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)
