I have a small business and I am being asked to produce a balance sheet. I have a very simple business model: I do hourly work and get paid on a 1099 basis. It is an LLC but I treat it kind of informally, basically taking all money out for personal use as soon as I receive it, and leaving say $1,000 in the business bank account at all times. Let's say I have made $50,000 this year so far. I am struggling to understand how this should look on the balance sheet, specifically the following:
Should the assets section of the balance sheet display only $1,000 (as cash) since that is what is maintained in the bank account, or will the assets section somehow indicate something about my $50k total income for the year?
In the owner's equity section, will I show a retained earnings of $50,000, and then an owner's draw of ($49,000), to match the $1,000 on the assets side?