Fundamentals of

Accounting, Business
and Management 2
Quarter 1 – Module 1:
Statement of Financial Position (SFP)
 Assessment This is a task which aims to evaluate your
level of mastery in achieving the learning
competency.

Additional Activities In this portion, another activity will be given

to you to enrich your knowledge or skill of the
lesson learned. This also tends retention of
learned concepts.

Answer Key This contains answers to all activities in the

module.

At the end of this module you will also find:

References This is a list of all sources used in developing

this module.

The following are some reminders in using this module:

1. Use the module with care. Do not put unnecessary mark/s on any part of the

module. Use a separate sheet of paper in answering the exercises.

2. Don’t forget to answer What I Know before moving on to the other activities

included in the module.

3. Read the instruction carefully before doing each task.

4. Observe honesty and integrity in doing the tasks and checking your answers.

5. Finish the task at hand before proceeding to the next.

6. Return this module to your teacher/facilitator once you are through with it.

If you encounter any difficulty in answering the tasks in this module, do not

hesitate to consult your teacher or facilitator. Always bear in mind that you are

not alone.

We hope that through this material, you will experience meaningful learning

and gain deep understanding of the relevant competencies. You can do it!

3
 What I Need to Know

STATEMENT OF FINANCIAL POSITION (SFP)

In Fundamentals of Accounting, Business and Management 1, you became equipped

with the history, concepts, and principles of accounting. You also get to enjoy the
challenge of going through the process of the full accounting cycle. This is the time
to keep the level of excitement to learn accounting as this module is designed and
written to help you easily recognize and familiarize yourself to the elements of the
Statement of Financial Position (SFP).

This module comprises three lessons that will mesh the broad concept of SFP, to wit:
Lesson 1: Introduction to SFP
Lesson 2: Assets – Current and Non-current Classifications
Lesson 3: Liabilities – Current and Non-current Classifications
Lesson 4: SFP Preparation – Report form and Account Form

You will be filled with activities that will help you categorize the accounts to its
respective classifications.

At the end of the lessons, you are expected to:

1. Identify the elements of the Statement of Financial Position (SFP), and

describe each of them.
(ABM_FABM12-Ia-b-1)

2. Prepare an SFP using the report form and the account form with proper
classification of items as current and non-current.
(ABM_FABM12-Ia-b-4)

4
 What I Know

Do you still remember some account titles? Here are some questions to test your
memory.

Select the letter of the correct answer. Write it in a separate answer sheet.

1. It is the most liquid and always comes first in the list among assets.
a. Accounts Receivable
b. Land
c. Cash
d. Supplies

2. The debt comes from the purchase of goods or services on account.

a. Accounts Payable
b. Notes Payable
c. Mortgage
d. Supplies

3. A long-term debt of a business with collateral in the form of real properties.

a. Bad Debts
b. Mortgage Payable
c. Accumulated Depreciation
d. Bonds Payable

4. It is a structure, an office, a store or a factory used by the business to conduct

its operations.
a. Building
b. Land
c. Trademarks
d. Merchandise inventory

5. It is an account bearing the name of the owner and shows the amount of
original and additional investments made by the owner.
a. Trademarks
b. Cash
c. Capital
d. Income Summary

5
 Lesson

1 Introduction to SFP

The statement of financial position (also known as the balance sheet) shows the
financial condition of a business in an accounting period. In this regard, it is the
document that shows whether a business is growing by analyzing its assets,
liabilities, and equities that can be used in decision making.

In SFP, three of the major accounts are found, namely Assets, Liabilities, and
Owner’s Equity which shows the accounting equation;

ASSETS = LIABILITIES + OWNER’S EQUITY

THE PERMANENT ACCOUNTS

ASSETS are the resources that the business owns and controls for a reason that it
can gain future economic value for the business. It is acquired by the business for
thought of that it can gain returns on sales, generate cash flow or reduce expenses.
It has two classifications: current assets and non-current assets (Barone 2020).

LIABILITIES are usually the sum of money the business owes. These are obligations
that arise from business transactions such as sales, exchange of assets, or service.
It has two classifications: current and non-current assets (Hayes 2019).

OWNER’S EQUITY is the result of original, additional investments made by the

owner to the business, net income added together, and deducting withdrawals
thereafter.

THE CONTRA-ASSETS

CONTRA-ASSET ACCOUNTS are accounts deducted from a related asset account.

This is done to reflect the realizable value or carrying value of an asset.

a. Allowance for Bad Debts is losses due to uncollected accounts in the

account receivable. It is deducted in the accounts receivable to show the
net realizable value.
(Ex. Accounts Receivable – Allowance for Bad debts = Net realizable value)
b. Accumulated Depreciation is the assumed cost of use of the property, plant,
and equipment over time. It is deducted in the related PPE to show the net
carrying value.
(Ex. Building – Accumulated depreciation = Carrying Value)

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 Lesson
Assets: Current and
2 Non-current Classifications
A. CURRENT ASSETS

According to Ballada (2005), the Philippine Accounting Standards (PAS) No. 1 assets
is known as current classification, when it is:

a. expected to be realized in, or is held for sale or consumption in the normal

course of the enterprise’s operating cycle; or
b. held primarily for trading purposes or for the short-term or expected to be
realized within twelve months of the balance sheet date; or
c. cash or cash equivalent asset which is not restricted in its use.

CLASSIFICATION OF CURRENT ASSETS

CASH includes coins, currencies, checks, bank deposits, and other cash items used
for operations of the business.

CASH EQUIVALENTS are short-term investments that can be converted into cash
immediately. Commercial paper, Treasury bills, and short-term government bonds
with 90-day maturity are some examples of cash equivalents.

MARKETABLE SECURITIES are equities or government bonds bought by the

business to be held only for a short time. Companies usually purchase marketable
securities only when they have excess cash.

*Equities are shares of stocks of a private company offered for sale to the
public as Initial Public Offering (IPO).
*Government Bonds are debt security issued by the government to attract
funding for a specific government project.

TRADE AND OTHER RECEIVABLES includes the following accounts:

a. Accounts Receivable is the amount collectible to customers who made

purchases on account or credit.
b. Notes Receivable is a promissory note issued by the client for the purchases
made on account as evidence of his/her obligation to pay.
c. Interest Receivable is the amount of interest collectible on promissory notes
received from customers and clients.

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 d. Advances to Employees are the sum of money that employees borrowed
and payable through salary deductions (Ong and Gomendoza 2017).
e. Accrued Income is income already received but not yet received.

PREPAID EXPENSES are expenses paid in advance or before use. Prepaid Rent,
Prepaid Insurance, and Supplies are some examples.

B. NON-CURRENT ASSETS

CLASSIFICATION OF NON-CURRENT

LONG-TERM INVESTMENTS are assets held by a business for the growth of wealth
through putting assets in different baskets where it can either

a. earn (ex. Interest, dividends, royalties or rentals); or

b. appreciate in amount (ex. Land, stock shares).

If these investments are intended to be held for a long period of time they are
classified as long-term investments.

INVESTMENT PROPERTIES are properties acquired by the business to earn a return

on investment through buying and selling and/or rent income (Chen 2019).

BIOLOGICAL ASSETS are assets used by an agricultural business in the production

of goods or services. Ex. Cows and carabaos are assets of a milk factory. Chickens
are assets for a poultry farm having eggs as its prime produce.

PROPERTY, PLANT, AND EQUIPMENT are tangible assets of the enterprise used in
the production or operation which are expected to be used for more than one period.
PPE includes:

a. Land is a piece of a lot or a real estate owned by the business on which the
building is constructed.
b. Building is a structure that is used by the business as its office, store, or
factory for its operations.
c. Equipment items or machinery are needed by the business to run its
operations. Examples of equipment include photocopy machines, air-
conditioners, trucks, vehicles, production machines, computer equipment,
etc. that are used by the business whether in the store, office, or production
areas. These accounts usually fall under the title of Office Equipment, Store
Equipment, Transportation/Delivery Equipment or Machinery and
Equipment.

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 d. Furniture and Fixtures (Bragg 2018) are larger items of movable equipment
that are used to furnish an office. Examples are bookcases, chairs, desks,
filing cabinets, and tables. This is a commonly used fixed asset that is
categorized as a long-term asset on an organization's balance sheet.

INTANGIBLE ASSETS are identifiable, nonmonetary assets without physical

substance but are held for use by the business in the:

• production or supply of goods/services;

• for rental to others; or
• administrative purposes.

Examples of intangible assets are goodwill, patents copyrights, licenses, franchises,

trademarks, brand names, secret processes, subscription lists and non-competition
agreements.

Below is an example of an Asset portion in the SFP:

ABM STORE
STATEMENT OF FINANCIAL POSITION
As of June 30, 2020

ASSETS

CURRENT ASSETS
CASH ₱ 20,000
ACCOUNTS RECEIVABLE 10,000
MERCHANDISE INVENTORY 150,000
SUPPLIES 5,000
PREPAID RENT 15,000
PREPAID INSURANCE 5,000
TOTAL CURRENT ASSETS ₱ 205,000

NON-CURRENT ASSETS
PROPERTY, PLANT AND EQUIPMENT
SERVICE VEHICLE ₱ 50,000
LESS: ACCUMULATED DEPRECIATION 4,000 46,000
STORE EQUIPMENT 35,000
LESS: ACCUMULATED DEPRECIATION 6,000 29,000 75,000
TOTAL ASSETS ₱ 280,000
Figure 1: Asset Section of SFP

9
 Lesson
Liabilities: Current and
3 Non-current Classifications
Liabilities, in its most common business definition, is a financial obligation. Not all
businesses can be debt-free due to continuous cycle operations. Whether a being
indebted due to unpaid purchase of merchandise or being indebted for expansion of
the business, these are all accounted for by the business.

Liabilities are classified into two classifications. They are current and non-current
classifications.

A. CURRENT LIABILITIES

Liabilities are classified as current (International Accounting Standards 1) when it

is:

a. expected to be settled in the entity’s normal operating cycle;

b. held primarily for the purpose of being traded; and
c. due to be settled in twelve months after the balance sheet date.

TRADE AND OTHER PAYABLES include the following accounts:

a. Accounts Payable are debts that come from purchases from suppliers for
goods or services.
b. Notes Payable are debts that come from purchases from suppliers for goods
or services evidenced by a promissory note or a legal document.
c. Loan Payable are debts or obligations of the business from the bank or other
financial institution that is payable within 12 months or less. (Note: if the loan
is payable beyond 12 months, it is classified as non-current.)
d. Unearned Revenues are advance payment from customers who are about to
avail the business’s product or service.
e. Accrued Expenses (also called accrued liability) are payables that arise from
expenses that are already used by not yet paid. Examples are salaries that are
incurred but payments have not yet to made to employees, utilities incurred
with no invoice received yet, services/goods that are consumed but no invoice
has been received yet, taxes payable and interest payable.
f. Utilities Payable are obligations arising from unpaid utility services for the
services they provide. Examples of utilities payable are the internet, telephone,
electricity, and water services.
g. Salaries Payable are salaries already earned by the employees but not yet paid
to them.
B. NON-CURRENT LIABILITIES

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Non-current liabilities are long term debts payable for more than one year. Examples
of non-current liabilities are the following:

MORTGAGE PAYABLE is a long-term debt of a business with collateral in the form

of real properties. If the business fails to pay the obligation, the creditor may sell the
collateral to settle its debt.

BONDS PAYABLE is a long-term debt of a business arising from borrowings from an

individual or another entity by issuing a certificate of indebtedness. These funds can
be used to expand or finance an operation. These bonds indicate specific terms of
interest and principal payment.

Below is an example of the liabilities and owner’s equity section in the SFP.

LIABILITIES and OW NER'S EQUITY

CURRENT LIABILITIES
NOTES PAYABLE ₱ 30,000
ACCOUNTS PAYABLE 20,000
SALARIES PAYABLE 10,000
UTILITIES PAYABLE 5,000
INTEREST PAYABLE 7,000
UNEARNED REVENUES 5,000
TOTAL CURRENT LIABILITIES ₱ 77,000

NON-CURRENT LIABILITIES
MORTGAGE PAYABLE 150,000
TOTAL LIABILITIES AND OW NERS EQUITY ₱ 227,000

OW NER'S EQUITY
KJAM, CAPITAL 6/30/2020 53,000
TOTAL LIABILITIES AND OW NERS EQUITY ₱ 280,000

Figure 2: Liabilities and Owner's Equity Section in a Statement of Financial Position

Note: The owner’s equity will be discussed comprehensively on another module.

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 Lesson
SFP Preparation:
4 Report form and Account Form

The difference of SFP of a service business and a merchandising business is the

concept of merchandise inventory. The merchandise inventory for a service business
is consist of the products that may help customers achieve prolonged satisfaction of
the service (ex. A salon is selling hair moisturizer for a client who had her hair color
done). On the other hand, merchandise inventory of a merchandising business is
consisting of different products bought and sold for consumption (ex. A sari-sari store
buys all sorts of food groceries, toiletries, and other consumables which it sells at a
mark-up).

There are two forms for preparation of the statement of financial position or balance
sheet, these are as follows:

A. REPORT FORM is when the accounts are listed in a straight column from
Assets followed by Liabilities and Equity.

Example: ABM STORE

STATEMENT OF FINANCIAL POSITION
As of June 30, 2020

ASSETS

CURRENT ASSETS
CASH ₱ 20,000
ACCOUNTS RECEIVABLE 10,000
MERCHANDISE INVENTORY 150,000
SUPPLIES 5,000
PREPAID RENT 15,000
PREPAID INSURANCE 5,000
TOTAL CURRENT ASSETS ₱ 205,000

NON-CURRENT ASSETS
PROPERTY, PLANT AND EQUIPMENT
SERVICE VEHICLE ₱ 50,000
LESS: ACCUMULATED DEPRECIATION 4,000 46,000
STORE EQUIPMENT 35,000
LESS: ACCUMULATED DEPRECIATION 6,000 29,000 75,000
TOTAL ASSETS ₱ 280,000

LIABILITIES and OW NER'S EQUITY

CURRENT LIABILITIES
NOTES PAYABLE ₱ 30,000
ACCOUNTS PAYABLE 20,000
SALARIES PAYABLE 10,000
UTILITIES PAYABLE 5,000
INTEREST PAYABLE 7,000
UNEARNED REVENUES 5,000
TOTAL CURRENT LIABILITIES ₱ 77,000

NON-CURRENT LIABILITIES
MORTGAGE PAYABLE 150,000
TOTAL LIABILITIES AND OW NERS EQUITY ₱ 227,000

OW NER'S EQUITY
KJAM, CAPITAL 6/30/2020 53,000
TOTAL LIABILITIES AND OW NERS EQUITY ₱ 280,000

Figure 3: SFP in Report Form

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B. ACCOUNT FORM is when the accounts are listed with Assets on the left side
of the page while Liabilities and Owner’s Equity on right side of the page.

ABM STORE
STATEMENT OF FINANCIAL POSITION
As of June 30, 2020
ASSETS LIABILITIES and OWNER'S EQUITY
CURRENT LIABILITIES
CURRENT ASSETS NOTES PAYABLE ₱ 30,000
CASH ₱ 20,000 ACCOUNTS PAYABLE 20,000
ACCOUNTS RECEIVABLE 10,000 SALARIES PAYABLE 10,000
MERCHANDISE INVENTORY 150,000 UTILITIES PAYABLE 5,000
SUPPLIES 5,000 INTEREST PAYABLE 7,000
PREPAID RENT 15,000 UNEARNED REVENUES 5,000

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PREPAID INSURANCE 5,000 TOTAL CURRENT LIABILITIES ₱ 77,000
TOTAL CURRENT ASSETS ₱ 205,000
NON-CURRENT LIABILITIES
NON-CURRENT ASSETS MORTGAGE PAYABLE 150,000
PROPERTY, PLANT AND EQUIPMENT TOTAL LIABILITIES AND OWNERS EQUITY ₱ 227,000
SERVICE VEHICLE ₱ 50,000
LESS: ACCUMULATED DEPRECIATION 4,000 46,000
STORE EQUIPMENT 35,000 OWNER'S EQUITY
LESS: ACCUMULATED DEPRECIATION 6,000 29,000 75,000 KJAM, CAPITAL 6/30/2020 53,000
TOTAL ASSETS ₱ 280,000 TOTAL LIABILITIES AND OWNERS EQUITY ₱ 280,000
Example:
 What’s In

Now that you have read and understood the elements of a statement of financial

position, let’s practice your learnings on this review.

Name the accounts being described. Write your answers in a separate answer sheet.

1. _____ are equities or government bonds bought by the business to be held only

for a short time.

2. _____ includes coins, currencies, checks, bank deposits and other cash items

used for operations of the business.

3. _____ is the amount collectible to customers who made purchases on account

or credit.

4. _____ is the amount of interest collectible on promissory notes received from

customers and clients.

5. _____ are assets held long-term by a business for the growth of wealth through

putting assets in different baskets where it can either earn or appreciate in

amount.

6. _____ is the structure that is used by the business as its office, store, or factory

for its operations.

7. _____ items or machinery needed by the business to run its operations.

8. _____ are debts that come from purchases from suppliers for goods or services.

9. ______ are advance payment from customers who are about to avail the

business’ products or services.

10. _____ is a long-term debt of a business arising from borrowings from an

individual or another entity by issuing a certificate of indebtedness.

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 Notes to the Teacher
Remember that the accounts as presented in the discussion are
according to liquidity. In listing current/non-current assets and
current/non-current liabilities in the SFP, liquidity should always
be followed.

What’s New

Based from the previous activity, list your answers in the accounts column and
classify as to current assets (CA), non-current assets (NCA), current liabilities (CL),
or non-current liabilities (NCL).

Put a CHECK to classify the accounts.

ACCOUNTS CA NCA CL NCL

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

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 What is It

The statement of financial position may sound complicated but knowing the basics
and doing written exercises make a big difference in learning. To help you go over
the lesson once again, here are some few takeaways:

• The statement of financial position shows the financial condition of a business

in an accounting period.

• There are two classifications of Assets: Current and Non-current Assets.

o Accounts under current assets are cash, cash equivalents, marketable
securities, accounts receivable, notes receivable, interest receivable,
advances to employees, accrued income, prepaid expenses, and
inventories.
o Contra-asset accounts are deducted in its related asset account;
namely, allowance for bad debt is to accounts receivable while
accumulated depreciation is to a PPE account.
o Accounts under non-current assets include long-term investment,
property, plant, and equipment like land, building, equipment,
furniture, and fixtures and intangible assets.

• There are two classifications of Liabilities: Current and Non-current Liabilities.

o Accounts under current liabilities are accounts payable, notes payable,
utilities payable, unearned revenues, accrued liabilities, and loans
payable if payable within twelve months.
o Accounts under non-current liabilities are mortgage payable, bonds
payable, and loans payable if payable beyond one year.

• The statement of financial position can be presented in two forms. These are
the Report Form and Account Form.

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 What’s More

ENRICHMENT ACTIVITY 1

Below are the accounts of ABaMagaling School Supply Store for the year ended June
30, 2020. Prepare the asset section of the SFP.

CASH ₱ 40,000
ACCOUNTS RECEIVABLE 24,000
ALLOWANCE FOR BAD DEBTS 2,000
NOTES RECEIVABLE 17,000
ACCRUED INCOME 23,000
MERCHANDISE INVENTORY 200,000
PREPAID INSURANCE 3,500
PREPAID RENT 2,000
SUPPLIES 6,000
LAND 500,000
BUILDING 250,000
ACCUMULATED DEPRECIATION - BLDG 15,000
EQUIPMENT 70,000
ACCUMULATED DEPRECIATION - EQPMT 14,000
FURNITURES AND FIXTURES 10,000
ACCOUNTS PAYABLE 50,000
LOANS PAYABLE (6 YEARS) 30,000
ACCRUED EXPENSES 25,000
MORTGAGE
It’s easier when you: PAYABLE 800,000
MAGALING, CAPITAL 209,500
1. Classify the accounts as to current/non-current assets.
2. Follow the format of the asset section
3. Please make the proper indention of accounts as you write them in the asset
section of the SFP.

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 ALLOWANCE FOR BAD DEBTS 2,000
NOTES RECEIVABLE 17,000
ACCRUED INCOME 23,000
MERCHANDISE INVENTORY 200,000
PREPAID INSURANCE 3,500
PREPAID RENT 2,000
SUPPLIES 6,000
ENRICHMENTLAND ACTIVITY 2 500,000
BUILDING 250,000
ACCUMULATED DEPRECIATION - BLDG 15,000
Below are the accounts of ABaMagaling School Supply Store for the year ended June
EQUIPMENT 70,000
30, 2020. Prepare the liabilities and equity section
ACCUMULATED DEPRECIATION - EQPMT of the SFP. 14,000
FURNITURES AND FIXTURES 10,000
ACCOUNTS PAYABLE 50,000
LOANS PAYABLE (6 YEARS) 30,000
ACCRUED EXPENSES 25,000
MORTGAGE PAYABLE 800,000
MAGALING, CAPITAL 209,500

It’s easier when you:

1. Classify the accounts as to current/non-current liabilities and capital.

2. Follow the format of the liabilities and owner’s equity section.
3. Please make the proper indention of accounts as you write them in the
liabilities and equity of the SFP. The indention will serve as your guide in
computing and will make your document look formal.

ENRICHMENT ACTIVITY 3

From the ENRICHMENT ACTIVITIES 1 & 2, combine the asset and liabilities and
equity sections and create a Report form and Account form.

Remember:

1. Please make the proper indention of accounts as you write them in the SFP.
The indention will serve as your guide in computing and will make your
document look formal.

18
 What I Have Learned

You have just completed the activity and you have already name few of account titles.
Now can you classify these accounts and put them in the table below?

1. Long-term Investment 13. Unearned Revenue

2. Mortgage Payable 14. Furniture and Fixtures
3. Marketable Securities 15. Intangible Assets
4. Land 16. Accounts Payable
5. Building 17. Notes Payable
6. Cash Equivalent 18. Interest Receivable
7. Advances to Employees 19. Equipment
8. Accrued Income 20. Accrued Expense
9. Prepaid Expense 21. Utilities Payable
10. Notes Receivable 22. Salaries Payable
11. Cash 23. Bonds Payable
12. Loans Payable 24. Accounts Receivable

CA NCA CL NCL
1. 1. 1. 1.
2. 2. 2. 2.
3. 3. 3.
4. 4. 4.
5. 5. 5.
6. 6. 6.
7. 7.
8.
9.

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 What I Can Do

Below are the accounts of Dan Bam Restaurant for the year ended June 30, 2020.
Prepare the statement of financial position in report form and account form.

CASH ₱ 55,000
ACCOUNTS RECEIVABLE 32,000
ALLOWANCE FOR BAD DEBTS 3,400
NOTES RECEIVABLE 17,000
ACCRUED INCOME 15,000
MERCHANDISE INVENTORY 125,000
PREPAID INSURANCE 3,500
PREPAID RENT 2,000
SUPPLIES 5,000
LAND 550,000
BUILDING 300,000
ACCUMULATED DEPRECIATION - BLDG 15,000
EQUIPMENT 50,000
ACCUMULATED DEPRECIATION - EQPMT 10,000
FURNITURES AND FIXTURES 12,000
ACCOUNTS PAYABLE 40,000
LOANS PAYABLE (2 YEARS) 30,000
ACCRUED EXPENSES 18,000
MORTGAGE PAYABLE 500,000
PARK, CAPITAL 550,100

It’s easier when you:

1. Classify the accounts as to current/non-current assets.

2. Follow the format of the asset section.
3. Classify the accounts as to current/non-current liabilities and capital.
4. Follow the format of the liabilities and owner’s equity section.
5. Please make the proper indention of accounts as you write them in the SFP.
The indention will serve as your guide in computing and will make your
document look formal.

20
 Assessment

A. Identify the accounts being described.

1. ____ is a long-term debt of business with collateral in the form of real
properties.
2. ____ are expenses paid in advance or before use. Prepaid Rent, Prepaid
Insurance, and Supplies are some examples.
3. ____ is when the accounts are listed in a straight column from Assets
followed by Liabilities and Equity.
4. ____ is the assumed cost of the use of the property, plant, and equipment
over time.
5. ____ are debts that come from purchases from suppliers for goods or
services evidenced by a promissory note or a legal document.

B. Classify the following accounts as to current/non-current assets or

current/non-current liabilities.

Write CA if an account is a Current Asset, NCA if Non-current Asset, CL if Current

Liabilities, NCL of Non-current Liabilities, and OE if Owner’s Equity.

1. Cash
2. Supplies
3. Land
4. Building
5. Mortgage Payable
6. Ahn, Capital
7. Furnitures And Fixtures
8. Accounts Payable
9. Loans Payable (6 Years)
10. Prepaid Insurance
11. Prepaid Rent
12. Notes Payable
13. Equipment
14. Desks
15. Accounts Receivable
16. Patent
17. Notes Receivable
18. Accrued Expenses
19. Accrued Income
20. Merchandise Inventory

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 Additional Activities

Below are the accounts of Masipag Variety Store for the year ended June 30, 2020.
Prepare the statement of financial position in report form.

CASH ₱ 12,300
ACCOUNTS RECEIVABLE 21,900
ALLOWANCE FOR BAD DEBTS 1,500
NOTES RECEIVABLE 13,200
ACCRUED INCOME 14,500
MERCHANDISE INVENTORY 123,800
PREPAID INSURANCE 9,700
PREPAID RENT 2,100
SUPPLIES 4,200
BUILDING 210,000
ACCUMULATED DEPRECIATION - BLDG 10,000
EQUIPMENT 32,400
ACCUMULATED DEPRECIATION - EQPMT 5,000
FURNITURES AND FIXTURES 7,600
ACCOUNTS PAYABLE 17,000
NOTES PAYABLE 5,000
ACCRUED EXPENSES 9,000
LOANS PAYABLE (2 YEARS) 300,000
MASIPAG, CAPITAL 104,200

It’s easier when you:

1. Classify the accounts as to current/non-current assets.

2. Follow the format of the asset section.
3. Classify the accounts as to current/non-current liabilities and capital.
4. Follow the format of the liabilities and owner’s equity section.
5. Please make the proper indention of accounts as you write them in the SFP.
The indention will serve as your guide in computing and will make your
document look formal.

22