Choice "D" is correct. A change in capital stock that is recorded after the year end is an example of a subsequent event that might require disclosure in the footnotes to the financial statements.
Choice "b" is incorrect. The inventory issue would not be considered a subsequent event because the inventory was ordered before year end.
Choice "a" is incorrect. If the payroll checks were recorded prior to year end, there is no subsequent event issue.
Choice "c" is incorrect. Tax returns prepared after year end would not be considered a subsequent event issue.
