Assets

Cash $ 500

Machinery and equipment 14,500

Suppliers 24,000

Hugues Légaré – Capital 36,000

$ 75,000

Liabilities and equity

Unused parts and supplies $ 32,000

Customers 25,500

Prepaid rents 2,500

Bank loan 15,000

$ 75,000

Home work

1.Hugues Légaré started operating an auto repair shop in early November. An inexperienced clerk prepared the following report as at November 30, 2018.

Work to do

1.1 Draw up the corrected balance sheet if you disagree with this presentation.

Scenario 2

Lucie Belloeuil, optician, opened a clinic on October 1, 2018 by investing $ 8,000 in cash. Ms. Belloeuil was disappointed with the following financial statements, prepared by the bookkeeper.

LUCIE BELLOEUIL, OPTICIAN

BALANCE SHEET

OCTOBER 30, 2019

A

Cash $ 1350

Prepaid rents 1,200

Medical supplies used 700

Material 22,800

$ 26,050

Equity

Bank loan $ 12,000

Lucie Belloeuil – Capital 14,050

______

$ 26,050

LUCIE BELLOEUIL, OPTICIAN

Status of the results

OCTOBER 30, 2019

Exploitation product

Fees earned $ 10,000.

Customers 2,450

Total products 12,450

Exploitation charges

Salaries 2,300

Rent 1,200

Unused medical supplies 5,000

Phone 200

Suppliers 4000

Total operating expenses 12,700

Net loss $ 250

In order to ensure the validity of these financial statements, Ms. Belloeuil asks you to review them.

Work to do

2.1 Draw up the corrected balance sheet and financial statement of Ms. Lucie Belloeuil, optician.