Below Are the Year-End Balance Sheets for Wolken Enterprises

question 58

Multiple Choice

Below are the year-end balance sheets for Wolken Enterprises:

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 2012.As of the end of 2013, none of the principal on this debt had been repaid.Assume that the company's sales in 2012 and 2013 were the same.Which of the following statements must be CORRECT?

• A) Wolken increased its short-term bank debt in 2013.
• B) Wolken issued long-term debt in 2013.
• C) Wolken issued new common stock in 2013.
• D) Wolken repurchased some common stock in 2013.
• E) Wolken had negative net income in 2013.

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Definitions:

Excess Supply

A situation where the quantity of goods or services supplied is greater than the quantity demanded at a given price.

Chemical Engineers

Professionals specialized in applying principles of chemistry, physics, biology, and mathematics to solve problems involving the production or use of chemicals, fuel, drugs, food, and many other products.

Salaries

Fixed regular payments made by employers to employees, typically on a monthly or biweekly basis, in exchange for their labor or services.

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