At the beginning of the current Year ("Year 1"), C Corporation ("C") had two shareholders, A and B, and accumulated E&P of $10,000. A's adjusted basis in his shares of C stock was $200 and B's adjusted basis in her shares of C stock was $3,000. During the current Year C had a capital gain of $4,000 on July 1, Year 1, but had no other income or deductions. C distributed $4,000 cash to each of its two shareholder's, A and B, on March 1, Year 1. On October 1 of Year 1, B sold her shares in C to D for $8,000. On December 5, Year 1, C distributed $4,000 cash to each of A and D.

a. What dividend income does A recognize, if any, during Year 1?

b. Does A recognize any income other than dividend income?

c. What is X' accumulated E&P at the beginning of Year 2?