Hazel Is the Sole Shareholder of Maple Corporation in 2020

question 22

Essay

Hazel is the sole shareholder of Maple Corporation In 2020 Maple operated as a C corporation and reported $16,600 of taxable income (and earnings and profits). On January 1, 2021, Maple elected S corporation status. During 2021 Maple reported $13,600 of ordinary business income and no separately stated items. It also distributed $26,600 to Hazel. What is the amount and character of income Hazel must recognize on the distribution? What is Hazel's stock basis at the end of 2021 (after accounting for the distribution)if her basis at the beginning of the year was $6,600?

Define and determine fixed, variable, semi-variable, and step costs.

Understand sales mix and its impact on composite unit calculations.

Understand the concept and calculation of the break-even point.

Comprehend the role and application of sensitivity analysis in cost-volume-profit (CVP) analysis.

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Definitions:

OTC Markets

Over-the-counter markets refer to decentralized markets where trading occurs directly between two parties without the supervision of an exchange.

Institution-To-Institution Trading

The buying and selling of securities between institutional investors, like pension funds and mutual funds, rather than individual investors.

Brokers

Intermediaries that facilitate buying and selling of securities, commodities, or other financial instruments for a commission.

Proprietorship

A business entity owned and run by one individual where there is no legal distinction between the owner and the business.