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.)
Amount owed on student loan balance (long-term) $ 5,000
Balance in checking account 1,200 Certificate of deposit (6-month) 3,000
Annual earnings from part-time job 11,300
Automobile 7,000
Balance on automobile loan (current portion) 1,500
Balance on automobile loan (long-term portion) 4,000
Home computer 800
Amount owed to you by younger brother 300
Balance in money market account 1,800
Annual tuition 6,400
Video and stereo equipment 1,350
Balance owed on credit card (current portion) 150
Balance owed on credit card (long-term portion) 1,650
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.