A calendar year corp. has substantial accumulated E&P, but it expects to incur a deficit in current E&P for the year due to significant losses in the last half of the year. A cash distribution to its shareholders on January 1 should result in a return of capital. Comment on the validity of this statement.

The statement is inaccurate.

Explanation:

Comment on the validity of this statement. LO 3 (p. 19-9).

The statement is inaccurate. When a deficit exists in current E & P and a positive balance exists in accumulated E & P, the accounts are netted at the date of distribution. If a positive balance results, the distribution is a divide to the extent of the balance. Any loss in current E & P is deemed to accrue ratably throughout the year unless the parties can show otherwise.

answer; engaging in effective public relations;

urban company reports the following information regarding its production cost: units produced 37,000 units direct labor $ 30 per unit direct materials $ 35 per unit variable overhead $ 237,000 in total fixed overhead $ 127,000 in total