Question

Companies prepare balance sheets in order to know their financial position at a specific point in time. This enables them (and other users) to make a comparison to their position at previous points in time, and gives them a basis for planning for the future. In order to evaluate your financial position, you need to prepare a personal balance sheet. Assume that you have compiled the following information regarding your finances. (Hint: Some of the items might not be used in your personal balance sheet.)

Amount owed on student loan balance (long-term) $ 5,000
Balance in checking account 1,200 Certificate of deposit (6-month) 3,000
Annual earnings from part-time job 11,300
Automobile 7,000
Balance on automobile loan (current portion) 1,500
Balance on automobile loan (long-term portion) 4,000
Home computer 800
Amount owed to you by younger brother 300
Balance in money market account 1,800
Annual tuition 6,400
Video and stereo equipment 1,350
Balance owed on credit card (current portion) 150
Balance owed on credit card (long-term portion) 1,650
Instructions: Prepare a personal balance sheet using the format you have learned for a classified balance sheet for a company.
For the equity account, use Owner's Equity.

Answer 1

Answer:

                                                  Personal

                                                  Balance Sheet

                                                  As at xxxxxxx

Non-Current Assets                                               Amount in $

Equipment                                                                1,350

Computer                                                                    800

Automobile                                                               7,000

Current Assets

Bank Balance                                                            1,200

Certificate of Deposit                                                3,000

Loan receivable from brother                                       300

Money Market Account                                               1,800

Total Assets                                                                  15,450

Owner's Equity & Liabilities

Long Term Liabilities A

Auto loan-long term portion                                         4,000

Credit Card                                                                       1,650

Student Loan                                                                     5,000

Short Term Liabilities B

Auto Loan-Current Portion                                               1,500

Credit Card-Current Portion                                                150

Owner's Equity     C                                                             3,150  

Total Owner's Equity & Liabilities    D=A+B+C                15,450                                              

   

Explanation:

The owners equity is taken as balancing figure s we are unaware of net profits retained during the year or net saving i.e net of expenses savings are not available.