Problem $7-64($LO $7-4)($Algo$)$

Spartan Corporation redeemed $25$ percent of its shares for $$3,000$ on July $1$ of this year, in a transaction that qualified as an exchange

under $$302($a$).$ Spartan reported accumulated E&P at the beginning of the year of $$3,000$ and current E&P at year end was $$17,900.$

Spartan made dividend distributions of $$2,700$ on June $1$ and $$5,700$ on August $31.$ Determine the beginning balance in Spartan's

accumulated E&P at the beginning of the next year. See Revenue Rule $74-338$ and Revenue Rule $74-339$ for help in making this

calculation.

Note: Round your intermediate calculations to the nearest whole dollar amount.

Accumulated E&P at the beginning of the next year