Canary Corporation Has 1,000 Shares of Stock Outstanding

Canary Corporation has 1,000 shares of stock outstanding. It redeems in a qualifying stock redemption 350 shares for $400,000 at a time when it has paid-in capital of $100,000 and E & P of $1 million. What would be the charge to Canary's E & P as a result of the redemption?

A) $400,000.
B) $350,000.
C) $140,000.
D) $40,000.
E) None of the above.