Packard Company Engaged in the Following Transactions During Year 1

question 48

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 cash.
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 cash.
4) Incurred expenses of $360.
"5) Paid dividends of $100.
The amount of total equity on Packard's balance sheet at the end of Year 1 is:"

• A) $1,350.
• B) $900.
• C) $250.
• D) $1,300.

Identify the components of a master budget and their interrelationships.

Analyze the impact of inventory policies on budgeting (both finished goods and raw materials).

Compute budgeted financial outcomes, such as cost of goods sold, direct labor costs, and purchase needs.

Exercise critical thinking to solve budgeting problems and make informed decisions based on budget data.

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Definitions:

Vehicle Battery Bank

A group of batteries connected together in a vehicle to supply electrical power, especially in electric and hybrid vehicles.

Transmission ECU

The electronic control unit responsible for managing an automobile's transmission system operations.

Self-adjusting

Refers to mechanisms or systems that automatically adjust parameters or settings to maintain or improve performance without manual intervention.

System-actuated Clutch

A clutch mechanism that is engaged or disengaged by an automated system, as opposed to requiring manual actuation.