Ask Question
BusinessBusiness
22 February, 09:53

Stacey and Andrew each own one-half of the stock in Parakeet Corporation, a calendar year taxpayer. Cash distributions from Parakeet are: $350,000 to Stacey on April 1 and $150,000 to Andrew on May 1. If Parakeet's current E & P is $60,000, how much is allocated to Andrew's distribution? Group of answer choices

1. $5,000

2. $10,000

3. $48,000

4. $150,000

5. None of the above

+1
Answers (1)
  1. 22 February, 10:09
    0
    Option 3

    Explanation:

    Earnings & profits (E&P) is the measure of a corporation's economic ability to pay dividends to its shareholders. An up-to-date E&P calculation is important for many corporate transactions, including determining whether a distribution to shareholders is a taxable dividend.

    The E&P allocated to Andrew's distribution

    = 160,000 * 150,000 / (350,000+150,000)

    = 160,000 * 150,000/500,000

    = 48,000

    Option C
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Stacey and Andrew each own one-half of the stock in Parakeet Corporation, a calendar year taxpayer. Cash distributions from Parakeet are: ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
John owns a corporate bond with a coupon rate of 8% that matures in 10 years. Bill owns a corporate bond with a coupon rate of 12% that matures in 25 years. If interest rates go down, then: A.
Answers (1)
Suppose that a firm has only one variable input, labor, and firm output is zero when labor is zero. when the firm hires 6 workers the firm produces 90 units of output. fixed costs of production are $6 and the variable cost per unit of labor is $10.
Answers (1)
EA12. LO 2.3Markson and Sons leases a copy machine with terms that include a fixed fee each month of $500 plus a charge for each copy made. The company uses the high-low method to analyze costs.
Answers (1)
Into what three general categories can food service employees be grouped?
Answers (2)
A friend of yours trades stocks based on confidential information he overhears at his work. He even told you once that this information is not available to the general public.
Answers (1)
New Questions in Business
Which of the following characteristics would lead the auditor to assess control risk at a higher level? a. It is difficult for the auditor to determine or gain access to the organization or individuals who own and/or control the entity. b.
Answers (1)
The reason for the Fed being set up as an independent agency of government is to:
Answers (1)
Headings in reports that describe the content of the section and may even give a conclusion about the section are called:
Answers (1)
Coronado Company purchased land for $80,000. The company also paid $12,000 in accrued taxes on the property, incurred $5,000 to remove an old building, and received $2,000 from the salvage of the old building.
Answers (1)
Trueview video ads can be especially effective for driving what goals?
Answers (1)
Home » Business » Stacey and Andrew each own one-half of the stock in Parakeet Corporation, a calendar year taxpayer. Cash distributions from Parakeet are: $350,000 to Stacey on April 1 and $150,000 to Andrew on May 1.
Sign Up Forgot Password?