Omega Corporation is formed in 2006. Its current E&P and distributions for each year through 2010 are as follows: Is the distribution made from current or accumulated E&P? At the beginning of 2011, what is accumulated E&P?

Question

Omega Corporation is formed in 2006. Its current E&P and distributions for each year through 2010 are as follows:  Is the distribution made from current or accumulated E&P? At the beginning of 2011, what is accumulated E&P?

Quizplus · Accepted Answer

The Answer is The $18,000 distribution is made from 2009's current E&P. At the beginning of 2010, Omega's accumulated E&P is $28,000, (- $20,000 + $30,000 + $36,000 - $18,000). At the beginning of 2011, Omega's accumulated E&P is $44,000, ($28,000 + $16,000).

Omega Corporation Is Formed in 2006