Barb and Chuck Each Own One-Half the Stock of Wren,Inc

question 67

Multiple Choice

Barb and Chuck each own one-half the stock of Wren,Inc. ,an S corporation.Each shareholder has a stock basis of $175,000.Wren has no accumulated E & P.Wren's taxable income for the current year is $100,000,and it distributes $75,000 to each shareholder.Barb's stock basis at the end of the year is:

• A)$0.
• B)$100,000.
• C)$150,000.
• D)$175,000.
• E)None of the above.

---

Definitions:

Variable Maintenance Cost

Costs that change in proportion to the operational activity of a company, such as repairs and maintenance expenses that vary with usage.

Mixed Cost

A cost containing both variable and fixed cost elements, changing in total with activity level but not proportionately.

Direct Labor Hours

The total time workers spend producing a product or providing a service, directly tied to the production process.

Contribution Margin Ratio

A financial metric that shows what percentage of sales revenue is available to cover fixed costs and generate profit after variable costs have been paid.