Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions.) 1. Acquired $4100 cash from issuing common stock. 2. Borrowed $2750 from a bank. 3. Earned $3650 of revenues. 4. Incurred $2510 in expenses. 5. Paid dividends of $510. Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions.) 1. Acquired an additional $1050 cash from the issue of common stock. 2. Repaid $1685 of its debt to the bank. 3. Earned revenues, $5050. 4. Incurred expenses of $2970. 5. Paid dividends of $1300. What was the amount of liabilities on Lexington's balance sheet at the end of Year 2?
A. $790.
B. ($1685).
C. $1050.
D. $1065.
Answer: D
Business
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