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Required information

Problem $18-45($LO $18-2)($Algo$)$

$[$The following information applies to the questions displayed below.$]$

Volunteer Corporation reported taxable income of $$410,000$ from operations this year. During the year, the company made a distribution of land to its sole shareholder, Rocky. The land's fair market value was $$80,000$ and its tax and E&P basis to Volunteer was $$57,500.$ Rocky assumed a mortgage attached to the land of $$16,000.$ The company had accumulated E&P of $$880,000$ at the beginning of the year.

Problem $18-45$ Part c $($Algo$)$

c$.$ Compute Volunteer's accumulated E&P at the beginning of next year.

Answer is complete but not entirely correct.

Accumulated E&P at the beginning of next year

$$1,180,175*$