The Balance Sheet

The Balance Sheet A = L + OE A financial statement used in business and prepared by accountants to show the financial position of that business on a particular date.

Accounts Receivable The money that is owed to a business by its customers. This money is considered an asset to the business. A debtor is anyone who owes money to the business.

Accounts Payable The money that a business owes to its creditors. This money is a liability of the business. A creditor is anyone to whom the business owes money.

Preparing a Balance Sheet Mark Bianchet owns “Mark’s Repair Shop” He has been in business for several years, and specializes in fixing small appliances such as toasters, microwave ovens, fans, coffee makers, vacuums, etc. Let’s look at Mark’s assets and liabilities

Preparing a Balance Sheet Mark’s Assets: Cash: 6500 Money owed to him from customers (AR): 8100 Supplies: 500 Spare Parts: 4000 Equipment: 25, 500 Building and land: 175,000 Total Assets? Mark’s Liabilities Debts he owes to other businesses (AP): 7350 Bank loan: 11,050 Mortgage: 110,000 Total Liabilities? Owner’s Equity?

Step 1 Statement Headings Mark’s Repair Shop Balance Sheet April 22, 2014 Assets Liabilities Cash $ 6 500 Accounts Payable 7 350 Accounts Receivable 8 100 Bank Loan 11 050 Supplies 500 Mortgage Payable 110 000 Parts Inventory 4 000 Total Liabilities $ 128 400 Equipment 25 500 Building and Land 175 000 Owner’s Equity Mark Bianchet, Equity $ 91 200 Total Liabilities and Total Assets $ 219 600 Owner’s Equity 219 600 Step 2 List Assets Step 3 List Liabilities Step 4 Calculate Owner’s Equity Step 5 Put It All Together

Page 299 Review Questions #7, 8, 9 Judy’s Boutique and Snackbar Heaven

Preparing a Balance Sheet Template – this is your good copy! Practice on your own Judy’s Boutique Snackbar Haven

Judy’s Boutique Cash 3200 Gord Lewis owes 475 Michael Erb owes 395 Inventory 34000 Furniture/Equipment 23450 Building 94000 Owed to Titan Wholesale 8420 Bank loan 9460 Mortgage 42000 Calculate Judy McCutcheon’s owner’s equity and complete the balance sheet

Snackbar Haven Bank Loan 8695.25 Supplies 17742.74 Cash 16941.19 Mortgage 38462.91 Owed to Lloyd Restaurant Supply 7492.37 Karen’s Catering owes 6248.23 Equipment 26497.36 Building 75400.00 Furniture 36481.22 Remember to calculate OE for the owner, Anu Persaud

Judy’s Boutique Balance Sheet 23 April, 2014 Assets Cash $ 3 200 Accounts Receivable 870 Inventory 34 000 Furniture & Equipment 23 450 Building 94 000 Total Assets $155 520 Liabilities Accounts Payable 8 420 Bank Loan 9 460 Mortgage 42 000 Total Liabilities $ 59 880 Owner’s Equity J. McCutcheon, Capital $ 95 640 Total Liabilities and Owner’s Equity $155 520

Snack Bar Haven Balance Sheet April 23, 2014 Assets Cash $ 16 941.19 Accounts Receivable 6 248.23 Supplies 19 742.74 Equipment 26 497.36 Furniture 36 481.22 Building 75 400.00 Total Assets $181 310.74 Liabilities Accounts Payable 7 492.37 Bank Loan 8 695.25 Mortgage 38 462.91 Total Liabilities 54 650.53 Owner’s Equity A Persaud, Capital $126 660.21 Total Liabilities and Owner’s Equity $181 310.74