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4. Puffin Corporation makes a property distribution to its sole shareholder, Bonnie. The property distributed is a car (basis of $30,000; fair market value of $40,000) that is subject to a $6,000 liability which Bonnie assumes. Puffin has no accumulated E & P and $70,000 of current E & P from other sources during the year. How much dividend should Bonnic report? a $4,000 b. $6,000 c. $10,000 d. $36,000 e. None of the above

4. Puffin Corporation makes a property distribution to its sole shareholder, Bonnie. The property distributed is a car (basis of $30,000; fair market value of $40,000) that is subject to a $6,000 liability which Bonnie assumes. Puffin has no accumulated E & P and $70,000 of current E & P from other sources during the year. How much dividend should Bonnic report? a $4,000 b. $6,000 c. $10,000 d. $36,000 e. None of the above

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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4. Puffin Corporation makes a property distribution to its sole shareholder, Bonnie. The property distributed is a car (basis of $30,000; fair market value of $40,000) that is subject to a $6,000 liability which Bonnie assumes. Puffin has no accumulated E & P and $70,000 of current E & P from other sources during the year. How much dividend should Bonnic report? a. $4,000 b. $6,000 c. $10,000 d. $36,000 e. None of the above
Transcribed Image Text:4. Puffin Corporation makes a property distribution to its sole shareholder, Bonnie. The property distributed is a car (basis of $30,000; fair market value of $40,000) that is subject to a $6,000 liability which Bonnie assumes. Puffin has no accumulated E & P and $70,000 of current E & P from other sources during the year. How much dividend should Bonnic report? a. $4,000 b. $6,000 c. $10,000 d. $36,000 e. None of the above
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