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:

Chart of Accounts

A systematic listing of all accounts used by an organization, typically organized by type such as assets, liabilities, equity, revenues, and expenses.

Balance Column Journal

A type of accounting record that includes columns for recording dates, details of transactions, and corresponding debit or credit balances.

Trial Balance

A bookkeeping report that lists the balances of all ledgers accounts to check the mathematical accuracy of the accounting entries.

Posting

The process of transferring accounting entries from the journal to the ledger accounts.