Reference no: EM132979995

Question - At the beginning of the year, the accumulated adjustments account (AAA) of Gopher Corporation, an S corporation, has a balance of $925,000. Gopher's other adjustments account (OAA) has a beginning balance of $35,000. Gopher has two 50% shareholders. During the yeas the following items occurred:

Operating Income 475,000

Dividend income 8,200

Municipal bond interest income 1,400

Long term capital gain from sale of land 32,800

Short term capital loss from sale of 3M corp stock (5,800)

Nondeductible sales tax penalty paid to the state of Minnesota (650)

Charitable contributions (cash) (22,000)

Interest expense on loan used to purchase municipal bond (1,100)

Cash distributions to shareholders 180,000

Required - Compute Gophers ending AAA and OAA balances for the year. Show computations.