Starling Corporation Has Accumulated E & P of $60,000 on January

question 125

Multiple Choice

Starling Corporation has accumulated E & P of $60,000 on January 1, 2019. In 2019, Starling Corporation had an operating loss of $80,000. It distributed cash of $40,000 to Zoe, its sole shareholder, on December 31, 2019. Starling Corporation's balance in its E & P account as of January 1, 2020, is:

• A) $60,000 deficit.
• B) $20,000 deficit.
• C) $0.
• D) $60,000.
• E) None of these.

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Definitions:

Closed Container

A system where no matter is allowed to enter or leave, though energy transfer may still occur.

Independent

not influenced or controlled by others; acting autonomously.

Average Kinetic Energy

The mean energy possessed by the particles of a substance due to their random motions, directly related to temperature.

Kinetic-Molecular Theory

A theory that explains the behavior of gases, stating that gas particles are in constant motion and that this motion has consequences for properties like pressure, volume, and temperature.