Wize University Introduction to Financial Accounting Textbook > Financial Statements
Preparing the Balance Sheet
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Preparing the Balance Sheet
Statement Header
- First line: name of the company
- Second line: name of the statement
- the word "partial" should appear if you not preparing the entire statement Example: Partial Balance Sheet
- Third line: date written in the format: As at [Date] Example: As at December 31, 2020
- Fourth line: the currency and unit Examples:
- (in Canadian dollars)
- (in million of US dollars)
- (in thousands of Euros)
Assets
The assets section is separated into two sections:
Current Assets
- List all current assets in this section
- Entered in order of liquidity (most to least liquid)
- Cash and cash equivalents
- Short-term investments
- Accounts receivables
- Other current assets
Non-Current Assets
- List all non-current assets in this section
- Depreciable assets are listed with the corresponding 'Accumulated depreciation' attached them
Wize Tip
Land and Long-term investments do not depreciate, but assets like buildings, machinery, equipment and furniture do.
Liabilities
List liabilities in two sections
- Current liabilities: Starting with accounts payable
- Non-current liabilities
Shareholders' Equity
- List equity accounts in this section
- In this order:
- Contributed capital
- Retained Earnings
- Add total liabilities and total shareholders' equity together
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Example: Balance Sheet
Cyrius Televisions Inc is a new company entering the electronics space. They specialize in the resale of very high-end televisions. The company's manager has presented you with a very unorganized list of financial information and has request for you to produce the company's balance sheet for as at December 31, 2020:
Additional information:
- Retained earnings balance is does not include the following information yet:
- Net income for 2020 totalled $120,000
- Dividends declared and paid in 2020 total $12,000
Practice: Balance Sheet
Viselli Inc. is a publicly traded company that is facing pressures from its shareholders for consistently having errors in their financial statements. You've been asked to review the company's books and to prepare the balance sheet. The financial records indicate that during 2020, the company earned $90,800 in net income and paid its shareholders $40,000 in dividends.
The following financial information is available on December 31, 2020:
What is the amount of retained earnings on December 31, 2020?