How to Construct a Balance Sheet
A balance sheet is an important financial statement that many corporations prepare for the benefit of their stakeholders. It show the company's financial status at a given point in time, such as over one month, quarter or year. It also shows the business owner how the company is doing overall. Learn how to construct a clear a basic balance sheet for your own company.
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Instructions
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Use a spreadsheet computer program to construct your balance sheet. Some programs come with balance sheet templates that you can start from. Open a new spreadsheet to start putting your balance sheet together.
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Type the company name, then "Balance Sheet" and finally "For Period Ending" followed by the full date of the end of the period (such as the last day of the month or year) as the title of the document. Separate the new worksheet into three main sections --- one for "Assets," another for "Liabilities" and the last for "Owner's Equity."
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Establish three columns for your balance sheet. The first column will contain the name of the item you're listing, the second the amount listed for that item and the third for the total of all item amounts at the end of the section.
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List "Current Assets" and "Other Assets" under the "Assets" section. Current assets include items like money available for withdrawal in bank accounts, petty cash envelopes in the office and accounts receivable. Other assets include all things of value that the business owners, including real estate property, cars and equipment. Provide the values for each of these assets at the close of the balance period. Total up each of these items and place the final amount in your third column at the end of the section.
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List "Current Liabilities" and "Long-Term Liabilities" under the "Liabilities" section of your balance sheet. Current liabilities for a business include accounts payable and short-term loans. Long-term liabilities include mortgages and long-term business loans. Enter the amount due for each of those liabilities as of the end of the balance period. Add all these liabilities and enter the amount into the third column of the last line of the section.
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Enter the amount of owner's equity that the company owner has in the third and final section. Owner's equity applies to corporations --- it includes common stock holdings and retained earnings that the business holds. Enter that total amount on the third column of the last line of the balance sheet. The total amount of your assets must equal the total liabilities plus owner's equity.
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Tips & Warnings
Make the totals for each section bold (listed in the third column of the worksheet) bold so that you can clearly distinguish them.
