MINDANAO MISSION ACADEMY
Manticao, Misamis Oriental
Teacher: Honey Leigh L. Nietes
Topic/ Lesson Name
Content Standard
Performance Standard
Learning Competency
Specific Learning Outcomes
Time Allotment
Lesson Outline
Materials
Resources
TEACHING GUIDE
Subject:FoA-2 Date: June 13-28, 2019
The Statement Financial Position
The learner s demonstrate an understanding of account titles under the assets, liabilities, and capital accounts of the Statement of Financial
Position, namely, cash, receivables, inventories, prepaid expenses, property, plant and equipment, payables, accrued expenses, unearned
income, long-term liabilities and capital that will equip him / her in the preparation of the SFP using the report form and account form
The Learners shall be able to solve exercises and problems that require preparation of an SFP for a single proprietorship with proper
classification of accounts as current and noncurrent using the report form and the account form.
The learner:
 Identify the elements of the SFP and describe each of them.
 Classify the elements of the SFP into current and noncurrent items.
 prepare the SFP of a single proprietorship
 prepare an SFP using the report form and the account form with proper classification of items as current and noncurrent
At the end of the lesson, the learners are able to:
1. explain the purpose of Statement of financial position
2. Categorize the various elements into current and non-current accounts
3. Solve short problems in relation to the elements of SFP
4. construct a statement of financial position of a sole proprietorship
5. prepare a statement of financial position in both forms with appropriate account classification
2 weeks
Introduction
Motivation
Instruction/Delivery
Practice
Enrichment
Evaluation
Computer, TV, projector, whiteboard, marker
Books, websites
 Procedure Teacher’s Tips
INTRODUCTION
A. Communicate learning objectives
 At the end of the topic I should be able to
- Explain the purpose of the statement of Financial Position Day 1
- Classify the various elements into current and non-current accounts
- Solve short problems in relation to the elements of SFP
- construct a statement of financial position of a sole proprietorship
- prepare a statement of financial position in both forms with appropriate account classification using the
comprehensive problem of Mira Convenience Store
B. Present terms
 At the end of this topic, I should be able to define the following terms:
- Statement of Financial Position/Permanent Accounts
- Assets
- Contra Assets
- Accrued Income
- Prepaid Assets
- Liabilities
- Contra Liability
- Accrued Expense
- Unearned Income
- Equity
- Report Form
- Account Form
MOTIVATION
A. Review
 Ask the learners if they can still remember the following terms DAY 1
- Accounting Equation
- Assets
- Liabilities
- Equity
- Single/sole Proprietorship Business
 Write learners’ answers on the board as they cite them even if there are wrong answers and differentiate them
one by one
 Ask the learners to give specific account titles for each of the terms above and give examples of single/sole
proprietorship businesses and merchandising businesses. (Note: Refer to topics discussed in ABM 1 – The
 Accounting Equation, Types of Major Accounts, Business Transactions and Their Analysis as Applied to the
Accounting Cycle of a Service Business.)
 Ask the learners to identify the normal balance of asset (debit), liabilities (credit) and equity (credit). Review on
how these accounts are increase/decrease.
B. Prepare a Personal SFP:
- Ask the learners to get a ¼ piece of paper (any paper will do if they don’t have a ¼ sheet)
- Ask them to write their current savings and everything that they own (clothes, pen, pencil, etc.)
- Ask them to write the amount that they owe their friends, family members, parents (tuition)
- Tell learners to deduct the amount they owe from the amount they own
- Associate amounts owned with assets and amount owed with liabilities with the net amount as equity

C. Flash Card Game

- By using a flashcard, create several of accounts found in the SFP. The learners will classify these accounts
whether it is current or non-current.
- What are the various format used in preparing a statement of financial position?

D. Crossword puzzle
- let the students individually answer the crossword puzzle

INSTRUCTION/DELIVERY Use PPT for the

discussion
A. Activity #1: Let the students pair themselves and discuss the purpose of SFP. The teacher will ask randomly some
students to share their discussion in class.
Day 1
B. Discuss the following
 Define the term Statement of Financial Position and introduce the term Permanent Accounts
 Provide a sample SFP to the learners (power point or acetate or hard copy) as an overview.
 Differentiate the Report Form and Account Form
 Group accounts under Current Assets, Noncurrent Assets, Current Liabilities, Noncurrent Liabilities and Owner’s Equity
 The elements of SFP and how to account them correctly.

C. Activity#2: Classification Between current and noncurrent

1. Materials needed: None
2. Learners should be grouped into 4 groups. Each group will start with 100 points.
3. 1st group will be the current assets. 2nd group will be the noncurrent assets. 3rd group will be the current liabilities. 4th
 group will be the noncurrent liabilities.
4. Teacher will enumerate accounts (cash, accounts receivable, equipment, accounts payable, loans payable, owners’
equity)
5. For each account, the group where the account should be classified into should stand while the other groups should stay
seated. For every member who was not able to stand when the group is required to or for every member who stood when
the group is not required to, a point will be deducted from the group.
6. Each group should reflect on the mistakes after the activity.
7. give accounts that maybe very specific to due dates to make students think (example: loans receivable that is due within
1 year after year-end)

D. Activity#3: Students are group together into 6 to 7 groups. Questions will be projected on the TV and let each group
solve the problems. The first group who will show their answers correctly will receive a point. The group who will get the
highest score will receive a “reward”.

E. Discuss how to construct a Statement of financial Position using the “Friendly Convenience Store” as a guide situation
for the step by step process.
- Using the same comprehensive problem, perform both account and report form of SFP.

PRACTICE

SFP-1 Day 1
 Let the students group into 4 persons in a group and brainstorm and answer the following:
Questions:
Easy:
1. Learning is Fun Company had current assets amounting to Php 100,000. Noncurrent assets for the year totaled Php 76,000. How
much is the company’s total assets? Answer: P176,000.
2. Happy Selling Company’s total liabilities amounted Php 10,000. Total equity had an ending balance of Php 20,000. How much is
total assets? Answer: P30,000.
Medium:
1. Happy Selling’s had the following accounts at year end: Cash-250,000, Accounts Payable-70,000, Prepaid Expense-15,000.
Compute for the company’s current assets. Answer: P265,000.
2. Happy Selling’s Accounts Receivable amounted to Php 500,000. Prepaid Expense and Unearned Income totaled Php 30,000 and
Php 10,000 respectively. Cash balance amounted to Php 100,000 while Accounts Payable and Inventory totaled to Php 20,000 and
Php 10,000 respectively. How much is the company’s current assets? Current liabilities? Answer: P640,000 and P30,000
Difficult
1. Company’s Total Liabilities and Equity amounted to Php 285,000. Total noncurrent assets ended at Php 85,000. Cash totaled
 Php50,000. Inventory amounted to Php100,000. Assuming the company had no other assets, how much is Accounts Receivable?
Answer: P50,000.
2. Total assets amounted to Php575,000. Total equity amounted to Php 250,000. Accounts Payable amounted to Php 50,000 while
Unearned Income totaled Php 85,000. Assuming there are no other current liabilities, compute for the company’s noncurrent
liabilities. Answer: P190,000

SFP-2
1. Easy
 Prepare a Statement of Financial Position using the following accounts (one in report form and one in account form): Cash –
5,000 Loans Payable – 77,500 Accounts Receivable – 2,600 Supplies – 2,300 Equipment – 17,000 Owner’s equity – 40,000
Accounts Payable – 22,400 Building – 113,000
Learners can use any business name and the end of the current year for the heading.
2. Medium
 You were hired by Mr. Juan Dela Cruz to prepare his sari-sari store’s Statement of Financial Position. In order to prepare the
statement, you identified the following assets and liabilities of Mr. Dela Cruz:
- His sari-sari store has cash deposited in a bank account amounting to P50,000
- His sari-sari store had a lot of uncollected sales from customers amounting to P75,000
- The total amount of merchandise left inside the store is P30,000
- He already paid one year’s rent in advance amounting to P12,000
- The value of all the company’s furniture amounted to P100,000
- He bought merchandise from his supplier amounting to P25,000 and the supplier agreed that payment can be made 2
months after year-end
- SSS, Philhealth and Pag-ibig Payables for his one employee totaled P5,000
- The sari-sari store had outstanding liabilities to utility companies amounting to P3,000
- He had a loan from the bank amounting to P50,000 to be paid in 3 years
Required: Prepare a Statement of Financial Position for the company (one in report form and one in account form)

3. Hard
 The following were taken from the books of Amihan Company:
Long-term Payable 500,000
Notes payable 120,000
Property, plant, and equipment 750,000
Accounts Receivable 56,000
Accounts Payable 65,000
Accumulated Depreciation 100,000
Cash 77,000
Owner’s capital ?
Unearned Income 15,345
Notes Receivable 244,000
 Prepaid expenses 56,700
Accrued expenses 37,890
Inventory 157,840
Intangible Assets 124,500

Required:
- Prepare a classified SFP given the following additional information:
a. Note payable is due in 6 mos. From now
b. Note receivable is collectible 9 months from now
c. Prepaid expense will be used during the year.

ENRICHMENT Day 2
A. Clarify to the students that without the SFP, the company cannot know if it truly owns anything because in case of
bankruptcy, liabilities are paid first.
- Small businesses don’t usually account for their assets and liabilities as long as the owners see that cash is
coming in. They sometimes forget that when liabilities become due, if they don’t have enough current
assets to be able to pay those liabilities, then they can get in trouble with their debts.
B.

EVALUATION
 What is the importance of SFP and what information it provides to the user?
 Identification: Determine the correct classification of the following accounts in the statement of financial Position
1. Prepaid Expenses Day 2
2. Merchandise inventory
3. Land
4. Cash in Bank
5. Notes Payable
6. Mortgage Payable
7. Interest Payable
8. Notes Receivable
9. Owner’s Capital
10. Owner’s drawing
11. Accumulated depreciation
12. Unearned Revenues
13. Wages payable
14. Supplies
15. Prepaid insurance
 16. Accrued expense

 Problem solving
1. If assets are Php17,000 and owner's equity is Php10,000, liabilities are ___________________. Answer: Php 7,000
(Topic: Assets = Liabilities + Owner’s Equity)
2. At the end of the first month of operations for Juana’s Delivery Service, the business had the following accounts:
Accounts Receivable, Php1,200; Prepaid Insurance, Php500; Equipment, Php36,200 and Cash, Php40,650. On the
same date, Juana owed the following creditors: Nena’s Supply Company, Php12,000; Maria’s Equipment,
Php9,500.The current assets for the Juana’s Delivery Service are _________. Answer:Php42,350 (Topic: Identifying
current assets)
3. At the end of the first month of operations for Juana’s Delivery Service, the business had the following accounts:
Accounts Receivable, Php1,200; Prepaid Insurance, Php500; Equipment, Php36,200 and Cash, Php40,650. On the
same date, Juana owed the following creditors: Nena’s Supply Company, Php12,000 (due in 6 months); Maria’s
Equipment, Php9,500 (due after 2 years).Current liabilities are _________. Answer: Php12,000 (Topic: Identifying
current liabilities)
4. If during the year total assets increase by Php75,000 and total liabilities decrease by Php16,000, by how much did
owner's equity increase/decrease? Answer: Increase by Php 91,000 (Topic: Effect of changes in one account to
the other accounts in the statement)

 Let the learners independently answer the following problems below:

Accounts Payable 12,000

Furniture and Fixtures 7,000
1. Prepaid Rent 18,000
Accounts Receivable 5,000
Dariel, Capital ????
Cash 22,000
Accrued Salaries 8,000
Inventory 15,000

Required: Prepare a properly formatted SFP in both account and report form.

Notes payable 82, 000

Building 150,000
Prepaid Insurance 24, 000
2. Jayriel, Capital 75,000
Accounts Payable 45,000
Jaybon, Capital 50,000
Accounts Receivable 8,500
Accumulated Depreciation 10,000
Cash ????
Supplies 6,000

3. Based on the data below, prepare a properly formatted SFP. Use the retained earnings account as the balancing amount.
Accounts payable 85,000
Share Capital 200,000
Accrued Expense 70,000
Land 700,000
Building 550,000
Furniture and fixtures 95,000
Retained earnings ?????
Cash 155,000
Accumulated Depreciation 250,000
Accounts Receivable 65,000
Notes Payable 295,000
Prepaid Expenses 150,000