What is the maximum amount of the distribution


Company A, a calender year corporation, has a deficit in current E & P of $100,000 and a $290,000 positive balance in accumulated E & P. If Company A determines that a $500,000 distribution to its shareholders is appropriate at some point during the year, what is the maximum amount of the distribution that could potentially be treated as a dividend?

a. $0

b. $190,000

c. $240,000

d. $290,000

e. None of the above

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Accounting Basics: What is the maximum amount of the distribution
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