The Balance Sheet Professor Eric Carstensen Mira Costa

The Balance Sheet Professor Eric Carstensen Mira. Costa College http: //www. miracosta. edu/instruction/accounting/index. html

The Balance Sheet • Also known as the Statement of Financial Position, this statement is as of a certain date, rather that for a period of time (as with the other three statements). Some refer to it as a ‘snapshot’ of the company. • The basis of the Balance sheet is the Accounting Equation. • There are two presentations of the balance sheet as well as two different forms.

The Accounting Equation Assets = Liabilities An asset is a resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit. A liability is a claim against the assets, or legal obligations of a person or organization, arising out of past or current transactions or actions. + Owners' Equity Owner's equity represents the owner's investment in the business minus the owner's draws or withdrawals from the business plus the net income since the business began. A few selected examples of each type of account * Cash * Accounts Receivable (A/R) * Supplies * Prepaid Insurance * Equipment * Accounts Payable (A/P) * Unearned Revenue * Notes Payable * Bank Loans * Paid In Capital (Owner Investment, Common Stock) * Retained Earnings

Unclassified Balance Sheet Assets Cash Accounts Receivable Supplies Prepaid Insurance Computer Equip Liabilities Accounts Payable $ 25, 800 10, 300 1, 200 5, 400 51, 600 Wages Payable Interest Payable Unearned Revenue Notes Payable Total Liabilities $14, 100 1, 500 1, 200 7, 900 20, 000 Owners' Equity Total Assets $ 94, 300 Total Liabilities & Equity 44, 700 49, 600 $ 94, 300

Classified Balance Sheet Assets Liabilities Cash $ 25, 800 Accounts Payable $14, 100 Accounts Receivable 10, 300 Wages Payable 1, 500 Supplies 1, 200 Interest Payable 1, 200 Prepaid Insurance 5, 400 Unearned Revenue 7, 900 Total Current Assets $ 42, 700 Total Current Liabs $ 24, 700 Notes Payable 20, 000 Computer Equipment 64, 000 Total Liabilities 44, 700 Accum Dep - Equip (12, 400) Owners' Equity Total Plant Assets 51, 600 Common Stock 40, 000 Retained Earnings 9, 600 Total Equity 49, 600 Total Assets $ 94, 300 Total Liabilities & Equity $ 94, 300

The Report Form Balance Sheet Assets Cash $ 38, 500 Accounts Receivable 3, 900 Supplies 700 Prepaid Insurance 4, 400 Total Current Assets $ Computer Equipment 47, 500 14, 200 Accum Deprec - Equipment (100) Total Plant Assets 14, 100 Total Assets $ 61, 600 Liabilities Accounts Payable Wages Payable Interest Payable Unearned Revenue $ 5, 600 2, 000 50 5, 700 Total Current Liabilities $ 13, 350 Notes Payable 10, 000 Total Liabilities 23, 350 Owners' Equity Common Stock Retained Earnings 35, 000 3, 250 Total Owners' Equity Total Liabilities & Equity 38, 250 $ 61, 600

The Account Form Balance Sheet Assets Liabilities Cash $ 38, 500 Accounts Receivable Supplies Prepaid Insurance 3, 900 Accum Deprec - Equip Total Plant Assets $ 5, 600 Wages Payable 700 2, 000 Interest Payable 4, 400 Total Current Assets Computer Equipment Accounts Payable 50 Unearned Revenue $ 47, 500 14, 200 (100) 5, 700 Total Current Liabilities $ 13, 350 Notes Payable 10, 000 Total Liabilities 23, 350 Owners' Equity 14, 100 Common Stock 35, 000 Retained Earnings Total Owners' Equity Total Assets $ 61, 600 Total Liabilities & Equity 3, 250 38, 250 $ 61, 600

The Balance Sheet - Concluded • In this video presentation, we have seen several ways to present Balance Sheet information. • I have prepared other videos on the Income Statement and Cash Flow Statement as well, should you wish to view those. • You might also wish to view the Accounting Cycle presentations to what goes into how the statements are created.