FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Clowhart Corporation has accumulated E&P at the beginning of the year of $40,000. Clowhart's current E&P is $20,000. Clowhart makes two distributions of $25,000 each to its sole shareholder, Leroy, on July 1st and December 31st of the current year. Leroy's basis in his stock at the beginning of the year is $60,000. Select the false answer from the list below. Options: A) Leroy has $50,000 of dividend income. B) Leroy has a $60,000 basis in his stock at the end of the year. C) Clowhart has accumulated E&P of $0 at the end of the year. D) Clowhart has accumulated E&P of $10,000 at the end of the year.
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Transcribed Image Text:Clowhart Corporation has accumulated E&P at the beginning of the year of $40,000. Clowhart's current E&P is $20,000. Clowhart makes two distributions of $25,000 each to its sole shareholder, Leroy, on July 1st and December 31st of the current year. Leroy's basis in his stock at the beginning of the year is $60,000. Select the false answer from the list below. Options: A) Leroy has $50,000 of dividend income. B) Leroy has a $60,000 basis in his stock at the end of the year. C) Clowhart has accumulated E&P of $0 at the end of the year. D) Clowhart has accumulated E&P of $10,000 at the end of the year.
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