Chance Corporation Has a $20,000 Deficit in Earnings and Profits

question 32

Multiple Choice

Chance Corporation has a $20,000 deficit in earnings and profits as of January 1,2017.During 2017,the corporation has current earnings and profits of $40,000 and makes a $70,000 cash distribution to its shareholders.What part of the distribution is taxable as dividend income to Chance's shareholders?

• A)$- 0 -
• B)$20,000
• C)$30,000
• D)$40,000
• E)$70,000

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Definitions:

Progeria

A rare genetic disorder characterized by rapid aging in children.

Chorionic Villus Sampling

A prenatal diagnostic test that involves collecting a small sample of the placental tissue, known as the chorionic villi, to test for genetic abnormalities.

Amniocentesis

A medical procedure used in prenatal diagnosis, where a small amount of amniotic fluid is extracted from the amniotic sac surrounding a developing fetus.

Karyotype

An individual's complete set of chromosomes, visually represented in a photograph or diagram which displays the chromosomes arranged by size and number.