Elvis Owns All of the Stock of White Corporation

question 18

Multiple Choice

Elvis owns all of the stock of White Corporation. The accumulated earnings and profits of White Corporation at the beginning of the year are a deficit of $20,000. The current earnings and profits are $30,000. Elvis' basis for his stock is $250,000. He receives a distribution of $300,000 on the last day of the tax year. How much dividend income and/or capital gain should Elvis report?

• A) $0.
• B) Dividend income of $30,000 and capital gain of $20,000.
• C) Dividend income of $30,000 and capital gain of $0.
• D) Dividend income of $10,000 and capital gain of $20,000.
• E) None of the above.

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Definitions:

Outliers

Observations in data that fall significantly above or below most of the other data points, potentially indicating variability in measurement, experimental errors, or novelty.

Slope of the Variable Cost

Represents the rate at which variable cost changes in relation to a change in output or activity level.

Scatter Diagram

A graphical representation used in statistics to show the relationship between two variables, displaying points at which a variable occurs.

Change in Units

The difference in the number of units, items, or parts between two periods, often used in inventory, production, or sales analysis.