Packard Company Engaged in the Following Transactions During Year 1

question 84

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 $1,070 cash from the issue of common stock.2) Borrowed $540 from a bank.3) Earned $890 of revenues.4) Paid expenses of $370.5) Paid a $110 dividend.
During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.)
1) Issued an additional $445 of common stock.2) Repaid $340 of its debt to the bank.3) Earned revenues of $870.4) Incurred expenses of $480.5) Paid dividends of $220.
What is the after-closing amount of retained earnings that will be reported on Packard's balance sheet at the end of Year 2? (Assume that closing entries have been made) .

• A)$580
• B)$1,220
• C)$800
• D)$180

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