Preparing SFP of

Sole
Proprietorship
Business
 OBJECTIVES
 define single proprietorship business
 differentiate the two forms of SFP (Report and Account
Form)
 determine the steps in preparing SFP
 prepare the SFP of a single proprietorship business using
the two formats
 participate actively in class discussion and activities
Review!

1) Define current and noncurrent accounts

2) Give examples of accounts under current assets,

noncurrent assets, current liabilities and noncurrent
liabilities

3) What are the different parts of SFP?

Grade 12 ABM students of GJVMMCHS, have just
finished preparing the Adjusted Trial Balance,
what financial statement should they prepare
next?
 GROUP ACTIVITY#1:
* Arrange the steps in preparing SFP on correct order.
Report the answer.
Prepare the heading

Report all company assets

Report the ending balance of capital

Gather the needed information

Report all liabilities

SCORING RUBRIC
Lesson Proper!
SINGLE/SOLE PROPRIETORSHIP
 An entity whose assets, liabilities, income and expenses are centered or
owned by only one person (Haddock, Price, & Farina, 2012).
 TWO FORMS OF SFP:
REPORT FORM
 A form of the SFP that shows asset accounts first and then liabilities and
owner’s equity accounts after. (Haddock, Price, & Farina, 2012)

ACCOUNT FORM
 Account Form – A form of the SFP that shows assets on the left side and
liabilities and owner’s equity on the right side just like the debit and credit
balances of an account. (Haddock, Price, & Farina, 2012)

Take Note:
The two are only formats and will yield the same amount of total assets, liabilities and equity
hence, assets should always be equal to liabilities and equity
REPORT FORM
ACCOUNT FORM
Reflect your answers on ACTIVITY #1:
Steps in preparing SFP

Step 1: Gather the needed information

 Like in any other financial statement, we
need to gather information to be used in
preparing a balance sheet. Any source that
shows updated account balances can be
used. The most appropriate tool for this,
however, would be the adjusted trial
balance.
Reflect your answers on ACTIVITY #1:
Steps in preparing SFP
Step 2: Prepare the heading
 The first line contains the name of the company. The
second line shows the title of the report. We can use
either "Balance Sheet" or "Statement of Financial
Position". The third line indicates the date of the
report.

 The income statement, statement of changes in

equity, and statement of cash flows use For the Year
Ended, For the Month Ended, For the Quarter Ended,
etc. However, we cannot use any of those phrases in
a balance sheet since we are not reporting
information for a period of time, but rather,
information as of a certain date.
Reflect your answers on ACTIVITY #1:
Steps in preparing SFP

Step 3: Report all company assets

 From the trial balance, we take all assets
and report them in the balance sheet.
Current assets are reported separately from
non-current assets. After which, we will
compute for the total current assets, the
total non-current assets, and the total
assets. A single line is drawn every time a
mathematical operation is made. The
amount of total assets is double-ruled.
Reflect your answers on ACTIVITY #1:
Steps in preparing SFP

Step 4: Report all liabilities

 After the "assets" portion, we
will now present "liabilities
and capital". We will start by
presenting current liabilities,
followed by non-current
liabilities. After that, we will
take the totals of each as well
as the amount of total
liabilities – just like what we
did for assets.
Reflect your answers on ACTIVITY #1:
Steps in preparing SFP
Step 5: Report the ending
balance of capital
 The trial balance above does
not show the ending balance
of capital. The ending balance
of capital can be taken from
the Statement of Changes in
Equity.
 After including capital, we will
take the total amount
of "liabilities and capital". That
amount is double-ruled.
 ACTIVITY #2:
(INDIVIDUAL ACTIVITY)

 Using the two formats, prepare

the SFP of a single/sole
proprietorship business.
 Red Cruz, Capital Ending: 409, 000.00
Additional question:
409, 000  How do we compute the Ending
Capital?
 What have you learned from our lesson today?

 define single proprietorship business

 differentiate the two forms of SFP (Report and Account Form)

 What are the steps in preparing SFP

THANK YOU
FOR
LISTENING!!!