Jayhawk Company reports current E&P of $465,000 and accumulated E&P of negative $315,000. Jayhawk distributed $542,500 to its sole shareholder, Christine Rock, on the last day of the year. Christines tax basis in her Jayhawk stock is $76,250.

a. How much of the $542,500 distribution is treated as a dividend to Christine?

b. What is Christines tax basis in her Jayhawk stock after the distribution?

c. What is Jayhawks balance in accumulated E&P on the first day of next year?