At year-end 2015, Wallace Landscaping's total assets were $2.17 million and its accounts payable were $560,000. Sales,

Question:

At year-end 2015, Wallace Landscaping's total assets were $2.17 million and its were $560,000. Sales, which in 2015 were $3.5 million, are expected to increase by 35% in 2016. Total assets and are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than amounted to $625,000 in 2015, and retained earnings were $395,000. Wallace has arranged to sell $195,000 of new in 2016 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 2016. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 5%, and 45% of earnings will be paid out as dividends.
a. What were Wallace's total long-term debt and total liabilities in 2015?
b. How much new long-term debt financing will be needed in 2016?
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...