Financing needs will be met by issuing new long term debt

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Reference no: EM131926250

At Year end 2016, Wallace Landscaping’s total assets were $2.17 million and its accounts payable were $560,000. Sales, which in 2016 were $3.5 million, are expected to increase by 35% in 2017. Total assets and accounts payable are proportional to sales, and the relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $625,000 in 2016 and retained earnings were $395,000. Wallace has arranged to sell $195,000 of new common stock in 2017 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 2017.

Reference no: EM131926250

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