instructions for a classified balance sheet
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Instructions for a Classified Balance Sheet for beginners.TRANSCRIPT
Instructions for a Classified Balance Sheet
MJC Revised 1-2014 1
Love Thy Pet Inc,. Balance Sheet
December 31, 2010
Assets
Current Assets:
Cash $X,XXX
Notes Receibable X,XXX
Interest Receivable X,XXX
Pet Supplies X,XXX
Prepaid Insurance X,XXX
Prepaid Rent X,XXX
Total Current Assets $XX,XXX
Long-Term Investments:
Investment in stock of Intel Corp. X,XXX
Investment in real estate X,XXX X,XXX
Property, Plant, and Equipment:
Land XX,XXX
Building $XX,XXX
Accumulated Depreciation-Building X,XXX XX,XXX
Pet Store Equipment XX,XXX
Accumulated Depreciation-Pet Store Equipment X,XXX XX,XXX
Office Equipment XX,XXX
Accumulated Depreciation-Office Equipment X,XXX XX,XXX XX,XXX
Intangible Assets:
Trademark X,XXX
Total Assets $XX,XXX
Liabilities and Stockholders’ Equity
Current Liabilities:
Notes Payable Current Portion $XX,XXX
Accounts Payable XX,XXX
Salaries Payable XX,XXX
Unearned Sales Revenues X,XXX
Total Current Liabilities $XX,XXX
Long-Term Liabilities:
Mortgage Payable XX,XXX
Notes Payable long-term portion XX,XXX
Total Long-Term Liabilities XX,XXX
Total Liabilities XX,XXX
Stockholders’ Equity:
Common Stock XX,XXX
Retained Earnings XX,XXX
Total Stockholders’ Equity XX,XXX
Total Liabilities and Stockholders’ Equity $XX,XXX
Instructions for a Classified Balance Sheet
MJC Revised 1-2014 2
Contents
Asset Section of the Classified Balance Sheet: ........................................................................................................... 3
Liabilities Section of the Classified Balance Sheet: .................................................................................................. 4
Stockholders’ Equity Section of the Classified Balance Sheet: ............................................................................. 5
Final Note............................................................................................................................................................................... 5
For a presentation on the topic of “The Classified Balance Sheet” go to this web-
link:
http://prezi.com/w4r3txctu4ef/balance-sheet-organization/
Instructions for a Classified Balance Sheet
MJC Revised 1-2014 3
Step-by-Step Instructions
Start with the three-line header, which includes first the name of the corporation, second the title
of the statement, and third the end date for the fiscal period in which the statement is being
prepared.
Asset Section of the Classified Balance Sheet:
1. On the first line of the body of the statement in the center of far left hand columns place
the title “Assets.” No amount is required since this is only a title.
2. On the second line of the body of the statement place the title “Current Assets” then list
all of the current assets, assets that will be used up in one year or less, in order of
liquidity (how fast the assets can be changed into cash) on the following lines. Place the
amounts in the column second from the right.
3. Add all of the current assets together and place the subtotal in the far right hand column
and label it in the far left hand column as “ Total Current Assets.”
4. The next section will be labeled “Long-Term Investments.” Place this title in the far left
hand column of the statement. Then list all investment in other companies’ stock and any
purchase of real estate that the company plans to keep for a long-term investment. Any
real estate is property not used to produce revenues for the company. Place the amounts
in the column second to the far right hand column and add the amounts and place that
subtotal in the column to the far right hand side on the same line as the last asset.
5. The next section will be labeled, “Property, Plant and Equipmet.” Place this title in the far
left hand column of the statement as before with titles there will be no amount in the
amount columns.
6. Start with Land then Buildings, Accumulated Depreication—Building, Equipment, then
Accumulated Depreciation—Equipment. Place the amount of the assets in the left hand
column with it corsponding accumulated depreciation contra account just below it. Land
will not have
7. a accumulated depreication contra account because it does not depreciate over time as
other physical assets do in a business. Subtract the accumulated depreciation amount
from its asset account to get the book value of the asset. Place those totals for each asset
into the middle column. Add all three more or less depending on how many of these type
of assets the company owns together and place the total in the far right hand column on
the last line of those types of assets.
Instructions for a Classified Balance Sheet
MJC Revised 1-2014 4
8. The next sectin will be labeled, “Intangible assets.” Place this title in the far left hand column of the statement. List any intangibles after it. Plance the amount in the far right hand column if there is only one. If there is more than one intangible asset place the amounts in the scecond to the far right hand column and only place the subtotal in the fare right hand column.
9. The last step for the asset section of the balance sheet is to total (add together) all of the
amounts in the far right hand column. The title for this line will be, “Total Assets.” Make
sure to place a double underline under the total for this line. Dollar signs are to be placed
at the top of any column of numbers that are added or subtracted and at the end grand
total.
Liabilities Section of the Classified Balance Sheet:
1. The next section will start with the labeled, “Liabilites and Stockholders’ Equity.” Center
the title in the left hand column. No amount is required since this is only a title.
2. On the next line place the label, “Current Liabilities.” These are liabilities that are due to
be paid within the next 12 months. List accounts in order of magnitude, highest to lowest,
and place the amounts in the second from the right hand column. Place the subtotal for
this section in the far right hand column with the title, “Total Current Liabilities” placed
in the far left hand column.
3. The next subsection of this section will be labeled, “Long-Term Liabilities.” List all of
the liabilities that will be paid off in more than one year in this section. Place the amounts
in the second to the right hand column. Place the subtotal for this section in the far right
hand column. Label the subtotal line, “Total Long-Term Liabilites.”
4. The last step in this section of the balance sheet is to add up all of the amounts on the far
right hand column for this section only. The subtotal for this section will stay in the far
right hand column. No double underlines is required for this section because the next
section will need to be added to it first. The title for this line will be, “Total Liabilites.”
Place it in the far left hand column.
Instructions for a Classified Balance Sheet
MJC Revised 1-2014 5
Stockholders’ Equity Section of the Classified Balance Sheet:
1. The title, “Stockholders’ Equity” is placed in the far left hand column at the beginning of
this section. List the two accounts of common stock and retained earnings in this section.
Place the amounts in the second to the far right hand column.
2. The next step is to subtotal the two accounts and place the subtotal in the far right hand
column. The title for this line will be, “Total Stockholders’ Equity.”
3. The last step required for the section, “Liabilities and Stockholders’ Equity’ is add
together total liablities and total stockholders’ equity and place the amount in the far right
hand column with a double underline and dollar sign. The title for this line to be placed in
the far left hand column will be, “Total Liabilities and Stockholders’ Equity.”
Final Note
Not all companies own the same assets or owe the same liabilities. Place only the sections you
need for each company in the balance sheet of a company if the company does not have a
specitic type of asset or liability feel free to leave out that section of the balance sheet. Do
remember that most companies will have current assets and current liabilities. Not all companies
will have long-term assets or intangible assets. Not all companies will have long-term liabilites.
The Stockholders’ Equity is a section that all companies will have on their balance sheet.