Question: On June 27, 2010, Brite Co. distributed to its common stockholders 100,000 outstanding 100,000 outstanding common shares of its investment in Quik, Inc., an unrelated

On June 27, 2010, Brite Co. distributed to its common stockholders 100,000 outstanding 100,000 outstanding common shares of its investment in Quik, Inc., an unrelated party. The carrying amount on Brites books of Quicks $1 par common stock was $2 per share. Immediate after the distribution, the market price of Quiks stock was $2.50 per share. In its income statement for the year ended June 30, 2010, what amount should Brite report as gain before income taxes on disposal of the stock? a. $250,000 b. $200,000 c. $ 50,000 d. $0

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