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Question: XYZ Corporation is a calendar-year S corporation. XYZ's form 1120S shows a non-separately stated net income of $100,000 for the year. Alex owns 60%

Question:

XYZ Corporation is a calendar-year S corporation. XYZ's form 1120S shows a non-separately stated net income of $100,000 for the year. Alex owns 60% of XYZ stock throughout the year.

The following information is obtained from the corporate records

Sales$176,000
Dividends received1,000
Tax exempt municipal bond interest income2,000
Short-term capital gain from the scale of ABC Corp Stock4,000
Section 1231 gain5,000
Section 1245 gain6,000
Charitable contributions(8,000)
Cost of goods sold(9,000)
Long-term capital loss from the sale of DEF Corp stock(30,000)
Depreciation expense(11,000)
Administrative expenses(12,000)
Salary paid to Nathan(50,000)
Alex's beginning stock basis80,000
Alex's additional stock purchases during the year20,000
Year-end cash distribution to Alex40,000
Beginning AAA balance10,000

a) Calculate XYZ's ending AAA Balance.

b) Calculate Alex's ending stocks basis.

c) Assume if the sales were $96,000 and inseparably stated income totaled $20,000, what was XYZ's ending balance?

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