ABC Corp. paid two cash distributions during year 5. The first was $42,000, and the second was $33,000. Accumulated earnings and profits (E & P) at the end of year 4 were $10,000. Current E & P for year 5 is $30,000. How will the first distribution be allocated between current E & P and accumulated E & P?

Current E & P

Accumulated E & P

a. $16,800 $25,200

b. $16,800 $10,000

c. $25,200 $16,800

d. $30,000 $10,000