Lexington Company engaged in the following transactions during Year 1, its first

Question

Lexington Company engaged in the following transactions during Year 1, its first year of operations. (Assume all transactions are cash transactions.)

1. Acquired $6,000 cash from issuing common stock.

2. Borrowed $4,400 from a bank.

3. Earned $6,200 of revenues.

4. Incurred $4,800 in expenses.

5. Paid dividends of $800.

Lexington Company engaged in the following transactions during Year 2:

1. Acquired an additional $1,000 cash from the issue of common stock.

2. Repaid $2,600 of its debt to the bank.

3. Earned revenues, $9,000.

4. Incurred expenses of $5,500.

5. Paid dividends of $1,280.

The amount of total assets on Lexington's balance sheet at the end of Year 1 was:

Multiple Choice

$11,000.

$12,000.

$1,600.

$7,600.

Explanation / Answer

1) cash 6000 2) Cash from bank loan 4,400 3) cash revenue 6,200 4) expenses paid -4,800 5) dividend paid -800 Cash at end of year 1 11000 answer $11,000 since there is no other assets besides cash , it will be the total asset at year end

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