Republic of the Philippines

Department of Education
Region III
SCHOOLS DIVISION OF ZAMBALES
Zone 6, Iba, Zambales
Tel./Fax No. (047) 602 1391
E-mail Address: zambales@deped.gov.ph
website: www.depedzambales.ph

Name: _________________________________ Grade/Section___________________

School: ________________________________ Date: ___________________________

LEARNING ACTIVITY SHEET

Fundamentals of Accountancy, Business and Management 2
Quarter 1 - Week 2

I. Introduction
How did you know that you have earn from your business? Even if
your said business involves a small or big amount of capital or principal,
did you asked yourself the question, “Did I earn or loss?”. Can you be able
to sight if your business will prosper or not?

Doing business is not as easy as one to three. Competency is always

around. So you must be guarding the financial status of your business.

II. Learning Competency

1.1. Identify the elements of the Statement of Comprehensive Income (SCI)
and Describe each of these items for a service business;
1.3. Prepare an SCI for a service business using the single-step approach.
Code: ABM_FABM12-Ic-d-5

III. Objectives
At the end of this learning activity sheet, you are expected to:
1. Solve exercises and problems that require preparation of SCI for a
service business
2. Prepare statement of income for a service business using single-step
approach.

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IV. Discussion
A. Statement of Comprehensive Income (SCI)

A statement of Comprehensive Income is a financial report. It is also

called the profit and loss statement. It generally contains the revenues and
expenses incurred by an entity for a specific period of time. A statement of
comprehensive income traditionally compared to a playing video because it
shows an entity’s business activities from the start to the end of the period.
This is a written report where you could see if you gain/earn or loss from
your said business.

B. Elements of Statement of Comprehensive Income (SCI)

1. The Title – we said that SCI is a financial report. And as a financial
report, it must be properly identified and dated. What are included in
the heading?
 The name of the reporting entity
Example: MUTYA Trading
PJ Electronix, Co.
ABM Publishing, Co.
Golden Buddha Computer Shop
Open Arms Lending Co.
 Title of the report
Example: Statement of Comprehensive Income
 The date or period of time covered by the report
Example: For the Year Ended December 31, 2019
For the Year Ended December 31, 2018

2. Revenue - is from the ordinary activities of an entity and is referred

to by a variety of different names including sales, fees, interests,
dividends, royalties and rent (International Accounting Standards Board
2010). Revenue is the income earned from the business activities of the
entity.

Revenues are the first line item in the statement of comprehensive

income. In a sari-sari store, their sales are their revenue while on the other
hand a dental clinic, will have professional fees as its revenue. Revenues also

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may come from dividends and interests are earned on financial instruments
such as equity shares and time deposits, respectively. Keep in mind that
revenues are recorded when earned rather when the related cash is received.

Examples: Service Income

Sales
Professional Fees
Interest
Dividends

Sales or Service Income are revenues or gross income from sale of

entity’s products and or services.

3. Expenses - These arises from the ordinary activities of the entity.

This includes the cost of sale, salaries, transportation, representation and
depreciation, etc. (International Accounting Standards Board 2010). This are
actually the activities you spend for the entity’s business operation. That
without this expenses, the business will not push through. The revenues
earned are matched with expenses. For service entities like car wash,
expenses are categorized as cost of services or operating expenses. In a case
of a dental clinic, costs of service include the salaries paid to the dentists who
render services to clients in behalf of the dental clinic. Operating expenses
also includes, rent for the space, salaries and wages of employees, business
permits, depreciation of office equipment, and other similar expenses.
Operating Expenses are also called general and administrative expense.

Example: Rent Expense

Salaries Expense
Supplies Expense
Utilities Expense
Taxes and Licenses
Cost of Sales or Cost of Services are direct cost of the products sold or
the service rendered.
Salaries Expense includes the salaries of employees for services
rendered.

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 Utilities Expense includes the usage of telephone, water and light.
Rent Expense are rentals for the use of equipment, office space,
building, and land owned by others.
Supplies Expense are the office, laboratory and medical supplies.
Transportation Expense are for fare trips and travels, cost of gasoline
and oil for the company vehicle.
Depreciation Expense includes portion of the cost of building and
equipment allocated to one accounting period.
Representation Expense are the amount paid to restaurants and hotels
for treating customers and others.
Interest Expense are the interest on debts or other monetary
obligations.

4. Gains and Losses – Gains represents other items that meet the
definition of income and may, or may not, arise in the course of the ordinary
activities of an entity. Gains are incidental to the operations of a business.
For example, a computer shop sells its one unit of computer for P 8,000.00
when carrying amount of the computer set is P6,000.00, a gain amounting to
P2,000.00 must be recorded.

Losses – This represents other items that meet the definition of expenses
and may or may not, arise in the course of the P2,500.00 a printer with a
value of P4,000.00, a loss of P1,500.00. this amount cannot be recorded as
expenses.

5. Other Items – Other items included in the computation of the total

comprehensive income are income taxes and items of other comprehensive
income. Income Tax is the sum of money payable to the government.

C. Statement of Comprehensive Income using a Single-Step

A single-step Statement of Comprehensive Income gives a simple report
of an entity’s profit, using a single equation to calculate income or a loss.
This presents the revenue, expenses and the profit or loss produce by a
business.

D. Steps in preparing a Statement of Comprehensive Income using a

single-step approach:
1. Writing the appropriate heading.

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 Name of the Company/Business
Statement of Comprehensive Income
For the Year Ended _____________

Example: Mendoza Law Office

Statement of Comprehensive Income
For the Year Ended December 31, 2019

Luciana Dental Clinic

Statement of Comprehensive Income
For the Year Ended December 31, 2018

2. List the total revenue from the Trial Balance.

Example: Mendoza Law Office

Statement of Comprehensive Income
For the Year Ended December 31, 2019

Professional Fees P 500,000.00

3. List and add all the expenses to get the total Operating Expense.

Example: Mendoza Law Office

Statement of Comprehensive Income

Note A – Operating Expenses

Representation Expense P 35,000.00
Salaries Expense 50,000.00
Rent Expense 25,000.00
Utilities Expense 20,000.00
Supplies Expense 10,000.00
Depreciation Expense 5,000.00
Interest Expense 5,000.00
Total Operating Expense (Note A) P150,000.00

4. Subtract the total Operating Expense from the total Revenue to get
the Net Income or Net Loss.
Example:

Mendoza Law Office

Statement of Comprehensive Income
For the Year Ended December 31, 2019

Professional Fees P 500,000.00

Operating Expenses (Note A) (150,000.00)
Net Income P 350,000.00

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 Some users of financial statements may prefer to see the
composition of the operating expenses on the Statement of
Comprehensive Income.

Example:
David Dental Clinic
Statement of Comprehensive Income
For the Year Ended December 31, 2019

Service Income P 8,500,000.00

Less: Cost of Service P 5,050,000.00
Salaries Expense 1,080,000.00
Employees’ Benefits 250,000.00
Professional Fees 150,000.00
Utilities Expense 320,000.00
Rent Expense 430,000.00
Taxes and Licenses 100,000.00
Supplies Expense 180,000.00
Advertising Expense 125,000.00
Transportation Expense 198,000.00
Depreciation Expense 57,500.00
Representation Expense 155,000.00
Interest Expense 18,000.00
Total Cost and Expenses (8,113,500.00)
Net Income P 386,500.00

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V. Activities

A. True or False
Directions: Write true if the statement is correct and if the statement is
wrong, write the correct the answer on the
__________ 1. Sales are an example of an expense.
__________ 2. Service Income are revenues or gross income from sale of
company products and services.
___________3. A Statement of Comprehensive Income is a financial report,
wherein you could easily see the entity’s business activities.
___________4. The name of the business entity is written at the heading
of the financial report.
___________5. Rent Expense includes the portion of the cost of building
and equipment allocated to one accounting period.
___________6. Sales less Operating Expenses is equal to Net Income or
Net Loss
____________ 7. You can see the Net Income or Net Loss in the Trial
Balance.
___________ 8. Supplies Expense is an element of a Statement of
Comprehensive Income.
___________ 9. Expenses and Revenues are elements of Statement of
Comprehensive Income.
____________10. Utilities Expense includes the amount paid to
restaurants for treating employees or customers.

B. Answer the following questions

1. What is a Statement of Comprehensive Income? (1pt)
2. Enumerate the Elements of Statement of Comprehensive Income?
(5pts)
3. What is a Revenue and give some example. (2pts)
4. What is an Operating Expense called and give some example. (2pts)

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C. Solve the following
1. Babi Medical Clinic
The following are the accounts of Babi Medical Clinic for December
31, 2018.

Professional Fees P 700,000.00

Salaries expense 55,000.00
Supplies expense 80,500.00
Depreciation expense 18,000.00
Utilities Expense 30,000.00
Insurance Expense 20,000.00
Rent Expense 35,000.00

You are employed by the company as their bookkeeper in its first year
of operations. You are now to prepare the necessary financial
statements for the current year.
a. Compute for the total Operating Expense

2. Fabrigas Legal Office

The following are the accounts of Fabrigas Legal Office for December
31, 2019.

Professional Fees P 1,050,000.00

Salaries Expense 120,000.00
Supplies Expense 210,000.00
Depreciation Expense 55,000.00
Utilities Expense 140,000.00
Insurance Expense 100,000.00
Rent Expense 200,000.00

You are employed by the company as their bookkeeper in its first

year of operations. You are now to prepare the necessary financial
statements for the current year.
a. Compute for the total Operating Expense

3. Gongora Junk Shop

The following are the accounts of Gongora Junk Shop for December
31, 2019.
Professional Fees P 1,750,000.00
Salaries Expense 170,000.00
Supplies Expense 278,000.00
Depreciation Expense 76,000.00
Utilities Expense 140,500.00
Insurance Expense 101,200.00
Rent Expense 260,000.00

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 You are employed by the company as their bookkeeper in its first
year of operations. You are now to prepare the necessary financial
statements for the current year.
a. Compute for the total Operating Expense

4. Happy Skin Clinic

The following are the accounts of Happy Skin Clinic for December 31,
2019

Professional Fees P 1,850,000.00

Salaries Expense 190,000.00
Supplies Expense 275,000.00
Depreciation Expense 76,500.00
Utilities Expense 148,500.00
Insurance Expense 100,500.00
Rent Expense 200,000.00

You are employed by the company as their bookkeeper in its first

year of operations. You are now to prepare the necessary financial
statements for the current year.
a. Compute for the total Operating Expense

D. Compute and Solve for the following

1. Librada Nursing Home
The following are the accounts of Librada Nursing Home for
December 31, 2019.

Professional Fees P 2,000,000.00

Salaries Expense 180,000.00
Supplies Expense 250,000.00
Depreciation Expense 350,000.00
Utilities Expense 180,000.00
Insurance Expense 150,000.00
Rent Expense 280,000.00

You are employed by the company as their bookkeeper in its first year
of operations. You are now to prepare the necessary financial
statements for the current year.
a. Compute for the total Operating Expense
b. Prepare a Statement of Comprehensive

2. Gelacio Eye Center

The following are the accounts of Gelacio Eye Center for December
31, 2019.

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 Professional Fees P 1,800,000.00
Salaries Expense 310,000.00
Supplies Expense 485,000.00
Depreciation Expense 155,000.00
Utilities Expense 235,000.00
Insurance Expense 120,000.00
Rent Expense 180,000.00

You are employed by the company as their bookkeeper in its first year
of operations. You are now to prepare the necessary financial
statements for the current year.
a. Compute for the total Operating Expense
b. Prepare a Statement of Comprehensive

3. W & B Hair Expert

The following are the accounts of W & B Hair Expert for December 31,
2019.

Professional Fees P 1,360,000.00

Salaries Expense 180,000.00
Supplies Expense 175,000.00
Depreciation Expense 146,000.00
Utilities Expense 235,000.00
Insurance Expense 120,000.00
Rent Expense 140,000.00

You are employed by the company as their bookkeeper in its first year
of operations. You are now to prepare the necessary financial
statements for the current year.
a. Compute for the total Operating Expense
b. Prepare a Statement of Comprehensive

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VI. Reflection
1. For you, what is the importance of learning or reading the Statement of
Comprehensive Income of a certain business before joining or entering
into that certain business? Is it really necessary to do so? Why?
Rubric Sheet No. VI

Score
Wei
ght

Criteria
100 90 80

 Indicates a  Factual  Factual

Understanding

clear information is information is

of Topic

understandin mostly somewhat

40% g of topic accurate accurate
/Factual /Good /Fair
information understandin understanding
is accurate g of topic of topic
 Cites own  Accepts most  Unwilling to
Relevance to the

ideas and ideas without compromise

experiences if negative /Few members
any; able to comments; contribute
topic

30%
compromise/ able to
other compromise/
contribute other
contribute
 Appropriate  Some use of  Some
Present
ation

use of words words not so Details are

30%
and examples related ideas lacking

Checked by:______________________________ Total:_______________

Score:_____________ Date:____________________________

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VII. Assessment

Directions: Choose the letter of the correct answer.

1. Which of the following accounts is included in the Statement of

Comprehensive Income?
a. Salaries Expense
b. Cash
c. Furniture and Fixtures
d. Equipment
2. Which of the following is included in the Operating Expenses?
a. Sales
b. Dividends
c. Office Supplies Expense
d. Profit
3. Which is the correct date for a Statement of Comprehensive Income?
a. As of December 31, 2016
b. For the Year Ended December 31, 2016
c. Either a or b
d. Neither a nor b
4. It is a financial report wherein you can see the entity’s business
activities.
a. Balance Sheet
b. Trial Balance
c. Cash Flow
d. Statement of Comprehensive Income
5. In a retail store its main revenue is their ________.
a. Interest
b. Sales
c. Dividends
d. Expense
6. The correct heading for financial report includes
a. name of entity, date, and title of report
b. title of report, name of entity, date
c. date, name of entity, title of report
d. name of entity, title of report, date
7. Insurance Expense, supplies expense and utilities are elements of.
a. Revenues
b. Interest
c. Gains/Losses
d. Operating Expenses

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8. These ae also called the general and administrative expenses.
a. Revenues
b. Interest
c. Gains/Losses
d. Operating Expenses
9. A single-step approach for Statement of Comprehensive Income is
done by
a. Total Revenue + Total Operating Expenses = Net Income or
Net Loss
b. Total Revenue – Total Operating Expenses = Net Income or Net
Loss
c. Total Revenue x Total Operating Expenses = Net Income or
Net Loss
d. Both a and c
10. These includes the fare for trips and travels
a. Representation Expense
b. Utilities Expense
c. Interest Expense
d. Transportation Expense

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VIII. References

Fundamentals of Accountancy, Business and Management 2; A Textbook

in Basic Accounting 2. 2016. The Phoenix Publishing House Inc. and
SolitaA. Frias

Fundamentals of Accountancy, Business and Management 2. 2016. Vibal

Group, Inc.

Other:
https://www.freshbooks.com>hub>accounting>single-step-vs-
multi-step-income-statement

Prepared by:

MERCY M. DAVID
SHS Teacher I
Subic National High School, Subic District

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