Final answer:
The balance of Packard's retained earnings account before closing in year 1 depends on the figures for net income and dividends.
Step-by-step explanation:
The balance of Packard's retained earnings account before closing in year 1 can be calculated using the formula:
Beginning Retained Earnings + Net Income - Dividends
Since the question does not provide the specific figures for net income and dividends, we cannot calculate the exact balance. However, we can explain how the balance changes.
If the company had a positive net income and did not pay any dividends, the balance of the retained earnings account would increase. On the other hand, if the company had a negative net income or paid dividends, the balance would decrease.