How to Make a Balance Statement
Balance sheets are financial statements that summarize a person or company's assets, liabilities and shareholders' equity. Your bank or the government may require you to create a balance statement or balance sheet setting out what is owed and owned, as well as the various investments by shareholders. It usually follows a formula where the total of all assets must equal all liabilities plus shareholders' equity. Shareholders' equity is determined by deducting liabilities from assets, and is also referred to the "book value" or "net worth" of the company.
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Instructions
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Information Required on a Balance Sheet
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Obtain the necessary information before creating your balance sheet. Gather copies of your financial records. Determine what is owed to the bank. Collect records of your expenses, and decide how much is owed to creditors for the ensuing months. Figure out the percentage of receivables that may not be recoverable.
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Design your balance sheet by writing or typing your name or the name of your company in the top center of your page. Insert the date underneath of the period covered in your balance sheet. Your balance sheet will be divided into two columns: one column on the left of the page for assets, and another one on the right side of the page for liabilities and shareholder equity (if you have shareholders).
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Create two sub-headings under the ASSETS column. You can call one "Current Assets," and the other, "Long-Term Assets." List each of your current assets on a separate line and assets can be called cash and cash equivalent, short-term investments, accounts receivables, inventory, prepaid expenses and other expenses. Add up all your current assets and on a separate line, type a heading called "Total Current Assets" and insert the total for your current assets.
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List each of your long-term assets under the sub-heading "Long-Term Assets." Enter each asset on a separate line using headings such as: furniture and fixtures, equipment, motor vehicles, buildings, land, production machinery. Show all of your fixed assets (except land) as the original price that you paid for them. Calculate the depreciation on the above items and indicate this as a negative amount under your fixed assets. Indicate whether you have intangible assets such as name brands or patents and enter an amount for these under a separate heading called "intangible assets." Total all of your long-term assets. Create a new line with the wording "total assets" and add the total of your current assets to your long-term assets for a grand total.
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Create two sub-headings under the LIABILITIES heading. You can call one "current liabilities" and the other "long-term liabilities." Create names such as accounts payable, short-term debt, taxes, wages and interest payable for your current liabilities. List each one on a separate line. Add up all of your current liabilities and insert the total on a new line under a heading called "total current liabilities." Do the same thing for your long-term liabilities. Create names such as notes payable, bonds payable, deferred liability charges, outstanding interest. Add each name on a separate line to your balance sheet. Total all of your long-term liabilities. Create another line with a heading titled "total liabilities" and combined the total of your current liabilities with your long-term liabilities.
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Create a new heading called "Shareholders' Equity" if your company has shareholders. Insert this below your Long-Term Liabilities heading. List all the common stock, preferred stock, miscellaneous stock options and treasury stock for your shareholders. Add it all up. Create a heading on a different line called "Total shareholder equity" and insert the amount on this line.
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