BALANCE SHEET

The balance sheet is a statement which shows the assets of a business and its liabilities. Unlike the trading, profit and loss account, the balance sheet is not an account; it presents information as at a particular date.
Balance sheet is a statement that shows the financial position or status of an organization at the end of particular period.
CONTENTS OF A BALANCE SHEET

1. ASSETS: These are economic resources used to generate future benefits for the organization. It is categorized into 2 for the purpose of balance sheet (a) Fixed asset (b) Current assets
2. LIABILITIES: These are obligation or indebtedness of the business to the third party e.g. bank overdraft, bill payable, prepaid income, creditors etc.
3. CAPITAL: These are obligation of the business to the owner. It is the amount that is used to start a business.
   FORMAT
   Balance Sheet as at 31st Dec. 2002
   N N
   Capital XXX FIXED ASSETS
   Add Net Profit XXX Land and Building XXX
   XXX Plant XXX
   Less Drawings XXX Furniture and Fittings XXX
   XXX Motor Van XXX
   XXX
   CURRENT LIABILITIES CURRENT ASSETS
   Loan XXX Cash in Hand XXX
   Bank Overdraft XXX Cash at Bank XXX
   Creditors XXX Debtors XXX
   Closing Stock XXX
   XXX XXX
   EXAMPLE 1
   The following list of balances at the end of the year ended 31st March 1991 has been extracted from the book of Wole and Sons.
   N
   Net Profit 40,000
   Creditors 15,000
   Capital 165,000
   Furniture and fittings 10,000
   Cash at Bank 20,000
   Drawings 5,000
   Closing Stock 20,000
   Land and Buildings 120,000
   Motor Vehicle 45,000
   You are required to prepare a balance sheet as at date

WORKINGS:
Wole and Sons balance sheet as at 31st March 1991
N N
Capital 165,000 Land and Buildings 120,000
Add Net Profit 40,000 Furniture and fittings 10,000
205,000 Motor Vehicle 45,000
Less Drawings 5,000 175,000
200,000
CURRENT LIABILITIES CURRENT ASSETS
Creditors 15,000 Cash in Hand 20,000
Cash at bank 20,000
215,000 215,000

ASSIGNMENT

1. The following balances were extracted from the books of Ayedaade Limited.
   N
   Land and Buildings 180,000
   Capital 399,500
   Drawings 2,600
   Furniture and fittings 2,000
   Debtors 11,500
   Cash at Bank 168,000
   Closing Stock 10,600
   Motor Vehicles 40,000
   Creditors 31,800
   Net Profit 5,800
   Cash in Hand 22,400
   You are required to prepare the balance sheet as at 31st Dec. 1990 from the above transaction
2. You are required to prepare Ojulari balance sheet as at 31st Dec. 1994 from the following balances:
   N
   Capital 19,600
   Cash in Hand 610
   Cash at Bank 3,000
   Plant and Machinery 8,000
   Land and Buildings 10,000
   Stock 5,090
   Net Profit 5,160
   Drawings 2,800
   Bank loan 5,400
   Debtors 5,340
   Creditors 4,680