Please help - I need to prepare Balance sheet and Income statement and I just can't seam to get it right. I have worked on it for few days now and the attached document shows what I've done so far.
I'm not sure that I have put appropriate items where they belong and therefore I can't get my balance sheet to balance and income sheet to make sense.

Attached Excel file shows the Items (sheet1), my Balance sheet (sheet 2) and Income statement (sheet 3).

Thank you for helping.

Rebecca, I haven't solved it, but noticed a few things to suggest: 1) I highly recommend using formulas for the sums instead of hard coding them. You're much less likely to make mistakes that way. 2) Go through your list of items on the inputs sheet one-by-one and make sure everything is counted once and only once. I noticed the item for $25 is not included. Lastly, just as a general approach for reconciling, note what the difference between two figures is (say $7,000 and $5,500 = $1,500) and try to find a figure with that amount in one or more of your entries that could be categorized. Good luck.

Hi Kurtwz,

Thank you for the tips. As for the amount of 25 dollars - yes, my mistake, I believe that is the only one not included. I hate to admit, but I don't know where depreciation expence goes...

I also tried and look at the outstanding amount, but nothing matches...

I really appreciate you taking the time to look at it... however, I am still lost.

Ivana

Rebecca,
I myself is an accounting student and I still need help too with my problems too. But I think the depreciation expense should go under the general and administrative expense. Depreciation methods, in some cases when ii is amortized, it is called depletion. I suggest you lable your work this way or in this format.
Revenues:
Sales
Less: sale Ret. And Allo. If there is any.
Sales Discount
Cost of goods Sold: this include Beg Inv. Plus net purch. Minus purch. Disc. Or any ret. And allow. Equal net net purch. Plus freight in equal goods avail. For sale minus ending Inv equal COGS.but this COGS have to be taken off to give you gross profit and this gross profit is always on your far right hand while the others in the middle. Sales and gross profit stays on the far right.net topic.
Operating expenses: if there is any. Then comes your gen. and adm. Expense. And do the rest. Just go back to your book and read with attention and you will be able to do your work. I have help myself this way somethimes.
Good luck.

Hey,

Thanks for the tips, but this is the actual format I must follow.

I have gone back to my books and I'm still stuck... not giving up though!

Well looking at your spreadsheet many items are classified wrong or classified twice. One the balance sheet put assets, liabilities and equity accounts. On the income statement put sales (revenues) and expenses (costs). Also accumulated depreciation is a contra asset account, meaning it is a credit balance or negative compared to an asset. You should list these after their corresponding asset. For example:

Equipment 1,000
Accum. Dep. Equip 250
Equipment (net) 750

Thank you codyman - especially for the tip about Depr. Assets and the format.

Quote:

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Originally Posted by rebecca2003

Thank you codyman - especially for the tip about Depr. Assets adn the format.

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If you want to post your spreadsheet again after making these changes I will take a look. Remember the balance sheet has to balance (Assets = Liabilities + Equity) if it does balance that is a pretty good indication you are correct.

Yes I will-take you for the offer. Just give me a day or two... must find time...

In the meantime, can you tell me how would balance/income statement change if for example we say that 70% of sports clothing and equipment sales is credit sales. Also, all stock is on credit.

:rolleyes:

More AR and more AP but compared to what...

Well, lets say we have to do balance and income statement for 2003 and 2004... how would they change if 70% of sports clothing and equipment sales is credit sales. Also, all stock is on credit.

Quote:

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Originally Posted by rebecca2003

Well, lets say we have to do balance and income statement for 2003 and 2004....how would they change if 70% of sports clothing and equipment sales is credit sales. Also, all stock is on credit.

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Right but what was the situation before the change... Were all sales for cash? If so I think you can figure out which accounts that would change.

Also was the stock purchased with cash before... Again what accounts would change.

I will help but I cannot give you the answer.

I'm afraid it doesn't mention the situation before or anything similar. THis is all the info I have.
Anyway, I'm working on baland and income statement and will attach the new version soon.

Dear Codyman,

Here is my new version of balance sheet and income statement. I'm afraid it doesn't balance again... I wish I knew what I was doing wrong!!

Perhaps its to do with the fact that it mentions that 70% of all the sales for clothes and equipment are on credit and all the stock is also on credit... Or perhaps its just me doing the wrong thing.

On the attached Excel, in the first sheet 'Items' you can also see how I classified each item without trying to locate them on balance/income sheet.

Thank you in advance for taking time to assist me.

Quote:

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Originally Posted by rebecca2003

Dear Codyman,

Here is my new version of balance sheet and income statement. I'm afraid it doesn't balance again....I wish I knew what I was doing wrong!!!

Perhaps its to do with the fact that it mentions that 70% of all the sales for clothes and equipment are on credit and all the stock is also on credit.....Or perhaps its just me doing the wrong thing.

On the attached Excel, in the first sheet 'Items' you can also see how I classified each item without trying to locate them on balance/income sheet.

Thank you in advance for taking time to assist me.

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Okay I got it... One check your formula for ending balance in owners equity. There is a mistake here, see it?

Also, you have one item classified as a liability that is an expense. Do you know what it could be? Hint it could have been on the balance sheet if it was pre-paid, but without being called a pre-paid its an expense.

I got it!! My assets finally equal OE+liabilities!!

I can't tell you how grateful I am!! Thank you so much-your guidance and advice has been priceless! :p:p:p