34. Jayhawk Company reports current E&P of

$300,000 and a deficit in accumulated E&P of

($200,000). Jayhawk distributed $400,000 to its sole shareholder, Christine Rock, on the last day of the year. Christine’s tax basis in her Jayhawk stock is $75,000.

a. How much of the $400,000 distribution is treated as a dividend to Christine?

b. What is Christine’s tax basis in her Jayhawk stock after the distribution?

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