Statement of

Changes in
Equity
The accounting for assets and
liabilities remains the same
regardless of the business
organization.
 Forms of business organization
Forms of business organization Ownership Formation/ Registration
1. Sole proprietorship One individual (sole Registered with the DTI
proprietorship)
2. Partnership More than one (partners) Formed by contractual agreement
Registered with SEC
3. Corporation More than one (stockholders) Formed by operation of law
Registered with SEC
4. Cooperative More than one (members) Formed in accordance with the
cooperative code
Registered with CDA
SEC – Securities and Exchange Commission
CDA – Cooperative Development Authority
 Mr. A’s Tuno-Tuno BBQ
Statement of financial position
As of December 31, 2017
ASSETS
Cash and Cash Equivalents P 10,000
Trade and Other Receivables 50,000
Inventory 80,000
Total Current Assets 140,000
Property, Plant and Equipment 260,000
Total Noncurrent Assets 260,000
TOTAL ASSETS P 400,000
LIABILITIES
Trade and other payables P 100,000
Total current liabilities 100,000
EQUITY
Mr. A’s Capital 300,000
TOTAL LIABILITIES & EQUITY P 400,000
 PARTNERSHIP

EQUITY
Mr. A’s Capital 120,000
Mr. B’s Capital 100,000
Mr. C’ Capital 80,000
TOTAL EQUITY P400,000
 Corporation
EQUITY
Share Capital 120,000
Retained Earnings 100,000
Other Components of Equity 80,000
TOTAL EQUITY P400,000
 Cooperative

EQUITY
Share Capital 120,000
Donations and Grants 100,000
Statutory Funds 80,000
TOTAL EQUITY P400,000
 Partnership is similar to the equity of sole
proprietorship except that partnership is
subdivided into the partners’ capital balances.
EQUITY EQUITY
Mr. A’s Capital 300,000 Mr. A’s Capital 120,000
TOTAL P 400,000 Mr. B’s Capital 100,000
LIABILITIES &
EQUITY Mr. C’ Capital 80,000
TOTAL EQUITY P400,000
The equity of corporation is similar to the equity of a
cooperative, they both have “share capital”
EQUITY
Share Capital 120,000
Retained Earnings 100,000
Other Components of Equity 80,000
TOTAL EQUITY P400,000

EQUITY
Share Capital 120,000
Donations and Grants 100,000
Statutory Funds 80,000
TOTAL EQUITY P400,000
 Sole proprietorship only

•Other forms of changes in equity

will be for higher accounting
 Statement of Changes in Equity

As a title suggests, a statement of changes in

equity provides information on the changes or
movements in “owner’s equity” during the
period.
 Transaction that cause changes in equity
Transactions Effect on Owner’s Equity
1. Additional Investment or Increase
contribution to the business by the
owner
2. Withdrawals or drawings from the Decrease
business by the owner.
3. Earning of profit by the business Increase
4. Incurrence of loss by the business Decrease
The owner’s equity of Boy Astig Laundry Shop has a
balance of P 90,000 on January 1, 2018. Transactions
affecting equity during 2018 are as follows:
A.Mr. Astig, the sole proprietorship, provided additional
investment of P180,000 to the business.
B. Mr. Astig’s Drawings during the period totaled
P70,000
C. The business earned Profit of P220,000
 Boy Astig Laundry Shop
Statement of Changes in Equity
For the Period ended December 31, 2017
Astig , Capital – beginning P90,000
Additional investment 180,000
Drawings (70,000)
Profit 220,000
Astig, capital – ending P420,000