Peggy75
Apr 14, 2012, 03:25 AM
If you are given a list of items and asked to prepared a balance sheet, do you first need to develop a financial journey that has dual entries? I have tried to do this but it is not making sense to me because the items that are given are provided on an 'as at' date, and something like a 'mortgage' of 28,000 is a liability but it is not going to 'dually' reduce cash of 28,000 at once I wouldn't think.
Items were provided randomly but I catogorized them into:
Assets: building, accum depreciation (subtracted this), pre-paid insurance, provision for doubtful debt (subtracted this), acc receivable, stock (inventory), cash at bank
Liabilties: accounts payable, wages payable, mortgage
Net sales, bank interest earned, wage expenses & telephone expenses I calculated to get profit which I then put into a draft balance sheet under equity. I used (net sales + bank interest) - (telephone + wage expenses).
I added assets, added liabilties and equity, but A does not = liabilties plus equity using the values given for each item above.
Should I develop financial journal (although date by date transactions aren't given)? Why can't I get this thing to balance? For example, is cash at bank also capital under equity? Am I being too simple with the values provided?
Thank you so much,
Peggy
Items were provided randomly but I catogorized them into:
Assets: building, accum depreciation (subtracted this), pre-paid insurance, provision for doubtful debt (subtracted this), acc receivable, stock (inventory), cash at bank
Liabilties: accounts payable, wages payable, mortgage
Net sales, bank interest earned, wage expenses & telephone expenses I calculated to get profit which I then put into a draft balance sheet under equity. I used (net sales + bank interest) - (telephone + wage expenses).
I added assets, added liabilties and equity, but A does not = liabilties plus equity using the values given for each item above.
Should I develop financial journal (although date by date transactions aren't given)? Why can't I get this thing to balance? For example, is cash at bank also capital under equity? Am I being too simple with the values provided?
Thank you so much,
Peggy