Topic: Statement of Financial Position

Learning Outcomes:
At the end of the period, students will be able to:

 Differentiate the elements of the Statement of Financial Position by identifying the accounts according to the
classification of assets, liabilities and equity;
 Compute for the total current assets, non current assets, current liabilities, non current liabilities and equity; and
 Prepare statement of financial position.
LO1: Differentiate the elements of the Statement of Financial Position

 Ask students to Discuss the following: (15 minutes)

o Statement of Financial Position/ Balance Sheet
o Assets, Liabilities, Equity
***Correct/ Confirm their answers. Make additional input.

 Activity 1: Classification
Ask students to pick from the roll of paper. And then, let them find their group members according to the
classification of the account they picked.

Groupings: (5 minutes)

Non-Current Current Non- Current

Current Assets Equity
Assets Liabilities Liabilities
Cash and Cash Land Trade Payables Bonds Payable A, Capital
Equivalents
Trade PPE Provisions Mortgage Withdrawals
Receivables Payable
Inventories Long Term Short Term Bank Deferred Tax Share Capital
Investments Loan Liability
Prepaid Assets Intangibles Accrued Lease Payable Retained
Expenses Earnings

LO2: Compute for the total current assets, non current assets, current liabilities, non current liabilities and equity

 Activity 2: With their group, let them classify the accounts according to the 5 classifications, and then let them
compute for the totals of each classification. (1 point for each correct classification, 3 points for correct totals)
Set A: (10 minutes)

Cash in Bank 1,800,000.00

Petty Cash Fund 30,000.00
Held for Trading Securities 900,000.00
Notes Receivables- Trade 1,000,000.00
Accounts Receivable-Trade 2,100,000.00
Allowance for Doubtful Accounts (250,000.00)
Advances to Employees 200,000.00
Inventories 800,000.00
Office Supplies 50,000.00
Prepaid Advertising 70,000.00
Total Current Assets 6,700,000.00
Property, Plant and Equipment 5,000,000.00
Accumulated Depreciation (1,500,000.00)
Long Term Investment 1,500,000.00
Patent 300,000.00
Total Non- Current Assets 5,300,000.00
Accounts Payable-Trade 1,200,000.00
Accrued Expenses 350,000.00
Total Current Liabilities 1,550,000.00
Bonds Payable 4,000,000.00
Total Non- Current Liabilities 4,000,000.00
Izzy, Capital 7,300,000.00
Izzy, Drawing (850,000.00)
Total Owner's Equity 6,450,000.00
***Have them take note the correct classification
Total Possible Score: 34
 Set B: (10 minutes)

Cash in PNB- 001 3,300,000

Change Fund 30,000
Accounts Receivable Trade 3,600,000
Allowance for Doubtful Accounts (300,000)
Raw Materials 500,000
Goods in Process 600,000
Finished Goods 1,000,000
Unused Office Supplies 20,000
Prepaid Advertising 80,000
Total Current Assets 8,830,000
Land 7,000,000
Building 8,000,000
Accumulated Depreciation- Bldg (2,000,000)
Office Furniture 1,800,000
Accumulated Depreciation- Office Furniture (800,000)
Machineries 5,000,000
Accumulated Depreciation- Machinery (1,500,000)
Copyright 300,000
Notes Receivable- Long Term 1,000,000
Total Non Current Assets 18,800,000 27,630,000
Notes Payable Trade 500,000
Accounts Payable Trade 2,350,000
Accrued Expenses 250,000
Bank Loan- Short Term 1,500,000
SSS Payable 200,000
Total Current Liabilities 4,800,000
Bonds Payable 5,000,000
Mortgage Payable 2,000,000
Notes Payable-Long Term 1,500,000
Total Non Current Liabilities 8,500,000
J, Capital 12,880,000
J, Drawing (2,800,000)
Profit 4,250,000
Total Equity 14,330,000 27,630,000

Total Possible Score: 44

 Mechanics for checking (for both sets): Have one member of the other group check work of the group. (ex. CA
group will check NCA, NCA will check CL, CL will check NCL, NCL will check E, and E will check CA)
 Write their scores in a ¼ sheet of paper with the names of the members of the group

LO3: Prepare statement of financial position.

 Activity 3: Using the data from Activity 2, set A, (Izzy Breezy Trading Business, June 30, 2017) let the students
prepare a statement of financial position using the correct format. (1WSP) 20 minutes

(Jay, paki observe asa ilang weakness sa pag-prepare sa Balance Sheet)

Assignment:

 Let them research about the account title that they picked, Recognition, Valuation, and Composition.
 Let them photocopy the assignment, Activity 4.
 Izzy Trading Business
Statement of Financial Position
30-Jun-17

Assets
Current Assets
Cash in Bank 1,800,000
Petty Cash Fund 30,000
Held for Trading Securities 900,000
Notes Receiavables- Trade 1,000,000
Accounts Receivable-Trade 2,100,000.00
Allowance for Doubtful Accounts (250,000.00) 1,850,000
Advances to Employees 200,000
Inventories 800,000
Office Supplies 50,000
Prepaid Advertising 70,000
Total Current Assets 6,700,000

Non Current Assets

Property, Plant and Equipment 5,000,000.00
Accumulated Depreciation (1,500,000.00) 3,500,000
Long Term Investment 1,500,000
Patent 300,000
Total Non- Current Assets 5,300,000
Total Assets 12,000,000

Liabilities and Owner's Equity

Current Liabilities
Accounts Payable-Trade 1,200,000
Accrued Expenses 350,000
Total Current Liabilities 1,550,000

Non Current Liabilities

Bonds Payable 4,000,000
Total Non- Current Liabilities 4,000,000
Total Liabilities 5,550,000
Izzy, Capital 7,300,000
Izzy, Drawing (850,000)
Total Owner's Equity 6,450,000
Total Liabilities and Owner's Equity 12,000,000

***Discuss and Check

Alternative Format:
 Izzy Trading Business
Statement of Financial Position
30-Jun-17

Assets
Current Assets

1,830,0
Cash and Cash Equivalents 00

Trading Securities 900,000

3,050,0
Trade and Other Receivables 00

Inventories 800,000

Prepaid Expenses 120,000

6,700,00
Total Current Assets 0

Non Current Assets

3,500,0
Property, Plant and Equipment (net) 00

1,500,0
Long Term Investment 00

Intangible Assets 300,000

5,300,00
Total Non- Current Assets 0

12,000,0
Total Assets 00

Liabilities and Owner's Equity

Current Liabilities

1,550,0
Trade and Other Payables 00

1,550,00
Total Current Liabilities 0

Non Current Liabilities

4,000,0
Bonds Payable 00

4,000,00
Total Non- Current Liabilities 0

5,550,00
Total Liabilities 0

6,450,0
Izzy, Capital 00
 6,450,00
Total Owner's Equity 0

12,000,0
Total Liabilities and Owner's Equity 00

Assignment: Below are financial data for Sample Company for the month ended July 31, 2017.
Accounts Payable 600,000
Accounts Receivable 1,380,000
Accrued Expenses 20,000
Accrued interest on Notes Receivable 20,000
Accumulated Depreciation- Building 1,600,000
Accumulated Depreciation- Machinery 1,400,000
Accumulated Depreciation- Office Equipment 250,000
Additional Investments 4,000,000
Allowance for Doubtful Accounts 50,000
Bonds Payable 2,500,000
Building 4,000,000
Cash in Bank 1,450,000
Cash on Hand 40,000
Copyright 250,000
Factory Supplies 25,000
Finished Goods 890,000
Goods in Process 225,000
Goodwill 850,000
Income Tax Payable 30,000
Land 2,250,000
Lease Payable 75,000
Long Term Investments 3,000,000
Machinery 2,500,000
Notes Payable- Trade 500,000
Notes Receivable- Short Term 400,000
Office Equipment 500,000
Other Non Current assets 250,000
Patents 400,000
Petty Cash Fund 10,000
Prepaid Rent 10,000
Profit/ (Loss) 2,550,000
Raw Materials 160,000
Sample, Capital 6,000,000
sample, Drawings 1,500,000
Short Term Bank Loan 50,000
Unused Office Supplies 15,000
Warranty Payable 500,000

Requirements: (Use columnar paper)

1. Compute for total Current Assets, Non- Current Assets, Current Liabilities, Non-Current Liabilities
and Equity.
2. Prepare a Statement of Financial Position using the data above.