Preparation of Balance Sheet

1 XYZ CO.
2 Balance Sheet
3 As at ……
Assets
Non-Current Assets
Land
Building
<Intangible Assets>
<Other Non-Current Assets>

Current Assets
Cash
Bank
…. Liquidity Order
© 2009 Prentice-Hall, Inc. 6–1
 Preparation of Balance Sheet
Equity and Liabilities
Share Capital and Reserves
Authorized Share Capital …
Issued Subscribed and Paid-up Capital …
Share Premium
Reserves

Non-Current Liabilities
Long Term Debt
Bonds Payable
Current Liabilities
Accrued Expenses
Accounts Payable
…. In order of maturity date
© 2009 Prentice-Hall, Inc. 6–2
 Preparation of Balance Sheet
Practise Qs
Darwin Co, provided following information at year-end:

Cash 1,500,000
Accounts Receivable 1,200,000
Inventory (including inventory expected in the ordinary course 1,000,000
of operations to be sold beyond 12 months amounting Rs. 700,000)
Financial Assets held for Trading 300,000
Equipment held for sale 2,000,000
Deferred Tax Asset 150,000

What amount should be reported as total current assets at year-end?

a. 6,000,000 b. 4,000,000 c. 6,800,000 d. 4,800,000

© 2009 Prentice-Hall, Inc. 6–3
 Preparation of Balance Sheet
Dilemma Co. provided following information on Dec 31, 2019:
Description DR CR Description DR CR
Cash 800,000   Machinery & Equipment 1,500,000  
Accounts Receivable 750,000   Accumulated Depreciation   300,000
Allowance for doubtful debts   50,000
Prepaid Expenses 160,000   Accounts Payable   900,000
Inventory 1,000,000   Accrued Expenses   150,000
Financial Assets 690,000   Notes Payable due July 1, 2021   250,000
Land 500,000   Bonds Payable   1,800,000
Building 5,000,000   Retained Earnings   4,150,000
Patent 200,000   Share Capital   3,000,000
  10,600,000 10,600,000

Prepare Balance Sheet

© 2009 Prentice-Hall, Inc. 6–4

Following balances remained in books of AK Ltd on 31 March 2017. Draft statement of financial position as at 31 March
2017. Dr (£000s) Cr (£000s)

Ordinary share capital:£1 shares 1,000

Preference share capital: 50p shares 400
Goodwill 416
Land and buildings – at cost 1,000
Plant and machinery – at cost 300
Provision for depreciation: Buildings 80
Provision for depreciation: Plant and machinery 120
Inventory: Raw materials 24
Inventory: Finished goods 144
Accounts receivable: Trade 96
Prepayments 4
Bank overdraft (repayable on demand) 62
Accounts payable: Trade (payable within one year) 68
Bills payable 16
Share premium 100
General reserve 80
Retained profits 58

© 2009 Prentice-Hall, Inc. 6–5