How do you prepare a balance sheet?

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Solution

The following steps can be used while preparing a balance sheet:

Determining the accounting period and reporting period.

Recognise the assets.

Recognise the liabilities.

Enumerate the equity of the shareholders.

Compute total liabilities with the total equity of the shareholders and compare with the assets.

Also see:

MCQs on Balance Sheet

What Is the Balance Sheet Equation?

What is a Balance Sheet?

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Discuss the need of preparing a balance sheet.


Particulars	Note No.	31st March, 2019, (₹)	31st March, 2018, (₹)
I. EQUITY AND LIABILITIES 1. Shareholders' Funds
(a) Share Capital		15,00,000	10,00,000
(b) Reserves and Surplus		10,00,000	10,00,000
2. Non-Current Liabilities
Long-term Borrowings		8,00,000	2,00,000
3. Current Liabilities
(a) Trade Payables		5,00,000	3,00,000
Total		38,00,000	25,00,000
II. ASSETS
1. Non-Current Assets
Fixed Assets:
(i) Tangible Assets		25,00,000	15,00,000
(ii) Intangible Assets		5,00,000	5,00,000
2. Current Assets
(a) Trade Receivables		6,00,000	3,50,000
(b) Cash and Cash Equivalents		2,00,000	1,50,000
Total		38,00,000	25,00,000


Particulars	Note No.	31st March, 2019 (₹)	31st March, 2018 (₹)
I. EQUITY AND LIABILITIES 1. Shareholder's Funds
(a) Share Capital		3,50,000	3,00,000
2. Non-Current Liabilities
Long-term Borrowings		1,00,000	2,00,000
3. Current Liabilities :
Trade Payables		1,50,000	1,00,000
Total		6,00,000	6,00,000
II. ASSETS
1. Non-Current Assets
Fixed Assets (Tangible)		4,00,000	3,00,000
2. Current Assets
Trade Receivables		2,00,000	3,00,000
Total		6,00,000	6,00,000

Prepare the format of balance sheet and explain the various elements of balance sheet.

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