What effect does a redemption distribution have on the distributing corporation's e& p? a. the distributing corporation's e& p will increase by the excess of fmv over the property's e& p basis. b.the distributing corporation's e& p is increased by a percentage that equals the outstanding stock redeemed. c.if the redemption is treated as a sale or exchange, the corporation must reduce its e& p by the portion of the current and accumulated e& p balances attributable to the redeemed stock. d.both a and c

Lusk corporation produces and sells 14,300 units of product x each month. the selling price of product x is $25 per unit, and variable expenses are $19 per unit. a study has been made concerning whether product x should be discontinued. the study shows that $72,000 of the $102,000 in monthly fixed expenses charged to product x would not be avoidable even if the product was discontinued. if product x is discontinued, the annual financial advantage (disadvantage) for the company of eliminating this product should be: