diff --git a/reactos/subsystems/mvdm/ntvdm/dos/dos32krnl/memory.c b/reactos/subsystems/mvdm/ntvdm/dos/dos32krnl/memory.c
index 5b8c1cba29f..18ff0628fa7 100644
--- a/reactos/subsystems/mvdm/ntvdm/dos/dos32krnl/memory.c
+++ b/reactos/subsystems/mvdm/ntvdm/dos/dos32krnl/memory.c
@@ -292,7 +292,8 @@ BOOLEAN DosResizeMemory(WORD BlockData, WORD NewSize, WORD *MaxAvailable)
                 NewSize);
 
         /* Just split the block */
-        NextMcb = SEGMENT_TO_MCB(Segment + NewSize + 1);
+        NextSegment = Segment + NewSize + 1;
+        NextMcb = SEGMENT_TO_MCB(NextSegment);
         NextMcb->BlockType = Mcb->BlockType;
         NextMcb->Size = Mcb->Size - NewSize - 1;
         NextMcb->OwnerPsp = 0;
@@ -300,6 +301,9 @@ BOOLEAN DosResizeMemory(WORD BlockData, WORD NewSize, WORD *MaxAvailable)
         /* Update the MCB */
         Mcb->BlockType = 'M';
         Mcb->Size = NewSize;
+
+        /* Combine this free block with adjoining free blocks */
+        DosCombineFreeBlocks(NextSegment);
     }
 
 Done:
diff --git a/reactos/subsystems/mvdm/ntvdm/dos/dos32krnl/process.c b/reactos/subsystems/mvdm/ntvdm/dos/dos32krnl/process.c
index 46c77c6f0a1..ba91b9168fc 100644
--- a/reactos/subsystems/mvdm/ntvdm/dos/dos32krnl/process.c
+++ b/reactos/subsystems/mvdm/ntvdm/dos/dos32krnl/process.c
@@ -198,7 +198,7 @@ VOID DosCreatePsp(WORD Segment, WORD ProgramSize)
     PspBlock->Exit[1] = 0x20;
 
     /* Set the number of the last paragraph */
-    PspBlock->LastParagraph = Segment + ProgramSize - 1;
+    PspBlock->LastParagraph = Segment + ProgramSize;
 
     /* Save the interrupt vectors */
     PspBlock->TerminateAddress = IntVecTable[0x22];