Wanda's Fashions is a small tailor's shop located in the centre of a medium-sized community. The shop is owned and operated by Wanda, who alters clothing, tailors clothing to the specification of customers, and carries a line of ready-made clothing that she designs and makes herself. Wanda also makes all the uniforms worn by the employees of her brother Wendel's businesses. Wanda has been in business for over 20 years and has a list of over 200 people who use her services regularly, both for tailoring new clothes and for repairing and altering clothes. The store owns several sewing machines, pressing equipment, mannequins, and furniture and fixtures in the showroom portion of the store. There is also a large sign in front of the store. All capital assets are depreciated using the rates required by the Income Tax Act. Wanda has a large quantity of fabrics in stock so she can provide a wide selection to customers who wish to have clothes made for them. Wanda operates the store on her own. She has two tailors who work for her part time, based on how busy she is. Her children, Wendy and Webster, sometimes work in the store when it's busy. Webster also helps his mother do alterations and some of the tailoring. The children aren't paid for their work but Wanda pays for their university tuition fees and last year bought them a car. The shop is located in a three-storey building owned by Wanda and her husband Willie. In addition to Wanda's shop, the building houses three other storefront businesses (a fruit store, a butcher shop, and a video store) and has two businesses and three apartments on the second floor. Each of the tenants (except Wanda's Fashions) pays a monthly rent. Wanda, Willie, and their children live on the third floor of the building.

Wanda and Willie prepare a single set of financial statements for tax purposes. The statements encompass all income and expenses generated by the business activities (all of which are unincorporated), including Wanda's Fashions, building operations, and some of Willie's unincorporated business ventures. Wolfgang Wondergarment has expressed interest in purchasing Wanda's shop. Wolfgang is an experienced tailor who arrived in Canada three years ago. He has been working as a tailor for a major chain but he feels he is ready to have his own business. He will be meeting with Wanda next week to discuss the sale. Wanda has said that she will provide any information that is required.

Required:

Wolfgang Wonder garment has asked you for help in preparing for the meeting.

Wolfgang would like a report outlining the information that should be requested from Wanda, including questions and concerns he should have about the financial statements that Wanda will show him. Wolfgang believes that Wanda's accountant (actually her cousin Wesley) will be present, so Wolfgang wants full explanations of what is needed and why it's required.