In this question, we are being asked to decide whether these items are non-current assets, current assets, current liabilities, non-current liabilities, or equity.

We're going to indicate our answer in this column just below.

If you want to pause the recording here and have a go, please do so now.

So stock in the warehouse.

Typically stock will be held for less than 12 months and it is an asset to the business.

Because it is held for less than 12 months that makes it a current asset.

Amounts owed to suppliers. Well that accounts payable.

Accounts payable we typically don't owe for longer than 12 months.

So again, it's going to be a current item.

But because it's money owed that makes it a current liability.

Vehicles used in the business while vehicles are an asset and we typically do use them for longer than 12 months.

So that makes vehicles non-current assets.

Money market securities.

This is often where there's a company that has some cash left over and they invest it to earn a return.

That basically means it's the same as cash and we're going to treat it as a current asset.

We typically don't hold them for longer than 12 months.

Seed capital invested by owners for shares. Well, this is an example of equity.

Profit from previous years reinvested So we've made some profit and what do we do with it? We put it back into the business.

That goes into retained earnings within our balance sheet and retained earnings is part of equity.

Moneys owed by customers is otherwise known as accounts receivable.

But how long do we give our customers to pay? Well, normally it's less than 12 months. So that would make this a current item.

Because it's money owed to us that makes it a current asset.

Cash in the bank account same as money market securities. This is a current asset.

Income tax owed, well, that's a liability. And typically the tax authority does not give us longer than 12 months to pay. So this is going to be a current liability.

Bank borrowings repaid in 10 years. Bank borrowings are a liability and 10 years is definitely longer than 12 months. So this would be a non-current liability.

Dividends announced but unpaid that's a liability.

And we typically pay this within quite a short period of time making this a current liability.

Bank overdraft typically, this is short-term. And so this would be a current liability.

And finally machines, companies typically use machines for longer than 12 months making these non-current assets.

The next question asks us to place the items from the previous question into the balance sheet below and to ensure that the balance sheet balances.

I have already calculated the subtotals and the totals and revealed my formulae in the column on the right.

If you would like to pause the video now and give this one a go, please do so.

Cash and cash equivalents. We actually have two items that we need to include here.

we have got the money market securities as well as the cash in the company bank account.

Accounts receivable, well accounts receivable is money that's owed to me by customers. So row 14.

And inventory, inventory is my stock in the warehouse.

And that gives us a subtotal for current assets of 2447.9.

Now we need to add in any non-current assets to give us our total assets balance.

And in this example, we have two non-current assets. We have got the machines.

Plus we have got vehicles.

So now we have current assets plus non-current assets giving us total assets of 3091.7.

Moving on to the equity and liability side of the balance sheet. We know that this total has to equal the total assets.

So let's get going with the current liabilities current liabilities short term debt. We have got that Bank overdraft. So if we pick up the Bank overdraft from row 19.

Accounts payable that's money that we owe to our suppliers. So amounts owed to our supplies in row 9.

Taxes payable, what do I owe the tax authorities? Row 16.

And then my final current liability is the dividends payable.

And dividends announced but unpaid is 71.1.

And there we have our subtotal for current liabilities.

Moving on to non-current liabilities. We've only got one item here and that's the long-term debt, which would be that bank loan.

Bank loan to be repaid in 10 years.

and then finally in equity we need to put share capital.

And share Capital would be that seed Capital invested by owners row 12.

And then we also have retained earnings which is an equity item.

And that's our profits reinvested in the business.

So we've got total equity of 1839.6.

And then we add together non-current liabilities, current liabilities, and equity giving us a total of 3091.7 and we are happy because our total sources of funds, my liabilities plus equity is equal to the total uses of funds which is my total assets. We've got a balance sheet check built-in below to calculate the difference between total assets and total liabilities and equity which should be 0 and you could also build in and if statement for that check