1. Project 4

1.3. Page 3

Training Room 1

Training Room 1: The Beginning Balance Sheet

 

Check Your Understanding

 

Open the balance sheets of the three companies that you saved from the Project 3: Financial Statements. These are saved in your FIN1015 Course Folder.

 

Note that these business balance sheets are in a different format, all in a row, called a report form. This is because they have so many accounts to record. However, all the sections remain the same as what you have been practicing. 

  • See if you can find the assets, liabilities, and qwner’s equity sections.
  • Can you find the total lines in the business balance sheets that you saved?¬†
  • Are there any double lines?

Your teacher may wish to discuss these findings with you.

 

Did you notice that in every case the total assets equaled the total liabilities plus the owner’s equity? This is described in more detail in the video titled The Accounting Equation.

 

Imagine a perfectly balanced weigh scale. Whatever occurs on one side affects the other side. If one side has more weight, then the scale will tip. If both sides are equal, the scale will stay in balance. The Fundamental Accounting Equation is similar to a weigh scale.

 

Time to Practise

 

This is an opportunity to practise completing beginning balance sheets for four different companies.

 

These practice activities are very similar and will prepare you for the assignment in this project that is submitted for assessment. You can check your work at the end of each practice.

 

Here are some tips for creating financial statements:

  • Put the date in full.¬†
  • Do not use $ or spaces in the dollar amounts.¬†
  • Capitalize the names of accounts, since they are formal names.
  • Do not use any abbreviations.¬†

For multiple accounts receivable (people owing the business money) and multiple accounts payable (people to whom the business owes money), follow the format of the example below:

 

 

For an example of a completed balance sheet, check the piece titled Balance Sheet Exemplar.

 

There are four different practice activities listed below. You may practice as many of these as needed to prepare for the balance sheet assignment. Be sure you are confident that you can complete a beginning balance sheet before proceeding to the Time to Work, where you complete the assignment for assessment. Please contact your teacher if you are having difficulty.

 

Practice 1: the beginning balance sheet for Dr. Zimmerman Medical Clinic

 

Practice 2: the beginning balance sheet for Koch Moving and Storage

 

Practice 3: the beginning balance sheet for Fanci Foods Ltd.

 

Practice 4: the beginning balance sheet for CHOO T.V.


Practice 1

 

 

Open a blank Balance Sheet Template, and save this in your FIN1015 Course Folder. Complete the beginning balance sheet for the Dr. Zimmerman Medical Clinic.

 

The following is Dr. Zimmerman’s Information. Your formatting must be exact.

 

Dr. Zimmerman is the owner of Dr. Zimmerman Medical Clinic. On January 31, 20xx, the assets and liabilities for the clinic were as follows: cash in bank, $9000; money due from patients (accounts receivable), $6000; money due from Alberta Health Care (accounts receivable), $14 000; supplies, $2000; equipment, $140 000; money owing to Pro-Speed Suppliers (accounts payable), $11 000; money owing to Dave’s Janitorial (accounts payable), $2000; bank loan, $7000.

 

 

When finished, check the Dr. Zimmerman Medical Clinic Balance Sheet.


 

Practice 2

 

 

Open a blank Balance Sheet Template, and save this in your FIN1015 Course Folder. Complete the beginning balance sheet for the Koch Moving and Storage.


Here is the information for Koch Moving and Storage. Your formatting must be exact.

 

Milos Popov is the owner of Koch Moving and Storage. The information for the beginning Balance Sheet on September 1, 20xx is given below:

 

Assets: cash, $1896.50

 

Accounts Receivable: J. Radick, $2500.00; City Bank, $11 750.00; M. Unger, $1565.00; warehouse, $137 500.00; truck, $47 500.00; office equipment, $3175.00

 

Liabilities: bank loan, $60 000; mortgage payable, $100 000

 

 

When finished, check the Koch Moving and Storage Balance Sheet.



Practice 3

 

 

Open a blank Balance Sheet Template, and save it in your FIN1015 Course Folder. Complete the beginning balance sheet for the Fanci Foods Ltd.

 

Here is the information for Fanci Foods Ltd.

 

Pouya Asadi is the owner of Fanci Foods Ltd. Use the current date.

 

Assets: cash, $7500.00

 

Accounts Receivable: $17 000.00; office supplies, $720.00; office equipment, $12 450.00

 

Liabilities: accounts payable, $9500.00; bank loan, $10 000.00

 

 

When finished, check the Fanci Foods Ltd. Balance Sheet.



Practice 4

 

 

Open a blank Balance Sheet Template, and save this in your FIN1015 Course Folder. You will complete the beginning balance sheet for the CHOO T.V.

 

Here is the information for CHOO T.V.

 

Duke Farrell, is the owner of CHOO T.V. Use the current date.

 

Assets: cash, $2106.31

 

Accounts Receivable: $1200.00; studio equipment, $45 000.00; mobile equipment, $27 000.00; office furnishings, $3575.00

 

Liabilities: accounts payable, $24 500.00; bank loan, $30 000.00

 

 

When finished, check the CHOO T.V. Balance Sheet.