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Chapter 3 Statement of Changes in Equity

The Statement of Changes in Equity (SoCE) shows the reconciliation of beginning and ending balances of equity accounts. It summarizes equity transactions with owners that occurred during the year. For a sole proprietorship, the SoCE tracks the owner's capital account. For a partnership, each partner's capital account is tracked for contributions, share of net income, and drawings. For a corporation, the SoCE reports changes in paid-in capital and retained earnings.

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246 views21 pages

Chapter 3 Statement of Changes in Equity

The Statement of Changes in Equity (SoCE) shows the reconciliation of beginning and ending balances of equity accounts. It summarizes equity transactions with owners that occurred during the year. For a sole proprietorship, the SoCE tracks the owner's capital account. For a partnership, each partner's capital account is tracked for contributions, share of net income, and drawings. For a corporation, the SoCE reports changes in paid-in capital and retained earnings.

Uploaded by

Ronald De La Rama
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Statement

of Changes in
Equity
What Is the Statement of Changes in
Equity (SoCE)?
The SoCE is prepared to meet the requirements of the readers to
understand the transactions that cause the movements in equity
accounts.

 The SoCE is a statement dated “for the year-ended”.


 The report shows a reconciliation of the
beginning and
ending balances of the equity accounts.
 It summarizes the equity transactions with the ownersof
the business that occurred during the year.
Forms of Business Organizations
• It is the most complex form of
• It isisa
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Preparation of SoCE
1. Sole proprietorship Juan Dela Cruz

Owner’s Capital Account


Preparation of SoCE
1. Sole proprietorship

SoCE ‒ Sole Proprietorship


Preparation of SoCE
1. Sole proprietorship
Preparation of SoCE

2. Partnership

 Each partner’s Capital account will track his/her:


• contributions to the business;
• share in the net income; and
• drawings.
Preparation of SoCE
2.
Partnership
Preparation of SoCE
3.
Corporation

Paid in Capital

Retained Earnings
Preparation of SoCE
3. Corporation

SoCE ‒ Corporation
Preparation of SoCE
3. Corporation
Preparation of SoCE
3. Corporation
Thank you!

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