Aztec Company Reports Current E&P of $200,000 in 20X3 Anda

question 94

Multiple Choice

Aztec Company reports current E&P of $200,000 in 20X3 anda deficit of ($100,000) in accumulated E&P at the beginning of the year. Aztec distributed $300,000 to its sole shareholder on January 1, 20X3. How much of the distribution is treated as a dividend in 20X3?

• A)$300,000
• B)$200,000
• C)$100,000
• D)$0

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Definitions:

Average Accounting Rate of Return

A financial ratio indicating the expected return on an investment, calculated by dividing the average profit by the initial investment cost.

Straight-Line Depreciation

A technique for spreading the expense of an asset uniformly over its expected lifespan.

Net Income

The sum a company is left with after all its expenses and taxes are removed from its income.

Crossover Point

The point at which two different financial scenarios yield the same result or where an investment's cost and benefits intersect.