Republic of the Philippines

Department of Education
National Capital Region
DIVISION OF CITY SCHOOLS – MANILA
Manila Education Center Arroceros Forest Park
Antonio J. Villegas St. Ermita, Manila

FABM2

Quarter 1 Week 4 Module 4

Learning Competency:
Prepare Statement of Changes
in Equity of a Single Proprietorship
ABM_FABM12-Ie-9
 Learning Module for Accountancy, Business and Management

HOW TO USE THIS MODULE?

Before starting the module, I want you to set aside other task/s that may
disturb you while enjoying the lessons. Read the simple instructions below to
successfully enjoy the objectives of this kit. Have fun!

1. Follow carefully all the contents and instructions indicated in

every page of this module.

2. Write on your notebook the concepts about the lessons. Writing

enhances learning that is important to develop and keep in mind.

3. Perform all the provided activities in the module.

4. Let your facilitator/guardian assess your answers using the

answer key card.

5. Analyze conceptually the posttest and apply what you have

learned.

6. Enjoy studying!

PARTS OF THE MODULE

Expectations - These are what you will be able to know after

completing the lessons in the module.
Pre-test - This will measure your prior knowledge and the concepts to
be mastered throughout the lesson.
Looking Back to your Lesson - This section will measure what
learnings and skills did you understand from the previous lesson.
Brief Introduction- This section will give you an overview of the
lesson.
Activities - This is a set of activities you will perform with a partner.
Remember - This section summarizes the concepts and applications
of the lessons.
Check your Understanding - It will verify how you learned from the
lesson.
Post-test - This will measure how much you have learned from the
entire module

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 Learning Module for Accountancy, Business and Management

Preparation of SCE in a
LESSON
4 single proprietorship
EXPECTATIONS

You will represent real-life situations using statement of changes in equity

Specifically, this module will help you:

prepare astatement of changes in equity for a single proprietorship
business.

PRETEST

Directions: Draw sign if the account increases owner’s equity, sign if it

decreases owner’s equity account and sign If no effect in a yellow paper.

Let us start your

journey in learning more on
SCE I am sure you are ready
and excited to answer the
Pretest. Enjoy answering!

1. Initial investment 11. Professional Fees

2. Rent expense 12. Transportation Expense
3. Service revenue 13. Rental Revenue
4. Capital 14. Payment of Liability
5. Drawing 15. Supplies
6. Salaries 16. Equipment
7. Additional investment 17. Depreciation Expense
8. Cost of Goods Sold 18. Land
9. Accounts Payable 19. Prepaid Expenses
10. Allowance for Bad Debts 20. Withdrawals

Great, you finished answering the

questions. You may request your
facilitator to check your work.
Congratulations and keep on
learning!

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 Learning Module for Accountancy, Business and Management

LOOKING BACK TO YOUR LESSON

Directions: Match column A with Column B. Write letters only.

Column A Column B
1. Also called a trading business
A. Purchase Discount
2. It is the stock at the beginning
B. Inventory Beginning
3. A contra purchase account
C. Merchandising business
4. Sales less cost of sales
D. Freight In
5. Beginning inventory plus net cost
E. Sales Discount
of purchases
F. Net Sales
6. Transportation paid by the
G. Cost of Sales
company to their suppliers
H. Net Cost of Purchases
7. Sales less contra sales account
I. Cost of goods available for sale
8. Cost of goods available for
J. Gross Profit
sale less ending inventory
9. Net purchases plus freight in
10. A contra sales account

BRIEF INTRODUCTION

The statement of changes in equity shows the movement of equity

account during the period. Whether it increases or decreases at the end of the
accounting period. In this module you have to recall what increases and
decreases owner’s equity account.

Increases owner’s equity account are: Decreases owner’s equity account are:
a. Additional investment a. Drawing
b. Profit b. Loss

Forms of Business and their owner’s as presented in the equity account

Forms of Business Owner/s
1. Single Proprietorship Proprietor
2. Partnership Partners
3. Corporation Shareholders
4. Cooperative Members

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 Learning Module for Accountancy, Business and Management

The objective of this module is to prepare the statement of changes in equity

of a single proprietorship business.

Parts of Statement of Changes in Owner’s Equity

a. Heading
b. Increases to Equity
i. Net income for the year
ii. Additional investment
c. Decreases to Equity
i. Net loss for the year
ii. Withdrawals by the owner

Format of SCE if the business has a net income

STEP MIN TUTORIAL SERVICES

STATEMENT OF CHANGES IN OWNER’S EQUITY
For the year ended December 31, 2019 HEADING

Capital, January 31, 2019 P 100,000 INCREASES

Additional Investment P50,000 EQUITY
Add: Net Income 25,000 75,000
Total P175,000
Less: Drawing 25,000 DECREASES
EQUITY
Capital, December 31, 2019 P150,000
========

Shown above is an example of SCE with a positive result of operation.

The net income is added to additional investment and the effect, it
increases equity account.

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 Learning Module for Accountancy, Business and Management

Format of SCE if the business resulted to a net loss

STEP MIN TUTORIAL SERVICES

STATEMENT OF CHANGES IN OWNER’S EQUITY HEADING
For the year ended December 31, 2019

Capital, January 31, 2019 P 100,000 INCREASES

EQUITY
Additional Investment 50,000
Total P 150,000
Less: Drawing P25,000 DECREASES
Net Loss 25,000 50.000 EQUITY
Capital, December 31, 2019 P100,000

Shown above is an example of SCE with a negative result of

operation. The net loss is added to drawing account and the effect, it
decreases the owner’s equity account.

ACTIVITIES

Activity 1.
Directions: Write the Correct answer on the space provided before the number.
_________ 1. A business organization owned by only one owner.
_________ 2. Two or more persons combine their property and industry
_________ 3. Has a legal entity entered by the operation of law.
_________ 4. Includes company name, the statement of equity and the date
_________ 5. The first investment made by the business.
_________ 6. Decreases the equity account because the business withdrew cash
_________ 7. The owner of a single proprietorship business.
__________8. The owners of a partnership business.
__________9. The term for the owner of a corporation.
_________10. Formed in accordance with a cooperative code of the Philippine

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 Learning Module for Accountancy, Business and Management

Activity 2.
Directions: Write True if the statement is correct and False if the statement is
incorrect.
____________1. Revenue increases owner’s equity account
____________2. Expenses decrease owner’s equity account
____________3. Liability decreases owner’s equity account
____________4. Additional investment decreases owner’s equity account
____________5. Losses decrease owner’s equity account\
____________6. Beginning capital is capital at the beginning of the period
____________7. Net loss is added to drawing account before it is deducted to the
capital beginning and additional investment.
____________8. The normal balance of Revenue is credit
____________9. The normal balance of Expenses is debit
___________10. The income amount in the statement of changes in owner’s
equity is the same amount as the income from the SCI for the same period.

Activity 3.

Directions: Compute for the statement of Changes in Equity. For you to answer the
unknown correctly, try to recall what increases and decreases owner’s equity
account.

Capital Additional Capital

Beginning Investment Drawings Profit Ending

1 50,000.00 25,000.00 7,000.00 85,000.00 1

2 35,000.00 75,000.00 2 (20,000.00) 77,500.00

3 80,000.00 20,000.00 10,000.00 3 105,000.00

4 250,000.00 4 75,000.00 200,000.00 425,000.00

5 5 38,000.00 120,000.00 250,000.00 263,000.00

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 Learning Module for Accountancy, Business and Management

REMEMBER

The statement of changes in equity shows the movements in

owner’s equity during the period.
The following accounts affect owner’s equity :
(a) Additional investment by the owner (increase);
(b) Drawings by the owner (decrease);
(c) Profit (increase); and
(d) Loss (decrease)

CHECK YOUR UNDERSTANDING

Directions: Solve for the unknown item by recalling what increases and decreases
owner’s account.

1
Capital
Beginning Php90,000 Php265,000 Php530,000 Php288,800

Additional 2
Investment Php150,000 Php120,000 Php180,000 Php100,000

3
Drawings Php138,000 Php50,000 Php75,000. *Php85,000

4
Profit Php120,000 (Php200,000) Php250,000 Php150,000
Capita+ 5
Ending Php217,000 (Php85,000) Php555,000 Php385,000.

POSTTEST

Directions: Prepare a statement of changes in equity. Use your family name

as the company name for the heading.
Date Dec 31, 2019 Date March 31,2020
Initial Investment Php268,000.00 Php150,000.00
Additional Investment Php125,000.00 Php150,000.00
Owner’s Drawing Php75,000.00 Php80,000.00
Net Profit/(Net Loss) Php200,000.00 (Php130,000.00)

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 Learning Module for Accountancy, Business and Management

REFLECTIVE LEARNING SHEET

Tito, a 51 year old entrepreneur has

operated his TMAM Transport (Tito Martinez
& Atienza Marie) for over three years now.
On normal days, his grab car earns P2,500
a day. On March 17, however, the
government imposed on enhance community
quarantine or lockdown in Luzon. Only
ECQ private establishments providing basic
necessities were allowed to remain in
business during the quarantine period. Tito
had no income since then up to May 31,
2020.

Tito’s equity decreases, because

transportation was not allowed during the
lockdown. There were some businesses that increase
their equity during pandemic. I want you to write
about what are ways and means to increase owner’s
equity account in your real life situation.

_________________________________________________________________________

_________________________________________________________________________

________________________________________________________________________

_______________________________________________________________________

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 Learning Module for Accountancy, Business and Management

E-SITES

To further explore the concept learned today, you may connect to your
internet and visit the links below if possible:
https://www.accountingcoach.com/onlineaccountingcourse

REFERENCES

Ferrer, R. and Millan, Z. V. (2017). Fundamentals of Accountancy, Business &

Management Part 2. 1st Edition

Valencia, E. G., & Roxas, G. F. (2010). Basic Accounting (3rd ed.). Mandaluyong
City, Philippines: Valencia Educational Supply.

Anastacio, V. (2011). Accounting Essentials 1, Centro Escolar University

Publisher

Acknowledgment
Writer : Ma. Cristina A. Labay, MM
Editor : Isabel A. Gumaru, DBA
Evaluator : Ellaine I. Dela Cruz, DBA

Validators & Reviewers:

Remylinda T. Soriano, EPS
Angelita Z. Modesto, PSDS
George B. Borromeo, PSDS
Layout Artist & Illustrator: Ma. Cristina A. Labay, MM

Management Team :

Maria Magdalena M. Lim, Schools Division Superintendent, Manila

Aida H. Rondilla, Chief Education Supervisor
Lucky S. Carpio, EPS in charge of LRMDS
Lady Hannah C. Gillo, Librarian II, LRMDS

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 Learning Module for Accountancy, Business and Management

Name: _________________Grade Level: ____Section: _____Score:_______

Teacher:____________________School:______________________________

Worksheet Week 4

Objective: To be able to acquire the knowledge in the preparation of

Statement of Changes in Equity

Learning Content: To be able to prepare the statement of changes in equity for

the net income and net loss.

Directions: Prepare the Statement of changes in equity with the accounts

given below using your surname as your company name for the period ended
December 31, 2019

Capital beginning Php150,000.00

Additional Investment Php50,000.00
Drawings Php78,000.00
Net Profit Php120,000.00

Capital beginning Php75,000.00

Additional Investment Php25,000.00
Drawings Php15,000.00
(Net Loss) Php20,000.00)

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 ANSWER KEY

PRETEST

1. 6. 11. 16.

2. 7. 12. 17.

3. 8. 13. 18.
4. 9. 14. 19.

5 10. 15. 20.

LOOKING BACK TO YOUR LESSON:

1. C 6. D
2. B 7. F
3. A 8. J
4. F 9. H
5. I 10. E

ACTIVITIES:
Activity 1
1. Single proprietorship 6. Withdrawals
2. Partnership 7. Proprietor
3. Corporation 8. Partners
4. Heading 9. Shareholders
5. Initial Investment 10. Cooperative

Activity 2:
1. True 6. True
2. True 7. True
3. False 8. True
4. True 9. True
5. True 10. True

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 Learning Module for Accountancy, Business and Management

Activity 3
1. Php153,000
2. Php12,500
3. Php15,000
4. Php50,000
5. Php95,000

POSTTEST

COMPANY NAME
STATEMENT OF CHANGES IN OWNER’S EQUITY
For the year ended December 31, 2019

Capital, January 31, 2019 Php 268,000.00

Additional Investment Php125,000.00
Add: Net Income 200,000.00 325,000.00
Total Php 593,000.00
Less: Drawing 75,000.00
Capital, December 31, 2019 Php 518,000.00
=============

CO NAME
STATEMENT OF CHANGES IN OWNER’S EQUITY
For the year ended March 31, 2020
Capital, January 31, 2019 Php 150,000.00
Additional Investment 150,000.00
Total Php 300,000.00
Drawing Php80,000.00
Net Loss 130,000.00 Php (210.000.00)
Capital, December 31, 2019 Php 90,000.00
==============

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