(Record information on a spreadsheet, prepare a balance sheet, LO 1, 2, 5) Andrea Reed is in her fourth year at a business school in Nova Scotia. Recently Andrea was asked by her brother Dennis to help him prepare a personal balance sheet. Dennis needed the balance sheet because he was applying for a scholarship at a prestigious art school and the school required the information to help it assess Dennis’ financial need. Andrea sat down with Dennis to go over his situation and she obtained the following information: :

i. Dennis’s bankbooks show that he has $844 in his bank accounts.

ii. Dennis purchased a used car from his uncle three years ago. He paid $4,500 for the car and he thinks he should be able to continue to use it for another two years.

Dennis is owed $750 for some decorating he did for a local social group’s recent fund-raising party.

iv. Dennis owes $2,000 to a local bank for a job training program he took a couple of years ago. He must begin to pay back the money once he accepts a full-time job or in five years, whichever comes first.

v. About six months ago Dennis bought a computer from a local store. The computer cost $1,200 and he paid the seller $700 at the time he purchased it and he must pay $50 a month until the computer is paid for.

Dennis’s personal property such as clothes, books, jewellery, etc., cost him about

$6,000.

Required:

a. 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.).

b. Use the information in the spreadsheet to prepare a balance sheet for Dennis.

c. How do you think the balance sheet would help the art school assess whether Dennis should receive financial assistance?

d. What additional information do you think the school would want to have before making a decision to offer financial assistance?