Purple Corporation has accumulated E & P of $100,000 on January 1, 2017 . In 2017, Purple has current E & P of $130,000 (before any distribution). On December 31, 2017, the corporation distributes $250,000 to its sole shareholder, Cindy (an individual). Purple Corporation's E & P as of January 1, 2018 is:
a. $0.
b. ($20,000).
c. $100,000.
d. $130,000.
e. None of the above.
a
RATIONALE: The $250,000 distribution will reduce the $230,000 balance in E & P to zero. A distribution may not generate a deficit in E & P.
You might also like to view...
Changing pricing policies will lead to direct cost implications immediately
Indicate whether the statement is true or false
The ________ of a product line is the price below which all products in the line will be priced
A) price ceiling B) dynamic price C) price floor D) price lining E) online price
____, along with the project managers, will review the progress report
A) Them B) They C) Themselves
Since the federal government has enacted the Uniform Commercial Code, it is mandatory that all states honor it
Indicate whether the statement is true or false