Bindloss Ltd. is a small manufacturing company in Alberta that produces products needed by companies in the
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Bindloss Ltd
Summarized Liabilities and Shareholders’ Equity
As of December 31, 2017
Bank loans............... $ 100,000
Accounts payable and accrued liabilities... 275,000
Current portion of long-term debt...... 75,000
Total current liabilities......... 450,000
Long-term debt............ 250,000
.................... 700,000
Common share capital.......... 250,000
Retained earnings............ 750,000
.....................1,000,000
Total liabilities and shareholders’ equity... $1,700,000
Bindloss Ltd
Summarized Income Statement
For the year ended December 31, 2017
Revenue............ $2,150,000
Expenses............ 1,700,000
Interest expense......... 30,000
Net income............ $ 420,000
During 2017, the company paid Mr. Bindloss $195,000 in dividends or $0.26 per share on his 750,000 shares.
Required:
Harry Bindloss would like you to prepare a report analyzing the pros and cons of each financing alternative. He would like you to explain the impact each alternative would have on the company's balance sheet, its income statement, and on measures of performance.
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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