Grade 11 School Batanes National Science High School Grade XI- AGUADA

Detailed Lesson Level/Section

Plan Teacher Jeric M. Nobleza Learning Area FUNDAMENTALS OF ABM I

Teaching Date and December 12, 2023, 2:30-3:30pm Semester 1st

Semester SY 2023-2024
Time

I. OBJECTIVES
A. Content Standards
B. Performance Standards
C. Learning Competencies/
Objectives
The learners demonstrate the understanding of the accounting cycle of a merchandising business to include
Worksheet preparation
The learners shall be able to prepare journal entries, post to the ledger, prepare the trial balance, worksheet, adjusting
entries and complete the accounting cycle of a merchandising business.
Prepares adjusting entries. (ABM_FABM11- IVe-j -39)

II. CONTENT- ADJUSTING ENTRIES FOR MERCHANDISING BUSINESS

III. LEARNING RESOURCES
A. Resources
1. Teacher’s Guide Pages
2. Learner’s Materials Pages

3. Textbook Pages
4. Additional Materials from Learning
Resources (LR) Portal

5. Other Learning Resources BASIC ACCOUNTING, Fundamentals of ABM1 Book, Learners Activity Sheet, Internet

IV. PROCEDURES
A. Preparatory Activities  Prayer
 Checking of attendance
 Review of the previous lesson about trial balance preparation

B. Establishing the purpose of the

lesson
Discuss the components of the accounting cycle.
 The accounting cycle is a collective process of identifying,
analyzing, and recording the accounting events of a company.
It is a standard process that begins when a transaction occurs
and ends with its inclusion in the financial statements and the
closing of the books.
The key steps in the accounting cycle include recording journal
entries, posting to the general ledger, calculating trial balances,
making adjusting entries, and creating financial statements

Activity (1)
PICTURE ANALYSIS: Compare the operating activities of a service and merchandising business

Analysis Discuss the operating activities of the two types of business. Emphasize that the accounting cycle of a service
business and an merchandising business is the same only that additional accounts are being used in a
merchandising business.

Abstraction ADJUSTING ENTRIES FOR MERCHANDISING BUSINESS

• This are adjustments used to bring the assets, liabilities, revenues and expenses up-to date at the end of the accounting
 period.
• They are usually made at the end of the accounting period in order for revenues to recognized within the period they are
earned and for expenses to be recognized within the period they are incurred.

BASIC ADJUSTMENTS
• DEPRECIATION – The gradual reduction in value of a tangible asset over time. accounting for wear and tear, and helps
determine the realize and projected future value of the asset.
Formula:

ACQUISITION COST – Historical cost. It usually includes the

purchase price and other incidental cost to acquire and prepare
the fixed asset for its intended use.

SALVAGE VALUE – Scrap value or the residual value of the

fixed asset at the end of its useful life

ESTIMATED USEFUL LIFE – Estimated economic life of the

fixed asset

Illustrative example:
X CORPORATION acquires a building on January 01, 200A at a cost of P5,500,000. The building has an estimated
useful life of 40 years and an estimated salvage value of P50,000. Record the provision for depreciation for year 200A.

• PREPAID EXPENSES/ PREPAYMENTS - A Type of asset in the balance sheet that results from a business making
advance payments for goods or services to be received in the future

TWO METHODS OF RECORDING PREPAYMENTS

• ASSET METHOD – Or SFP Method of recording prepayments initially records the advance payments as asset. Thus, at
the end of an accounting period, the asset is overstated. Accordingly, the expired portion of asset should be recorded as
expense.
• EXPENSE METHOD - Or SCI Method of recording prepayments initially records the total amount of advance payment as
 an expense. Thus, at the end of the accounting period, the expense is overstated. Accordingly, the portion of such expense
that has not yet expired should be recorded as asset

Illustrative example:
On October 31, 200X, JOE MARTS ENTERPRISE paid in advance an insurance premium for P60,000 covering a period
of 2.5 years. Prepare the adjustments using asset and expense method.

Application Group Activity: COMPUTATION FOR ADJUSTMENTS (DEPRECIATION AND PREPAYMENTS)

DEPRECIATION:
1. Carl Lester purchased a glass-type display shelf to be used in her convenience store amounting to P180,000 on
September 2023. It is estimated that the display shelf will be useful for 15 years. After its projected useful life, the
display shelf can be sold at P5,000. if the preparation of the financial statements is at the last day of the year. How
much should be recorded as a depreciation for the year?
Additional requirements:
 Prepare the initial journal entry for the transaction
 Compute for the yearly depreciation
 How much is the monthly depreciation
 Prepare the adjusted journal entry for the following:
a. As of September 2023, b. Monthly c. As of December 31, 2023 c. Yearly
2. SANDER COMPANY purchased a cargo truck on July 01, 2010 for P100,000. It has an estimated P25,000 residual
value after 7 years.
 What is the depreciation expense relating to the cargo truck for the years 2010 and 2011.
 Initial journal entry
 Compute for the depreciation
 Adjusted journal entry
PREPAYMENTS:
3. Khate, the owner of Jube Convenience Shop made an advance payment on the insurance of her store helper amounting
to P36,000 covering a period of 18 months on April 01,2022. Compute for the adjustments and give the adjusting
entries assuming the company uses
a. Asset method b. Expense method
4. Antonette Construction firm purchased a two-year insurance policy on August 31,2022 for P28,800. The financial
statement was made on December 31,2022.
Requirements: (asset and expense method)
 Prepare the initial journal entry using asset and expense method
 Compute for the adjustments using the two methods with supporting analysis
 Prepare adjusted journal entry as of December 31,2022

*Values integration: Honesty and integrity in business enhances your reputation — which can help attract and
retain customers, engender employee loyalty and become a more attractive investment proposition. Business
integrity is strongly correlated with financial performance
 Assessment 1.Pedro Reyes purchased a delivery vehicle on April 1, 2016 amounting to PHP250,000. It is estimated that the vehicle will be
useful for 10 years. The vehicle can be sold for PHP10,000 at the end of its useful life.
Compute for the depreciation of the service vehicle on the following given time.
a. Monthly b. April to December 2016 c. Yearly

2. Czery purchase a P250,000 insurance policy covering a period of 10-years on March 2023. Compute and give the adjusting
entries as of December 31,2023 assuming he uses asset method.

V. REMARKS:

VI. REFLECTION

A. No. of learners who earned 80% in

the evaluation.

B. No. of learners who require

additional requirements for
remediation.
C. Did the remedial class work? No. of
learners who have caught up with the
lesson.

D. No. of learners who continue to

require remediation.

E. Which of my teaching strategies

worked well? Why did these work?

F. What difficulties did I encounter

which my principal or my supervisor
can help me solve?

H. What innovation or localized

material did I use which I wish to
share/ discover with other teachers?
Prepared by: Checked by: Reviewed by: Noted by:

JERIC M. NOBLEZA SHIRLEY FLORA A. GALOLO JOYCE G. BALLON CARMEN C. NOGUERA

Subject Teacher Master teacher-II/Mentor Head Teacher - II School Principal - I