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eems 1,000 shares from Juan for $250,00 pital gain of $250,000. pital gain of $190,000. dend income of $190,000. dend income of $250,000.

eems 1,000 shares from Juan for $250,00 pital gain of $250,000. pital gain of $190,000. dend income of $190,000. dend income of $250,000.

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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Bristlebird Corporation (E & P of $700,000) has 3,000 shares of common stock outstanding. Juan owns 1,500 shares and his spout Roberta, owns 1,500 shares. Both Juan and Roberta have a basis of $90,000 in their Bristlebird stock. In the current year, Bristleb Corporation redeems 1,000 shares from Juan for $250,000. With respect to the distribution in redemption of the Bristlebird stock: Oa. Juan has a capital gain of $250,000. Ob. Juan has a capital gain of $190,000. Oc. Juan has dividend income of $190,000. d. Juan has dividend income of $250,000.
Transcribed Image Text:Bristlebird Corporation (E & P of $700,000) has 3,000 shares of common stock outstanding. Juan owns 1,500 shares and his spout Roberta, owns 1,500 shares. Both Juan and Roberta have a basis of $90,000 in their Bristlebird stock. In the current year, Bristleb Corporation redeems 1,000 shares from Juan for $250,000. With respect to the distribution in redemption of the Bristlebird stock: Oa. Juan has a capital gain of $250,000. Ob. Juan has a capital gain of $190,000. Oc. Juan has dividend income of $190,000. d. Juan has dividend income of $250,000.
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