 Hello. In this lecture, we're going to create the current asset section of the balance sheet. We're going to create this current asset section from a trial balance. We're going to piece together the financial statements piece by piece as we go through a series of lectures, the trial balance being here. This is going to be the adjusted trial balance. And what will happen is we will then find a home for all of the accounts on the financial statements. Once we then do that, that means that we have then converted this from the double intrigue accounting system being in the format of debits minus credits equaling zero or debits equaling the credits to the assets equaling liabilities plus the owner's equity, basically the accounting equation, which is reflected on the balance sheet. So we're going to start off by doing the current asset section, which will just be this part, we're going to find a home for these first few accounts. And that's going to include cash, accounts receivable, prepaid insurance, supplies, not land. Why not land? Land is not a current asset because it's going to be a long term asset. Difference being current assets are things that are going to be more liquid, things that we are going to readily use soon or is close to cash. And that's because it's more comparable to the liabilities. We want to know what's close to cash. Those are going to be the things that we can more readily use to pay the current liabilities, the things that will be due relatively soon. In order to do that, we're going to say, okay, we're in the assets section. And all we're going to do is just pull these numbers over. We're going to say current assets colon, look at the format, because the format is going to really tell you a lot about how to create the financial statements as well as how to read the financial statements. So we're going to say, this is going to be an asset section, another subsection represented by the colon, then we're going to end in. So we're going to pull over these accounts, notice it's slightly indented here. We're just pulling over the cash accounts. We're going to pull that into the inside and then sum them up on the outside. This doesn't represent debits and credits. What we're doing is taking the building blocks of debits and credits over here and then transposing those to a plus and minus format over here, transforming that process from the double entry accounting system in terms of debits and credits to the same double entry accounting system, which now will be in terms of assets, equilibrates plus equity. Then we're going to do the same for accounts receivable, we'll just pull on this number here. Here's the accounts receivable. We're just pulling that number over. We're putting it in the inner column, not a debit column. It's just going to be the inner column that we're subtolling. We're going to do the same for the prepaid insurance. We're just pulling the prepaid insurance over into our balance sheet. And we will do the same for the supplies. We will stop there, not including land. Land is not a current out. Then we will put an underline under here and we will then sum that up. Notice again the format colon here. That means it's a subcategory. We then indented these items here. Then we indented again and now we're putting the subcategory on the right hand side. How is that calculated? It's just going to be the 568,000 plus the 369 plus the 11,000 plus the 1050. We are now summing it up on the right hand side. That's going to be the format that we will repeat as we go through all the financial statements. We can now see that this has been recreated from our trial balance being the current asset section of the balance sheet. We're going to move on to next time property, plant and equipment, then onto the rest of the balance sheet and the income statement and the statement of owner's equity and then discuss how these financial statements fit together.