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Puffin Corporation Makes a Property Distribution to Its Sole Shareholder

question 140

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Puffin Corporation makes a property distribution to its sole shareholder, Bonnie. The property distributed is a car (basis of $30,000? fair market value of $20,000) that is subject to a $6,000 liability which Bonnie assumes. Puffin has no accumulated E & P and $30,000 of current E & P from other sources during the year. What is Puffin's E & P after taking into account the distribution of the car?


Definitions:

Total Assets

The sum of all current and non-current assets owned by a company.

Total Expenses

The sum of all costs and expenses incurred by a business or organization during a specific period.

Accrued Wages

Wages that have been earned by employees but have not yet been paid or recorded in the financial statements.

Pay Period

The interval of time for which an employee’s wages are calculated, such as weekly, bi-weekly, monthly, etc.

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