Reference no: EM132497099

Question - Cambra, Inc., is a calendar year S corporation. Cambra's Form 1120S shows non-separately stated ordinary income of $80,000 for the year. Andy owns 40% of the Cambra stock throughout the year. The following information is obtained from the corporate records:

Tax-exempt interest income $3,000

Salary paid to Andy (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)

Andy's beginning stock basis 32,000

Andy's additional stock purchases 9,000

Beginning AAA 31,000

Andy's loan to corporation 20,000

Required -

a. Compute Cambra's book income or loss.

b. Compute Andy's ending stock basis.

c. Calculate Cambra's ending AAA balance.