Below are the 2017 and 2018 year-end balance sheets for Tran Enterprises: Assets:2018 2017 Cash$ 200,000 $ 170,000 Accounts receivable864,000 700,000 Inventories2,000,000 1,400,000 Total current assets$3,064,000 $2,270,000 Net fixed assets6,000,000 5,600,000 Total assets$9,064,000 $7,870,000 Liabilities and equity: Accounts payable$1,400,000 $1,090,000 Notes payable to bank1,600,000 1,800,000 Total current liabilities$3,000,000 $2,890,000 Long-term debt2,400,000 2,400,000 Common stock3,000,000 2,000,000 Retained earnings664,000 580,000 Total common equity$3,664,000 $2,580,000 Total liabilities and equity$9,064,000 $7,870,000 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 2017. As of the end of 2018, none of
the principal on this debt had been repaid. Assume that the company's sales in 2017 and 2018 were the same. Which of the following statements must be CORRECT?
A. The firm increased its short-term bank debt in 2018.
B. The firm issued long-term debt in 2018.
C. The firm issued new common stock in 2018.
D. The firm repurchased some common stock in 2018.
E. The firm had negative net income in 2018.
Answer: C
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