Towne, Inc., a calendar year S corporation, holds AAA of $627,050 at the beginni

Question

Towne, Inc., a calendar year S corporation, holds AAA of $627,050 at the beginning of 2015. During the year, the following items occur:

Calculate Towne's ending AAA balance.

Sales income $216,000 Loss from real estate operations (4,000) Officers' life insurance proceeds 100,000 Premiums paid for officers' life insurance (3,600) Dividend income 17,000 Interest income 3,000 Charitable contributions (22,000) Section 179 depreciation expense (2,500) Administrative expense (35,000) Cash distribution to shareholders (73,220)

Explanation / Answer

Beginning AAA$627,050

Add:Sales income $216,000

Dividend income 17,000

Interest income3,000

Less:Real estate loss $ 4,000

Charitable contributions 22,000

§ 179 expense 2,500

Administrative expenses 35,000

Less distributions (73,220)

Ending AAA $726,330

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