The preparation of the balance sheet of Paramount Design is as follows:
Paramount Design
Balance Sheet
As of December 31, 2020
Assets
Current Assets:
Cash $1,407
Accounts Receivable 2,056
Supplies 1,250
Total current assets $4,713
Long-term Assets:
Furniture $9,700
Equipment 10,000
Automobile 19,350 $39,050
Total assets $43,763
Liabilities and Equity
Liabilities:
Bank Loan $9,000
Accounts Payable 2,655
Total liabilities $11,655
Equity $32,108 ($43,763 - $11,655)
Total liabilities + equity $43,763
What is a balance sheet?
A balance sheet is a financial statement that summarizes the financial position of an entity at a point in its financial period.
The financial position shows the entity's assets (what it owns), liabilities (what it owes creditors), and equity (what it owes the owner).
At each financial period, the assets are always equal to the liabilities and equity.
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