Best way to prepare Balance Sheet of a Freelancer?

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  1. INDIAN

    INDIAN New Member

    What is the best way to compile a balance sheet for a freelancer who :

    a) has no liability (no loans)
    b) Only fixed asset is a laptop (Hence can consider depreciated cost of laptop)
    c) business income from providing services (so gross sales minus the business expenses considered)

    How to account for the bank balance (current asset ?), owner's draw and the P&L account into the balance sheet?

    A simple illustration would be highly useful.
     
  2. ZED

    ZED Well-Known Member

    Then we will be having only the capital account.

    Ok

    OK

    Yes

    Drawing is not allowed as deduction for income tax purpose. That means it will not decrease the profit (for tax purposes)

    From accounting point of view profits can be decreased.
     
  3. INDIAN

    INDIAN New Member

    ZED - Thanks for your reply.

    My query on owner's drawing was not for deduction of expenses --- but rather how to account this amount in balance sheet.
    I basically need clarification on how to represent owner's drawing and profit income in the balance sheet in the above freelancer case. Appreciate your help.
     
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