During the year, Belyk Paving Co. had sales of $2,393,000. Cost of goods sold, administrative and selling expenses, and depreciation expense were $1,432,000, $435,700, and $490,700, respectively. In addition, the company had an interest expense of $215,700 and a tax rate of 35 percent (ignore any tax loss carryback or carryforward provisions.). The company paid out $407,000 in cash dividends. Assume that net capital spending was zero, no new investments were made in net working capital, and no new stock was issued during the year. Calculate the firm's net new long-term debt added during the year.

Cash obtained From Bank $588,100

Explanation:

Lets Solve it By Cash Flow Method To find out Amount of Debt Acquired During the Year.

Cash Inflows

Sales                                                 2393000

Out Flow

Cost of Goods Sold                         (1432000)  Assuming total purchases were made during the year  

Depreciation                                       -               Non-Cash Item

Admin Expense                                 (435700)  Cash Expense

Selling Expense                                 (490700)   Cash Expense

Interest Expense                                (215700)    

Net Inflow/(Outflow)                            (181700)   Net outflow

Dividend Paid                                      (407000)

Total Cash obtain form the bank      (588100)      i.e 181700+407000

To make the payments.  

Assuming that there were no cash at start of the year.