Balance sheet

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
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
LIABILITIES: These are obligation or indebtedness of the business to the third party e.g. bank overdraft, bill payable, prepaid income, creditors etc.
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 F meIXED 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
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

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