Paul Sabin organized Sabin Electronics 10 years ago to produce and sell several electronic devices on which he had secured patents. Although the company has been fairly profitable, it is now experiencing a severe cash shortage. For this reason, it is requesting a $650,000 long-term loan from Gulfport State Bank, $175,000 of which will be used to bolster the Cash account and $475,000 of which will be used to modernize equipment. The company's financial statements for the two most recent years follow: Sabin Electronics Comparative Balance Sheet This Year Last Year Assets Current assets: 130,000 300,000 Cash 12,000 Marketable securities 672,000 450,000 Accounts receivable, net 1,095,000 745,000 Inventory 34,000 37,000 Prepaid expenses Total current assets 1,931,000 1,544,000 2,099,400 1,520,000 Plant and equipment, net $4,030,400 3,064,000 Total assets Liabilities and Stockholders Equity Liabilities: 875,000 450,000 Current liabilities 750,000 750,000 Bonds payable, 12% Total liabilities 1,625,000 1,200,000 Stockholders' equity Common stock, $15 par 840,000 840,000 1,024,000 1,565,400 Retained earnings 2,405,400 1,864,000 Total stockholders' equity $4,030,400 3,064,000 Total liabilities and equity