Quail Corporation was created six years ago through contributions from Kasha ($900,000) and Frank ($100,000), In a transaction qualifing as a reorganization, Quail exchanges all of its assets currenty valued at $1,800,000( basis of $1,200,000) for Covey Corporation stock valued at $1,700,000 plus $100,000 in Covey bonds. Quall distributes the Covey stock and bonds proportionately to Frank and kashs in exchange for their stock in Quall. Quali's current and accumulated E \& P before the reorganization amounts to $70,000. If an amount is zero, enter 00. a. Complete the computations below for Kasha and Frank regarding this transaction. Kasha: Frank: How do Kasha and Frank treat this transaction for income tax purposes? Kasha: Ordinary income: s How do Kasha and Frank treat this transaction for income tax purposes? Kasha: Ordinary income: ? Dvicend income: $ Copital gain income: 1 x Frank: Ordinary income: 1 Dividend income: 9 Capital gain income: 1 x Rendowa - Cleck My wosk b. Complete the statement below regarding how Quall and Covey should treat this transaction, induding Covey's basis in the assets it recelves from Quail. Qual recognizes 4 gain or loss on the reorganization. Covey's basis in the Quail assets is. x