$123$ AESOP CORP.

INCOME STATEMENT

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EXHIBITS

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exhibits

Balance Sheet

Income Statement

Schedule of Distributions to Shareholder

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Aesop Corp. was a C corporation until it elected S status on January $1,$ Year $2.$ Aesop had $$40,000$ of accumulated earnings and profits at the end of Year $1$ and made no distributions in Year $1$ or Year $2.$ At the end of Year $2,$ the sole shareholder's basis in her stock was $$35,000.$

Using the information provided, complete the table below. For each annual shareholder distribution in Years $3,4,$ and $5,$ enter the amount of the increase or decrease to the shareholder's stock basis and the $S$ corporation's accumulated earnings and profits account in columns B and C$,$ respectively. In column D$,$ select the type of income recognized by the shareholder from the drop$-$down menus provided. Enter increases as positive whole numbers and decreases as negative whole numbers. If an amount is zero, enter a zero $(0).$

$\backslash$table$[[,$A$,$B$,$C$,$D$],[1,$Distributions to Shareholder,$\backslash$table$[[$Change in$],[$Shareholder$\text{'}$s$],[$Stock Basis$]],\backslash$table$[[$Change in$],[$Corporate$],[$Accumulated$],[$E&P$]],\backslash$table$[[$Type of Income$],[$Recognized by$],[$Shareholder$]]],[2,$Year $3$ distribution to shareholder,$123,123,],[3,$Year $4$ distribution to shareholder,$123,123,],[4,$Year $5$ distribution to shareholder,$123,123,]]$