At a Time When Blackbird Corporation Had E & P

question 68

True/False

At a time when Blackbird Corporation had E & P of $700,000 and 1,000 shares of stock outstanding, the corporation distributed $300,000 to redeem 400 shares of its stock.The transaction qualified as a disproportionate redemption for the shareholder.Blackbird's E & P is reduced by $280,000 as a result of the distribution.

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Definitions:

Supplies

Items that are used in the day-to-day operations of a business, not directly part of the manufactured product but necessary for its production.

Labor Rate Variance

The difference between the actual labor costs incurred and the standard labor costs expected for the work performed.

Labor Efficiency Variance

A metric used to measure the difference between the actual labor hours worked and the standard labor hours allowed for the production achieved.

Labor Standards

Predetermined measures of the amount of labor time necessary for the completion of a task or project.