Chapter 4 The Balance Sheet. Individual Balance Sheet Accounts.
11. the Classified Balance Sheet
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Transcript of 11. the Classified Balance Sheet
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Balance SheetYou better know what accounts go on the
Balance Sheet by the point in the course!
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The Balance SheetAssets
Anything the Business OwnsOrder of Liquidity
LiabilitiesAnything the Business OwesPromise of MoneyMaturity Date
Owner’s EquityBeginning Capital – Add: Net Income – Less:
Drawings and/or Net Loss – Ending Capital
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The Account Form Balance Sheet
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The Classified Balance SheetNow that you are used to it...
LET’S CHANGE IT!!
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The Classified Balance SheetIs a lot more specific than the balance sheet
you are used toWe are now grouping accounts within our
main categoriesAssets & Liabilities more specifically
Different categories allow us to dive into the numbers and compare similar items
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ASSETSAssets are broken down into two categories
1.Current Assets Assets that are smaller and easy to turn into
cash within the year Cash, Accounts Receivable, Supplies, Inventory
2.Fixed Assets Sometimes called Plant & Equipment Long term assets used in making goods or
providing services Large items: Equipment, Car, Building, Land
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LIABILITIESVery similar to assetsBroken into two groups1.Current Liabilities
Debts to be paid off within the year Accounts Payable, Bank Loan, HST
Payable/Recoverable
2.Long-Term Liabilities Debts to be paid off in over a year Mortgage, Long-Term Bank Loan
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Owner’s EquityWhat we have already learned
Beginning BalanceNet Income/LossDrawingsNew Balance
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Analyzing NumbersA number that stakeholders like to know is
called working capitalThe amount of money that the company should
have to work with on a short term basisThe higher the betterIndicates how easily the business can pay off
its debts
Current Assets – Current Liabilities
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The Classified Balance SheetWe are no longer going to put our balance
sheet into Left Side and Right SideThis was to teach you the difference between
Debit Accounts and Credit AccountsWe will be listing ours from top to bottom
Kind of like the income statementThere will be one column for the accountsThere will be two columns for the numbers
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PT’s PIZZA
Balance Sheet
October 31, 2013
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The Asset SectionAssetsCurrent AssetsCash xxAccounts Receivable xxTotal Current Assets xx
Fixed AssetsEquipment xxAutomobile xxBuilding xxLand xxTotal Fixed Assets xx
Total Assets xx
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The Liabilities SectionLiabilitiesCurrent LiabilitiesAccounts Payable xxHST Payable xxHST Recoverable (xx)Total Current Liabilities xx
Long-Term LiabilitiesBank Loan xxMortgage Payable xxTotal Long-Term Liabilities xx
Total Liabilities xx
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The Owner’s Equity Section
Owner’s Equity
D. Fense, Capital Oct. 31
$45000
Add: Net Income $1400
Less: D. Fense, Drawings
($950) $450
D. Fense, Capital Nov. 30
$45450
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Put it all together...PAGE 180 IN YOUR TEXT
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HomeworkPg 182
#4,5Prepare the Balance Sheet on Page 193 in an
excel spreadsheet