Packard Company Engaged in the Following Transactions During Year 1

question 92

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 $1,250 cash from the issue of common stock.2) Borrowed $720 from a bank.3) Earned $900 of revenues cash.4) Paid expenses of $310.5) Paid a $110 dividend.During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.) 1) Issued an additional $625 of common stock.2) Repaid $430 of its debt to the bank.3) Earned revenues of $1,050 cash.4) Incurred expenses of $480.5) Paid dividends of $160.What was the amount of total stockholders' equity on Packard's balance sheet at the end of Year 1?

• A) $1,840
• B) $310
• C) $1,730
• D) $1,140

---

Definitions:

Production Possibilities Curve

A graphical representation showing the maximum number of goods or services that can be produced using limited resources efficiently.

Normative Statements

Statements that express value judgments or opinions about what ought to be, rather than facts that can be tested or verified.

Facts

Pieces of information that are verifiably true and can be proven with evidence or observation.

Rational Individuals

The concept that individuals make decisions based on the maximization of their utility or benefit, taking into consideration all available information and factors.