McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 54

Sooner Company reports current E P of negative $300,000 and accumulated E P of $200,000.Sooner distributed $400,000 to its sole shareholder, Boomer Wells, on June 30, 2012.Boomer's tax basis in his Sooner stock is $75,000.a.How much of the $400,000 distribution is treated as a dividend to Boomer?
b.What is Boomer's tax basis in his Sooner stock after the distribution?
c.What is Sooner's balance in accumulated E P as of January 1, 2012?