Search Definition of balance sheet The balance sheet shows the financial status of an organisation at a particular instant in time — normally at the end of a reporting period such as a financial year, half-year or quarter.
The following assumptions also are needed for our example. Be sure to read all assumptions since they will be referred to as we explain the components of the balance sheet.
Assumptions For Our Example: Donald Sutherland is the sole-proprietor of The Toy Company. The Company buys preassembled wooden toys from a supplier in Maine and sells them to end consumers you and I.
Donald registered the company on January 1, X and has been operating it since then. Today's date is January 10, Y.
The equipment consists of two computers, a fax machine, and a mobile photocopier. Donald's accountant suggested these item be pooled into one asset account called Office Equipment.
The building will be used to sell the company's preassembled toys. Donald's accountant suggests the building has a useful life of 5 years and will be depreciated in equal amounts per year over these 5 years. Lets also assume, the accountant suggests the office equipment pool of assets has a useful life of two years and will be depreciated in equal amounts per year over these two years.
The asset's estimated value, after their useful lives have expired, is assumed to be zero. The useful lives have been set only for presentational purposes and should not be used as guidelines. The insurance contract called for a 1 year payment to be made in advance.
The company allows its customers to buy products on credit. The credit terms established by the Toy Company requires customers to pay within 30 days of the purchase date. The Toy Company has established a credit rating with its supplier which allows them to pay for each order of preassembled toys within 45 days.
Also, Donald has set up charge accounts with local vendors merchants which allows him to pay for the company's general office supplies within 45 days.
As of December 31, X, the tax obligation has not been paid and therefore is considered an income tax payable. This concludes the assumptions section of our example.
Now lets examine each of the four Balance Sheet items and components: Balance Sheet Items and Components:Balance Sheet for Coca-Cola Company (The) (KO) - view income statements, balance sheet, cash flow, and key financial ratios for Coca-Cola Company (The) and all the companies you research at ashio-midori.com Mar 03, · The ending cash balance is also the cash balance on the balance sheet.
Using Financial Analysis to Increase Cash Flow For many owners, the most important metric for their business is the amount of cash they need to operate each month/5(48).
Balance sheet reserves are an amount expressed as a liability on the insurance company's balance sheet for benefits owed to policy owners. What is a 'Balance Sheet' A balance sheet reports a company's assets, liabilities and shareholders' equity at a specific point in time, and provides a basis for computing rates of return and.
Balance Sheet for Apple Inc. (AAPL) - view income statements, balance sheet, cash flow, and key financial ratios for Apple Inc. and all the companies you research at ashio-midori.com Steps in Preparing a Business Startup Balance Sheet. All the calculations in this spreadsheet are done as of the date of startup.
First, list the value of all the assets in the business as of the startup date. This includes cash, equipment, and vehicles, supplies, inventory, prepaid items (insurance, for example), the value of any buildings or land owned.