Edward Rogers is a notary public with his business located in Tofino, BC. Since he recently separated from his wife, they are discussing how they will split their assets once divorce procedures complete. On that note, Edwards lawyer has asked for a balance sheet for Edwards business to help value it. Edward has asked you to prepare the balance sheet. You gather the following information (see below).

• Edward purchased all his equipment eight years ago when he started his business. The total cost of all the equipment was $100,000. He expects to replace all the equipment in four years.
• He purchased furniture and decorations for his office four years ago for $22,000. He expects the furniture and decorations to last for about ten years.
• Clients owe Edward $19,000.

• Edward owes suppliers $12,000 for goods and services he purchased for his business.

• The business has $4,750 in its bank account.

• Edward owes his staff $2,500. This amount will be paid on the next payday, in two weeks.

• Edward has a bank loan outstanding for $10,000.

• Edward keeps supplies he needs in his business. The cost of the supplies he currently has on hand is $750.

Required:

1. Use the information provided to prepare a balance sheet for Edwards business. Provide an explanation for why you classified each item as you did (asset, liability, equity). The difference between assets and liabilities will give you Edwards equity.
2. As a judge in this case, how would you use the balance sheet in deciding how to value Edwards business?
3. What additional information would you as judge might want before deciding how to value his business?