Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions.) Acquired $4,100 cash from issuing common stock.Borrowed $2,750 from a bank.Earned $3,650 of revenues.Incurred $2,510 in expenses.Paid dividends of $510.
Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions.)
Acquired an additional $1,050 cash from the issue of common stock.Repaid $1,685 of its debt to the bank.Earned revenues, $5,050.Incurred expenses of $2,970.Paid dividends of $1,300.
What is the amount of total assets that will be reported on Lexington's balance sheet at the end of Year 1?
A)$3,910
B)$1,350
C)$7,540
D)$7,480

Question

Quizplus · Accepted Answer

Total assets at the end of Year 1 can be calculated as follows: 
Beginning cash balance = $4,100 (from issuing common stock) 
Add: Cash received from operations = $3,650 
Subtract: Cash paid for expenses = $2,510 
Ending cash balance = $5,240 
Total assets = Ending cash balance = $5,240

Therefore, the correct option is (D).

Lexington Company Engaged in the Following Transactions During Year 1