Question

Dove Corporation, a calendar year C corporation, had the following information for 2016:

Answer 1

Answer:

$1,032,260

Explanation:

To calculate Dove's unappropriated retained earnings balance (UREB) as of December 31, 2016, the following simple formula is employed:

UREB = Unappropriated retained earnings as of 01 January 2016 + Net income per books (after-tax) - Cash dividend distributions

UREB = $796,010  + $386,250 - $150,000 = $1,032,260

Therefore, Dove's unappropriated retained earnings balance (UREB) as of December 31, 2016 is equal to $1,032,260.

Note:

This will appear in Schedule M–2 of Form 1120 as follows:

Unappropriated retained earnings as of 01 January 2016      $796,010  

Net income per books (after-tax)                                               $386,250

Sub-Total                                                                                     $1,182,260                                                                                

Less: Cash dividend distributions                                               $150,000

Unappropriated retained earnings as of 31 December 2016  $1,032,260