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    Prepare a Balance Sheet from information presented; compute owner's equity.

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    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 = ?

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    Solution Preview

    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 ...

    Solution Summary

    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.