Question

Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.) 1) Acquired $1,350 cash from the issue of common stock, 2) Borrowed $820 from a bank. 3) Earned $1,050 of revenues. 4) Paid expenses of $330. 5) Paid a $130 dividend During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.) 1) Issued an additional $725 of common stock. 2) Repaid $500 of its debt to the bank. 3) Earned revenues of $1,150. 4) Incurred expenses of $520 5) Paid dividends of $180. What is the amount of total stockholders' equity that will be reported on Packard's balance sheet at the end of Year 1?

Answer 1

option (a) 1940 should be the right answer.

Credit Accounts title 1 Cash To common stock Debit 1350 1350 820 2 Cash To Loan/Notes payable 820 1050 3 Cash/Accounts receivable To sale/ service revenue 1050 330 4 Expense To Cash 330 130 5 Dividend To cash 130

Stockholder's equity account consists following items -

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