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

1) Acquired $950 cash from the issue of common stock.

2) Borrowed $420 from a bank.

3) Earned $650 of revenues.

4) Paid expenses of $250.

5) Paid a $50 dividend.

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

1) Issued an additional $325 of common stock.

2) Repaid $220 of its debt to the bank.

3) Earned revenues of $750.

4) Incurred expenses of $360.

5) Paid dividends of $100.

What is the amount of total stockholders equity that will be reported on Packards balance sheet at the end of Year 1?

Answers:

a.) $220 outflow

b.) $320 outflow

c.) $5 inflow

d.) $225 inflow