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

1. 1) Acquired $1,950 cash from the issue of common stock.
2. 2) Borrowed $1,420 from a bank.
3. 3) Earned $1,600 of revenues cash.
4. 4) Paid expenses of $450.
5. 5) Paid a $250 dividend.

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

1. 1) Issued an additional $1,325 of common stock.
2. 2) Repaid $920 of its debt to the bank.
3. 3) Earned revenues of $1,750 cash.
4. 4) Incurred expenses of $760.
5. 5) Paid dividends of $300.

The amount of retained earnings on Packards Year 2 balance sheet is:

Multiple Choice

• $1,590.

• $2,290.

• $1,890.

• $2,515.