This year, Sooner Company reports current E&P of negative $430,000. Its accumulated E&P at the beginning of the year was $356,000. Sooner distributed $712,000 to its sole shareholder, Boomer Wells, on June 30 of this year. Boomers tax basis in his Sooner stock is $119,500.

a. How much of the $712,000 distribution is treated as a dividend to Boomer?

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