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    C Corporation Conversion

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    Mishra converted from a C corporation to an S corporation on January 1, when its accumulated
    E&P was $161,000. This year, Mishra generated an $11,000 operating loss
    and distributed $25,000 cash to its shareholders.
    a. How much of the distribution was a dividend?
    b. Compute Mishra's accumulated E&P and AAA on January 1 of the next year.

    © BrainMass Inc. brainmass.com June 3, 2020, 8:53 pm ad1c9bdddf
    https://brainmass.com/business/accounting/c-corporation-conversion-157087

    Solution Preview

    Dear Student,

    Once the company elects to be an S corporation, E&P = $161,000, AAA = $0.
    The company ...

    Solution Summary

    This solution explains how much of the distribution was a dividend and computes Mishra's accumulated E&P and AAA on January of the next year.

    $2.19

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