Question: Problem 12-35 (LO. 6, 8, 9) Drop, Inc., a calendar year S corporation, distributes $16,000 cash to its only shareholder, Luetta, on December 31. Luetta's

Problem 12-35 (LO. 6, 8, 9) Drop, Inc., a calendar year S corporation, distributes $16,000 cash to its only shareholder, Luetta, on December 31. Luetta's basis in her stock is $20,000. Drop's AAA balance is $9,000, and Drop holds $3,000 of AEP and $1,000 of OAA before the distribution. Complete the following chart shown below. If an amount is zero, enter "O". Beginning balance Distribution from Account Effect on Stock Basis Balance after Distribution From AAA account $9,000 From AEP account $3,000 From OAA account $1,000 $1 All From Luetta's stock basis $20,000 $1

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