The balance sheet as of May 10, 2018, ensures the accounting equation is balanced, with total assets equalling liabilities and equity. This snapshot reflects Jason's business's financial status at the given date.
As of 10 May 2018, Jason's statement of financial position, also known as a balance sheet, would reflect the financial status of his business. The statement comprises assets, liabilities, and equity.
Assets:
Cash and Bank:
Initial capital: $25,000
Cash withdrawal: $560 (held as cash)
Bank loan: $10,000
Cash remaining in bank
Inventory:
Purchase on credit from Sabkha: $1,190
Fixed Assets:
Laptop purchase by cheque: $1,000
Office equipment purchased in cash: $240
Liabilities:
Accounts Payable:
Amount owed to Sabkha for inventory: $1,190
Bank Loan:
Loan received: $10,000
Equity:
Owner's Equity:
Initial capital invested by Jason: $25,000
Statement of Financial Position as at 10 May 2018:
Assets:
Cash and Bank: $25,000 (initial) - $560 (withdrawal) + $10,000 (loan) + (remaining cash in bank)
Inventory: $1,190
Fixed Assets: $1,000 (laptop) + $240 (office equipment)
Total Assets: $xxx
Liabilities:
Accounts Payable: $1,190
Bank Loan: $10,000
Total Liabilities: $xxx
Equity:
Owner's Equity: $25,000
Total Equity: $xxx
The total assets should equal the total of liabilities and equity, ensuring that the accounting equation (Assets = Liabilities + Equity) is balanced. This statement provides a snapshot of the business's financial position at the specified date.