Below Are the 2010 and 2011 Year-End Balance Sheets for Tran

question 113

Multiple Choice

Below are the 2010 and 2011 year-end balance sheets for Tran Enterprises: The firm has never paid a dividend on its common stock, and it issued $2,400,000 of 10-year, non-callable, long-term debt in 2010. As of the end of 2011, none of the principal on this debt had been repaid. Assume that the company's sales in 2010 and 2011 were the same. Which of the following statements must be CORRECT?

• A) The firm increased its short-term bank debt in 2011.
• B) The firm issued long-term debt in 2011.
• C) The firm issued new common stock in 2011.
• D) The firm repurchased some common stock in 2011.
• E) The firm had negative net income in 2011.

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