Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.) 1) Acquired $1200 cash from the issue of common stock. 2) Borrowed $670 from a bank. 3) Earned $850 of revenues. 4) Paid expenses of $300. 5) Paid a $100 dividend. During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.) 1) Issued an additional $575 of common stock. 2) Repaid $395 of its debt to the bank. 3) Earned revenues of $1000. 4) Incurred expenses of $460. 5) Paid dividends of $150. What is the after-closing amount of retained earnings that will be reported on Packard's balance sheet at the end of Year 2? (Assume that closing entries have been)
A. $1315.
B. $840.
C. $990.
D. $1240.
Answer: B
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