FABM 2 - ABM 12

MODULE 1:
STATEMENT OF FINANCIAL POSITION

REY D. AMAYA, CPA, MAIA

COLEGIO DE LA INMACULADA CONCEPCION -
CEBU
SHS DEPARTMENT
Statement of Financial Position A formal statement showing the three elements (Assets, Liabilities and
Equity)

REPORT FORM Purpose:

Reiborn Company To evaluate the liquidity, solvency and the need of the
Statement of Financial Position entity for additional financing
December 31, 2020
Presentation
Assets
REPORT FORM AND ACCOUNT FORM
Current Assets:
Cash and Cash Equivalents Pxxx
Trade and other receivables Xxx
Inventories xxx Pxxx
ACCOUNT FORM
Reiborn Company
NOnCurrent Assets:
Property, plant and equipment Pxxx Statement of Financial Position
December 31, 2020
Long term Investment Xxx
Intangible Assets Xxx xxx
Total Assets Pxxx Assets Liabilities and Equity
Liabilities and Equity Current Assets: Current Liabilities:
Cash and Cash Equivalents Pxxx Trade and other payables Pxxx
Current Liabilities:
Trade and other payables Pxxx Trade and other receivables Xxx Note Payable – Short term Xxx Pxxx
Inventories xxx Pxxx
Note Payable – Short term Xxx Pxxx
NOnCurrent Assets: Noncurrent Liabilities:
Noncurrent Liabilities:
Note payable – long term Xxx Property, plant and equipment Pxxx Note payable – long term Xxx
Long term Investment Xxx
Total Liabilities Pxxx Intangible Assets Xxx xxx Total Liabilities Pxxx

Reiborn, Capital PXxx Reiborn, Capital PXxx

Total Liabilities and Capital Pxxx Total Assets Pxxx Total Liabilities and Capital Pxxx
Assets A present economic resource controlled by the entity as a result of past
events or PROPERTIES OWNED BY AN ENTITY,

Essential Characteristics Presentation

a. The asset is controlled by the entity Order of liquidity
b. The asset is the result of past event
c. The asset has the potential to produce economic benefits

Types of Assets

Current Assets NonCurrent Assets

• Holds primary for purpose of trading
• All other assets not classified as current
• Expects to realize within 12 months after the reporting period
asset
• Expects to sell or consume within the normal operating cycle

• CASH AND CASH EQUIVALENTS

• FINANCIAL ASSET AT FV-PL • PROPERTY, PLANT AND EQUIPMENT
• TRADE AND OTHER RECEIVABLES • LONG TERM INVESTMENTS
• Office Supplies • INTANGIBLE ASSETS
• INVENTORIES • OTHER NONCURRENT ASSETS
• PREPAID EXPENSES
• Accrued Income
• Other Current Assets
Current Assets
Cash and Cash Equivalents Trade and Other Receivables Office Supplies
Contractual right to receive cash or other
Cash financial asset from another entity
Includes cash on hand, cash in
Trade Receivables These are consumables and
bank and cash fund as long as it is
Accounts receivable, notes small equipments
unrestricted and available for
receivable, loans receivable regularly used in offices
payment of current obligation
by businesses
Cash Equivalents Nontrade Receivables
Short term investments that can be
convertible to cash within 3 months Receivable from shareholders,
or less from the date of acquisition directors or officers, Advances to
suppliers, subscription receivables,
accrued income, claims receivable

Financial Asset at Fair Inventories Prepaid Expenses

Assets held in an ordinary course of business, in
Value the process of production for such sale or in the Expenses paid in advance
form of material or supplies to be consumed in the but still unused or not yet
production process or in the rendering of business incurred. It may include but
Short term investments with the
not limited to prepaid
intention of trading (buy and sell Raw materials inventory insurance, prepaid rent,
shares at a short period of time) to Goods to be used in production
prepaid interest, prepaid
generate short term gains or
Work in process inventory utilities etc.
profits
Goods partially completed
Finished goods inventory
Goods ready for sale
NonCurrent Assets
Property, Plant and Equipment Intangible Assets
These are tangible assets which are held by an entity for use in the Identifiable nonmonetary asset without physical
production or supply of goods and services, for rental to others or substance
for administrative purposes and are expected to be used during more
than one period
• Broadcasting license
• Patent
• Land • Motor vehicle • Airline right
• •
• Trademark
Land improvement Furniture and Fixtures • Customer list
• Building • Office Equipment • Copyright
• Computer software
• Machinery • Patterns, mold and dies • Franchise
• Ship • Tools
• goodwill
• Aircraft • Bearer plants

Long Term Investments

It is held for the purpose of accretion of wealth through capital
Other Noncurrent Asset
distribution, such as interest, royalties, dividends and rentals, for
capital appreciation or for benefits to the investing entity.
These are other noncurrent assets which do not fit
into the definition of those mentioned above like long
• Investment in shares and bonds
term advances to officers, abandoned property and
• Investment in subsidiaries
long term refundable deposits.
• Investment in associates
• Investment in funds (sinking fund, plant expansion
fund, and preference share redemption fund)
• Investment property
• Cash surrender value of life insurance policy
• Investment in joint Venture
Liabilities A present obligation of an entity to transfer an economic resource as a
result of past events or WHAT IS OWED BY THE ENTITY

Essential Characteristics
a. The entity has a present obligation
b. The obligation is to transfer an economic resource
c. The liability arises from past event.

Types of Liabilities

Current Liabiltiies NonCurrent Liabilities

• Holds primary for purpose of trading
• All other liabilities not classified as
• Due to be settled within 12 months after the reporting period
current asset
• Due to pe settled within the normal operating cycle

• Trade and other payables • Noncurrent portion of long term debt

• Current provisions • Lease liability
• Short term borrowings • Deferred tax liability
• Current portion of long term debt • Long term obligation to entity officers
• Current tax liability • Long term deferred revenue
Equity The residual interest in the assets of the entity after deducting all of the
liabilities or NET ASSETS

Sole Proprietorship Partnership

Owner’s equity Partner’s equity

Corporation
Shareholder’s equity

• Capital stock or share capital

• Subscribed capital capital or subscribed share capital
• Common stock or ordinary share capital
• Preferred stock or preference share capital
• Additional paid in capital or share premium
• Retained earning (deficit) or Accumulated profits (losses)
• Retained earnings appropriated or appropriation reserve
• Revaluation surplus or revaluation reserve
• treasury stock or treasury shares

Go to ACTIVITY 1.1 - CANVAS

Activity 1.1 Classify if it is asset,
liability, equity or others

Accounts ACCRUED RENT EXPIRED

CASH ON HAND NOTE PAYABLE
receivable INCOME INSURANCE
PRECOLLECTED PROVISION FOR REVENUE FROM INTEREST UNEXPIRED
RENT INCOME INCOME TAX SERVICES EXPENSE INSURANCE
NOTES UNEARNED MORTGAGE TAXES
LOAN PAYABLE
RECEIVABLE REVENUES PAYABLE PAYABLE
PREPAID JULIO MORENO,
SALES MACHINERY PREPAID RENT
ADVERTISING CAPITAL
ACCRUED
MERCHANDISE INVESTMENT IN ACCOUNTS
RENT PAYABLE SALARIES
INVENTORY STOCK PAYABLE
EXPENSE
Activity 1.2
Prepaid Insurance P10,000
Notes Receivable 60,000
Petty Cash fund 2,000
Accounts Payable 10,000
Accounts Receivable 80,000
Unused supplies 20,000
Allowance for doubtful accounts 1,000
Cash in bank 30,000
Salaries Payable 15,000
Transportation equipment 90,000
Accumulated Depreciation 5,000

Compute the
A. Current Asset
B. Noncurrent Asset
Activity 1.3
Accrued Interest Income P4,800
Accrued Interest Expense 6,200
Bonds Payable 150,000
Petty Cash fund 52,200
Cash surrender value 12,000
Notes Receivable, due after 2 yrs 40,000
Financial Asset – Trading 100,000
Land 70,000
Ordinary shares 200,000
Share premium – Ordinary shares 15,000
Time Deposit – six months 80,000

Compute the
A. Current Asset
B. Noncurrent Asset
Activity 1.4
Taxes and Licenses P15,000
Accrued Salaries expense 25,000
Cash on hand 75,000
Deferred Tax liability 5,000
Accounts Payable 80,000
Deferred Revenue – Long term 10,000
Supplies expense 9,000
Note payable due in 7 months 40,000
Cash in BPI - overdraft (10,000)
Bank loan Payable in 3 yrs 50,000
Unearned Rent income (current) 8,000

Compute the
A. Current Asset
B. Noncurrent Asset
Activity 1.5
Bonds payable P150,000
Mortgage Payable Due in 2 yrs 200,000
Accrued Expenses 40,000
Accrued Income 20,000
Income Tax payable 55,000
Dividends Payable 85,000
Preference Shares 800,000
Retained Earnings 785,000
Franchise 84,000
Accounts Payable 62,000
Advances from subsidiaries 120,000

Compute the
A. Current Liability
B. Noncurrent Liability
Activity 1.6
B. At the beginning of the year
a. At the beginning of the year eman eman company had total assets of
company had total assets of P700,000 P700,000 and total liabilities of
and total liabilities of P500,000. If P500,000. If the total assets
the total assets increased by P150,000 decreased by P90,000 and Equity
during the year and total liabilities increased by P110,000 during the
decreased by P80,000. What is the year, What is the amount of total
Equity at the end of the year? liabilities at the end of the year?
Activity 1.7
B. At the beginning of the year
Naomi company had total assets of
a. At the beginning of the year Naomi P1,000,000 and total liabilities of
company had total assets of P350,000 P600,000. If the total assets
and total liabilities of P250,000. If
Increased by P100,000 and Equity
the total assets Decreased by increased by by P110,000 during
P150,000 during the year and total the year, What is the amount of
Equity Increased by P80,000. What is total liabilities at the end of the
the liability at the end of the year? year?