If the beginning balance in OAA is zero and the following transactions occur, what is the ending OAA balance? $\begin{array}{lc}
\text { Depreciation recapture income } & \$ 21,000 \
\text { Payroll tax penalty } & 4,200 \
\text { Tax-exempt interest } & 5,700 \
\text { Nontaxable life insurance proceeds } & 3,900 \
\text { Insurance premiums paid (nondeductible) } & 2,900\
\text { Charitable contributions}&17,000\
\end{array}$
A) $1,300.
B) $6,700.
C) $23,300.
D) $27,500.

Question

If the beginning balance in OAA is zero and the following transactions occur, what is the ending OAA balance? $\begin{array}{lc}
\text { Depreciation recapture income } & \$ 21,000 \
\text { Payroll tax penalty } & 4,200 \
\text { Tax-exempt interest } & 5,700 \
\text { Nontaxable life insurance proceeds } & 3,900 \
\text { Insurance premiums paid (nondeductible) } & 2,900\
 \text { Charitable contributions}&17,000\
\end{array}$
A) $1,300.
B) $6,700.
C) $23,300.
D) $27,500.

Quizplus · Accepted Answer

The ending balance of the Other Adjustments Account (OAA) is calculated by adding or subtracting specific transactions that affect this account. In this case, the transactions that affect the OAA are: - Depreciation recapture income (+$21,000), - Payroll tax penalty (-$4,200), - Tax-exempt interest (does not affect OAA), - Nontaxable life insurance proceeds (does not affect OAA), - Insurance premiums paid (nondeductible) (-$2,900), - Charitable contributions (does not affect OAA directly for OAA purposes). Therefore, the ending balance is $21,000 - $4,200 - $2,900 = $13,900. However, since the correct answer is not listed, it appears there was a mistake in the calculation or interpretation of the options provided. The correct approach involves only considering items that directly affect the OAA, leading to the conclusion that there might have been an error in the question or answer choices as presented.

If the Beginning Balance in OAA Is Zero and the Following