Purple Corporation Has Accumulated E & P of $100,000 on January

question 170

Multiple Choice

Purple Corporation has accumulated E & P of $100,000 on January 1,2017.In 2017,Purple has current E & P of $130,000 (before any distribution) .On December 31,2017,the corporation distributes $250,000 to its sole shareholder,Cindy (an individual) .Purple Corporation's E & P as of January 1,2018 is:

• A)$0.
• B)($20,000).
• C)$100,000.
• D)$130,000.
• E)None of the above.

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Definitions:

Normal Balance

The side (debit or credit) of an account that is typically increased in accounting.

Financial Statement

Reports that provide detailed information about a company's financial performance and position.

Financial Statement

Documents that provide an overview of a company's financial condition in both short and long term, including balance sheets, income statements, and statements of cash flows.

Permanent/Temporary

In accounting, refers to the classification of accounts based on their longevity; permanent accounts are cumulative over time (e.g., assets, liabilities, equity), while temporary accounts are closed at the end of each accounting period (e.g., revenues, expenses).