CB Corporation was formed as a calendar-year S corporation. Casey is a 60percent shareholder and Bryant is a 40percent shareholder. On September 30, 2020, Bryant sold his CB shares to Don. CB reported business income for 2020 as follows: (Assume that there are 365 days in the year.)
How much 2020 income is allocated to each shareholder if CB uses its normal accounting rules to allocate income to the specific periods in which it was actually earned?
Definitions:
Collateral
An asset pledged as security for the repayment of a loan, forfeitable in the event of a default.
Financing Statement
A document filed to give public notice that a creditor has a security interest in the debtor's collateral, used in securing transactions.
Attach
in legal terms, means to legally seize a person's property to secure or satisfy a court judgement.
Enforceable Security Interest
A legal claim or lien on collateral that gives a creditor the right to take possession of the property if the debtor defaults on obligations.
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