1. The problem is to prepare a balance sheet by separating assets from liabilities and equity, and then calculate the totals. 2. A balance sheet follows the accounting equation: $$\text{Assets} = \text{Liabilities} + \text{Equity}$$ 3. Assets are resources owned by the company, liabilities are obligations owed to others, and equity represents the owner's interest. 4. To prepare the balance sheet: - List all assets and sum them to get total assets. - List all liabilities and sum them to get total liabilities. - List all equity items and sum them to get total equity. 5. Verify that total assets equal total liabilities plus equity. 6. Without specific numbers, this is the general method to separate and calculate the balance sheet components.