eBook Problem Walk$-$Through

At year$-$end $2021,$ total assets for Arrington Inc. were $$1\mathrm{.}3$ million and accounts payable were $$310,000.$ Sales, which in $2021$ were $$3\mathrm{.}00$ million, are expected to increase by $20\%$ in $2022.$ Total assets and accounts payable are proportional to sales, and that relationship will be maintained; that is$,$ they will grow at the same rate as sales. Arrington typically uses no current liabilities other than accounts payable. Common stock amounted to $$450,000$ in $2021,$ and retained earnings were $$220,000.$ Arrington plans to sell new common stock in the amount of $$55,000.$ The firm's profit margin on sales is $8\%$; $45\%$ of earnings will be retained.

What were Arrington's total liabilities in $2021?$ Write out your answer completely. For example, $25$ million should be entered as $25,000,000.$ Round your answer to the nearest cent.

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How much new long$-$term debt financing will be needed in $2022?($Hint: AFN $-$ New stock $=$ New long$-$term debt.$)$ Write out your answer completely. For example, $25$ million should be entered as $25,000,000.$ Do not round intermediate calculations. Round your answer to the nearest cent.

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