Packard Company Engaged in the Following Transactions During Year 1

Multiple Choice

Packard Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.) 1) Acquired $1,700 cash from the issue of common stock.2) Borrowed $1,170 from a bank.3) Earned $1,350 of revenues cash.4) Paid expenses of $400.5) Paid a $200 dividend.During Year 2, Packard engaged in the following transactions. (Assume all transactions are cash transactions.) 1) Issued an additional $1,075 of common stock.2) Repaid $745 of its debt to the bank.3) Earned revenues of $1,500 cash.4) Incurred expenses of $660.5) Paid dividends of $250.What is the amount of retained earnings that will be reported on Packard's Year 2 balance sheet?

A) $985
B) $1,590
C) $1,340
D) $1,700