Student: Teacher: Pinky F.

Sarmiento-Tacason
Section: Date of
Submission:

Quarter 1 Week 2 Work Sheet No. 5

Statement of Financial Position (SFP)

Objectives: The learner are able to classify accounts under each elements of SFP

Discussion:

The elements of SFP are assets, liabilities and owners equity. This is represented in the
accounting equation

Assets = Liabilities + Owner’s Equity ( A = L + OE )

These elements are grouped into Current Assets, Noncurrent Assets, Current Liabilities,
Noncurrent Liabilities and Owner’s Equity.
Current Assets – Assets that can be realized (collected, sold, used up) one year after year-end
date. Examples include Cash, Accounts Receivable, Merchandise Inventory, Prepaid Expense, etc.

Current Liabilities – Liabilities that fall due (paid, recognized as revenue) within one year after year-
end
date. Examples include Notes Payable, Accounts Payable, Accrued Expenses (example: Utilities
Payable), Unearned Income, etc.

Current Assets are arranged based on which asset can be realized first (liquidity). Current assets and
current liabilities are also called short term assets and shot term liabilities.

Noncurrent Assets – Assets that cannot be realized (collected, sold, used up) one year after yearend
date. Examples include Property, Plant and Equipment (equipment, furniture, building, land),
Long Term investments,Intangible Assets etc.

Noncurrent Liabilities – Liabilities that do not fall due (paid, recognized as revenue) within one year
after year-end date. Examples include Loans Payable, Mortgage Payable, etc.

Noncurrent assets and noncurrent liabilities are also called long term assets and long term
liabilities.

Owner’s Equity is the residual interest of the owner from the business. It can be derived by
deducting liabilities from assets.

Activity No. 1

Directions: Classify the accounts into the following:

Elements: Assets Classification : Current
Liabilities Non-current
Owner’s Equity No classification
Account Element Classification
Note Payable
Notes Receivable
Prepaid Rent
Property and Equipment
Raw Materials
Salaries Payable
Supplies
Preferred Stock
Utilities Payable
Drawings
Accounts payable

Accounts Receivables

Bonds payable

Cash

Retained Earnings

Interest Payable

Cash on Hand

Additional Paid – In Capital

Cash in Bank

Common Stock

Activity No. 2

Directions: Below are the accounts of Benedict Services for the year ended December 31, 2015.
Compute for:

1. How much is the total current asset of the entity

2. How much is the total non current assets of the entity
3. How much is the total current liabilities of the entity?
4. How much is the total non current liabilities of the entity?
5. How much is the total assets of the entity?
6. How much is the total liabilities of the entity?
7. How much is the owner’s equity?

Accounts Payable 50,000.00

Accounts Receivable 70,000.00
Capital 920,000.00
Cash 500,000.00
Inventories 225,000.00
Long - Term Debt 150,000.00
Notes Payable 50,000.00
Notes Receivable 50,000.00
Property and Equipment 275,000.00
Supplies and other prepayments 50,000.00