Question
Credit Decisions and the Balance Sheet You just started your new position as a junior credit analyst with a large Canadian bank. For your first
Credit Decisions and the Balance Sheet You just started your new position as a junior credit analyst with a large Canadian bank. For your first assignment, you have been asked to review the balance sheets of Design Your Sign Inc. and Info Tech Systems. Both companies have applied for a $100,000 small business loan. However, given current credit conditions, only one company will be awarded the loan. You manager has given you a brief background on the operations of each company and the purpose of the loan: "Design Your Sign Inc.: The company designs and prints corporate signs, business cards, letterheads, etc. Although the company is relatively new, it has been able to secure deals with various local businesses. TheCanadian Financial Accounting Cases32
Current assets
Accounts reccivable
Inventory
Non-current assets
Land and buildings
Intangible assets
Total assets
Canadian Financial Accounting Cases
EXHIBIT I - BALANCE SHEETS
DESIGN YOUR SIGN INC.
BALANCE SHEET
AS AT DECEMBER 31, 2014
$22.750
35,000
57,750
Current liabilities
Bank overdraft
Accounts payable
Non-current liabilities
Long-term debt
125,750
15,000
140.750
$198,500
Shareholders' equity
Share capital
Retained Earnings
$22.575
17,750
40,325
82.750
25,000
50,125
75,125
$198,500INFO TECH SYSTEMS LTD.
BALANCE SHEET
AS AT DECEMBER 31, 2014
$12.750
55,750
$68.500
Current liabilities
Accounts payable
Accrued liabilities
S15,575
7.000
$22,575
152.750
Non-current assets
Property and equipment
Intangible assets
Total assets.
$12,750
98.950
111,700
$180,200
Non-current liabilities
Long-term debt
Shareholders equity
Share capital
Retained Earnings
5,000
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