Light Corporation purchased for $400,000 shares of Beer Corporation common stock (less than 5% of the outstanding Beer stock) at the beginning of the current year. It used $120,000 of borrowed money a...

Light Corporation purchased for $400,000 shares of Beer Corporation common stock? (less than? 5% of the outstanding Beer? stock) at the beginning of the current year. It used $120,000 of borrowed money and $280,000 of its own cash to make this purchase. Light paid $12,000 of interest on the debt this year. Light received a $25,000 cash dividend on the Beer stock on September 1 of the current year.

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Light Corporation purchased for $400,000 shares of Beer Corporation common stock? (less than? 5% of the outstanding Beer? stock) at the beginning of the current year. It used $120,000 of borrowed money and $280,000 of its own cash to make this purchase. Light paid $12,000 of interest on the debt this year. Light received a $25,000 cash dividend on the Beer stock on September 1 of the current year.

Requirements

Requirement a. What amount can Light deduct for the interest paid on the? loan?Light may deduct allthe interest paid on the loan.

Requirement b. What? dividends-received deduction can Light

claim with respect to the? dividend?