Below are the 2008 and 2009 year-end balance sheets for Wolken Enterprises:

Assets, Liabilities and equity

Assets:	2009	2008
Cash	$ 200,000	$ 170,000
Accounts receivable	864,000	700,000
Inventories	2,000,000	1,400,000
Total current assets	$ 3,064,000	$2,270,000
Net fixed assets	6,000,000	5,600,000
Total assets	$ 9,064,000	$7,870,000
Liabilities and equity:
Accounts payable	$ 1,400,000	$1,090,000
Notes payable	1,600,000	1,800,000
Total current liabilities	$ 3,000,000	$2,890,000
Long-term debt	2,400,000	2,400,000
Common stock	3,000,000	2,000,000
Retained earnings	664,000	580,000
Total common equity	$ 3,664,000	$2,580,000
Total liabilities and equity	$ 9,064,000	$7,870,000

Wolken has never paid a dividend on its common stock, and it issued $2,400,000 of 10-year non-callable, long-term debt in 2008. As of the end of 2009, none of the principal on this debt had been repaid. Assume that the company's sales in 2008 and 2009 were the same. Which of the following statements must be CORRECT?

Select one:

a. Wolken repurchased some common stock in 2009.

b. Wolken issued new common stock in 2009.

c. Wolken increased its short-term bank debt in 2009.

d. Wolken had negative net income in 2009.

e. Wolken issued long-term debt in 2009.

Answer rating: 100% (QA)

In the given problem long term debt for both the year of 2008 and 2009 are 2400000 So its clear that ... View the full answer