Required information

[The following information applies to the questionsdisplayed below.]

Packard Company engaged in the following transactions duringYear 1, its first year of operations: (Assume all transactionsare cash transactions.)

1. 1) Acquired $1,800 cash from the issue of common stock.
2. 2) Borrowed $1,270 from a bank.
3. 3) Earned $1,450 of revenues.
4. 4) Paid expenses of $420.
5. 5) Paid a $220 dividend.

During Year 2, Packard engaged in the following transactions:(Assume all transactions are cash transactions.)

1. 1) Issued an additional $1,175 of common stock.
2. 2) Repaid $815 of its debt to the bank.
3. 3) Earned revenues of $1,600.
4. 4) Incurred expenses of $700.
5. 5) Paid dividends of $270.

What was the balance of Packard's Retained Earnings accountbefore closing in Year 1?

Multiple Choice

• $810

• $0

• $1,030

• $1,050

with the information above....

What is the after-closing amount of retained earnings that willbe reported on Packard’s balance sheet at the end of Year 2?(Assume that closing entries have been made).

Multiple Choice

• $2,080

• $1,710

• $1,440

• $2,275

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The following entry is taken from the journal of a merchandisingcompany:

Cost of Goods Sold	6,000
Merchandise Inventory		6,000

What is the effect of this entry on the company’s financialstatements?

Multiple Choice

• Assets and stockholders’ equity increase.

• Assets and liabilities increase.

• Assets and stockholders’ equity decrease.

• Assets decrease and stockholders’ equity increases.