CHAPTER 12 - BALANCE SHEET PROJECTIONS
This is where lenders and investors will to look to find out what
the equity and collateral of your company is going to be worth.
List anything of value that is owned or legally due the business.
Total assets include all net values. These are the amounts derived
when you subtract depreciation and amortization from the original
costs of acquiring the assets.
Cash -- List cash and resources
that can be converted into cash within 12 months of the
date of the balance sheet
(or during one established cycle of operation). Include money
on hand and demand deposits
in the bank, e.g., checking accounts and regular savings
Petty cash -- If your business
has a fund for small miscellaneous expenditures, include
the total here.
Accounts receivable -- The amounts
due from customers in payment for merchandise or
Inventory -- Includes raw materials
on hand, work in progress and all finished goods,
either manufactured or purchased
Short-term investments -- Also
called temporary investments or marketable securities,
these include interest-
or dividend yielding holdings expected to be converted into cash
within a year. List stocks
and bonds, certificates of deposit and time-deposit savings
accounts at either their
costs or market value, whichever is less.
Prepaid expenses -- Goods, benefits
or services a business buys or rents in advance.
Examples are office supplies,
insurance protection and floor space.
Long-term Investments -- Also called
long-term assets, these are holdings the business
intends to keep for at
least a year and that typically yield interest or dividends. Included
are stocks, bonds and savings
accounts earmarked for special purposes.
Also called plant and equipment. Includes
all resources a business owns or acquires for use in operations
and not intended for resale. Fixed assets may be leased. Depending
on the leasing arrangements, both the value and the liability of
the leased property may need to be listed on the balance sheet.
Land -- List original purchase
price without allowances for market value.
Improvements (Including leasehold
Accounts payable -- Amounts owed
to suppliers for goods and services purchased in
List all debts, monetary obligations and claims payable within 12
months or within one cycle of operation. Typically they include:
connection with business operations.
Notes payable -- The balance of
principal due to pay off short-term debt for borrowed
funds. Also includes, the
current amount due of total balance on notes whose terms
exceed 12 months.
Interest payable -- Any accrued
fees due for use of both short-and long-term borrowed
capital and credit extended
to the business.
Taxes payable -- Amounts estimated
by an accountant to have been incurred during the
Payroll accrual -- Salaries and
wages currently owed.
Notes payable -- List notes, contract payments or mortgage payments
due over a period exceeding 12 months or one cycle of operation.
They are listed by outstanding balance less the current position
Also called owner's equity, net worth is the claim of the owner(s)
on the assets of the business. In a proprietorship or partnership,
equity is each owner's original investment plus any earnings
after withdrawals. In a corporation it is the capital investment
paid for the issuance of stock, plus the surplus paid in by the
principals, and the after tax retained earnings.
Total Liabilities and Net
The sum of these two amounts must always match that
for total assets.
The Balance Sheet Worksheet
Current Assets (Net Values)
Petty cash $
Accounts receivable $
Short-term investment $
Prepaid expenses $
Long-term investments $
Total Assets $
Current Liabilities (within 12
Accounts payable $
Notes payable $
Interest payable $
Federal income tax $
State income tax $
Self-employment tax $
Sales tax (SBE) $
Property tax $
Payroll accrual $
Long-term liabilities (over 12
Notes payable $
Total Liabilities $
Net worth (owner equity) $
If Proprietorship or Partnership
(name's) equity $
If Corporation Capital stock $
Surplus paid in $
Retained earnings $
Total Net Worth $
Total Liabilities and Total Net
(Total assets will always
equal total liabilities and total net worth)
Workbook Main Menu To Chapter 13