Clampett,Inc

question 74

Multiple Choice

Clampett,Inc.(an S corporation) previously operated as a C corporation.Under general rules,distributions from Clampett,Inc.are deemed to be paid in the following order:

• A) shareholder's remaining stock basis, prior C corporation earnings and profit, the AAA account.
• B) shareholder's remaining stock basis, the AAA account, prior C corporation earnings and profit.
• C) prior C corporation earnings and profit, the AAA account, shareholder's remaining stock basis.
• D) the AAA account, prior C corporation earnings and profit, shareholder's remaining stock basis.
• E) none of the choices are correct.

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Definitions:

Price Elasticity

A measure of how sensitive the quantity demanded of a good is to a change in its price.

Demand Curve

A graph representing the relationship between the price of a good and the quantity demanded by consumers, typically downward sloping, indicating an inverse relationship between price and quantity demanded.

Price-inelastic

A characteristic of a good for which demand does not change significantly when its price changes.

Total Revenue

The overall amount of money received by a company for goods sold or services provided during a certain time period.