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At year-end 2016, Wallace Landscaping's total assets were $1.3 million and its accounts payable were $350,000. Sales, which in 2016 were $2.0 million, are expected
At year-end 2016, Wallace Landscaping's total assets were $1.3 million and its accounts payable were $350,000. Sales, which in 2016 were $2.0 million, are expected to increase by 20% in 2017. Total assets and accounts payable are proportional to sales, and that relatlonship will be maintained. Wallace typically uses no current llabilitles other than accounts payable. Common stochk amounted to s375,000 in 2016, and retained earnings were s240,000. Wallace has arranged to sell $95,000 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 profit margin on sales is 7%, and 55% of earnings will be paid out as dividends. a. What was Wallace's total long-term debt In 2016? Round your answer to the nearest dollar What were Wallace's total liabllitles in 2016? Round your answer to the nearest dollar. b. How much new long-term debt financing will be needed in 2017? (Hint: AFN New stock New long-term debt.) Round your answer to the nearest dollar
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