Packard Company Engaged in the Following Transactions During Year 1

question 113

Multiple Choice

Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.) 1) Acquired $1,900 cash from the issue of common stock.2) Borrowed $1,370 from a bank.3) Earned $1,550 of revenues cash.4) Paid expenses of $440.5) Paid a $240 dividend.During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.) 1) Issued an additional $1,275 of common stock.2) Repaid $885 of its debt to the bank.3) Earned revenues of $1,700 cash.4) Incurred expenses of $740.5) Paid dividends of $290.What is Packard's retained earnings account balance at the end of Year 1 before the process of closing the accounts has been undertaken?

• A) $1,110.
• B) $0
• C) $870.
• D) $1,210.

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