Benchmark,Inc

question 147

Multiple Choice

Benchmark,Inc. ,a U.S.shareholder owns 100% of a CFC from which Benchmark receives a $3 million cash distribution.The CFC's E & P is composed of the following amounts.

Benchmark recognizes a taxable dividend of:

• A)$3 million.
• B)$700,000.
• C)$2,300,000.
• D)$0.

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Definitions:

Statement Of Cash Flows

A financial statement that provides a summary of a company's cash inflows and outflows over a specific period.

Direct Method

A way of preparing the cash flow statement where actual cash flow information from the company's operations is used, rather than accrual accounting values.

Operating Activities

Activities directly related to a company's core business operations, including income-earning endeavors and other functions central to its purpose.

Statement Of Cash Flows

A financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company, showing how it raises and spends cash.