This paper will discuss a financial statement that reports the assets, liabilities, and owners equity on January1, 2012 called the balance sheet. The report the reader will see below is a current balance sheet for a company called Custom Building that I personally work with. Working one on one with the owner has offered quite a bit of experience in the accounting world. The reader will be able to view the balance sheet below, following the explanation of the balance sheet for Custom Building discussed in full.
Custom Building Company Balance Sheet
January 1, 2012
Non-current Assets 2,150,000
Current Assets 10,000
Total Current Assets = 2,160.00
Equity & Liabilities
Owner’s equity 1,700,000
Non current Liabilities 440,000
10% loan 440,000
Current Liabilities 20,000
Total Equity & Liabilities 2,160.00
A business owner can understand this balance by first reviewing the balance sheet in it’s entirety. This is a snap shot of a company I work with called Custom Building. The last day of the reporting period was December 31, 2011. The inventory is the goods and stock of the company. Assets and liabilities are divided up into short term and long term catergories. Non- current is equivalent to long term, and current is equivalent to short term. Custom Building’s current assets are expected to be sold or used within a year’s time of the balance sheet date. If it expected to be used for more than one year, at that point assests will be classified as non-current. The total assets must total liabilities and stockholder’s equity.
Custom building’s liabilities are expected to be paid off in a years time, such as the creditors. The it would considered classified. The non current liabilities are loans that are expected to be paid off...