How to Make a Balance Sheet for a Corporation

Every business and corporation expresses its financial position with a balance sheet. It is the generally accepted accounting document with which banks and other financial entities evaluate the finances of a business, whether it is a sole proprietorship or a multi-national corporation. A balance sheet follows a strict format---first the corporate assets are listed, then the corporate liabilities, and finally the net worth of the corporation. If you follow this formula, you can prepare a balance sheet for any business entity, as long as you have the correct financial figures.

Instructions

1. List the current assets of the corporation. Current assets include cash on hand and in the bank, accounts receivable, merchandise inventory and any prepaid expenses. Examples of prepaid expenses include the remaining value of any service paid for in advance by the corporation, but not yet used. List the assets in order of their ability to be easily converted to cash, with cash itself as the first item on the list. Total all of the current assets.

2. List the fixed assets of the corporation. These include any equipment owned by the corporation, including real estate. Total the fixed assets.

3. Total the assets section of the balance sheet. Add the totals of the current assets and fixed assets to arrive at the total assets of the corporation.

4. List the corporation's liabilities in the next section. First list the current liabilities, such as accounts payable, any notes the corporation has which are due to be paid within one year of the date of the balance sheet, and accrued payroll expenses. Accrued payroll expenses are monies owed to employees for work already performed, but for which they have not yet been paid. Total the current liabilities section.

5. List the long-term liabilities in the next section. Long-term liabilities are any debts to be repaid by the corporation more than one year from the date of the balance sheet. Total the long-term liabilities section.

6. Total the current and long-term liabilities sections to arrive at the total liabilities of the corporation.

7. Determine the corporation's net worth. The net worth of the corporation is determined by subtracting the total liabilities from the total assets. Place this figure at the bottom of the balance sheet.