If an S corporation's beginning balance in OAA is zero, and the following transactions occur, what is the ending OAA balance?

Question

Quizplus · Accepted Answer

- Beginning balance in OAA is zero
- $8,000 of net income is allocated to OAA
- $1,400 of distributions are made to shareholders
- $200 of prior period adjustments are allocated to OAA
- $1,200 of unrealized losses on available-for-sale securities are allocated to OAA
Ending balance in OAA = Beginning balance + Net income allocated to OAA - Distributions to shareholders + Prior period adjustments allocated to OAA + Unrealized losses allocated to OAA
= 0 + 8,000 - 1,400 + 200 + 1,200
= $7,600

If an S Corporation's Beginning Balance in OAA Is Zero