At year-end 2012, total assets for Shome, Inc., amounted to $1.2 million and accounts payable were $375,000.

Question:

At year-end 2012, total assets for Shome, Inc., amounted to $1.2 million and were $375,000. Sales, which totaled $2.5 million in 2012, are expected to increase by 25 percent in 2013. Total assets and are proportional to sales, and that relationship will be maintained in the future. Shome typically has no current liabilities other than The value of its amounted to $425,000 in 2012, and retained earnings were $295,000. Shome plans to sell new in the amount of $75,000. The firm's profit margin on sales is 6 percent, and 40 percent of earnings will be paid out as dividends.
a. What was Shome's total debt in 2012?
b. How much new, long-term debt financing will be needed in 2013? Do not consider any financing feedback effects.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...