Paul Sabin organized Sabin Electronics 10 years ago to produce and sel 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 $510,000 long-term loan from Gulfport State Bank, $105,000 of which will be used to bolster the Cash account and $405,000 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 Cash Marketable securities Accounts receivable, net Inventory Prepaid expenses $ 74,000 $160,000 19,000 490,000 310,000 955,000 605,000 23,000 0 23,000 1,542,000 1,117,000 1,376,400 1,300,000 Total current assets Plant and equipment, net $2,918,400 s2,417,000 Total assets Liabilities and Stockholders Equity Liabilities Current liabilities Bonds payable, 12% $ 750,000 $440,000 650,000 650,000 Total liabilities 1,400,000 1,090,000 Stockholders' equity: Common stock, $15 par Retained earnings 720,000 720,000 798,400 607,000 1,518,400 1,327,000 $2,918,400 s2,417,000 otal stockholders equity Total liabilities and equity