Please help answer this question that is attached.

Q u e s t i o n H e l p Duval transfers $600,000 in cash to newly formed Sanchez Corporation for 100% of Sanchez's stock. In the first year of operations, Sanchez's taxable income before any payments to Duval is $130,000. What total amount of taxable income must Duval and Sanchez each report in the following two scenarios? a. Sanchez pays a $32,000 dividend to Duval. b. Assume that when Sanchez was formed, Duval transferred his $600,000 to the corporation for $500,000 of Sanchez stock and $100,000 in Sanchez notes. The notes are repayable in ten annual installments of $10,000 plus 2% annual interest on the unpaid balance. During the current year, Sanchez gives Duval $10,000 in repayment of the first note plus $2,000 interest. Duval reports taxable income of $ . Sanchez Corporation reports taxable income of $ Duval reports taxable income of $ . Sanchez Corporation reports taxable income of $