Sample Balance Sheet

A student of accounts needs to learn how to prepare a balance sheet. This is a very important financial statement that shows the financial condition of a company on paper. It is also called statement of financial position. A balance sheet consists of three parts, that is, assets, liabilities and ownership equity. In the following paragraphs, we shall have a look at the sample balance sheet for small business as well as an income statement. Let us go into the details of sample balance sheet and income statement.

Sample Balance Sheet Analysis

Before we have a look at the sample balance sheet and income statement, let us analyze and understand what these two financial statements mean. A balance sheet helps you understand about a company, business, partnership, etc. in terms of assets, liabilities and the difference between the two helps you understand the condition of the company. Whatever is owned by the owner of the business or company is called equity. If you have a look at the balance sheet, it is represented by the following equation.

Assets = Liabilities + Equity

This means the assets are all the resources owned by the company. These assets include cash, accounts receivable, fixed assets like land, equipment, vehicles. etc. Liabilities is in terms of the money owned by the company to creditors. These creditors include suppliers, banks, other institutions, etc. This money or accounts are in the form of accounts receivable as well as accrual like taxes. Finally, equity is the owners share in the company. When the company is under sole proprietorship, equity is called capital. In case of public companies, equity is referred to as common stock or share capital. This was all about sample balance sheet analysis. Let us move on to sample income statement.

Sample Income Statement

An income statement contains information about the inflow and outflow of assets. The revenue generated is called the inflow and the expenses are known as outflows. When there is an excess of inflow it is called net income and when the outflows surpass the inflow, it is called net loss. The income statements can be explained with the help of the following statement.

Revenue - Expense = Net Income (or Loss)

An income statement is always prepared for a particular time period. It is always written as for the period ended ..... The balance sheet and income statement are very important for financial planning of a company.

Sample Balance Sheet for Small Company

The following tables contain sample balance sheet and income statements. The first table contains a sample balance sheet and the other one contains an income statement.

Sample Balance Sheet

	Assets		Liabilities
Current Assets		Current Liabilities
Cash in bank	_____________________	Accounts payable	__________________
Accounts receivable	_____________________	Wages Payable	__________________
Supplies	_____________________	Interest Payable	__________________
Inventory	_____________________	Taxes Payable
Prepaid Insurance	_____________________	Warranty Liability	__________________
Total current assets	_____________________	Unearned Revenues	(_________________)
		Total current liabilities	__________________
Fixed Assets		Long-term Liabilities
Land	_____________________	Long-term loans (due after 1 yr)	__________________
Buildings	_____________________	Mortgage	__________________
Less amortization	(____________________)	Total long-term liabilities	__________________
Net land & buildings	_____________________
		Total Liabilities (L)	__________________
Equipment	_____________________
Less amortization	(____________________)	Stockholder's Equity
Net equipment	_____________________	Investment	__________________
		Retained Earnings	__________________
Intangible Assets		Less: Treasury Stock	(____________________)
Goodwill	____________________	Total owners' equity (E)	__________________
Trade Names	__________________
Total Intangible Assets	_____________________
Other Assets	_____________________
Total Assets (A)	_____________________	Total liabilities and equity (L+E)	__________________

Sample Income Statement

DeBuzz Company Income Statement For the year ended Dec. 31, 2010
Revenue			(_____________________)
Cost of goods
Beginning inventory	(_____________________)
Net purchases	(_____________________)
Cost of goods available for sale	(_____________________)
Less: ending inventory	(_____________________)
Cost of goods sold		(_____________________)
Gross profit			(_____________________)
Expenses
Selling expenses	(_____________________)
General and administrative expenses	(_____________________)
Total operating expenses		(_____________________)
Operations Income			(_____________________)
Other revenue
Interest	(_____________________)
Dividends	(_____________________)
Gain from sale of equipment	(_____________________)
Other expenses
Interest		(_____________________)
Income before taxes			(_____________________)
Income tax expense		(_____________________)
Continuing Operations Net Income			(_____________________)
Extraordinary items		(_____________________)
Net Income			(_____________________)

As you can see from the above sample balance sheet and income statement, both are connected to each other. The connection is through net income for a period and the increase or decrease in equity. An income statement and balance sheet represent the financial condition of a company. Hope the above sample balance sheet for small business has helped you in understanding these two important financial statements.