At year-end 2021, Wallace Landscaping’s total assets, all of which are used in operations, were $2.17 million, and its accounts payable were $560,000. Sales, which in 2021 were $3.5 million, are expected to increase by 35% in 2022. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $625,000 in 2021, and retained earnings were $395,000. Wallace has arranged to sell $195,000 of new common stock in 2022 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 2022. 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 2021? 

b. How much new long-term debt financing will be needed in 2022? AFN 2 New stock 5 New long-term debt.