36. This year Bobcat Company reports a deficit in current E&P of ($300,000) that accrued evenly throughout the year. At the beginning of the year, Bobcat’s accumulated E&P was

$200,000. Bobcat distributed $200,000 to its sole shareholder, Melanie Rushmore, on June 30 of this year. Melanie’s tax basis in her Bobcat stock was $75,000.

a. How much of the $200,000 distribution is treated as a dividend to Melanie?

b. What is Melanie’s tax basis in her Bobcat stock after the distribution?

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