Shares of stock and stock redemption

Reference no: EM13143757

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 $1,000 per share. Amata paid $300 per share for her Kingbird 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 of the above.

Reference no: EM13143757

Questions Cloud

Probability that more than one orders filled incorrectly : A local fast-food restaurant has determined that 10% of drive-thru orders are filled incorrectly. Suppose 5 orders are randomly selected. What is the probability that more than one of the orders is filled incorrectly?

Factory overhead controllable variance : Actual fixed overhead was $360,000 and actual variable overhead was $170,000. Actual production was 11,700 units. Compute the factory overhead controllable variance.

How does the practice of female : How does the practice of female circumcision differ from the other practices identified in the readings? What is it about this practice that makes it illegal

What properties do homologous chromosomes share : What properties do homologous chromosomes share? a. size or length b. centromere position c. location of genes along its length d. all of the above.

Shares of stock and stock redemption : 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 $1,000 per share. Amata pa..

What is the break-even sales if costs fixed : fixed costs are $250,000, the unit selling price is $20, and the unit variable costs are $16, what is the break-even sales (units) if fixed costs are reduced by $40,000?

What amount should inventory be reported : when the parts were received and payment was made, the spot rate was $.28 per stickle. At what amount should inventory be reported?

How vesicles are secreted from golgi apparatus : Given what you know about the differences between prokaryotic cells and eukaryotic cells, which of the listed processes is possible to study in bacteria? a. formation of the endoplasmic reticulum b. DNA replication c. how vesicles are secreted fro..

Number of equivalent units of production : If Department K had 2,000 units, 45% completed, in process at the beginning of the period, 12,000 units were completed during the period, and 1,200 units were 40% completed at the end of the period, what was the number of equivalent units of produ..

User Account

All Pages