Lexington Company Engaged in the Following Transactions During Year 1

question 49

Multiple Choice

Lexington Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.) 1) Acquired $3,900 cash from issuing common stock.2) Borrowed $2,650 from a bank.3) Earned $3,550 of revenues.4) Incurred $2,490 in expenses.5) Paid dividends of $490.Lexington Company engaged in the following transactions during Year 2:1) Acquired an additional $950 cash from the issue of common stock.2) Repaid $1,615 of its debt to the bank.3) Earned revenues, $4,950.4) Incurred expenses of $2,930.5) Paid dividends of $1,180. The amount of retained earnings on Lexington's balance sheet at the end of Year 1 was:

• A) $1,060.
• B) $570.
• C) $3,550.
• D) $3,060.

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