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  3. 42) & 43) apple corp distributes a piece of eq

42) & 43) Apple Corp distributes a piece of equipment to Sarah, its 100% shareholder....

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Accounting

42) & 43) Apple Corp distributes a piece of equipment to Sarah, its 100% shareholder. The property has a FMV of $35,000 and an adjusted basis of $15,000

42) Assuming there is sufficient E & P to treat this transaction as a dividend to Sarah, the effect of this transaction to the E & P of Apple is

a. an increase of $20,000

b. a decrease of $15,000

c. a decrease of $35,000

d. a decrease of $15,000

43) Sarah has dividend income of

a. $10,000

b. $15,000

c. $20,000

d. $35,000

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