Allgood Textiles, Inc. started the year with $200,000 in accumulated earnings and profit. During the year,...

Allgood Textiles, Inc. started the year with $200,000 in accumulated earnings and profit. During the year, it earned $75,000 from its business operations, received a $2,000 federal income tax refund, received a $10,000 contribution to capital from its shareholders, paid $13,750 in federal income taxes, and could not deduct $1,000 of its meal expenses. What is the amount of its accumulated earnings and profits at the end of the year?

Expert Solution

Beginning accumulated earnings and profits at the beginning of year	200000
Revenue earned	75000
Refund of Income tax (is not a revenue ,it is just a refund of excess tax you have paid)	0
capital contribution is not a part of accumulated profit	0
Federal income tax paid	(13750)
meal expense not yet deducted	(1000)
Amount of its accumulated earnings and profits at the end of the year	260250

jeff jeffy answered 3 years ago

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