Lexington Company Engaged in the Following Transactions During Year 1

question 79

Multiple Choice

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

• A) $11,000.
• B) $12,000.
• C) $1,600.
• D) $7,600.

---

Definitions:

Psychology

The scientific study of the human mind, behavior, and processes associated with how people think, feel, and interact with their environment.

Arrow's Impossibility Theorem

A theory in social choice stating that no rank-order voting system can convert the ranked preferences of individuals into a community-wide complete and transitive ranking without violating one of the criteria necessary for a fair vote.

Median Voter Theorem

A principle in political science proposing that the outcome of a majority vote is most likely to match the preferences of the median voter, assuming voters can be placed along a single-dimensional policy space.

Impossibility

A condition or situation that cannot be achieved or is unattainable.