Hawkeye Company reports current E&P of $300,000 this year and accumulated E&P at the beginning of the year of $200,000. Hawkeye distributed $400,000 to its sole shareholder, Ray Kinsella, on December 31 of this year. Rays tax basis in his Hawkeye stock is $75,000.

a.	How much of the $400,000 distribution is treated as a dividend to Ray? 178,900
b.	What is Rays tax basis in his Hawkeye stock after the distribution?