Final answer:
The calculation results in a new balance of $894 after Mr. Smith's payment and subsequent shopping, however, this doesn't match the provided answer choices. It's advised to re-check the problem and options.
Step-by-step explanation:
Mr. Smith had an initial credit card balance of $780. He made a payment that included an $85 flat amount and an additional 5% of his original balance. To calculate the 5% additional payment, we multiply the original balance by 5% (or 0.05). So, 0.05 * $780 = $39. Therefore, the total payment he made is $85 + $39 = $124. After this payment, the remaining balance would be $780 - $124 = $656. Mr. Smith then went shopping and spent $238, which increases the balance. Finally, to find the new balance, we add the shopping expenditure: $656 + $238 = $894. However, none of the options provided (A. $372 B. $403 C. $457 D. $520) match this calculation. Therefore, it appears there may be a mistake within the problem or the options given. Without the correct options, we cannot provide an accurate answer, so we recommend re-checking the problem and the answer choices.