Question

Required information The following information applies to the questions displayed below) Packard Company engaged in the following transactions during Year 1. its first year of operations: (Assume all transactions are cash transactions) 1) Acquired $1.800 cash from the issue of common stock. 2) Borrowed $1.270 from a bank 3) Earned $1,450 of revenues. 4) Paid expenses of $420. 5) Paid a $220 dividend. During Year 2. Packard engaged in the following transa Assume all transactions are cash transactions.) 1) Issued an additional $1,175 of common sto 2) Repaid $815 of its debt to the bank. 3) Earned revenues of $1600. 4) Incurred expenses of $700. 5) Pald dividends of $270. What is the after closing amou have been) ined earnings that will be reported on Packard's balance sheet at the end of Year 27 (Assume that closing entries 34 of 8 !! Next >

Answer 1

Year 1 Retained earnings = Revenue-Expense-Dividend = 1450-420-220 = 810

Year 2 Retained earnings = Beginning balance+Revenue-expense-Dividend = 810+1600-700-270 = 1440

So answer is b) $1440