24- If the beginning balance in OAA is zero and the following transactions occur, what is the ending OAA balance?

Depreciation recapture income	$21,000
Payroll tax penalty	4,200
Tax-exempt interest	5,700
Nontaxable life insurance proceeds	3,900
Insurance premiums paid (nondeductible)	2,900
Charitable contributions	17,000

a.$6,700.

b.$23,300.

c.$1,300.

d.$27,500.

25- Cherry, Inc., an S corporation, holds an AAA balance of $614,000 at the beginning of the tax year. During the year, the following items occur.

Operating income $501,000

Interest income6,500

Dividend income 13,020

Municipal bond interest income 6,000

Long-term capital loss from sale of investment land 7,400

Section 179 depreciation deduction 6,000

Charitable contributions 19,000

Cash distributions 57,000

What is Cherry Inc.’s ending AAA balance?

Answer:..................................