Reference no: EM132577847

ACC1175 Financial Accounting II - Lethbridge College

The following are condensed financial statements of South Dakota Corporation for the three years ended December 31, 2017, 2018, 2019.

South Dakota Corporation
Comparative Balance Sheets (in the thousands)
December 31

Current Assets	2019		2018		2017
Cash		$          24		$             9		$          20
Accounts Receivable	$          46		$          38		$          24
Less:  Allowance for Doubtful Accounts	1	45	2	36	0	24
Inventory		72		48		36
Prepaid Expenses		3		3		4
Total Current Assets		$        144		$          96		$          84
Capital Assets	405		234		118
Less:  Accumulated Depreciation	93	312	54	180	27	91
Total Assets		$        456		$        276		$        175

Current Liabilities
Accounts Payable		90		72		40
Accrued Liabilities		30		24		20
Total Current Liabilities		$        120		$          96		$          60
Bonds Payable		60		60		0
Total Liabilities		$        180		$        156		$          60
Shareholder's Equity
Common Shares		240		96		96
Retained Earnings		36		24		19
Total Shareholders' Equity		$        276		$        120		$        115
Total Liabilities and Shareholders' Equity		$        456		$        276		$        175

South Dakota Corporation
Comparative Income Statements (in the thousands)
For the Year Ended December 31
The following are condensed financial statements of South Dakota Corporation for the three years ended December 31, 2017, 2018, 2019.

	2019		2018		2017
Sales		$        252		$        144		$        120
Cost of Goods Sold
Beginning Inventory	$          48		$          36		$          24
Add:  Purchases	213		108		78
	$        261		$        144		$        102
Less:  Ending Inventory	72		48		36
Cost of Goods Sold		189		96		66
Gross Profit		$          63		$          48		$          54
Less:  Selling and Administrative Expenses		37		34	0	30
Net Income from Operations		$          26		$          14		$          24
Interest Expense		6		6		0
Income Before Income Tax		$          20		$             8		$          24
Income Tax		8		3		9
Net income		$          12		$             5		$          15

South Dakota Corporation
Comparative Statements of Retained Earnings (in the thousands)
For the Year Ended December 31

	2019		2018		2017
Balance, January 1		$          24		$          19		$          12
Add: Net income		12		5		15
		$          36		$          24		$          27
Less:  Dividend		0		0		8
Balance, December 31		$          36		$          24		$          19

Required: #1 Based on the information provided, calculate the following for each year. Round all answers to two (2) decimal places. Be careful with your rounding. There will be deductions for incorrect rounding.

The following are condensed financial statements of South Dakota Corporation for the three years ended December 31, 2017, 2018, and 2019.

Required:

1. Complete the required calculations. There is sufficient information to complete all required calculations. Be sure to include the industry averages that are provided in the textbook as sample averages. Fill in the formula for each of the calculations. Every blank is worth marks.

"2. In a Word document, analyze the ratio calculations for each of the four financial areas.

Your report should have a brief introduction followed by four headings (liquidity, solvency, profitability and market.

What conclusions can be drawn from each of the four financial ratio areas you calculated above? What do the numbers tell you about this company. Compare 2019 to 2018 and 2017 to identify trends. Also compare to the industry averages, page 1122 Exhibit 17.11."

3. Was South Dakaota Corporation wise to expand operations? Yes or no and a brief explanation. Tell me why, yes or no is not enough! Make a case, supported by your analysis.

"Questions #2 and #3 together should be a minimum of one page of comments using 11 point font (double-spaced) and a maximum of two pages. DO NOT hand write your report!

Attachment:- Final_Case.rar