Question

On January 1 of the current year, Rhondell Corporation has accumulated E & P of $66,000. Current E & P for the year is $198,000, 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 $105,600 ($52,800 to Elizabeth and $52,800 to Jonathan) on April 30 and a total of $184,800 ($92,400 to Jonathan and $92,400 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.

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.

From Current E & P $ From Accumulated E & P $ Treated as Return of Capital $

April 30 distribution of $105,600 $ $ $

December 31 distribution of $184,800 $ $ $

Answer 1

Book1 - Excel Sign in o X File Home Insert Page Layout Formulas Data Review View Help Tell me what you want to do & Share Σ AutoSum X Cut Be Copy Calibri - 12 Å lili ab Wrap Text General Bad AY HA H Fill - Paste BIU- A - % Merge & Center - Insert Delete Format .00 Normal Conditional Format as Good Formatting Table Styles Neutral 20 Format Painter Clear Sort & Find & Filter - Select Editing Clipboard Font Alignment Number Cells UPDATES AVAILABLE Updates for Office are ready to be installed, but first we need to close some apps. Update now X K16 Х fix А B с D E F G Н. j K L M N O Р Q R S 1 Solution- 2 3 Particular 4 Accumulated E&P 5 Current E&P 6 Total E & P Amount($) 66000 198000 264000 7 8 Particular 9 Amount($) 30-Apr 31-Dec % 105600 36.36% 184800 63.64% 290400 100% 10 11 12 Treated as Return of Capital($) 0 26400 13 14 Particular From Current E&P($) From Accumulated E&P($) 15 Apr 30 distribution of $105600 71993 33607 16 Dec 31 distribution of $184800 126007 58793 17 18 *Treated as Return of Capital =( $290400 - $264000 ) = $26400 19 * From Current E&P (Apr-30) = 198000 * 36.36% = 71993 20 * From Accumulated E&P (Apr-30) = 105600 - 71993 = 33607 21 * From Current E&P (Dec-31) = 198000 * 63.64% = 126007 22 * From Accumulated E&P (Dec-31) = 184800-126007 = 58793 23 24 25 Sheet1 + Ready 100% O Type here to search 1 O I a () ENG 02:42 AM 18-09-2020