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) <u>$386,250</u>
Sub-Total $1,182,260
Less: Cash dividend distributions <u>$150,000</u>
Unappropriated retained earnings as of 31 December 2016 <u>$1,032,260</u>
