Cougar, Inc., is a calendar year S corporation. Cougar's Form 1120S shows non-separately stated ordinary income of $80,000 for the year. Johnny owns 40% of the Cougar stock throughout the year. The following is obtained from the corporate records.
Tax exempt - $3,000
Salary paid to Johnny - (52,000)
Charitable Contributions - (6,000)
Dividends received from a foreign corporation - 5,000
Short-term capital loss - (6,000)
Depreciation recapture income - 11,000
Refund of prior state income taxes - 5,000
Cost of goods sold - (72,000)
Long-term capital loss - (7,000)
Administrative expenses - (18,000)
Long-term capital gain - 14,000
Selling Expenses - (11,000)
Johnny's beginning stock basis - 32,000
Johnny's additional stock purchase - 9,000
Beginning AAA - 31,000
Johnny's loan to corporation - 20,000
a. Compute Cougar's book income or loss.
b. Compute Johnny's ending stock basis.
c. find out Cougar's ending AAA balance.