Problem 1:
The Rand Corporation began the current year with a retained earnings balance of $25,000. During the year, the company corrected an error made in the prior year, which was a failure to record depreciation expense of $3,000 on equipment. Also, during the current year, the company earned net income of $12,000 and declared cash dividends of $5,000. Compute the year end retained earnings balance
- $29,000
- $35,000
- $39,000
- $45,000
Problem 2: A corporation has 40,000 shares of $25 par value stock outstanding. If the corporation issues a 4-for-1 stock split, the number of shares outstanding after the split will be ________.
- 160,000 shares
- 40,000 shares
- 120,000 shares
- 10,000 shares