Hi Guys,

I have this difficult homework, the teacher ask me to to do the Balance sheet in account format. I tried many times, but I got lost and end up with unbalance number:( PLEASE HELP ME...

This is the description:

Cash $5670
A/R $37100
Inventory $60500
Supplies $ 3930
Prepaid rent $ 6000
Furniture $ 26500
Accumulated depreciation $21200
A/P $46340
Unearned sales revenue $3500
Notes payable-long term $35000
Capital $23680
Withdrawal $48000
Sales revenue $$346700
Sales discount $ 10300
Sales return & allowance $ 8200
Purchases $175900
Purchase discount $ 6000
Purchase return and allowance $ 7430
Freight in $9300
Salary expenses $ 82750
Rent expenses $7000
Utility expenses $ 5800
Interest expenses $ 2900

Thank you so much for the result...

Bizou

Difficult for you, easy for me.
Due to the rules here, I really cannot do your homework for you.
SORRY!

We don't do your homework for you... that is, we're not going to give you the "result" you want, but if you will show the work you did to get that unbalanced number, then we can see where you've gone wrong.

This what I did:
On Asset:
I put: Cash, A/R, Inventory, Supplies, Prepaid rent, Furniture, Accumulate depreciation, and capital.

On Liabilities:
I put:
A/P, Long term notes payable, salary, rent expense, utility and interest.

The numbers are not balance. Is there anything I need to add on each section?

Thnk in Advance

Bizou

akbizou,

You are far from being correct.
It would appear that you are tackling a problem far ahead on what you have reached in accounting.

Let me start you , pace by pace.

You need to do this as I suggest.

Mark each item as to whether it is a DEBIT OR a CREDIT.

Cash $5670***DR
A/R $37100***DR
Inventory $60500
Supplies $ 3930
Prepaid rent $ 6000
Furniture $ 26500
Accumulated depreciation $21200***CR
A/P $46340
Unearned sales revenue $3500
Notes payable-long term $35000
Capital $23680
withdrawal $48000
Sales revenue $$346700
sales discount $ 10300
sales return & allowance $ 8200
purchases $175900
purchase discount $ 6000
purchase return and allowance $ 7430
freight in $9300
salary expenses $ 82750
Rent expenses $7000
utility expenses $ 5800
interest expenses $ 2900

_____________________________________
Just to help you:-

All assets and all expenses are DEBITS.
All liabilities and all incomes and all EQUITY
are CREDITS.
This is the Accounting Formula.=
A + E = L + I + EQUITY.

------------------------------------------------------

When you total all the Debits and all the Credits in separate columns , you find that they should be equal.
Try and see how you go.

The original accounts given already balance. While you do need to know debits & credits, I don't see what that has to do with doing financial statements, nor does it have to do with the errors that you are making. (There isn't anything here that shows us your knowledge of debits & credits, but most people could use some review in that area.)

You need to learn what the five classifications of accounts are and which accounts belong in each category. And you need to know which accounts go on which financial statement.

The five classifications:
Assets - stuff you own or have some kind of claim on
Liabilities - what you owe or have an obligation to
Equity - net worth of the company (and therefore net amount the owner has in the company)
Revenue - what you earn
Expenses - services done for you or the use of assets

Those are the quickie definitions. The accounts are already in order.

What you have in assets ia almost correct. Notice that you've just copied them off the list, right in order from the top, which is exactly where assets ought to be. Except it doesn't include capital. Capital is just a net worth - it's not a thing. Since assets are first, followed by liabilities, once you hit the liabilities, you're done with assets and need to move to the next section. As you see, capital is several accounts down.

But the liabilities are pretty messed up. You've included a lot of expenses in there - those aren't liabilities. For instance, salaries expense is the amount the employees have earned for their work - not how much your owe them. If you still owed them, it would be salaries payable.

You also cannot do a balance sheet first. You must do the income statement so you have net income, and then do a statement of owner's equity to update that account, and then you can do your balance sheet. So that's part of the problem also.

Your text should have examples of these. Go look these up and study them and see if you can fit these accounts in with the examples. (Keep in mind they won't have the same accounts, but also keep in mind the accounts are in order so you've already got a headstart right there.)

Considering that you're into merchandising at these point, everything I said above is a few chapters back. These concepts aren't going away, so if you need to, go back and review earlier chapters, like probably the first chapter which should give the basic types of accounts and what they are, and should present simple financial statements. An income statement for a merchandising company has more stuff, but should be in the merchandising chapter.