Question

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The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2016 and 2017.

December 31	2016			2017
Cash	$	42,759		$	6,324
Accounts receivable		23,210			18,197
Office supplies		3,661			2,682
Office equipment		112,390			119,717
Trucks		43,980			52,980
Building		0			146,610
Land		0			36,583
Accounts payable		61,020			30,264
Note payable		0			83,193

Required:
1. Prepare balance sheets for the business as of December 31, 2016 and 2017. (Hint: Report only total equity on the balance sheet and remember that total equity equals the difference between assets and liabilities.)

Answer 1

Equity + Liabilities	2016	2017	Assets	2016	2017
	Amount $	Amount $		Amount $	Amount $
Equity	164,980	269,636	Fixed Assets
(Balancing Figure)			Office Equipment	112,390	119,717
			Trucks	43,980	52,980
Long term liabilities			Building	-	146,610
Note Payable	-	83,193	Land	-	36,583
Current Liabilities			Current Assets
Accounts Payable	61,020	30,264	Cash	42,759	6,324
			Accounts Receivable	23,210	18,197
			Office Supplies	3,661	2,682
Total	226,000	383,093	Total	226,000	383,093

We know that Assets = Liabilities + Equity

In the present scenario, we have all the figures of Assets and Liabilities but we do not have figure of Equity. So, using the above equation, we will find the figure of equity as balancing figure as follows

Equity = Assets - Liabilities