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Crowley Building Supply sells various building materials to retail outlets. The company has just approached Sycamore State Bank requesting a $300,000 loan to strengthen the
Crowley Building Supply sells various building materials to retail outlets. The company has just approached Sycamore State Bank requesting a $300,000 loan to strengthen the Cash account and to pay certain pressing short-term obligations. The company's financial statements for the most recent two years follow: Crowley Building Supply Comparative Balance Sheets This Year Last Year Assets Current assets: Cash 58,000 143,000 Marketable securities 3,000 21,000 479,000 291,000 Accounts receivable, net Inventory 950,120 590,060 Prepaid expenses 21,000 28,000 1,073,060 Total current assets 1,511,120 Plant and equipment, net 1,644,620 1,549,580 3,155,740 2,622,640 Total assets Liabilities and Stockholders' Equity Liabilities Current liabilities 809,000 448,000 Bonds payable, 8% 618,000 618,000 1,427,000 Total liabilities 1,066,000 Stockholders' equity: 321,000 Preferred stock, $25 par, 7% 321,000 Common stock, $10 par 513,000 513,000 Retained earnings 894,740 722,640 Total stockholders' equity 1,728,740 1,556,640 3,155,740 2,622,640 Total liabilities and stockholders' Equity
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