At year -end 2016 , Wallace Landscaping's total assets were $ 1. 6 million , and its accounts payable were $ 340 , 000 . Sales , which in 2016 were $ 2. 3 million , are expected to increase by 30% in 2017 . Total assets and accounts payable are* proportional to sales , and that relationship will be maintained . Wallace typically uses no current liabilities other than accounts payable . Common stock amounted to $ 450 , 000 in 2016 , and retained earnings were $295 , 000 . Wallace has arranged to sell $ 50 , 000 of new common stock in 2017 to meet some of its financing needs . The remainder of its financing needs will be met by issuing new long-term debt at the end of 2017 . ( Because the debt is added at the end of the year , there will be no additional interest expense due to the new debt . ; Its net profit margin on sales is 6%/ , and 45% of earnings will be paid out as dividends