Question
At year-end 2019, total assets for Arrington Inc. were $1.6 million and accounts payable were $315,000. Sales, which in 2019 were $2.10 million, are expected
At year-end 2019, total assets for Arrington Inc. were $1.6 million and accounts payable were $315,000. Sales, which in 2019 were $2.10 million, are expected to increase by 25% in 2020. Total assets and accounts payable are proportional to sales, and that relationship will be maintained; that is, they will grow at the same rate as sales. Arrington typically uses no current liabilities other than accounts payable. Common stock amounted to $390,000 in 2019, and retained earnings were $245,000. Arrington plans to sell new common stock in the amount of $80,000. The firm's profit margin on sales is 4%; 65% of earnings will be retained.
- What were Arrington's total liabilities in 2019? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest cent. $ -----
- How much new long-term debt financing will be needed in 2020? (Hint: AFN - New stock = New long-term debt.) Write out your answer completely. For example, 25 million should be entered as 25,000,000. Do not round intermediate calculations. Round your answer to the nearest cent.
$------
please mark the 2 answers in BOLD
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