Question - Companies prepare balance sheets in order to know their financial position at a specific point in time. This enables them (and other users) 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 your financial position, you need to 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.)
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Amount owed on student loan balance (long-term)
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$5,000
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Balance in checking account
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1,200
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Certificate of deposit (6-month)
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3,000
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Annual earnings from part-time job
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11,300
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Automobile
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7,000
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Balance on automobile loan (current portion)
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1,500
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Balance on automobile loan (long-term portion)
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4,000
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Home computer
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800
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Amount owed to you by younger brother
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300
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Balance in money market account
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1,800
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Annual tuition
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6,400
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Video and stereo equipment
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1,350
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Balance owed on credit card (current portion)
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150
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Balance owed on credit card (long-term portion)
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1,650
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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 Owner's Equity.