Lexington Company Engaged in the Following Transactions During Year 1

question 32

Multiple Choice

Lexington Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.) Acquired $6,000 cash from issuing common stock.Borrowed $4,400 from a bank.Earned $6,200 of revenues.Incurred $4,800 in expenses.Paid dividends of $800.Lexington Company engaged in the following transactions during Year 2:Acquired an additional $1,000 cash from the issue of common stock.Repaid $2,600 of its debt to the bank.Earned revenues, $9,000.Incurred expenses of $5,500.Paid dividends of $1,280.The amount of retained earnings on Lexington's balance sheet at the end of Year 1 was:

• A) $6,200
• B) $5,400
• C) $1,400
• D) $600

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Definitions:

Percent More

A comparative measure indicating how much higher one quantity is than another, expressed as a percentage.

Percent Change

The measure of the degree of change of a quantity, expressed as a percentage.

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The rate at which property in a particular area is taxed.