A Calendar-Year Corporation Has Negative Current E&P of $500 and Accumulated

question 50

Multiple Choice

A calendar-year corporation has negative current E&P of $500 and accumulated positive E&P of $1,000. The corporation makes a $600 distribution to its sole shareholder. Which of the following statements is true?

• A) $500 of the distribution will be a dividend because total earnings and profits is $500.
• B) $0 of the distribution will be a dividend because current earnings and profits are negative.
• C) $600 of the distribution will be a dividend because accumulated earnings and profits is $1,000.
• D) Up to $600 of the distribution could be a dividend depending on the balance in accumulated earnings and profits on the date of the distribution.

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Definitions:

United States

A country primarily located in North America consisting of 50 states and a federal district, known for its diverse culture and influential economy.

Suicide Rate

The number of suicide deaths in a given population over a specified period of time.

Black Males

Refers to men of Black African descent; in sociological terms, it also pertains to discussing their experiences, issues, and identities within societal contexts.

White Males

Refers to individuals who are biologically male and identified as having Caucasian or European ancestry.