The Skate Stop is owned by Marc Blanger. It sells in-line skates and accessories. It shares rented

The Skate Stop is owned by Marc Bélanger. It sells in-line skates and accessories. It shares rented space with another company, Ride Snowboards. Ride Snowboards is owned by Marc's wife, Dominique Maltais, who was an Olympic bronze medallist in snowboarding. Ride Snowboards sells snowboards and related accessories. The market for in-line skates is growing and Marc wants to expand the amount of inventory The Skate Stop carries. He has asked his bank for a loan to finance the inventory. The bank manager has requested financial statements that are prepared using GAAP.

Instructions

(a) Explain how financial statements will help the bank manager decide whether to loan Marc money for inventory.

(b) Why does the bank manager want the statements to be prepared using GAAP?

(c) Should Marc include Ride Snowboards' financial information in Th e Skate Stop's financial statements? Explain.

(d) Should Marc report all of the store's assets at cost or what they could be sold for? Explain.