Below are the 2011 and 2012 year-end balance sheets for Tran Enterprises:

Assets: 2012 2011

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

The firm has never paid a dividend on its common stock, and it issued $2,400,000 of 10-year, non-callable, long-term debt in 2011. As of the end of 2012, none of the principal on this debt had been repaid. Assume that the companys sales in 2011 and 2012 were the same. Which of the following statements must be CORRECT?

a. The firm increased its short-term bank debt in 2012.

b. The firm issued long-term debt in 2012.

c. The firm issued new common stock in 2012.

d. The firm repurchased some common stock in 2012.

e. The firm had negative net income in 2012.