Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions) 1. Acquired $3900 cash from issuing common stock. 2. Borrowed $2650 from a bank. 3. Earned $3550 of revenues. 4. Incurred $2490 in expenses. 5. Paid dividends of $490. Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions) 1. Acquired an additional $950 cash from the issue of common stock. 2. Repaid $1615 of its debt to the bank. 3. Earned revenues, $4950. 4. Incurred expenses of $2930. 5. Paid dividends of $1180. What was the amount of retained earnings that will be reported on Lexington's balance sheet at the end of Year 1?
A. $1060.
B. $570.
C. $3060.
D. $3550.
Answer: B
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