Calendar Year Parent Corporation Acquired All of the Stock of SubCo

Essay

Calendar year Parent Corporation acquired all of the stock of SubCo on January 1, year 1, for $500,000. The subsidiary's operating gains and losses are shown below. In addition, a $50,000 dividend is paid early in year 2.
Complete the following chart, indicating the appropriate stock basis and excess loss account amounts. $$\begin{array} { l c c c } \text { Year } & \begin{array} { c } \text { Operating } \\\text { Gain/Loss }\end{array} & \begin{array} { c } \text { Stock } \\\text { Basis }\end{array} & \begin{array} { c } \text { Excess } \\\text { Loss } \\\text { Account }\end{array} \\1 & ( \$ 100,000 ) & ? & ? \\2 & ( \$ 150,000 ) & ? & ? \\3 & \$ 300,000 & ? & ?\end{array}$$