In Chapter 1, you were asked to imagine that you were a student needing insurance on your apartment and you examined different ways of valuing the contents of the apartment. We identified three different ways of valuing the contents of the apartment. Table 1.7 from Chapter 1 is reproduced next. All the items on the list are owned by you, except for the appliances, which belong to the building.

In addition to the above, the following information is available:
Item                                  Amount
Student loans .................$27,500
Loans from parents........... 5,000
Cash in bank....................... 1,200
Owing from employer.......... 700

Required:

a. Prepare three separate balance sheets using the information in each column above. Make sure to include the "other information" in each balance sheet.

b. Explain the benefits and limitations of each balance sheet to the people who might use them. Make sure to discuss specific stakeholders that might use each balance sheet.

c. Which balance sheet do you think would be appropriate under IFRS?

d. Which balance sheet do you think is best? Explain.

Transcribed Image Text:

Inventory of Apartment Contents Column 1 Column 2 Column 3 What it would cost to replace Column 4 What it could be tem Television Laptop Furniture Books Clothes Phone Jewellery Appliances Art Other Total What it cost $1,100 800 4,225 750 1,600 175 500 2,600 300 1,000 $13,050 sold for S 400 300 2,300 300 300 275 300 1,800 500 750 S7,225 S 925 900 4,525 875 1,950 600 625 3,300 500 1.200 S15,400