Bruin Company Reports Current E&P of $200,000 in 20X3 and Accumulated

question 28

Multiple Choice

Bruin Company reports current E&P of $200,000 in 20X3 and accumulated E&P at the beginning of the year of $100,000. Bruin distributed $400,000 to its sole shareholder on January 1, 20X3. How much of the distribution is treated as a dividend in 20X3?

• A) $200,000.
• B) $100,000.
• C) $400,000.
• D) $300,000.

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Definitions:

Troy Oz

A unit of measure for the weight of precious metals, traditionally equal to about 31.1035 grams.

Hedging

A financial strategy used to reduce or mitigate risk by taking offsetting positions in related securities or derivatives.

Futures Contract

An agreement in law whereby parties commit to buying or selling an asset, such as a financial instrument or commodity, at a set price, to be concluded on a defined future date.