B Corporation, a Service Company, Operates on a Calendar Year

question 28

Multiple Choice

B Corporation, a service company, operates on a calendar year and has paid no dividends for three years.What would its accumulated earnings credit be? $$\begin{array}{l}\begin{array} { l r } \text { Estimated reasonable needs for the current year }& \$ 200,000\\\text { Prior accumulations } & 100,000 \\\text { Net capital gain } & 15,000 \\\text { Taxes attributed to capital gain } & 5,100\end{array}\end{array}$$

• A)$85,000
• B)$90,100
• C)$100,000
• D)$150,000
• E)$250,000

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Definitions:

Debt Financing

The raising of capital through borrowing, which typically involves taking out loans or issuing bonds.

Initial Public Offering

The process by which a private company offers its shares to the public for the first time.

Angel Investment

Financing provided by affluent individuals to startups or small businesses in exchange for ownership equity or convertible debt.

Attitudes

Mental and emotional entities that denote an individual's degree of like or dislike for an item.