Please help with the following problem regarding balance sheets and owner's equity.
Prepare a balance sheet from the following information:
Stock of goods - $13,000
Loan from Bank - $58,000
Freehold Land and buildings - $64,000
Cash - $1,000
Trade Creditors - $10,000
Bank Overdraft - $10,700
Delivery van - $3,200
Office Furniture - $4,600
Fixtures and fittings - $15,200
Owner's Equity = ?
Problem: Prepare a balance sheet from the provided information.
First, classify each into their respective categories - Assets/ Liabilities/ Owner's Equity.
Stock of goods - current assets
Loan from Bank - long term liabilities
Freehold Land and buildings - fixed ...
The solution first classifies the account by type and then presents a balance sheet wherein assets are arranged as fixed assets first with least liquid first and more liquid last, then current assets second with less liquid first and most liquid last. It can be easily modified by moving current assets and current liabilities up.