Maui Corporation Makes Two Distributions During the Current Tax Year-The

question 69

Multiple Choice

Maui Corporation makes two distributions during the current tax year-the first for $20,000 on February 1 and the second for $30,000 on August 1.Before consideration of the distributions, the corporation has $18,000 in current earnings and profits and $21,000 of accumulated earnings and profits.How much of the second distribution is taxable as a dividend?

• A)$10,200
• B)$10,800
• C)$19,000
• D)$21,000

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Definitions:

Net Price

The final cost of a product or service once all discounts, rebates, and promotions have been applied.

Complement Method

A mathematical technique used to simplify certain types of calculations, often by subtracting a number from a base value like 10 or 100.

Equivalent Single Discount

A method used in accounting to consolidate multiple trade discounts into one single discount, simplifying the calculation process.

Discount Date

The specified date by which a payment can be made at a reduced rate or a debt settled to avail a discount.