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.
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.