b. Suppose that Matt sold half of his shares to Chris Coop on June 1st for $40,000.How much dividend income will Matt recognize this year?Dividend recognizedShow Transcribed TextGoc. If Matt's basis in his Lone Star shares was $7,000 at the beginning of the year,how much capital gain will he recognize on the sale and distributions from LoneStar?Capital gain recognized on the sale and distribution !Required information[The following information applies to the questions displayedbelow.]Lone Star Company is a calendar-year corporation, and this yearLone Star reported $100,000 in current E&P that accrued evenlythroughout the year. At the beginning of the year, Lone Star'saccumulated E&P was $12,000. At the beginning of the year, LoneStar's sole shareholder was Matt McCon. Lone Star declared$30,000 in cash distributions on each of the following dates:March 31, June 30, September 30, and December 31. (Leave noanswer blank. Enter zero if applicable. Negative amount shouldbe indicated by a minus sign.)a. How much of the $120,000 in total distributions will be treated as dividends?Dividends

A dividend distribution is the amount which has been paid by the company from the retained earnings…

b. Suppose that Matt sold half of his shares to Chris Coop on June 1st for $40,000. How much dividend income will Matt recognize this year? Dividend recognized Show Transcribed Text c. If Matt's basis in his Lone Star shares was $7,000 at the beginning of the year, how much capital gain will he recognize on the sale and distributions from Lone Star?

b. Suppose that Matt sold half of his shares to Chris Coop on June 1st for $40,000. How much dividend income will Matt recognize this year? Dividend recognized Show Transcribed Text c. If Matt's basis in his Lone Star shares was $7,000 at the beginning of the year, how much capital gain will he recognize on the sale and distributions from Lone Star?

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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