Packard Company Engaged in the Following Transactions During Year 1

question 50

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 $950 cash from the issue of common stock.2) Borrowed $420 from a bank.3) Earned $650 of revenues.4) Paid expenses of $250.5) Paid a $50 dividend. During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.) 1) Issued an additional $325 of common stock.2) Repaid $220 of its debt to the bank.3) Earned revenues of $750.4) Incurred expenses of $360.5) Paid dividends of $100.
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)$640
• B)$800
• C)$290
• D)$740

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Definitions:

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