At year-end 2010, Bertin Inc.s total assets were $1.2 million and its accounts payable were $375,000. Sales,

Question:

At year-end 2010, Bertin Inc.’s total assets were $1.2 million and its were $375,000. Sales, which in 2010 were $2.5 million, are expected to increase by 25% in 2011. Total assets and are proportional to sales, and that relationship will be maintained. Bertin typically uses no current liabilities other than amounted to $425,000 in 2010, and retained earnings were $295,000. Bertin has arranged to sell $75,000 of new common stock in 2011 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2011. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its profit margin on sales is 6%, and 40% of earnings will be paid out as dividends.
a. What were Bertin’s total long-term debt and total liabilities in 2010?
b. How much new long-term debt financing will be needed in 2011?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...