Woodshop is a warehouse that has many machines used for woodworking. Trevor, the owner, has extensive experience in woodworking. Trevor opened the Woodshop, for people to come in to use his tools and machinery. They could also receive training and work on their hobby woodworking projects. Trevor charges his clients $250 a month to use his place and machinery to create things like tables and shelves. While he has some great equipment, he realizes that some of the machinery will need to be replaced because of the wear and tear over 5 years. Some of the machines do not run as smoothly as when he first bought them. For example, the saw that he bought 5 years ago still works, however, he has decided to sell it to buy a new one. He bought it for $2,000 but after 5 years, he might be able to sell it for only $500. Trevor must also pay about $100 a month on new saw blades, sandpaper, and woodworking supplies for his business. When Trevor started the business, he had to put in $50,000 of his own money. The business has progressed, so he is slowly paying himself and the amount of his own investment is now only $20,000.00.

a) Based on the information in the example above, examine the statements below and explain the accounting term that applies to each

. i) Trevors investment into the company (0.5 marks)

ii) Trevor has a saw that he must get rid of what he paid and what he will recover when he sells it (.5 mark)

iii) The rent that he charges his clients (0.5 marks)

iv) The supplies he must buy every month (0.5 marks)

b) He wants to realize his profit and loss, what is the best accounting report that Trevor should use?

Describe the report and explain why it is the most appropriate (2 marks)

3) "Woodshop" is a warehouse that has many machines used for woodworking. Trevor, the owner, has extensive experience in woodworking. Trevor opened the "Woodshop", for people to come in to use his tools and machinery. They could also receive training and work on their hobby woodworking projects. Trevor charges his clients $250 a month to use his place and machinery to create things like tables and shelves. While he has some great equipment, he realizes that some of the machinery will need to be replaced because of the wear and tear over 5 years. Some of machines do not run as smooth as when he first bought them. For example, the saw that he bought 5 years ago still works, however he has decided to sell it to buy a new one. He bought it for $2,000 but after 5 years, he might be able to sell it for only $500. Trevor must also pay about $100 a month on new saw blades, sandpaper, and woodworking supplies for his business. When Trevor started the business, he had to put in $50,000 of his own money. The business has progressed, so he is slowly paying himself and the amount of his own investment is now only $20,000.00 a) Based on the information in the example above, examine the statements below and explain the accounting term that applies to each. i) Trevor's investment into the company (.5 mark) ii) Trevor has a saw that he must get rid of - what he paid and what he will recover when he sells it (.5 mark) iii) The rent that he charges his clients (.5 mark) iv) The supplies he must buy every month (.5 mark) b) He wants to realize his profit and loss, what is the best accounting report that Trevor should use? Describe the report and explain why it is the most appropriate (2 marks)