Problem 18-64 (LO 18-4) (Algo)

Spartan Corporation redeemed 25 percent of its shares for $2,100 on July 1 of this year, in a transaction that qualified as an exchange under IRC 302(a). Spartan's accumulated E&P at the beginning of the year was $2,100. Its current E&P is $14,500. Spartan made dividend distributions of $3,600 on June 1 and $5,400 on August 31. Determine the beginning balance in Spartan's accumulated E&P at the beginning of the next year. See Revenue Rule 74-338 and Revenue Rule 74-339 for help in making this calculation. Note: Round your intermediate calculations to the nearest whole dollar amount.

Accumulated E&P at the beginning of the next year:

(PLease hlp)