Greg Corporation,an accrual method taxpayer,had accumulated earnings and profits of $300,000 as of December 31,last year.For its current tax year,Greg's books and records reflect the following: Based on the above,what is the amount of Greg Corporation's current earnings and profits for this year?

Question

Greg Corporation,an accrual method taxpayer,had accumulated earnings and profits of $300,000 as of December 31,last year.For its current tax year,Greg's books and records reflect the following:  Based on the above,what is the amount of Greg Corporation's current earnings and profits for this year?

Quizplus · Accepted Answer

To calculate the current earnings and profits, we start with the beginning balance of last year's earnings and profits ($300,000) and add the current year's taxable income ($100,000) and subtract any distributions or dividends declared ($-25,000). So, the current earnings and profits for Greg Corporation would be $375,000 - $250,000 = $124,500. Therefore, the best choice is C.

Greg Corporation,an Accrual Method Taxpayer,had Accumulated Earnings and Profits of $300,000