At year-end 2019, total assets for Arrington Inc. were $1.3 million and accounts payable were $315,000. Sales, which in 2019 were $2.10 million, are expected to increase by 25% in 2020. Total assets and accounts payable are proportional to sales, and that relationship will be maintained; that is, they will grow at the same rate as sales. Arrington typically uses no current liabilities other than accounts payable. Common stock amounted to $350,000 in 2019, and retained earnings were $470,000. Arrington plans to sell new common stock in the amount of $155,000. The firm's profit margin on sales is 3%; 70% of earnings will be retained.
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