Schutz Building Services is a fast-growing business in the housing industry. Johan Schutz started the business three years ago and has worked hard to establish the firm. Johan has no accounting knowledge and simply keeps his invoices and receipts in a shoebox that he takes to his accountant once a year to be sorted out and turned into financial statements for tax purposes. Johan does not use financial statements for decision making. So long as he has cash in the bank, Johan is satisfied with how his business is operating. Unfortunately, Johans accountant has suddenly left the country and retired to South America.

Johan is negotiating a contract with a supplier of building materials who wants to see his financial statements to ensure that Johan can meet his payments each month. Johan has asked you to prepare financial statements. Based on his last tax return and the contents of his shoebox for this year, you have established the following items.

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How would the financial statements you produce help the supplier of building materials decide whether to trade with Johan? What parts of the financial statements would be positive indicators that Schutz Building Services would pay for supplies on time and what items may cause some concern for the supplier?

Cash in the shoebox (with the receipts and invoices) Cash in the bank account Building services provided Amounts owed by customers Wages paid to employees Wages owed to the employees Equipment Building supplies used Building supplies on hand Amounts owed to suppliers Motor vehicle Motor vehicle expenses Electricity and telephone expense Cash used by Johan for personal expenditure $ 500 3800 550 000 80 000 150 000 3500 68 000 310 000 18 000 30 000 32 000 5 600 4000 5700 Using the information, provide a profit and loss statement and a balance sheet in narrative form for Schutz Building Services for the current period. Complete the statements in the forms provided below. SCHUTZ BUILDING SERVICES Profit and Loss Statement For the year ended June 30, 2020 INCOME EXPENSES SCHUTZ BUILDING SERVICES Balance Sheet As at June 30, 2020 ASSETS TOTAL ASSETS LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY TOTAL EQUITY