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The Balance Sheet Made easy. How to set out a Balance Sheet. Use with the ‘best selling guide’. Balance Sheets are ALWAYS set out in the same way. You must learn this, and then it is easy to answer questions on them. We always start with Fixed Assets .

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The balance sheet made easy

The Balance Sheet Made easy

How to set out a Balance Sheet.

Use with the ‘best selling guide’.


Balance Sheets are ALWAYS set out in the same way. You must learn this, and then it is easy to answer questions on them.


We always start with learn this, and then it is easy to answer questions on them.Fixed Assets.

Theses are things you own and will kep fo more than a year.

Fixed Assets

Buildings 1,000,000

Machines 500,000

Vehicles 150,000

Fixtures & Fittings 50,000

1,700,000


In limited Companies you will usually see them as a total rather than itemeised

WHY?

Fixed Assets 1,700,000


We then need to subtract the depreciation. This means the Bal Sheet reflects the true value of the assets.

Fixed Assets 1,700,000

Less Depreciation 200,000

Net book Value 1,500,000


We then add in any intangible assets. E.G. Trademarks, brands or goodwill

Fixed Assets 1,700,000

Less Depreciation 200,000

Net book Value 1,500,000

+ Intangible assets 500,000

2,000,000


Then you add in current assets. Things you own but will use up within the year.

Fixed Assets 1,700,000

Less Depreciation 200,000

Net book Value 1,500,000

+ Intangible assets 500,000

2,000,000

Current Assets

Stock 100,000

Debtors 400,000

Cash 200,000

700,000


Then you subtract the current liabilities. Things you owe but will pay within the year.

Fixed Assets 1,700,000

Less Depreciation 2,000,000

Net book Value 1,500,000

+ Intangible assets 500,000

2,000,000

Current Assets

Stock 100,000

Debtors 400,000

Cash 200,000

700,000

Less: Current Liabilities

Creditors (150,000)

Overdraft (50,000)


Next we subtract current liabilities from the current assets. This gives us Working Capital

Fixed Assets 1,700,000

Less Depreciation 200,000

Net book Value 1,500,000

+ Intangible assets 500,000

2,000,000

Current Assets

Stock 100,000

Debtors 400,000

Cash 200,000

700,000

Less: Current Liabilities

Creditors (150,000)

Overdraft (50,000)

Working Capital 500,000


To finish the top half we add working capital to the fixed assets. This gives us Net Assets.

Fixed Assets 1,700,000

Less Depreciation 200,000

Net book Value 1,500,000

+ Intangible assets 500,000

2,000,000

Current Assets

Stock 100,000

Debtors 400,000

Cash 200,000

700,000

Less: Current Liabilities

Creditors (150,000)

Overdraft (50,000)

Working Capital 500,000

Net Assets 2,500,000


The 2 assets. This gives us nd ½ shows how all of this was paid for. Loan, Owners capital and reserves

Fixed Assets 1,700,000

Less Depreciation 200,000

Net book Value 1,500,000

+ Intangible assets 500,000

2,000,000

Current Assets

Stock 100,000

Debtors 400,000

Cash 200,000

700,000

Less: Current Liabilities

Creditors (150,000)

Overdraft (50,000)

Working Capital 500,000

Net Assets 2,500,000

Shareholders funds

Share Capital 1,500,000

Reserves 700,000

Bank loan 300,000

Capital Employed 2,500,000


Capital Employed is the same as Net Assets. They assets. This gives us BALANCE!

Fixed Assets 1,700,000

Less Depreciation 200,000

Net book Value 1,500,000

+ Intangible assets 500,000

2,000,000 2,000,000

Current Assets

Stock 100,000

Debtors 400,000

Cash 200,000

700,000

Less: Current Liabilities

Creditors (150,000)

Overdraft (50,000)

Working Capital 500,000500,000

Net Assets 2,500,000 2,500,000

Shareholders funds

Share Capital 1,500,000

Reserves 700,000

Bank loan 300,000

Capital Employed 2,500,0002,500,000


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