Professional Documents
Culture Documents
QUARTER 1 – MODULE
3
Statement of Changes in Equity (SCE)
Republic Act 8293, section 176 states that: No copyright shall subsist in any work
of the Government of the Philippines. However, prior approval of the government
agency or office wherein the work is created shall be necessary for the exploitation
of such work for a profit. Such agency or office may, among other things, impose
as a condition the payment of royalty.
Borrowed materials (I.e., songs, stories, poems, pictures, photos, brand names,
trademarks, etc.) included in this book are owned by their respective copyright
holders. Every effort has been exerted to locate and seek permission to use these
materials from their respective copyright owners. The publisher and authors do not
represent nor claim ownership over them.
: Glenn S. Manlupig
Writer
: Allen Joy A. Vedra
Editor
:
Reviewer
Illustrator :
Layout Artist :
Development Team:
Chairperson:Dr. Arturo B. Bayocot, CESO III
Regional Director
Jonathan S. Dela Peńa, Ph.D., CESO V Schools Division Superintendent
Rowena H. Para-on, PhD
Assistant Schools Division Superintendent
Mala Epra B. Magnaong Chief, CLMD
ii
Introductory Message
Dear Teachers and Learners! The writer welcomes you all to this module for the
subject Fundamentals of Accountancy, Business, and Management 2 in the ABM Strand of
Senior High School. The discussion focussed on the preparation of financial statements and
its analyses to determine the profitability, liquidity, and solvency of the business.
As your partner in learning, I hope that you will not miss out on every detail that the
writer would like you to learn in this material. Do enjoy it as there are challenging and
interesting activities inside these learning modules. Congratulations in advance for this will
make you the master of your learning.
Ops! you wait for a while, for easy use of this material take note of some few
reminders
1. Take your time to read every detail that this module contains.
2. This material contains Module 1 and Module 2 and each of which is provided
with activities/tests that will surely lead you to learn.
3. Here are the Icons used as your guide in every part of the lesson.
Page
What This Module is About………………………………………………….. ii
Icons of this Module………………………………………………………….. iii
MODULE 3 Statement of Changes in Equity…….…………… 1
Activity
1.3.2 Compare & Contrast…………………………………… 9
1.3.3 Outline Me……………………………………………… 11
1.3.4 Solving the Problem Case #1………………………. 12
1.3.5 Solving the Problem Case #2………………………. 12
1.3.6 Choosing the Right One ……………………………. 12
3 Statement of Changes in Equity (SCE)
At the end of this lesson, you are expected to discuss the different forms of
business organization and prepare a statement of changes in equity of a single/sole
proprietorship.
What I Know
Before starting with this module, let us see what you already know about the
Statement of Changes in Equity. Answer the questions below.
Directions. Read and analyze each item carefully. Write the letter corresponding to the best
answer on your answer sheet. 1 point each.
1
3. How many are considered owner(s) of a sole proprietorship?
A. One
B. More than one
C. Two but not more than five
D. Five and above
4. How many is/are considered owner(s) in a partnership?
A. One
B. More than one
C. Two but not more than five
D. Five and above
10. Which of the following is the most appropriate business organization for an
entity named “Segismundo, Gomez, Valencia, & Co., CPA’s”?
A. Sole Proprietorship
B. Partnership
C. Corporation
D. None of the above
11. Which of the following is most related to the saying “two heads are better than
one”?
A. Partnership
B. Sole Proprietorship
C. Corporations
D. None of the above
What’s In
What’s New
To achieve the objectives of this lesson, you must remember to do the following:
Read the lessons carefully.
Follow all directions and given instructions.
Answer all given tests and activities.
Learn to familiarize the following terms:
TERM DEFINITION
1. Sole/Single Proprietorship
This is a business organization owned by one person. The owner of the sole
proprietorship is the proprietor. In most cases, the proprietor is also the general
manager of a sole proprietorship. As a general manager, he oversees the day-to-day
operations of the sole proprietorship. A sole proprietor is more involved than other
business owners. Sole proprietorships are relatively easy to organize.
Major disadvantages of a sole proprietorship include the limited source of
capital, proprietor's unlimited liability, and the business entity's limited existence. The
sole proprietor is the major source of financing available for business. Another major
disadvantage of a sole proprietorship is the unlimited liability of the sole proprietor.
Bankruptcy occurs when the sole proprietorship is unable to pay debts. In the
Philippines, in case that the assets of a sole proprietorship are not enough to cover
its existing liabilities, creditors can run after the personal assets of the owner. Lastly,
sole proprietorships have limited life. A sole proprietorship generally co-exists with
the sole proprietor.
Common examples of sole proprietors are stores and individuals rendering
professional services like lawyers, physicians, dentists, and accountants.
2. Partnership
3. Corporation
The Corporation Code of the Philippines (1980) defines the word corporation
as an "artificial being created by operation of law, having the right word of
succession and the powers, attributes, and properties expressly authorized by law or
incident to its existence.”
What’s More
5. If you are to put up your own business someday, what type of business
organization are you going to choose? Support your answer.
_
_
_
_
_
_
_ _
What I Have Learned
2. 2. 2.
3. 3. 3.
2. 2. 2.
3. 3. 3.
What I Can Do
Firm
Limbaco Law Firm is owned by Atty. Allan Limbaco. The balance of his capital as of
January 1, 2019, is P 1,800,000.00. During the year, he invested additional cash of P
450,000.00 in the business. Also, Limbaco Law Firm earned P 168,750.00 of net
income. Finally, he withdraws P 112,500.00.
1. How much is the balance of Atty Limbaco's capital as of December 31, 2019?
2. Prepare a Statement of Changes in Owner’s Equity for Limbaco Law Firm.
Clinic
Jalagat Medical Clinic is owned by Dr. Ana Jalagat. The balance of Dr. Jagalat’s
capital is P 400,000.00 as of January 1, 2019. During the year, she invested an
additional P 100,000.00 in the business. Also, Jalagat Medical Clinic earned P
37,500.00 of net income. Finally, she withdraws P 25,000.00 for personal use.
1. How much is the balance of Dr. Jalagat’s capital balance as of December 31,
2019?
2. Prepare a Statement of Changes in Owner’s Equity for Jalagat Medical Clinic.
Now, that you are finished accomplishing the module, let us check what you
have learned. Answer the questions given below by encircling the letter of the correct
answer.
11. Which of the following is most related to the saying “two heads are better than
one”?
A. Partnership
B. Sole Proprietorship
C. Corporations
D. None of the above
What’s More / Activity 1.3.2 – Compare & Contrast (Answer may vary)
1. How much is the balance of Dr. Jalagat’s capital balance as of December 31,
2019?
P 512,500.00
Additional References:
https://edge.pse.com.ph/openDiscViewer.do?edge_no=5b3feb584ad68ec41db82e3
77ee70f3b)