Computation of earnings and profits


Problem: How do current earnings and profits differ from accumulated earnings and profits? Is there any reason to keep the two accounts separate? How does a corporation's computation of earnings and profits?

How do current earnings and profits differ from accumulated earnings and profits? Is there any reason to keep the two accounts separate? How does a corporation's computation of earnings and profits differ based on the tax treatment of a stock redemption as a dividend as opposed to an exchange?

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Accounting Basics: Computation of earnings and profits
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