At year-end 2021, total assets for Arrington Inc. were

$1.8 million and accounts payable were $450,000. Sales, which in 2021 were $3.0 million, are expected to increase by 25% in 2022. Total assets and accounts payable are proportional to sales, and that relationship will be maintained; that is, they will grow at the same rate as sales. Arrington typically uses no current liabilities other than accounts payable. Common stock amounted to $500,000 in 2021, and retained earnings were $475,000. Arrington plans to sell new common stock in the amount of $130,000. The firm’s profit margin on sales is 5%; 35% of earnings will be retained.

a. What were Arrington’s total liabilities in 2021?

b. How much new long-term debt financing will be needed in 2022?