Instructions for a Sole Proprietorship or a Partnership Balance Sheet

MJC 5/2012 Page 1

Morrison Pet Supply Company Balance Sheet

December 31,20XX

Assets Liabilities and Owner’s Equity

Cash $XX,XXX Liabilities

Accounts Receivable XX,XXX Notes Payable $XX,XXX

Supplies XX,XXX Accounts Payable X,XXX

Prepaid Insurance X,XXX Total Liabilities XX,XXX

Land XX,XXX

Building XX,XXX Owner’s Equity

Equipment X,XXX A.L. Morrison, Capital XX,XXX

Total Assets $XX,XXX Total Liabilities and Owner’s Equity $XX,XXX

Systematic Instructions

Always start with the three-line header, which includes the name of the company, the title of the

statement, and the date the statement is prepared.

The body of the balance sheet is divided into two halves on the left side is the asset section and

on the right side is the liabilities and owner’s equity section.

Asset Section of the Simple Balance Sheet

Step 1.In the center of the left hand two columns of the body of the statement, center the title

“Assets.”

Step 2.On the next few lines of the statement list all assets in order of liquidity (how fast the

assets can be changed into cash). Place the dollar value of the asset in the amounts

column next to the account title.

Step 3. Add all of the assets values together and place the total in the amounts column and label

it “Total Assets.” Make sure to place a double underline under the total for this line item.

Dollar signs are to be placed at the top and bottom of any column of numbers that are

either added or subtracted and at the end grand total.

Instructions for a Sole Proprietorship or a Partnership Balance Sheet

MJC 5/2012 Page 2

Liabilities and Owner’s Equity section of the Simple Balance Sheet

The right hand side of the balance sheet is further divided into two sections, which are the

liability section and the owner’s equity section. At the end, the subtotals for these two sections

are added together. The total from these two sections will match the total assets.

Liability Section

Step 1.In the center of the right hand two columns of the body of the balance sheet center the title

“Liabilities and Owner’s Equity” on the first line.

Step 2. On the second line, center the header “Liabilities” across the two columns.

Step 3. On the next few lines, list the liabilities in order of magnitude (highest to lowest in cost).

Dollar amounts should go in the right hand column.

Step 4. After listing all of the liabilities on the next line, subtotal (add together) all of the

liabilities. Title this line “Total liabilities.”

Owner’s Equity Section

Step 1. In the center of the right hand two columns of the body of the balance sheet, center the

title “Owner’s Equity” after the total liabilities.

Step 2. On the next line place the account title “Owner’s Name, Capital” in this case the owner’s

name is A.L. Morrison. Each owner will have his or her own separate Capital account. In

the case of Morrison Pet Supply Company a sole proprietorship (which means there is

only one owner), there is only one capital account listed. For your own company you will

list the name or names of the owners of the company after which you will place a comma

and the word capital. Place the dollar amount of all investment, which comes from the

owner’s equity statement, in the right hand column. You will only need to subtotal the

owner’s equity section if it is a partnership before you total the liabilities and owner’s

equality section

Step 3. Finally, add the total liabilities and the owner’s equity to arrive at the dollar amount for

the last line. Title the last line “Total liabilities and owner’s equity.” Double underline the

final total.