Lexington Company Engaged in the Following Transactions During Year 1

question 141

Multiple Choice

Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions.) Acquired $3,100 cash from issuing common stock.Borrowed $2,250 from a bank.Earned $3,150 of revenues.Incurred $2,410 in expenses.Paid dividends of $410.
Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions.)
Acquired an additional $550 cash from the issue of common stock.Repaid $1,335 of its debt to the bank.Earned revenues, $4,550.Incurred expenses of $2,770.Paid dividends of $700.
What was the amount of retained earnings that will be reported on Lexington's balance sheet at the end of Year 1?

• A)$330.
• B)$2,740.
• C)$740.
• D)$3,150.

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