Answer:
Decline in Agee's total paid up capital is $14,000,000
Explanation:
<u>Computation of decline in Paid-Up capital</u>
Particulars                                        Amount
Cash paid for first repurchase      $10,000,000
(1 million shares*$10)
Value of first purchase                   $12,000,000
(1 million * $12                                 <u>                        </u>
Benefit on first repurchase            $2,000,000
Cash paid for second repurchase = $16,000,000
(1 million shares * $16)
Value of second repurchase            $12,000,000
(1 million * $12)                                    <u>                        </u>
Reduction in Total paid-in-capital   <u>$14,000,000</u> ($2 million + $12 million)