I'm having problems in preparing a budgeted balance sheet.I'm confused about how to treat the prepaid insurance from the current BS to the budgeted one.Bcuz the text said that the annual insurance is $180,000 so I wonder whether we minus the prepaid amount from here to know the paid amount.
One more thing is the account payable.The current account payable shows the total of credit purchase of material and another amount which I don't know how to treat it in the budgeted BS.
Can anyone help me with this? :D

As for the insurance... the amount PAID is not what goes on the balance sheet. The amount going into the prepaid account is what goes there. I don't have any idea how much would be in there because I don't know when the $180,000 was paid, and therefore what portion would belong to the current year (expense) and what portion goes to the next year (prepaid). As for the payable, it's a little difficult to know how it's treated when all you've said is there's an amount you don't know how to treat and no information about what it is.

Pretty vague. If you want a truly helpful answer, you need to provide us with enough info to know what's going on.

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Originally Posted by morgaine300

As for the insurance... the amount PAID is not what goes on the balance sheet. The amount going into the prepaid account is what goes there. I don't have any idea how much would be in there because I don't know when the $180,000 was paid, and therefore what portion would belong to the current year (expense) and what portion goes to the next year (prepaid). As for the payable, it's a little difficult to know how it's treated when all you've said is there's an amount you don't know how to treat and no information about what it is.

Pretty vague. If you want a truly helpful answer, you need to provide us with enough info to know what's going on.

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Uhm,so is the prepaid insurance still in the budgeted BS ? Because $180,000 will be paid in the 2nd quarter of next year and the prepaid amount is in current BS.
About the payable, the amount in current BS is $268,860 but the unpaid portion of credit purchase is only $203,820 (I did check this number several times and it's right), so there's an amount of $65,040 which I don't know whether we minus from the net income or let it stay in the account payable.

First you need to make it very clear what exactly it is that you're going. You're saying that you have a current balance sheet, but that you're making a budget, which would logically be for the next year. However, then you give information which sounds like you're working on this year's - perhaps adjusting this year's? But when you speak of the payable, it almost rather sounds like you're doing corrections to this year's balance sheet.

So which is it? Doing a budgeted one for next year, adjusting this year's, and correcting this year's are three different things.

As for the insurance, it sounds as if $180,000 gets paid in the 2nd quarter for a full year. So then by time the end of the year comes, how much of that is expired? And how much is left that belongs in to a future year which has not expired yet? The part not expired yet is the prepaid account.

As for the payable, I really don't know, because that's where there's confusion over what exactly it is that you're doing -- the payable issue almost sounds like corrections, despite that you're saying you're doing a budget.

We can't help if you aren't exact about what you're doing. Perhaps some instructions would help instead of you trying to explain what you're supposed to be doing?