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

question 84

Multiple Choice

Aztec Company reports current E&P of $200,000 in 20X3 and accumulated E&P at the beginning of the year of negative $100,000. Aztec distributed $300,000 to its sole shareholder on January 1, 20X3. How much of the distribution is treated as a dividend in 20X3?

• A) $300,000.
• B) $200,000.
• C) $100,000.
• D) $0.

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Definitions:

Installment Note

An installment note is a form of debt that requires the borrower to make scheduled payments (including both principal and interest) over a set period until the debt is paid off.

Bearer Bonds

Bonds not registered to any owner, allowing whoever holds the bond physically to claim the interest payments or the principal.

Unsecured Bonds

Bonds issued without collateral, relying on the issuer's creditworthiness for support.

Term Bonds

Bonds that have a set maturity date on which the principal amount will be repaid to bondholders.