Electro Corporation has $400$ shares of stock outstanding. Karyn owns $160$ of these shares, and unrelated individuals own the remaining $240$ shares. Electro redeems $40$ of Karyn's shares for $$160,000.$ In the year of the redemption, Electro has $$170,000$ of paid$-$in capital and $$220,000$ of E&P$.$

Requirements

a$.$ How does the redemption affect Electro's E&P balance if the redemption qualifies for sale treatment?

b$.$ How does the redemption affect Electro's E&P balance if the redemption does not qualify for sale treatment?

Requirements a and $b.$ How does the redemption affect Electro's E&P balance if the redemption qualifies for sale treatment and if the redemption does not qualify for sale treatement? $($If an input field is not used, leave the input field empty. Do not select a label or enter a zero.$)$

Redemption qualifies for sale treatment

Redemption does not qualify for sale treatment

$\backslash$table$[[\backslash$table$[[$Effect on$],[$E&P$]],\backslash$table$[[$By this$],[$amount$]],\backslash$table$[[$Remaining$],[$amount $($if$],[$applicable$)]],\backslash$table$[[$Treatment of remaining$],[$amount$]]],[$Decrease$,22,000,138,000,$Decreases capital account$]]$