Track Software, Inc. even years ago, after 15 years in public accounting, Stanlcy Booker, CPA, resigned his position as manager of cost systems for Davis, Cohen, and O'Brien Public Accountants and started Track Software, Inc. In the 2 years preceding his departure from Davis, Cohen, and O'Brien, Stanley had spent nights and weekends devcloping a sophisticated cost-accounting software program that became Track's initial product offering. As the firm grew, Stanley planned to develop and expand the software product offerings, all of which would be related to streamlining the accounting processes of medium- to large-sized manufacturers. Although Track experienced losses during its first 2 ycars of operation 2009 and 2010-its profit has increased stcadily from 2011 to the present (2015). The firm's profit history, including dividend payments and contributions to retained carnings, is summarized in Table 1 Stanley started the firm with a $100,000 investment: his savings of $50,000 as equity and a $50,000 long-term loan from the bank. He had hoped to maintain his initial 100 percent ownership in the corporation, but after experiencing a $50,000 loss during the first year of operation (2009), he sold 60 percent of the stock to a group of investors to obtain needed funds. Since then, no other stock transactions have taken placc. Although he owns only 40 percent of the firm, Stanley actively manages all aspects of its activities; the other stockholders are not active in manage- ment of the firm. The firm's stock was valued at $4.50 per share in 2014 and at $5.28 per share in 2015. TABLE 1 Track Software, Inc., Profit, Dividends, and Retained Earnings, 2009-2015 Dividends Net profits after taxes retained earnings (1) (2) Year ($50,000) 120,000) 15,000 35,000 40,000 43,000 48,000 (550,000) (20,000) 2010 2011 2012 2013 2014 2015 15,000 35,000 39,000 40,000 43,000 1,000 3,000 5,000