[The Following Information Applies to the Questions Displayed Below

question 89

Multiple Choice

[The following information applies to the questions displayed below.]

Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions)

Acquired $6,000 cash from issuing common stock.
Borrowed $4,400 from a bank.
Earned $6,200 of revenues.
Incurred $4,800 in expenses.
Paid dividends of $800.

Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions)

Acquired an additional $1,000 cash from the issue of common stock.
Repaid $2,600 of its debt to the bank.
Earned revenues, $9,000.
Incurred expenses of $5,500.
Paid dividends of $1,280.

-What was the amount of liabilities on Lexington's balance sheet at the end of Year 2?

• A)$1,000.
• B)$1,800.
• C)($2,600).
• D)$480.

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Definitions:

Judgment

The ability to make considered decisions or come to sensible conclusions based on a critical evaluation of evidence and reasoning.

Empowerment

The process of granting individuals or groups the power, authority, and resources to make decisions, take action, and influence outcomes in their work or community.

Rewards

Benefits, privileges, or compensations given to individuals or groups in recognition of their achievements, behavior, or effort.

Decisions

The process of making choices between alternatives to achieve a goal or solve a problem.