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57. First Co. had a deficit in E&P of $90,000 on December 31 last year....

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Accounting

57. First Co. had a deficit in E&P of $90,000 on December 31 last year. Its taxable income was $180,000 for this year. Cash dividends on common stock totaling $80,000 were paid in December this year. Modern should report the distribution to its shareholders as:

1. Return of capital 100 percent

2. Dividends 80/90, return of capital 10/90

3. Dividends 50 percent, return of capital 50 percent

4. Dividend

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