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Fabm2 Q1 M3

The document provides an introduction to a module on the Statement of Changes in Equity (SCE). It discusses the purpose of the module, which is to help learners meet curriculum standards while learning at their own pace. It outlines the parts of the module, including learning objectives, pre-assessments, lessons, practice activities, and assessments. It provides guidance for both facilitators and learners on how to use the module.

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Beverly Comamo
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0% found this document useful (0 votes)
446 views19 pages

Fabm2 Q1 M3

The document provides an introduction to a module on the Statement of Changes in Equity (SCE). It discusses the purpose of the module, which is to help learners meet curriculum standards while learning at their own pace. It outlines the parts of the module, including learning objectives, pre-assessments, lessons, practice activities, and assessments. It provides guidance for both facilitators and learners on how to use the module.

Uploaded by

Beverly Comamo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 19

Fundamentals of

Accounting, Business and


Management 2
Quarter 1 – Module 3:
Statement of Changes in
Equity (SCE)
Introductory Message
For the facilitator:

Welcome to the Fundamentals of Accounting, Business and Management 2 –

Grade 12 Alternative Delivery Mode (ADM) Module on the Statement of Changes in

Equity (SCE)!

This module was collaboratively designed, developed, and reviewed by

educators both from public and private institutions to assist the teacher or facilitator

in helping the learners meet the standards set by the K to 12 Curriculum while

overcoming their personal, social, and economic constraints in schooling.

This learning resource hopes to engage the learners into guided and

independent learning activities at their own pace and time. Furthermore, this also

aims to help learners acquire the needed 21st century skills while taking into

consideration their needs and circumstances.

In addition to the material in the main text, you will also see this box in the

body of the module:

Notes to the Teacher


This contains helpful tips or strategies that
will help you in guiding the learners.

As a facilitator you are expected to orient the learners on how to use this

module. You also need to keep track of the learners' progress while allowing them to

manage their own learning. Furthermore, you are expected to encourage and assist

the learners as they do the tasks included in the module.

1
For the learner:

Welcome to the Fundamentals of Accounting, Business and Management 2 –


Grade 12 Alternative Delivery Mode (ADM) Module on the Statement of Changes in
Equity (SCE)!

The hand is one of the most symbolized part of the human body. It is often
used to depict skill, action and purpose. Through our hands we may learn, create,
and accomplish. Hence, the hand in this learning resource signifies that you as a
learner is capable and empowered to successfully achieve the relevant competencies
and skills at your own pace and time. Your academic success lies in your own hands!

This module was designed to provide you with fun and meaningful
opportunities for guided and independent learning at your own pace and time. You
will be enabled to process the contents of the learning resource while being an active
learner.

This module has the following parts and corresponding icons:

What I Need to Know This will give you an idea of the skills or
competencies you are expected to learn in the
module.

What I Know This part includes an activity that aims to


check what you already know about the
lesson to take. If you get all the answers
correct (100%), you may decide to skip this
module.

What’s In This is a brief drill or review to help you link


the current lesson with the previous one.

What’s New In this portion, the new lesson will be


introduced to you in various ways such as a
story, a song, a poem, a problem opener, an
activity or a situation.

What is It This section provides a brief discussion of the


lesson. This aims to help you discover and
understand new concepts and skills.

What’s More This comprises activities for independent


practice to solidify your understanding and
skills of the topic. You may check the
answers to the exercises using the Answer
Key at the end of the module.

What I Have Learned This includes questions or blank


sentence/paragraph to be filled in to process
what you learned from the lesson.

2
What I Can Do This section provides an activity which will
help you transfer your new knowledge or skill
into real life situations or concerns.

Assessment This is a task which aims to evaluate your


level of mastery in achieving the learning
competency.

Additional Activities In this portion, another activity will be given


to you to enrich your knowledge or skill of the
lesson learned. This also tends retention of
learned concepts.

Answer Key This contains answers to all activities in the


module.

At the end of this module you will also find:

References This is a list of all sources used in developing


this module.

The following are some reminders in using this module:

1. Use the module with care. Do not put unnecessary mark/s on any part of the
module. Use a separate sheet of paper in answering the exercises.
2. Don’t forget to answer What I Know before moving on to the other activities
included in the module.
3. Read the instruction carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your answers.
5. Finish the task at hand before proceeding to the next.
6. Return this module to your teacher/facilitator once you are through with it.

If you encounter any difficulty in answering the tasks in this module, do not
hesitate to consult your teacher or facilitator. Always bear in mind that you are
not alone.

We hope that through this material, you will experience meaningful learning and
gain deep understanding of the relevant competencies. You can do it!

3
What I Need to Know

STATEMENT OF CHANGES IN EQUITY (SCE)

This module is about the elements of a statement of changes in equity. It is


the simplest financial statement to prepare.

At the end of the lessons, you should be able to:

1. Prepare a Statement of Changes in Equity (SCE) for a single proprietorship


(ABM_FABM12-Ie-9)
a. Identify the accounts under SCE.

What I Know

As you remember, there is a quick overview of the Statement of Changes in


Equity in FABM1. Let’s test if you can still recall the basics of SCE.

Identify the accounts/terms being described. Write it in a separate answer


sheet.

1. It is the account bearing the name of the owner.

2. This account represents the withdrawals made by the owner from the
business.

3. It is the investment that is gradually added through to the business by the


owner during the course of operation.

4. Drawings of the owner in the business can either be cash or .

5. The owner’s equity is a result of original and additional investment decreased


by the withdrawals of the owner and increased/decreased by .

4
Lesson
Statement of Changes in
1 Equity (SCE)
The statement of changes in equity shows the changes made by the owner as

a result of additional investment, or withdrawals increased or decreased by net

income or loss.

CAPITAL is the account that bears the name of the owner. It represents the

original and additional investment increased by net income. It is also decreased by

cash or asset withdrawal and net loss.

*Original investment is the owner’s initial investment when the business

started from scratch.

*Additional investment is the investment that is gradually added through to

the business by the owner during the course of operation.

DRAWINGS is the withdrawals made by the owner. It can either be cash or

other assets.

Illustration:

Pedal Bike Parts has a beginning capital for the month amounting to P

300,000, an additional investment of P 15,0000, and a net income of P 44,900. Mr.

Pedal also made withdrawals amounting to P 20,000. Prepare a statement of changes

in equity for June 30, 2020.

5
PEDAL BIKE PARTS
Statement of Changes in Equity For the
Month Ended June 30, 2020

Pedal, Capital, 6/1/20 ₱ 300,000


Add: Additional Investments ₱ 15,000
Net Income 44,900 59,900
Total ₱ 359,900
Less: Withdrawals 20,000
Pedal, Capital, 6/30/20 ₱ 339,900

What’s In

Too easy right? You have just finished the basics of the statement of changes

in equity. Let’s learn more about these exercises.

1. Compute for the missing figures.

ABM MERCHANDISE
Statement of Changes in Equity For the
Month Ended Jan 31, 2020

Magaling, Capital, 1/1/20 ₱ 188,900


Add: Additional Investments ₱ 21,390
Net Income ??? 53,830
Total ???
Less: Withdrawals 42,730
Magaling, Capital, 1/31/20 ???

6
2. Prepare a statement of changes in equity.

ABM Merchandise has a beginning capital for the month amounting P

25,000, an additional investment of P 15,000, and a net income of P 10,000. Ms.

Magaling also makes withdrawals amounting to P 3,000. Prepare a statement of

changes in equity for January 31, 2020.

Notes to the Teacher


It may be easy as it looks but remember that computing owner’s
equity needs to be accurate because its ending account is needed
to balance the statement of financial position.

What’s New

Study the financial statements of ABM Consultancy Services below. Given

are the statement of financial position. Notice that the financial position lacks the

owner’s equity amount.

7
ABM CONSULTANCY SERVICES STATEMENT OF
FINANCIAL POSITION
As of June 30, 2020

ASSETS

CURRENT ASSETS
CASH ₱ 20,000
ACCOUNTS RECEIVABLE 10,000
MERCHANDISE INVENTORY 150,000
SUPPLIES 5,000
PREPAID RENT 15,000
PREPAID INSURANCE 5,000
TOTAL CURRENT ASSETS ₱ 205,000

NON-CURRENT ASSETS
PROPERTY, PLANT AND EQUIPMENT
SERVICE VEHICLE ₱ 50,000
LESS: ACCUMULATED DEPRECIATION 4,000 46,000
STORE EQUIPMENT 35,000
LESS: ACCUMULATED DEPRECIATION 6,000 29,000 75,000
TOTAL ASSETS ₱ 280,000

LIABILITIES and OW NER'S EQUITY


CURRENT LIABILITIES
NOTES PAYABLE ₱ 30,000
ACCOUNTS PAYABLE 20,000
SALARIES PAYABLE 10,000
UTILITIES PAYABLE 5,000
INTEREST PAYABLE 7,000
UNEARNED REVENUES 5,000
TOTAL CURRENT LIABILITIES ₱ 77,000

NON-CURRENT LIABILITIES
MORTGAGE PAYABLE 150,000

OW NER'S EQUITY
MAGALING, CAPITAL 6/30/2020 ???
TOTAL LIABILITIES AND OW NERS EQUITY ???

To fill this, let’s try to prepare the statement of changes in equity for ABM

Consultancy Services. Given are the accounts balances below:

Magaling, Capital, 6/1/20 ₱ 150,000

Additional Investments 20,000

Net Income 209,000

Withdrawals 326,000

8
What is It

The previous activity shows that the owner’s equity account is needed to
balance the financial position. Below is an illustration of how these statements linked
to each other.

ABM CONSULTANCY SERVICES STATEMENT OF


COMPREHENSIVE INCOME FOR THE YEAR ENDED JUNE
30, 2020
ABM CONSULTANCY SERVICES
Consultancy Fee ₱ 323,000
Statement of Changes in Equity For the
Other Income
Rent Income ₱ 10,000 Month Ended June 30, 2020
Dividends Income 6,000
Gain On Sale Of Equipment 12,000 Magaling, Capital, 6/1/20 ₱ 150,000
Interest Income 5,000 33,000 Additional Investments ₱ 20,000
Add:
Total Income ₱ 356,000
Net Income 209,000 229,000
Expenses Total ₱ 379,000
Salaries 98,000 Less: Withdrawals 326,000
Rent 10,000 Magaling, Capital, 6/30/20 ₱ 53,000
Depreciation 7,000
Supplies 4,000
Insurance 10,000
Loss On Sale Of Equipment 3,000
Interest Expense 15,000 147,000
Net Income ₱ 209,000

ABM CONSULTANCY SERVICES


STATEMENT OF FINANCIAL POSITION
As of June 30, 2020

ASSETS

CURRENT ASSETS
CASH ₱ 20,000
ACCOUNTS RECEIVABLE 10,000
MERCHANDISE INVENTORY 150,000
SUPPLIES 5,000
PREPAID RENT 15,000
PREPAID INSURANCE 5,000
TOTAL CURRENT ASSETS ₱ 205,000

NON-CURRENT ASSETS
PROPERTY, PLANT AND EQUIPMENT
SERVICE VEHICLE ₱ 50,000
LESS: ACCUMULATED DEPRECIATION 4,000 46,000
STORE EQUIPMENT 35,000
LESS: ACCUMULATED DEPRECIATION 6,000 29,000 75,000
TOTAL ASSETS ₱ 280,000

LIABILITIES and OW NER'S EQUITY


CURRENT LIABILITIES
NOTES PAYABLE ₱ 30,000
ACCOUNTS PAYABLE 20,000
SALARIES PAYABLE 10,000
UTILITIES PAYABLE 5,000
150,000
INTEREST PAYABLE 7,000
UNEARNED REVENUES 5,000
TOTAL CURRENT LIABILITIES ₱ 77,000
53,000
NON-CURRENT LIABILITIES ₱ 280,000
MORTGAGE PAYABLE 150,000

OW NER'S EQUITY
MAGALING, CAPITAL 6/30/2020 ???
TOTAL LIABILITIES AND OW NERS EQUITY ???

The P209,000 net income is needed to prepare the owner’s equity statement.
Meanwhile, the ending balance of P 53,000 in equity is used to balance the statement
of financial position. The financial position is now balanced at P 280,000 for both
total assets and total liabilities, and owner’s equity.

9
What’s More

ENRICHMENT ACTIVITY 1

Saranghae Records Studio has a beginning capital amounting P 250,000, an

additional investment of P 150,000, and a net income of P 125,000. Ms. Gummy also

makes withdrawals amounting to P 78,000. Prepare the statement of changes in

equity for February 28, 2020.

ENRICHMENT ACTIVITY 2

PetMalu Animal Grooming Services has the following accounts. Prepare

month-end statement of changes in equity.

Malou, Capital, 6/1/20 ₱ 29,321


Additional Investments 23,854
Net Income 154,223
Withdrawals 32,911

What I Have Learned

What are the accounts in the statement of changes in equity? Describe briefly.

1.

10
2.

3.

What I Can Do

Practice makes perfect! Let’s do more!

Application #1: Below are the accounts of MMK Review Center. Prepare a statement

of changes in equity for June 30, 2020.

Santos, Capital, 6/1/20 ₱ 1,234,876

Additional Investments 520,345

Net Income 909,648

Withdrawals 234,674

Application #2: Below are the accounts of Malasa Bake Shop. Prepare a statement of

changes in equity for June 30, 2020.

Malasa, Capital, 6/1/20 ₱ 304,456

Additional Investments 20,005

Net Income 99,621

Withdrawals 23,691

11
Application #3: Complete the statement of changes in equity.

MISS CHEESE PUBLICATION


Statement of Changes in Equity
For the Month Ended June 30, 2020

Keso, Capital, 6/1/20 ₱ (1)


Add: Additional Investments ₱ 11,000
Net Income 34,000 (2)
Total ₱ 77,900
Less: Withdrawals 8,700
Keso, Capital, 6/30/20 ₱ (3)

Assessment

A. Prepare a statement of changes in equity.

Fabienne Talent Agency has a beginning capital amounting P 1,250,000, an

additional investment of P 550,000, and a net income of P 725,000. Ms. Fabienne

also makes withdrawals amounting to P 380,000. Prepare a statement of changes in

equity for March 31, 2020.

B. Here are the accounts of Aurulent Citrine Pawnshop. Prepare a statement of

changes in equity for May 31, 2020.

Dizon, Capital, 5/1/20 ₱ 3,890,000

Additional Investments 5,432,000

Net Income 2,004,000

Withdrawals 500,000

12
C. Complete the statement of changes in equity.

MURA MALL, INC.


Statement of Changes in Equity
For the Month Ended June 30, 2020

Mahal, Capital, 6/1/20 ₱ (1)


Add: Additional Investments ₱ 234,000
Net Income 374,000 (2)
Total ₱ 1,000,000
Less: Withdrawals 238,700
Mahal, Capital, 6/30/20 ₱ (3)

Additional Activities

A. Prepare a statement of changes in equity.

Daniella Mobile Games has a beginning capital amounting P289,000, an

additional investment of P398,000, and a net income of P259,000. Ms. Daniella also

makes withdrawals amounting to P 56,000. Prepare a statement of changes in equity

for May 31, 2020.

B. Complete the statement of changes in equity.

KAMOTE FARMING SUPPLIES

Statement of Changes in Equity

For the Month Ended April 30, 2020

13
Sweet, Capital, 4/1/20 ₱ (1)

Add: Additional Investments ₱ 32,000

Net Income (2) 79,000

Total ₱ 123,000

Less: Withdrawals 35,000

Sweet, Capital, 4/30/20 ₱ (3)

14
15
References
Ballada, Win. 2005. Basic Accounting Made Easy. DomDane Publisher & Made Easy
Books.

Bragg, Steven. 2018. Accounting Tools. october 7.


https://www.accountingtools.com/articles/2017/5/10/furniture-and-
fixtures#:~:text=Furniture%20and%20fixtures%20are%20larger,on%20an%2
0organization's%20balance%20sheet.

Ong, Flocer Lao, and Janelle Gomendoza. 2017. Fundamentals of Accounting, Business and
Management 2 for Senior High School. C & E Publishing, Inc.

16
For inquiries or feedback, please write or call:

Department of Education – Region III,


Schools Division of Bataan - Curriculum Implementation Division
Learning Resources Management and Development Section (LRMDS)

Provincial Capitol Compound, Balanga City, Bataan

Telefax: (047) 237-2102

Email Address: [email protected]

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