Problem related to stock redemption

Assignment Help Accounting Basics

Reference no: EM13145499

Kingbird Corporation ( E & P of $800,000) has 1,000 shares of stock outstanding. That stock is held by Amata (550 shares) and Esteban (450 shares), who are unrelated individuals. Kingbird redeems 200 of Amata's shares for $1000 per share. Amata paid $300 per share for her stock nine years ago. Which of the following statements is correct with respect to the stock redemption?

A. Amata has dividend income of $200,000

B. Amata has a long-term capital gain of $140,000

C. Amata's basis in her remaining 350 shares is $60,000

D. Kingbird reduces its E & P by $200,000

E. None

Reference no: EM13145499

Questions Cloud

Compute the final celsius temperature of hydrogen : Calculate the final Celsius temperature of hydrogen chloride gas if 0.500 L at 35°C and 0.950 atm is heated

What is the limiting reactant : 10.0 grams of sodium bicarbonate reacts with 50.0 mL of 2 M acetic acid, what is the limiting reactant? what reactant is in excess, and by how much? what volumeof carbon dioxide gas would form?

What exactly is a cytoplasmic receptor : What exactly is a cytoplasmic receptor and why is a small nonpolar molecule the most likely candidate to have a cytoplasmic receptor?

Find support the claim that defective rate exceeds : Uuse a level of significance of a =0.01 to test to see if you have sufficient evidence to support the claim that the defective rate exceeds 3%.

Problem related to stock redemption : Kingbird redeems 200 of Amata's shares for $1000 per share. Amata paid $300 per share for her stock nine years ago. Which of the following statements is correct with respect to the stock redemption?

What are the predicted numbers of offspring : What would be the predicted numbers of offspring with these four genotypes if the parental generation had been AAbb and aaBB instead of AABB and aabb?

Relationship between marginal revenue and elasticity : The relationship between marginal revenue and elasticity is when demand is elastic marginal revenue is positive and when demand is inelastic marginal revenue is negative

Define what is the final celsius temperature of nitric oxide : What is the final Celsius temperature if 4.55 L of nitric oxide gas at 35°C is cooled until the volume reaches 1.00 L

Estimate the sampling distribution of y mean : You can estimate the sampling distribution of y mean (y with a - on top) by repeatedly taking samples of size n with replacement from the list of sample values.

User Account

All Pages