© 2014 Cengage Learning. All Rights Reserved. Learning Objectives © 2014 Cengage Learning. All...
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© 2014 Cengage Learning. All Rights Reserved. Learning Objectives © 2014 Cengage Learning. All Rights Reserved. LO3 Prepare a balance sheet for a service business organized as a proprietorship.
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© 2014 Cengage Learning. All Rights Reserved. Heading of a Balance Sheet SLIDE 3 LO3 Lesson 7-2 Center the date of the report on the third line. 3 3 Center the name of the company on the first line. 1 1 Center the name of the report, Balance Sheet, on the second line. 2 2
Transcript of © 2014 Cengage Learning. All Rights Reserved. Learning Objectives © 2014 Cengage Learning. All...
© 2014 Cengage Learning. All Rights Reserved.
Lear
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Obj
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© 2014 Cengage Learning. All Rights Reserved.
LO3 Prepare a balance sheet for a service business organized as a proprietorship.
© 2014 Cengage Learning. All Rights Reserved.
Preparing a Balance Sheet from Information on a Work Sheet
● Information needed to prepare the balance sheet is obtained from the work sheet.
SLIDE 2
LO3
Lesson 7-2
Account titles are obtained from the work sheet’s Account Title column.
Account balances are obtained from the work sheet’s Balance Sheet columns.
© 2014 Cengage Learning. All Rights Reserved.
Heading of a Balance Sheet
SLIDE 3
LO3
Lesson 7-2
Center the date of the report on the third line.
3
Center the name of the company on the first line.
1
Center the name of the report, Balance Sheet, on the second line.
2
© 2014 Cengage Learning. All Rights Reserved.
Assets and Liabilities Sections of a Balance Sheet
SLIDE 4
LO3
Lesson 7-2
Liabilities4
9 Total of Liabilities
Assets1
7 Single RuleTotal Liabilities8
Account Titles2
Account Titles5
Liability Amounts 6
Asset Amounts3
© 2014 Cengage Learning. All Rights Reserved.
Owner’s Equity Section of a Balance Sheet
SLIDE 5
SingleRule
4
Compare Totals9
Owner’s Equity1 Account Title2
Total of Assets6 7 Total Liabilitiesand Owner’s Equity
Total Assets5
Total of Liabilities and Owner’s Equity
8
Capital Amount
3
DoubleRule
10
LO3
Lesson 7-2
© 2014 Cengage Learning. All Rights Reserved.
Owner’s Equity Reported in Detail on a Balance Sheet
SLIDE 6
Drawing 4
Beginning Capital1 Beginning Capital Amount2
Difference6
7 Ending Capital Single Rule5Total Liabilities and Owner’s Equity
9
Net Income3
Current Capital Amount8
LO3
Lesson 7-2
© 2014 Cengage Learning. All Rights Reserved.
Lesson 7-2 Audit Your Understanding
1. List the four sections on a balance sheet.
SLIDE 7
ANSWER
Heading, assets, liabilities, and owner’s equity
Lesson 7-2
© 2014 Cengage Learning. All Rights Reserved.
Lesson 7-2 Audit Your Understanding
2. What is the formula for calculating current capital?
SLIDE 8
ANSWER
Capital Account Balance plus Net Income (or less Net Loss) less Drawing Account Balance equals Current Capital.
Lesson 7-2
