Question
A) EG Corporation redeemed 200 shares of stock from one of its shareholders in exchange for $190,000. The redemption represented 20% of the corporations outstanding
A) EG Corporation redeemed 200 shares of stock from one of its shareholders in exchange for $190,000. The redemption represented 20% of the corporations outstanding stock. The redemption was treated as an exchange by the shareholder. EGs total E&P at the time of the distribution was $2,000,000. By what amount does EG reduce its total E&P as a result of the redemption?
B)EG Corporation redeemed 200 shares of stock from one of its shareholders in exchange for $190,000. The redemption represented 20% of the corporations outstanding stock. The redemption was treated as an exchange by the shareholder. EGs total E&P at the time of the distribution was $400,000. By what amount does EG reduce its total E&P as a result of the redemption?
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College Accounting Chapters 1-29
Authors: John J. Wild, Vernon J. Richardson, Ken W. Shaw
2nd Edition
0077398173, 978-0077398170
