Balance Sheet Exercise

In the white boxes below are balance sheet items for 2015 and 2016.

Step 1: Copy and paste all items in the white boxes below into the correct white boxes on the next tab in
columns B, D and F (the 'Questions' tab).

Step 2: Make sure that assets = liabilities + equity.

Step 3: On the right side of the balance sheet you created in step 1 (on the Questions tab), answer (in column L) whether or
not the change in the balance sheet line item from the previous year is a concern or not. Simply enter "Yes" or "No".

Step 4: If you answered "Yes" in column L, then please state why this is a concern in the white box in column M.

Step 5: Check to see if your answers are correct on the "Answers" tab and please watch the next lecture for an explanation of the

Balance Sheet Items (Sorted Alphabetically) 12/31/2015 12/31/2016

Accounts payable $ 35,000 $ 50,000
Accounts receivable $ 230,000 $ 400,000
Building we own, net of depreciation $ 95,000 $ 90,000
Cash and cash equivalents $ 600,000 $ 301,500
Inventory $ 45,000 $ 692,125
Long-term debt $ 900,000 $ 1,200,000
Retained Earnings $ 845,750 $ 1,003,625
Short-term debt $ 89,250 $ 120,000
Short-term investments $ 900,000 $ 900,000
BALANCE SHEET

$ Change from
12/31/2015 12/31/2016 2014 to 2015
ASSETS:
Current Assets:
Cash and cash equivalents $ 600,000 $ 301,500 $ (298,500)
Accounts receivable $ 230,000 $ 400,000 $ 170,000
Short-term investments $ 900,000 $ 900,000 $ -
Inventory $ 45,000 $ 692,125 $ 647,125
Total Current Assets $ 1,775,000 $ 2,293,625 $ 518,625

Long Term Assets:

Building we own, net of depreciation $ 95,000 $ 90,000 $ (5,000)
Land $ 25,000 $ 25,000 $ -
Machine $ 50,000 $ 50,000 $ -
Total Long Term Assets $ 170,000 $ 165,000 $ (5,000)
Total Assets $ 1,945,000 $ 2,458,625 $ 513,625

LIABILITIES & EQUITY:

Current Liabilities:
Short-term debt $ 89,250 $ 120,000 $ 30,750
Accounts payable $ 35,000 $ 50,000 $ 15,000
Total Current Liabilities $ 124,250 $ 170,000 $ 45,750

Long Term Liabilities:

Long-term debt $ 900,000 $ 1,200,000 $ 300,000
Total Liabilities $ 1,024,250 $ 1,370,000 $ 345,750

Equity:
Retained Earnings $ 845,750 $ 1,003,625 $ 157,875
Common Shares $ 75,000 $ 85,000 $ 10,000
Total Equity $ 920,750 $ 1,088,625 $ 167,875
Total Liabilities and Equity $ 1,945,000 $ 2,458,625 $ 513,625

Does Assets = Liabilities + Equity? Yes the Yes the balance

balance sheet sheet balances.
balances.
% Change from
2014 to 2015

-50%
74%
0%
1438%
29%

-5%
0%
0%
-3%
26%

34%
43%
37%

33%
34%

19%
13%
18%
26%
BALANCE SHEET

$ Change from
12/31/2015 12/31/2016 2014 to 2015
ASSETS:
Current Assets:
Cash and cash equivalents $ 600,000 $ 301,500 $ (298,500)
Short-term investments $ 900,000 $ 900,000 $ -
Accounts receivable $ 230,000 $ 400,000 $ 170,000
Inventory $ 45,000 $ 692,125 $ 647,125
Total Current Assets $ 1,775,000 $ 2,293,625 $ 518,625

Long Term Assets:

Building we own, net of
depreciation $ 95,000 $ 90,000 $ (5,000)
Land $ 25,000 $ 25,000 $ -
Machine $ 50,000 $ 50,000 $ -
Total Long Term Assets $ 170,000 $ 165,000 $ (5,000)
Total Assets $ 1,945,000 $ 2,458,625 $ 513,625

LIABILITIES & EQUITY:

Current Liabilities:
Accounts payable $ 35,000 $ 50,000 $ 15,000
Short-term debt $ 89,250 $ 120,000 $ 30,750
Total Current Liabilities $ 124,250 $ 170,000 $ 45,750

Long Term Liabilities:

Long-term debt $ 900,000 $ 1,200,000 $ 300,000
Total Liabilities $ 1,024,250 $ 1,370,000 $ 345,750

Equity:
Retained Earnings $ 845,750 $ 1,003,625 $ 157,875
Common Shares $ 75,000 $ 85,000 $ 10,000
Total Equity $ 920,750 $ 1,088,625 $ 167,875
Total Liabilities and Equity $ 1,945,000 $ 2,458,625 $ 513,625

Does Assets = Liabilities + Equity? Yes the Yes the balance

balance sheet sheet balances.
balances.
% Change from
2014 to 2015

-50%
0%
74%
1438%
29%

-5%
0%
0%
-3%
26%

43%
34%
37%

33%
34%

19%
13%
18%
26%