Puffin Corporation Makes a Property Distribution to Its Sole Shareholder

question 140

Multiple Choice

Puffin Corporation makes a property distribution to its sole shareholder, Bonnie. The property distributed is a car (basis of $30,000? fair market value of $20,000) that is subject to a $6,000 liability which Bonnie assumes. Puffin has no accumulated E & P and $30,000 of current E & P from other sources during the year. What is Puffin's E & P after taking into account the distribution of the car?

• A) $4,000
• B) $6,000
• C) $10,000
• D) $14,000
• E) None of the above

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Definitions:

Collective Bargaining

A process of negotiation between employers and a group of employees aimed at agreeing on working conditions, wages, and benefits.

Minimum Wage

The lowest legal salary that employers can pay their employees.

Labor Union

An organization of workers that aims to negotiate with employers for better wages, working conditions, and benefits.

Efficiency Wages

A concept in economics where employers pay higher than the market equilibrium wage to increase worker productivity, loyalty, and quality.