Problem:

During the year, Belyk Paving Co. had sales of $2,395,000. Cost of goods sold, administrative and selling expenses, and depreciation expense were $1,430,000, $435,500, and $490,500, respectively. In addition, the company had an interest expense of $215,500 and a tax rate of 40 percent (ignore any tax loss carryback or carryforward provisions.). Belyk Paving Co. paid out $405,000 in cash dividends. Assume that no new investments were made in net fixed assets or net working capital, and no new stock was issued during the year.

Requirement:

Question: Calculate the firm's new long-term debt added during the year.

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