Owners use a balance sheet to show an organization’s financial position at a specific date. It helps to summarize an organization’s value. The balance sheet presents a listing of assets, liabilities and owner’s equity. It’s called a balance sheet because assets equal liabilities plus owner equity. The numbers must balance.
This is the most accepted method to list the value of a shared airplane ownership. It shows what the company owns as well as what it owes. In this series, we’ll review how to prepare and present the balance sheet in a shared ownership.
Example Balance Sheet Classifications
Cirrus-We-Own, LLC: Balance Sheet, May 31,2016
| ASSETS | LIABILITIES & OWNERS EQUITY | ||
| Cash & Receivables | 8,517 | Credit Cards | 690.55 |
| Funded Reserves | 19,000 | Other Payables | |
| Prepaid Items | 4,543 | ||
| Aircraft: Cirrus SR22 | 230,600 | Capital Accounts | |
| Member – Jones | 87,323 | ||
| Member – Smith | 87,323 | ||
| Member – Brown | 87,323 | ||
| Total Assets | $262,660 | Total Liabilities | $262,660 |
Next week we’ll review assets listed on the balance sheet in more detail.
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