and profits (E & P) of $53,700. At the end of year 7, XYZ had a balance of $32,000 in its accumulated adjustments account (AAA). During year 8, XYZ had ordinary income of $15,300 and made distributions of $100,000. What amount of the distribution will be a taxable dividend to the shareholders of XYZ at the end of year 8?

a.$1,000
b.$47,300
c.$52,700
d.$53,700
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