User Account

All Pages

What impact does the distribution have on earnings

Assignment Help Accounting Basics
Reference no: EM132674296

Manning Corporation has two shareholders who are brothers: Eli owns 60% of the stock and Peyton owns the remaining 40%. Eli and Peyton have a basis in their stock of $60,000 and $40,000, respectively. As of December 31, 2018, Manning Corporation owns the following assets:

                       Asset Basis            FMV

Cash            30,000                   30,000

Land            12,000               20,000

Equipment      40,000              30,000

Both the land and the equipment are used in the operation of the family business. The equipment has accumulated depreciation of $10,000. Eli had contributed the equipment to the corporation in 2013 when it had a value of $70,000 and basis of $60,000.

The corporation's earnings and profits (determined before considering the effects of the distributions) are allocable to Eli and Peyton as follows:

                                                     Eli                Peyton

Current Earnings and Profits      3,000            2,000

Accumulated Earning and Profits  24,000      16,000

Assume that on December 31, 2019 Manning Corporation distributes the land to Eli.

Problem 1: What impact does this distribution have on earnings and profits? How much do Eli and Peyton get in distributions?

Reference no: EM132674296

Questions Cloud

How would you characterize maersk culture : How would you characterize Maersk's Culture? What are its best aspects? What could or should change? The response must be typed.
What is stagflation : What is stagflation? We were in a stagflationary period in the 1970s. Did our last oil crisis (2011) drive us back into the world of stagflation?
What is the full path to the home directory : What is the full path to the home directory of the user account lucio in Linux?
What you can do to bring about a change to the workplace : You're the supervisor of a group of employees whose task is to assemble disk drives that go into computers. You find that quality is not what it should be.
What impact does the distribution have on earnings : Manning Corporation, What impact does this distribution have on earnings and profits? How much do Eli and Peyton get in distributions?
Name three common topologies for local area networks : Name three common topologies for local area networks (LANs).
Give a polynomial-time algorithm for the problem : Give a polynomial-time algorithm for the problem. (Hint: try to cast the problem as minimum-weight matching of given cardinality.)
Describe one way in which an organization might validate : Briefly describe one way in which an organization might validate a particular selection test for hiring software developers (i.e., establish/support that).
Prepare the accounts receivable turnover : Prepare the accounts receivable turnover and the inventory turnover. Merchandise inventory, beginning of year, $59,000. Gross profit, $448,000

Reviews

Write a Review

Accounting Basics Questions & Answers

  Difference between gross income and adjusted gross income

What is the difference between gross income and adjusted gross income, and what is the difference between adjusted gross income and taxable income

  Vulcan molding produces molded rubber components at the

vulcan molding produces molded rubber components. at the start of the year the company estimated that it would incur

  Stock in dragula industries has a beta of 11 the market

stock in dragula industries has a beta of 1.1. the market risk premium is 7 percent and t-bills are currently yielding

  Journalize and post the entry on july 1 and the adjusting

Using the data in BE4-6, journalize and post the entry on July 1 and the adjusting entry on December 31 for Craig Insurance Co. Craig uses the accounts Unearned Service Revenue and Service Revenue.

  Determine the amortization expense for the first two years

Determine the amortization expense for the first two years using the Straight-line method and Declining-balance method at the rate of 150%

  Find the balances of the deferred tax liability

At 30 June 2019, Beta Ltd had the following deferred tax balances: Find the balances of the deferred tax liability and deferred tax asset at 30 June 2020

  Please define the word ethics

Please define the word "ethics" and summarize what issues/ramifications might apply to this example

  The culmination of preparing operating budgets

The culmination of preparing operating budgets

  Contrast the effects of a cash dividend and a stock dividend

Three dates associated with Petrie Company's cash dividend are May 1, May 15, and May 31. Discuss the significance of each date and give the entry at each date.

  Calculate the amortization expense for the years

At beginning of 2010, the company paid $48,600 in legal fees for successful defense in a patent infringement suit. Calculate the amortization expense for years

  Discuss the key business processes for your client

HA2042 Accounting Information Systems Assignment - System Analysis and Selection, Holmes Institute, Australia. Discuss key business processes for your client

  Reduce the residual value remaining furniture

Purchased office furniture on credit from Goodyear supply for defective office furniture received on may 10 and returned for credit. The return of defective furniture will reduce the residual value remaining furniture to $3000.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd