W Corporation was owned by shareholder C prior to a sale of allof his stock (basis at the beginning of the year, $5,000) to D inJune for $10,000. During the year, W Corporation distributed$60,000 on May 1 and $40,000 on September
1. Indicate how the distributions would be treated by individualshareholders C and D in the following situations (15):
Accumulated E&P
Current E&P
a
10,000
50,000
b
(70,000)
50,000
c
95,000
(18,250)
W Corporation was owned by shareholder C prior to a sale of allof his stock (basis at the beginning of the year, $5,000) to D inJune for $10,000. During the year, W Corporation distributed$60,000 on May 1 and $40,000 on September
1. Indicate how the distributions would be treated by individualshareholders C and D in the following situations (15):
Accumulated E&P | Current E&P | |
a | 10,000 | 50,000 |
b | (70,000) | 50,000 |
c | 95,000 | (18,250) |
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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 (Joeâs son) | 200 |
Jane Jackson (Joeâs daughter) | 200 |
Vinnie Price (unrelated) | 200 |
Total | 1,000 |
Thriller Corporation has current E&P of $300,000 for this year and accumulated E&P at January 1 of this year of $500,000.
During this year, the corporation made the following distributions to its shareholders:
03/31: Paid a dividend of $10 per share to each shareholder ($10,000 in total).
06/30: Redeemed 200 shares of Joeâs stock for $200,000. Joeâs basis in the 200 shares redeemed was $100,000.
09/30: Redeemed 60 shares of Vinnieâs stock for $60,000. His basis in the 60 shares was $36,000.
12/31: Paid a dividend of $10/share to each shareholder ($7,400 in total).
Compute the corporationâs accumulated E&P at January 1 of next year. (Round all intermediate calculations to 2 decimal places. Round final answers to the nearest dollar amount.)