Lone Star Con
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![applies to the questions displayed below.]
Lone Star Company is a calendar-year corporation, and this year Lone Star reported $104,000 in current E&P that accrued
evenly throughout the year. At the beginning of the year, Lone Star's accumulated E&P was $12,480. Lone Star declared
$31,200 in cash distributions on each of the following dates: April 1, July 1, October 1, and December 31.
Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.
b. Suppose that Matt owned all Lone Star's shares at the beginning of the year and sold half of the shares to Chris on June 1st for
$41,600. How much dividend income will Matt recognize this year?
Answer is complete but not entirely correct.
Dividend recognized
$ 166,400 X](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffca72ff8-b803-444c-a12c-4ba5cca91dd0%2Fc299bf3d-5314-4e7f-908d-e8c6e3c4b68d%2F1vstcsf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:applies to the questions displayed below.]
Lone Star Company is a calendar-year corporation, and this year Lone Star reported $104,000 in current E&P that accrued
evenly throughout the year. At the beginning of the year, Lone Star's accumulated E&P was $12,480. Lone Star declared
$31,200 in cash distributions on each of the following dates: April 1, July 1, October 1, and December 31.
Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.
b. Suppose that Matt owned all Lone Star's shares at the beginning of the year and sold half of the shares to Chris on June 1st for
$41,600. How much dividend income will Matt recognize this year?
Answer is complete but not entirely correct.
Dividend recognized
$ 166,400 X
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