If Smart Company issues 1,000 shares of $5 par value common stock for $90,000, the account

a. Cash will be debited for $95,000.
b. Common Stock will be credited for $90,000.
c. Paid-in Capital in Excess of Par Value will be credited for $85,000.
d. Paid-in Capital in Excess of Par Value will be credited for $5,000.

Wave 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 $5,000 on equipment. Also, during the current year the company earned net income of $15,000 and declared cash dividends of $5,000. Compute the year-end retained earnings balance.

a. $40,000.
b. $30,000.
c. $39,000.
d. $35,000.

Which of the following statements is not true about a 4-for-1 split?

a. A stockholder with ten shares before the split owns forty shares after the split.
b. Par value per share is reduced to one-fourth of what it was before the split.
c. The market price will probably decrease.
d. Total contributed capital increases.