A corporation purchases 9,529 shares of its own $4 par common stock for $28 per share, recording it at cost. What will be the effect on total stockholders' equity?

Select the correct answer.

increase, $228,696

increase, $266,812

decrease, $266,812

decrease, $228,696

The Dayton Corporation began the current year with a retained earnings balance of $32,000. 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 $7,000. Compute the year end retained earnings balance.

a. $37,000

b. $44,000

c. $34,000

d. $41,000