MGAB01H3 Lecture Notes - Lecture 1: Income Statement, Financial Statement, Accounts Receivable
10 Oct 2014
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MGAB01H3 Full Course Notes
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Francois arnaud is in the process of retiring and sold his business, le gateau au chocolat bakery, to. The purchase agreement included a provision that required. Genevieve to pay francois ,000 plus 25 percent of the bakery"s profit in each of the next five years and required that the bakery"s financial statements to be measured in a fair and reasonable manner . Genevieve financed the business acquisition with the royal bank and their only stipulations are to provide them with audited financial statements and for the business to not exceed a certain debt to equity ratio. Neither genevieve nor francois is familiar with accounting concepts. Francois has hired you to determine the fairness and reasonableness of genevieve"s accounting policies and provide advice on how the profit should be measured in future years. In reviewing the profit for the first year, you discover that genevieve adopted the following accounting policies: the bakery had two main sources of revenue.
