Companies prepare balance sheets in order to know their financial position at a specific point in time. This enables them to make a comparison to their position at previous points in time and gives them a basis for planning for the future. In order to evaluate yourfinancial position, you can prepare a personal balance sheet. Assume that you have compiled the following information regarding your finances. (Hint:Some of the items might not be used in your personal balance sheet.)
Amount owed on student loan balance (long-term) |
$5,000 |
Balance in checking account |
1,200 |
Certificate of deposit (6-month) |
3,000 |
Annual earnings from part-time job |
11,300 |
Automobile |
7,000 |
Balance on automobile loan (current portion) |
1,500 |
Balance on automobile loan (long-term portion) |
4,000 |
Home computer |
800 |
Amount owed to you by younger brother |
300 |
Balance in money market account |
1,800 |
Annual tuition |
6,400 |
Video and stereo equipment |
1,250 |
Balance owed on credit card (current portion) |
150 |
Balance owed on credit card (long-term portion) |
1,650 |
Instructions
Prepare a personal balance sheet using the format you have learned for a classified balance sheet
for a company. For the equity account, use M. Y. Own, Capital.