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At year-end 2019, Wallace Landscaping's total assets were $2.17 million, and its accounts payable were...

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Accounting

At year-end 2019, Wallace Landscaping's total assets were $2.17 million, and its accounts payable were $560,000. Sales, which in 2019 were $3.5 million, are expected to increase by 35% in 2020. 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 2019, and retained earnings were $395,000. Wallace has arranged to sell $195,000 of new common stock in 2020 to meet some of its financing needs. The remainder of its financing needs will be met by by issuing new long-term debt at the end of 2020. Its net profit margin on sales is 6%, and 50% of earnings will be paid out as dividends. What were Wallace's total long-term debt and total liabilities in 2019? How much new long-term debt financing will be needed in 2020? (Please use the formula approach to solve this problem)

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