Three Most Common Types of Small Businesses – Sole Proprietorship, Partnership and Private Limited Company » Sole Proprietor – Example of Income Statement and Balance Sheet
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sabrenda said
i need help because on my balance sheet it has an area for inv.beginning and inv. ending and for the beginning my inventory was 25000.00 but at the end of the yr my inv is 3400.00 and it is adding both so my assets were more. is this correct or is it suppose to subtract the ending from the beginning? i need help!
coreina said
During the year you are to debit all inventory purchased to cost of good sold in the income statement. At the end of the year you would do an inventory count and the remaining balance is then going to be Debot Inventory ending in the balance sheet and credit cost of good sold which is in the income statement. If this is a new company you will notice that this has no opening inventory.
But in the next year you would debit opening inventory and then credit closing inventory (to switch close inventory to open). And do again as you did above for closing inventory.
In the third year you would put all of open inventory (from the first year) amount into cost of good sold by debit Cost of good sold and credit inventory for what ever balance was in the opening inventory. Then follow step second year steps to put closing inventory in to opening inventory.
Christian Jay said
I’m a BS Accountancy student here in the Philippines and luckily, I stumble upon your blog… I have problems with preparing a balance sheet… Could you help me with it? If yes, kindly contact me at christianj_415@yahoo.com
Thanks. Your help is much appreciated.
learnaccounting said
Sorry Chris, I don’t have time to resolve your problem at the moment. guess you got to look for other means
Christian Jay said
No need for apologies, it’s okay now… i understood it already… thanks to you… ^^
Johnathen Jnr said
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John
JoJo Johnathen said
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I saw the blog on learnaccounting.wordpress.com
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Great effort keep up the good work !
John
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learnaccounting said
Great to hear you got that don