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Balance sheet preparation

Shand Business Solutions

can provide you with an Accountant Ready Balance Sheet if required depending on what your  accountant requires.

balance sheet is one of the financial statements that will be distributed outside of the accounting department and is often distributed outside of the company. The balance sheet is organized into sections or classifications such as current assets, long-term investments, property, plant and equipment, other assets, current liabilities, long-term liabilities, and stockholders’ equity. Only the asset, liability, and stockholders’ equity account balances from the general ledger or from the trial balance are then presented in the appropriate section of the balance sheet. Totals are also provided for each section to assist the reader of the balance sheet. The balance sheet is also referred to as the statement of financial position or the statement of financial condition.

The accounting balance sheet is one of the major financial statements used by accountants and business owners. (The other major financial statements are the income statement, statement of cash flows, and statement of stockholders’ equity.  The balance sheet is also referred to as the statement of financial position.

The balance sheet presents a company’s financial position at the end of a specified date. Some describe the balance sheet as a “snapshot” of the company’s financial position at a point (a moment or an instant) in time. For example, the amounts reported on a balance sheet dated December 31, 2013 reflect that instant when all the transactions through December 31 have been recorded.

Because the balance sheet informs the reader of a company’s financial position as of one moment in time, it allows someone—like a creditor—to see what a company owns as well as what it owes to other parties as of the date indicated in the heading. This is valuable information to the banker who wants to determine whether or not a company qualifies for additional credit or loans. Others who would be interested in the balance sheet include current investors, potential investors, company management, suppliers, some customers, competitors, government agencies, and labor unions.

Most accounting balance sheets classify a company’s assets and liabilities into distinctive groupings such as Current Assets; Property, Plant, and Equipment; Current Liabilities; etc. These classifications make the balance sheet more useful. The following balance sheet example is a classified balance sheet.

Sample Balance Sheet:

Example Company
Balance Sheet
December 31, 2011

ASSETS     LIABILITIES
Current Assets     Current Liabilities  
  Cash

$   2,100

    Notes Payable

$   5,000

  Petty Cash

100

    Accounts Payable

35,900

  Temporary Investments

10,000

    Wages Payable

8,500

  Accounts Receivable – net

40,500

    Interest Payable

2,900

  Inventory

31,000

    Taxes Payable

6,100

  Supplies

3,800

    Warranty Liability

1,100

  Prepaid Insurance

     1,500

    Unearned Revenues

     1,500

    Total Current Assets

   89,000

      Total Current Liabilities

   61,000

-

Investments

   36,000

  Long-term Liabilities  
          Notes Payable

20,000

Property, Plant & Equipment     Bonds Payable

  400,000

  Land

5,500

      Total Long-term Liabilities

  420,000

  Land Improvements

6,500

         
  Buildings

180,000

         
  Equipment

201,000

  Total Liabilities

  481,000

  Less: Accum Depreciation

   (56,000)

     
    Prop, Plant & Equip – net

  337,000

       

-

Intangible Assets     STOCKHOLDERS’ EQUITY  
  Goodwill

105,000

    Common Stock

110,000

  Trade Names

  200,000

    Retained Earnings

229,000

    Total Intangible Assets

  305,000

    Less: Treasury Stock

   (50,000)

            Total Stockholders’ Equity

  289,000

Other Assets

     3,000

       

-

Total Assets

$770,000

  Total Liab. & Stockholders’ Equity

$770,000

 

The notes to the sample balance sheet have been omitted.