Create Your Balance Sheet

Finding the numbers to put on the Balance Sheet

December 30th, 2010 BY Claire Moore

Prepare your Balance Sheet monthly, quarterly or annually. Always use the last day of the month as your guide. If your bank statements don’t cut off on the last day of the month, contact your bank and ask them to do so and they will. Financial information is usually reported on a monthly basis so you will see that your loan, credit card and investment statements are all for a calendar month (some investments are quarterly, however, for instance only reporting as of the end of March, June, September and December).

Just pull the number for the ending balance from your bank, loan and credit card statements and put it on the appropriate line on your Balance Sheet. So, if you are doing your April Balance Sheet, you will gather your statements for the month of April and take the ending balances to put on your Balance Sheet.

You can group the information if you need to. For instance if you have several savings accounts, you can add up all of the monthly balances and put the total on the Savings line of the Balance Sheet. For this exercise, you should invest in an adding machine. You can get one cheap at the same places I mentioned for getting your other office supplies. I suggest that you get a machine that has a paper tape in it so that you can print out your calculations and double check your input of the numbers for accuracy.

Balance Sheet as of : _____________________________
Step 1. List what you own
A.Cash and other “liquid” assets
Bank accounts: Checking $__________________
Saving ___________________
Money Market ___________________
Cash value life insurance ___________________
Other ___________________

B. Investments
Bank CDs $__________________
Bonds ___________________
Mutual Funds ___________________
Stocks ___________________
Other ___________________

C. Retirement Investments (Tax deferred)
Pension (the amount vested) $__________________
401K ___________________
Tax Deferred Annuity ___________________
IRA or SEP/IRA ___________________
Other ___________________

D. The Market Value of Real Property
Home $__________________
Second Home ___________________
Other Property ___________________
Land ___________________
Cars ___________________
Other Personal Property ___________________

E. Business Interests and Partnerships $__________________

F. Receivables (people owe you) $__________________
G. Your annual salary ___________________
TOTAL ASSETS ___________________

Step 2: List your liabilities – what you owe
A. Mortgage: Home first loan $__________________
Home second loan ___________________
Other property ___________________
B. Other Loans
Cars $__________________
Home equity credit line ___________________
Student Loans ___________________
Credit cards ___________________
Other ___________________
C. Taxes owed
Federal $__________________
State ___________________
Property ___________________
Other ___________________
D. Other
Leases: cars, equipment $___________________

TOTAL LIABILITIES ___________________

Step 3: Calculate your Net Worth (Assets minus Liabilities)
Assets $__________________
Liabilities _-__________________
Net Worth $__________________

As you can see, Net Worth is what you own free and clear. It is often referred to as Equity. If you calculate your Net Worth on a regular basis, you can see if your Worth is growing or shrinking. Growth is good and is an indication that you are doing a good job of managing your finances.

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