Stacey and Andrew Each Own One-Half of the Stock in Parakeet

question 53

Multiple Choice

Stacey and Andrew each own one-half of the stock in Parakeet Corporation,a calendar year taxpayer.Cash distributions from Parakeet are: $350,000 to Stacey on April 1 and $150,000 to Andrew on May 1.If Parakeet's current E & P is $60,000,how much is allocated to Andrew's distribution?

• A)$5,000
• B)$10,000
• C)$18,000
• D)$30,000
• E)None of the above

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Definitions:

Production Possibilities

The various combinations of goods and services that can be produced from a fixed set of resources.

Circular-Flow Diagram

An economic model depicting how money, goods, and services move through an economy between households and firms.

Economy

An organized system of production, distribution, and consumption of goods and services within a specific geographical area, involving various agents and market forces.

Circular-Flow Diagram

A model that illustrates the flow of goods and services and money between households and businesses in an economy.