LONG-TERM FINANCING NEEDED At year-end 2018, total assets for Arrington Inc. were $1.8 million and accounts...

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LONG-TERM FINANCING NEEDED At year-end 2018, total assets forArrington Inc. were $1.8 million and accounts payable were$450,000. Sales, which in 2018 were $3.0 million, are expected toincrease by 25% in 2019. Total assets and accounts payable areproportional to sales, and that relationship will be maintained;that is, they will grow at the same rate as sales. Arringtontypically uses no current liabilities other than accounts payable.Common stock amounted to $500,000 in 2018, and retained earningswere $475,000. Arrington plans to sell new common stock in theamount of $130,000. The firm’s profit margin on sales is 5%; 35% ofearnings will be retained.
a. What were Arrington's total liabilities in 2018?
b. How much new long-term debt financing will be needed in 2019?(Hint: AFN ? New stock New long term debt.)

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LONG-TERM FINANCING NEEDED At year-end 2018, total assets forArrington Inc. were $1.8 million and accounts payable were$450,000. Sales, which in 2018 were $3.0 million, are expected toincrease by 25% in 2019. Total assets and accounts payable areproportional to sales, and that relationship will be maintained;that is, they will grow at the same rate as sales. Arringtontypically uses no current liabilities other than accounts payable.Common stock amounted to $500,000 in 2018, and retained earningswere $475,000. Arrington plans to sell new common stock in theamount of $130,000. The firm’s profit margin on sales is 5%; 35% ofearnings will be retained.a. What were Arrington's total liabilities in 2018?b. How much new long-term debt financing will be needed in 2019?(Hint: AFN ? New stock New long term debt.)