Below are the year-end balance sheets for Wolken Enterprises: Assets: 2015 2014
Cash $ 200,000 $ 170,000
Accounts receivable 864,000 700,000
Inventories 2,000,00 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
Wolken has never paid a dividend on its common stock, and it issued $2,400,000 of 10-year non-callable, long-term debt in 2014. As of the end of 2015, none of the principal on this debt had been repaid. Assume that the company's sales in 2014 and 2015 were the same. Which of the following statements must be CORRECT?
a. Wolken had negative net income in 2015.
b. Wolken repurchased some common stock in 2015.
c. Wolken issued new common stock in 2015.
d. Wolken issued long-term debt in 2015.
e. Wolken increased its short-term bank debt in 2015.