On December $15,$ Year $1,$ the Binghamton Corporation established a retained earnings appropriation of $$32,000$ for future expansion.

The balance of the retained earnings account prior to the transaction was $$67,000.$ At December $31,$ Year $1,$ the Corporation had $3,400$

shares of $$10$ par common stock $($issued at par$)$ outstanding. The corporate charter indicates $34,000$ shares of common stock are

authorized and there is no treasury stock.

Required:

a$.$ Indicate the effect of the appropriation on the financial statements.

b$.$ Prepare the Stockholder's Equity section of the Binghamton Corporation's Balance sheet of December $31,$ Year $1.$

Complete this question by entering your answers in the tabs below.

Indicate the effect of the appropriation on the financial statements.

Note: Enter any decreases to account balances and cash outflows with a minus sign. For cash flows, indicate whether it is an operating activity $($OA$),$ investing activity

$($FA$).$ Leave cells blank if no input is needed.