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Calculate the reduction to Caramels E-P

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Problem - Caramel Corporation has 5,000 shares of stock outstanding. In a qualifying stock redemption, Caramel distributes $145,000 in exchange for 1,000 of its shares. At the time of the redemption, Caramel has paid-in capital of $800,000 and E & P of $300,000. Calculate the reduction to Caramel's E & P as a result of the distribution.

Reference no: EM132646724

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