Problem 07-55 (LO 07-4) (Static) [The following information applies to the questions displayed below.] Bedrock Incorporated is owned equally by Barney and his wife Betty, each of whom holds 1,000 shares in the company. Betty wants to reduce her ownership in the company, and it was decided that the company will redeem 500 of her shares for $25,000 per share on December 31 of this year. Betty's tax basis in each share is $5,000. Bedrock has current E&P of $10,000,000 and accumulated E\&P of $50,000,000. Problem 07-55 Part a (Static) a. What are the amount and character (capital goin or dividend) recognized by Betty because of the stock redemption, assuming only the "substantially disproportionate with respect to the sharehoider' test is applied