Issue link: http://cp.revolio.com/i/142672
balance sheets • nventory. Generally, the I inventory in a massage, bodywork, or somatic therapy business will consist only of supplies, unless you also sell an ancillary line of products, such as nutritional supplements or relaxation tapes. The value of the inventory is what it would cost to replace it. Long-term (fixed) assets Depreciation A convenient way to figure depreciation for your balance sheets is to divide the cost you paid for something by its estimated useful life. For instance, if you paid $500 for a massage table that you expect to replace in five years, then the annual depreciation rate is $100. Keep in mind that the depreciation figures you create for your balance sheets will probably be different from the depreciation you take on your tax returns. The IRS has specific rules for the depreciation of different kinds of assets in your business, and the rules in your state may differ as well. • quipment. Note the value E of computers, office furniture, fixtures, work tables, counters, etc. Generally, you'll list the value of these items at cost minus depreciation. • ehicles. If the business owns V a car or truck, list the value of the vehicle at its original cost minus depreciation. • ong-term investments. L Anything of value that can't be converted to cash in less than a year is a long-term investment. This would also be the place to list the value of any machinery, buildings, or land owned by the business. Liabilities The second section of the balance sheet details what the business owes. This section also is divided into current and long-term categories. Current liabilities • ccounts payable. This is A the amount owed to suppliers. Such debts are usually due within 30 days. • otes payable. Typically, this N covers the amount due on a bank or other loan in the next year. • ccrued expenses. These include A wages, salaries, commissions, and other costs incurred, but not paid, during the reporting period. • axes payable. Amounts owed T for taxable sales, real property, payroll taxes, and business income. Long-term liabilities • ortgage payable. The amount M the business owes the bank or other lender on real property. • otes payable. Any promissory N notes taken out by the business and payable in a year or more. Start-up loans provided by relatives, friends, and finance companies fall in this category. Equity Subtract the total sum of the liabilities from the total sum of the assets and you have a figure that represents the owners' equity stake in the company. This figure is also called net worth. SPH