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Broadbill Corporation (E&P of $1,650,000) has 1,000 shares of common stock outstanding. The shares are owned by the following: Tammy 300 shares Yvette 400 shares

Broadbill Corporation (E&P of $1,650,000) has 1,000 shares of common stock outstanding. The shares are owned by the following: Tammy 300 shares Yvette 400 shares

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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Broadbill Corporation (E&P of $1,650,000) has 1,000 shares of common stock outstanding. The shares are owned by the following: Tammy 300 shares Yvette 400 shares Jeremy 300 shares. Each paid $50/share for the stock four years ago. In the current year, Broadbill distributes $75,000 to Tammy in redemption of 150 of her shares. Is the distribution a dividend or a sale if: a. Tammy and Jeremy are mother and son. b. Tammy, Yvette, and Jeremy are siblings.
Transcribed Image Text:Broadbill Corporation (E&P of $1,650,000) has 1,000 shares of common stock outstanding. The shares are owned by the following: Tammy 300 shares Yvette 400 shares Jeremy 300 shares. Each paid $50/share for the stock four years ago. In the current year, Broadbill distributes $75,000 to Tammy in redemption of 150 of her shares. Is the distribution a dividend or a sale if: a. Tammy and Jeremy are mother and son. b. Tammy, Yvette, and Jeremy are siblings.
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