[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 retained earnings that will be reported
on Lexington's balance sheet at the end of Year 1?
A. $5,400
B. $600
C. $1,400
D. $6,200
Answer: B
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