Donna owns 800 shares of common stock in macaw corporation
Course:- Accounting Basics
Reference No.:- EM13601523

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Donna owns 800 shares of common stock in Macaw Corporation (adjusted basis of $40,000). She receives a 5% stock dividend when the stock is selling for $60 a share.

a. How much gross income must Donna recognize because of the stock dividend?
b. What is Donna's basis for her 840 shares of stock?

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