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irinina [24]
3 years ago
13

A calendar-year corporation has positive current E&P of $500 and accumulatednegative E&P of $1,200. The corporation make

s a $400 distribution to its soleshareholder. Which of the following statements is true?
A)The distribution will be a dividend because current earnings and profits arepositive and exceed the distribution.
B)A distribution from a corporation to a shareholder is always a dividend, regardlessof the balance in earnings and profits.
C)The distribution may be a dividend, depending on whether total earnings andprofits at the date of the distribution is positive.
D)The distribution will not be a dividend because total earnings and profits is anegative $700.
Business
1 answer:
andrew11 [14]3 years ago
6 0

Answer:

Correct option is (a)

Explanation:

Current earnings and profits represent current year's earnings and accumulated E&P represent earnings after making distributions in the form of dividends to the shareholders. The level of accumulated E&P shows the ability of organizations to make cash distributions to its shareholders.

A distribution made by the corporation is considered dividend if current year E&P is positive irrespective of whether accumulated E&P is positive or negative.

In this case, current E&P is $500, which is more than distribution of $400, so it is considered as dividends.

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A company sells goods for $150,000 that cost $54,000 to manufacture. Which statement is true? a. The company will recognize sale
kirza4 [7]

Answer:

The correct answer is C

Explanation:

Finished goods are those goods which have been finished or completed through the process of the manufacturing or purchased or bought in the completed form, but not sold yet to the customers.

The finished goods cost or expense is considered to be a asset which is short term in nature, which is expected to be sold in less than a year or period.

So, when the company sold the goods that worth $54,000 to the manufacture for $150,000, this will lead to decrease in the finished goods of the company which worth $54,000.

7 0
3 years ago
If a business is in need of working capital, one option is to use a(n) ________ that will buy the company's account receivables
vesna_86 [32]

Answer:

factoring company

Explanation:

Factoring companies purchase your company's invoices (account receivables). When they do that, your company promptly receives a cash advance, instead of waiting for the usual 60, 90 day period to receive the full payment amount. Afterward, the factoring company collects the payment from your clients.

All of that is done for a fee to the factoring company (deducted from the full payment amount) and mostly with clients with whom it is normal to have longer payment periods. Factoring is an essential way to get bigger working capital.

5 0
3 years ago
Read 2 more answers
Vance has a vested account balance in his employer-sponsored qualified profit-sharing plan of $40,000. He has two years of servi
Maurinko [17]

Answer: $5,000

Explanation:

Per the requirements of qualified plans that permit loans, the maximum amount that an individual can withdraw is whichever is lesser between $50,000 and 50% of their Vested Account Balance.

Vance in this scenario has a vested account balance of $40,000.

50% of that would be $20,000.

That means that he can be loaned $20,000. However, he already has an outstanding loan balance that must be accounted for of 15,000.

Subtracting those figures we have,

= 20,000 - 15,000

= $5,000

The maximum loan that Vance can take from the qualified plan is $5,000

7 0
3 years ago
Discuss why South Africa as a country has a scarcity of skilled workers, and how this can be changed more especially in terms of
FromTheMoon [43]

South Africa, as a country still experiences a scarcity of skilled workers.  This should not be, given the country's population size.

<h3>What is the scarcity of skilled workers?</h3>

The scarcity of skilled workers means that South African companies cannot attract the manpower they need to power the South African industry and economy.

However, this scarcity can become a thing of the past if many more South African companies can start investing in the education sector by giving out scholarships, grants, and endowing academic chairs in the universities.

This was how the economy of the United States was enabled to flourish until today.  South African companies can emulate their footsteps.

Thus, South Africa, given its enormous population, has no business experiencing a scarcity of skilled workers.

Learn more about the scarcity of skilled workers at brainly.com/question/1787954

5 0
2 years ago
Sheridan Company issued $6,500,000 of 6%, 10-year bonds for $5,614,000. The straight line method of amortization is to be used.
Mrac [35]

Answer:

The solution of the given query is explained throughout the segment below.

Explanation:

The given values are:

Company issued amount,

= $6,500,000

Rate of interest,

= 6%

Time,

= 10 years

Now,

On bonds payable amortization, the discount will be:

= \frac{6,500,000 -5,614,000}{10}

= \frac{886,000}{10}

= 88,600 ($)

Interest expenses will be:

= (6,500,000\times 6 \ percent) + 88,600

= 390,000+88,600

= 478,600 ($)

5 0
3 years ago
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