Ask Question
31 May, 18:27

A corporation had $10,000, of earnings and profits (E&P) for the current year and accumulated negative E&P of $100,000. It paid a cash distribution of $30,000. What amount represents the taxable dividend to the shareholder for that year?

a. $100,000

b. $30,000

c. $10,000

d.$0

+4
Answers (1)
  1. 31 May, 21:42
    0
    c. $10,000.

    Explanation:

    The profit of the company is $10,000 which is taxable dividend income. The company's E&P accumulate is negative. Dividends are paid out from current or accumulated earning and profits of the company. The company had only $10,000 earnings in the current earning and profits account which will be taxable dividend income.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A corporation had $10,000, of earnings and profits (E&P) for the current year and accumulated negative E&P of $100,000. It paid a cash ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers