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RSS
1st year
 
I dont know about accounting before and now i have to produce statements for my small company.

It's 1st year of operation with capital of 10,000 £
I purchase 4000 £ of inventory.
I sell half for 3000 £
My remaining inventory is worth 2000 £
My fixed costs are 1000 £

I'd say I have income deficit of 2000 £

In the balance sheet,

My total assest would be: 8000 £ cash + 2000 £ inventory = 10000 £No liabilities.

Equity:
Capital: 10000 £
Accumulated Deficit: 2000 £
Total : 8000 £
The balance sheet doesn't balance and I don't understand how it could.
 
If you sold half your inventory for 3,000 and then incurred 1,000 of expenses, you didn't lose 2,000....you exactly broke even.

Total equity remains at 10,000 and balance sheet balances.
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