On January 1 of the current year, Rhondell Corporation has accumulated E & P of...
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Accounting
On January 1 of the current year, Rhondell Corporation has accumulated E & P of $166,000. Current E & P for the year is $498,000, 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 $265,600 ($132,800 to Elizabeth and $132,800 to Jonathan) on April 30 and a total of $464,800 ($232,400 to Jonathan and $232,400 Marshall) on December 31.
Determine the allocation of the distributions by completing the table below. Assume 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 dirstibution of 265,600
December 31 districtuin of 464,800
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