(Record information on a spreadsheet, prepare a balance sheet, LO 1, 2, 5) Louis Langer is a dentist with a practice in a small town in Manitoba. Recently, he sepa- rated from his wife and they are currently negotiating how they will divide their assets when their divorce proceedings conclude. As part of the process, Louis’s lawyer has asked for a balance sheet for his practice. The balance sheet will be used to help value Louis’ practice. Louis has asked you to prepare the balance sheet. You gather the following information from Louis:

Louis purchased all his equipment eight years ago when he started his practice.

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.

. Patients owe Louis $19,000.

Louis owes various suppliers $12,000 for various goods and services that he used in his practice.

The practice has $4,750 in its bank account.

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

Louis has a bank loan outstanding for $10,000.

vill. Louis keeps various supplies that he needs in his practice. The cost of the supplies he currently has on hand is $750.

Set up a spreadsheet like the one in Table 2-1 on page 41 and record each of the above events into the worksheet. For each entry make sure to state the type of asset, liability, or equity that is affected (cash, accounts receivable, accounts payable, etc.).

Required:
. Use the information in the spreadsheet to prepare a balance sheet for Louis’
dental practice.
. Asa judge in this case, how would you use the balance sheet in deciding how to value Louis’ practice?
. What additional information do you think that you as judge might want to have before deciding how to value Louis’ practice?