Pre BookExercise 19-25 (Algorithmic) (LO. 3)On January 1 of the current year, Rhondell Corporation has accumulated E & P of $168,000. Current E & P for the year is $504,000, earnedevenly throughout the year. Elizabeth and Jonathan are sole equal shareholders of Rhondell from January 1 to April 30. On May 1, Elizabethsells all of her stock to Marshall, Rhondell makes two distributions to shareholders og the year: a total of $268,800 ($134,400 toElizabeth and $134,400 to Jonathan) on April 30 and a total of $470,400 ($235,200 to Jonathan and $235,200 to Marshall) on December31.Determine the allocation of the distributions by completing the table below. Assume that the shareholders have sufficient basis in theirstock for any amount that is treated as return of capital.If an amount is zero, enter "0". If required, round any division to two decimal places and use in subsequent computations.Round final answers to the nearest dollar.April 30 distribution of $268,800December 31 distribution of $470,400FoodbakFrom Current From AccumulatedE&PE&P183,273 XChak M18Treated asReturn of CapitalCheck My VikAccumulated E&P is the total of all previous years' current E & P (since February 28, 1913) reduced by distributions made from E & Pan previousyears. It is important to distinguish between current E & P and accumulated E & P because the taxability of corporate distributions depends onhow these two accounts are allocated to each distribution made during the year.(₁

It is the measure of a company’s ability to pay dividends to its shareholders. The current year’s…

On January 1 of the current year, Rhondell Corporation has accumulated E & P of $168,000. Current E & P for the year is $504,000, earned evenly throughout the year. Elizabeth and Jonathan are sole equal shareholders of Rhondell from January 1 to April 30. On May 1, Elizabeth sells all of her stock to Marshall, Rhondell makes two distributions to shareholders ng the year: a total of $268,800 ($134,400 to Elizabeth and $134,400 to Jonathan) on April 30 and a total of $470,400 ($235,200 to Jonathan and $235,200 to Marshall) on December 31.

On January 1 of the current year, Rhondell Corporation has accumulated E & P of $168,000. Current E & P for the year is $504,000, earned evenly throughout the year. Elizabeth and Jonathan are sole equal shareholders of Rhondell from January 1 to April 30. On May 1, Elizabeth sells all of her stock to Marshall, Rhondell makes two distributions to shareholders ng the year: a total of $268,800 ($134,400 to Elizabeth and $134,400 to Jonathan) on April 30 and a total of $470,400 ($235,200 to Jonathan and $235,200 to Marshall) on December 31.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter19: Corporations: Distributions Not In Complete Liquidation

Section: Chapter Questions

Problem 22CE

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Show your work On January 1 of the current year, Rhondell Corporation has accumulated E & P of $174,000. Current E & P for the year is $522,000, earned evenly throughout the year. Elizabeth and Jonathan are sole equal shareholders of Rhondell from January 1 to April 30. On May 1, Elizabeth sells all of her stock to Marshall. Rhondell makes two distributions to shareholders during the year: a total of $278,400 ($139,200 to Elizabeth and $139,200 to Jonathan) on April 30 and a total of $487,200 ($243,600 to Jonathan and $243,600 Marshall) on December 31. Determine the allocation of the distributions by completing the table below. Assume that the shareholders have sufficient basis in their stock for any amount that is treated as return of capital.
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