Preparing The Balance SheetStep 5b:

Classified Balance Sheet• A classified balance sheet is split into four

separate parts.• Current Assets• Fixed Assets• Current Liabilities • Long Term Liabilities

Current Assets• Assets that will be changed into cash within one

year and or/assets that will be used up within one year. • Examples include: Cash, A/R, Supplies, Insurance.

Fixed Assets• Assets that will be kept for longer than one year• Examples include equipment, furniture, buildings,

depreciation (contra asset, takes away) etc.

Current Liabilities• Liabilities that will be paid within one year.• Examples include: A/P, Bank Loan Payable

Long Term Liabilities• Liabilities that take longer that one year to repay. • Example: Mortgage

Mr. LeBlanc's BusinessBalance Sheet

Month Ending March 31, 2014

AssetsCurrent AssetsBank 520Accounts Receivable 12260Merchandise Inventory 35651Supplies 350Parts and Materials 4560Pre Paid Insurance 600 53941

Fixed AssetsEquipment 18600Less: Accumulated Depreciation 13724 4876Truck 18000Less: Accumulated Depreciation 15883 2117 6993

Total Assets 60934

Liabilities and Owners EquityCurrent LiabilitiesAccounts Payable 5360GST Payable 850Less GST Recoverable 420 430PST Payable 980 6770

H. Rohr CapitalBalance January 1, 29010

Net Income 50154Drawings 25000Increase in Capital 25154

Balance December 31 54164Total Liabilities and Equity 60934

Procedure1. Complete the heading2. Prepare the current assets portion

a) Insert title “Current Assets” to the left marginb) Insert account titles indented to right and put their amounts

in the middle columnc) Underline the final amount in the middle column. Total all of

the current assets and put that total in the third column, beside the last amount you entered.

3. Prepare the fixed assets portiona) Insert title “Fixed Assets” to the left marginb) Insert account titles indented to right and put their amounts

in the middle columnc) Total your depreciation amount, insert a title called “Less:

accumulated depreciation” and insert the number in the middle column.

d) Underline the final amount in the middle column. Total all of the fixed assets and put that total in the third column, beside the last amount you entered.

Procedure4. On a new line write total assets at the left margin. Add up the two total assets numbers in the third column. Single underline the last number in the third column and double underline your total.5. Prepare the Current Liabilities portion

a) Insert title “Current Liabilities” to the left marginb) Insert account titles indented to right and put their

amounts in the middle columnc) Underline the final amount in the middle column.

Total all of the current liabilities and put that total in the third column, beside the last amount you entered.

Procedure6. Prepare the Long Term Liabilities portion

a) Insert title “Long Term Liabilities” to the left marginb) Insert account titles indented to right and put their

amounts in the middle columnc) Underline the final amount in the middle column.

Total all of the Long Term liabilities and put that total in the third column, beside the last amount you entered.

7. Prepare the Capital Portiond) Insert Title “ Owner Name, Capital” along left margin. e) Write “balance, date” indent, and put the amount in

the middle column. f) Write net income and indent further write total in the

first column

Procedured) Write “drawings” indent and put the amount in the first column and underline it. e) Subtract net income from drawings. If the difference is positive write “increase in equity” if it is negative write “decrease in equity” put the total in the middle column and underline it. f) Write balance and the end of the fiscal period, indent and put the total in the third column, single underline. g) Add up the third column, write “Total Liabilities and Owners Equity, place the total in the third column. Double underline and check to make sure that they and assets balance.

Assignment• Identify the item• Fraser River Enterprises• Stanley Park Enterprises