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Financial statements for a business

(a) Your friend has been provided with the most recent financial statements for a business that she is interested in buying. She is familiar with the income statement and cash flow statement but is unsure about the contents of the balance sheet. Briefly describe the information contained in a balance sheet. (2 marks)

A balance sheet presents the book value of an organization. It reports the assets, liabilities, and shareholders’ equity of a business during a specific period.

(b) Your friend Tony is a great Chinese chef and wants to expand his restaurant from Sydney to Wollongong. He wants to maintain control of his business and keep costs and taxes to a minimum. Tony has plans to borrow funds to expand the service in the future.
Use the four main stages of critical thinking and what you have learnt about business structures to suggest the most appropriate business structure for Tony’s restaurant and why you think it is most suitable for Tony. Ensure you explain your answer, including Accounting and non-accounting information. (4 marks)