Bruin Company Reports Current E&P of $200,000 in 20X3 and Accumulated

question 103

Multiple Choice

Bruin Company reports current E&P of $200,000 in 20X3 and accumulated E&P at the beginning of the year of $100,000. Bruin distributed $400,000 to its sole shareholder on January 1, 20X3. How much of the distribution is treated as a dividend in 20X3?

• A)$400,000
• B)$300,000
• C)$200,000
• D)$100,000

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Definitions:

Bank Checking Account

A bank account that allows the holder to deposit and withdraw money and write checks.

Postdated Check

A check written with a future date, preventing it from being cashed or deposited until that date.

Bank Reconciliation

The process of matching and comparing figures from the accounting records against those presented on a bank statement to ensure they are in agreement.

Deposit in Transit

Funds that have been deposited by a company in its bank account but have not yet been recorded by the bank, leading to a timing difference in the company's accounting records.