Spartan Corporation redeemed 25 percent of its shares for $4,500 on July 1 of this year, in a transaction that qualified as an exchange under $302(a). Spartan reported accumulated E&P at the beginning of the year of $4,500 and current E&P at year end was $12, 300. Spartan made dividend distributions of $3,600 on June 1 and $6,600 on August 31. Determine the beginning balance in Spartan's accumulated E&P at the beginning of the next year. See Revenue Rule 74-338 and Revenue Rule 74 - 339 for help in making this calculation.

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
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Spartan Corporation redeemed 25 percent of its shares for $4,500 on July 1 of this year, in a
transaction that qualified as an exchange under $302(a). Spartan reported accumulated E&P at
the beginning of the year of $4,500 and current E&P at year end was $12,300. Spartan made
dividend distributions of $3,600 on June 1 and $6,600 on August 31. Determine the beginning
balance in Spartan's accumulated E&P at the beginning of the next year. See Revenue Rule
74-338 and Revenue Rule 74 - 339 for help in making this calculation.
Transcribed Image Text:Spartan Corporation redeemed 25 percent of its shares for $4,500 on July 1 of this year, in a transaction that qualified as an exchange under $302(a). Spartan reported accumulated E&P at the beginning of the year of $4,500 and current E&P at year end was $12,300. Spartan made dividend distributions of $3,600 on June 1 and $6,600 on August 31. Determine the beginning balance in Spartan's accumulated E&P at the beginning of the next year. See Revenue Rule 74-338 and Revenue Rule 74 - 339 for help in making this calculation.
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