Chapter 4, Problem 4.8EYCT

To determine

Personal balance sheet: Balance Sheet is a financial position statement classified into assets of the organization, stockholder’s equity and other liabilities at a specific date. One side is Organization’s assets and another side is stockholder’s equity and other liabilities. Both the sides should be balanced to each other.

The personal balance sheet is also prepared in the same manner. The assets and liabilities recorded will be personal assets and personal liabilities which are related to the main owners. It does not include the assets and liabilities of the business.

Owner’s equity: It is a statement which reports the changes in the stockholder’s equity during an accounting period. It includes the amount due in the capital account, the balance of reserves and surplus, additional capital raised and the value of withdrawn capital.

To prepare: The personal balance sheet on the format of the classified balance sheet for a company.