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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 $600,000 long-term loan from Gulfport State Bank, $150,000 of which will be used to bolster the Cash account and $450,000 of which will be used to modernize equipment. he Company's financial statements for the two most recent years follow: Sabin Electronics Comparative Balance Sheet This Year Last Year Assets Current assets: 110,000 250,000 Cash Marketable securities 28,000 607,000 Accounts receivable, net 400,000 695,000 1,045,000 Inventory 30,000 Prepaid expenses 32,000 1,405,000 Total current assets 1,792,000 1,470,000 Plant and equipment, net 1,946,400 Total assets $3,738,400 2,875,000 Liabilities and Stockholders Equity Liabilities 850,000 400,000 Current liabilities Bonds payable, 12% 750,000 750,000 Total liabilities 1,600,000 1,150,000 Stockholders' equity: 790,000 790,000 Common stock, $20 par 935,000 Retained earnings 1,348, 400 Total stockholders' equity 1,725,000 2,138,400 Total liabilities and equity $3,738,400 2,875,000