! Required information Problem 07-40 (LO 07-2) (Algo) [The following information applies to the questions displayed below.] Lone Star Company is a calendar-year corporation, and this year Lone Star reported $160,000 in current E&P that accrued evenly throughout the year. At the beginning of the year, Lone Star's accumulated E&P was $19,200. At the beginning of the year, Lone Star's sole shareholder was Matt. Lone Star declared $48,000 in cash distributions on each of the following dates: March 31, June 30, September 30, and December 31. Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign. Problem 07-40 Part a (Algo) a. How much of the $192,000 in total distributions will be treated as dividends? Dividends b. Suppose that Matt sold half of the shares to Chris on June 1st for $46,000. How much dividend income will Matt recognize this year? Dividend recognized c. If Matt's basis in the Lone Star shares was $7,240 at the beginning of the year, how much capital gain will he recognize on the sale and distributions from Lone Star? Capital gain recognized on the sale and distribution