Pet Value Inc. the Company a Canadian retailer of pet supplies, is owned and operated by Blake Lively and her husband Ryan Reynolds. The Companys success is driven by excellent product selection and knowledgeable sales staff who are paid a commission based on sales.

As a result of the coronavirus pandemic COVID the Company is facing cash shortages. The Company has applied for a government grant that is available to financially struggling businesses, defined as those with a net loss in the current fiscal year calculated in accordance with Generally Accepted Accounting Principles applicable to the company.

As a junior financial analyst working in the government grant department, you have been asked by your boss, Hardeep Singh, to prepare a draft report analyzing the Companys application. Hardeep wants to understand any accounting issues you discover, valid accounting alternatives, if any, and your conclusions including recommended next steps.

The following information relates to the Companys September yearend:

Chuckit, a popular dog toy, has experienced a decline in sales influencing the Company to lower the selling price to $ per toy. Because of the lower selling price, the Company considered all Chuckit toys fully impaired. As such, a $ inventory impairment loss was recorded.Due to supply chain disruptions resulting from COVID lockdowns, the Company ordered $ of pet food from its largest supplier. The supplier has committed to start producing once the necessary ingredients become available in November. An account payable has been recorded for the purchase.In the Company declared a $ dividend which was expensed at the time of declarationThe Company is reporting an unaudited net loss of $ Historically, the Company has prepared financial statements primarily for tax purposes.

Required

Prepare the requested report.