Below are the 2005 and 2006 year-end balance sheets for Wolken Enterprises: Wolk

Question

Below are the 2005 and 2006 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 2005. As of the end of 2006, none of the principal on this debt had been repaid. Assume that the company's sales in 2005 and 2006 were the same. Which of the following statements must be CORRECT? (Points : 5) a) Wolken increased its short-term bank debt in 2006. b)Wolken issued long-term debt in 2006. c)Wolken issued new common stock in 2006. d)Wolken repurchased some common stock in 2006. e)Wolken had negative net income in 2006.

Explanation / Answer

c)Wolken issued new common stock in 2006.

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