In Chapter 1 you were asked to imagine you were a student needing insurance on your apartment and examined different ways of valuing the contents of the apartment. We identified three different ways of valuing the contents of the apartment. Table 1.6 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:

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 Item What it cost What it would cost to replace What it could be sold for Television $ 500 $ 650 $ 225 Computer 1,200 900 300 Furniture 3,200 3,800 1,700 Books 750 875 300 Clothes 1,600 1,950 300 Stereo 900 1,100 700 Jewellery 500 625 300 Appliances 2,100 2,600 1,400 Art 300 500 500 Other 1,000 1,200 750 Total $10,650 $14,200 $6,475