Fundamentals of Accountancy Business Management 2: Learning Packet

This learning packet contains the
materials intended for the first four

weeks of SY 2020-2021 (from August
24, 2020 to September 18)
Fundamentals of
Accountancy
Business
Management 2
Learning Packet
DepEd – SDO Valenzuela

EDUCATION IN THE TIME OF PANDEMIC
As we continue to confront the issues brought about the pandemic, we in the

Mathematics Department in the Division of Valenzuela respond in our commitment in ensuring
that education will continue “No Matter What”. It is our ultimate goal to facilitate learning in
this crucial days of pandemic.
New normal in education used various teaching-learning modalities and platforms.

Distance Learning is the well-timed and appropriate form of distance education in our current
situation. Online learning that takes place over the internet and with our Free Learning Packets
which are designed to collaborative teaching and learning anywhere, anytime at home with
the help of our parents, guardians and other members of the family.
Technology can help make distance learning possible and more accessible with the
help of our LGUs, NGOs, TV and Mobile Networks.
Students in Grades 1-12 will complete the Most Essential Learning Competencies
extracted from the Basic Education Curriculum by utilizing Learning Packets designed by the
DepEd – SDO Valenzuela which include the Parent’s Guide, Learner’s Guide, Activity Sheets,
Formative Test, Instructional Design Guide, Learner Home Weekly Learning Task, and Individual
Learning Monitoring Plan. It is also supported by worktext, textbook, learning module, ebook,
or any other suggested references.
The learning packet provides link for teacher-made recorded videos, slide
presentations, ebooks, or websites such as knowledge channel, etc. For the Grades 5 to 12
learners with internet connections, online consultation may be given by the teachers through
online learning platform as enhancement.
1 | Fundamentals of Accountancy Business Management 2: Grade 12: 1st Quarter

PARENT’S GUIDE
Dear Parents,
Education can and must continue but only under the conditions and health protocols
set by the DOH and WHO.
Yes we can do it! DepEd Valenzuela is partnering with you, parents/guardians to

support Distance Learning while your children are home. As your child’s first teacher, we
empower you to utilize the resources provided to foster a deeper understanding of grade-level
mathematics. With your guidance, your child shall complete various learning activities through
Home-Based Learning using the learning packets to be provided by DepEd – SDO Valenzuela.
This Parents guide is provided to assist you on your significant role on your child’s
learning progress. Schedule your child an hour per day from Monday to Friday to study using
this learning packet. As the material demonstrates sample activities with a lot of follow up
exercises, feel free to engage your child in this work. Always monitor what your child is doing
and see to it that the intended weekly learning packet is completed. Ask your child to show
the solutions and explain the answer in your presence. When needed, have your child add
model or drawing to help them solve and record answers in complete sentences.
The Learning Packet contains weekly lessons with follow up activities and exercises.
Self-learning reflection is also included next to the exercises to give the student a chance to
explain what have learned. See to it that all the worksheets be completed by your child. After
completion of the activities for the week, in your presence and with your assistance, let your
child check the answers using the key to correction in the last part of each learning material.
In order to deepen the understanding and experience of your child, there are
suggested references such as LMs, ebooks, online websites, or teacher made videos or slide
presentations. Teachers may provide online consultation and updates.

STUDENT’S GUIDE
Dear Student,
Your learning progress depends on your initiative to study the contents of this learning
packet. You need to learn how to manage your time wisely. At least an hour every school
day, shall be allotted to your self-learning schedule using this material. Your learning progress
may not be limited because more than enough materials are provided in the references and
time to surf portion.
This learning packet contains five weekly learning materials each with presentation of
the lesson, follow up activities and exercises, self-reflection, online and offline references, and
key to corrections. Each part of the weekly learning material are presented by the following
icons:
Your Target!
This part declares what you need to learn from the weekly learning material.
Spark it Up!
This portion presents the simplified discussion or presentation of the lesson including
examples and detailed solutions. This part may be supported by references; online classes;
teacher made on the Go videos, slide presentation, or ebook.
Connecting to the Real World

This part exposes the you to the role of the lesson in your life. Presented here are
problem solving in real life scenario with detailed solutions.
Keep in Mind
This portion reminds you to the summary of the lesson in general about the things to be
remembered.
Flex Your Brain!
This is where your tasks begins which contains Easy exercises (Try There portion) followed
by average exercises (Keep Trying portion).

Go for an Extra mile!
This gives you the chance to level up with difficult and enrichment exercises.
Reflect Upon!
This portion lets you to reflect on what you learned from the lesson.
Time to Surf!
This provides you references both online or websites and printed materials.
Suggested weekly schedule are as follows:
First Day : Go through the lesson and performing the easy and average exercises
(Spark It Up, Connecting to the Real World, Keep in Mind, Flex Your Brain)
Second Day : Do the difficult activities (Going for an Extra Mile)
Third Day : Do the exercises on the DepEd Learner’s Module
(For enhancement or remediation, online consultation for those with

internet connection)
Fourth and Fifth Days : Reflection and surfing or using other references for enrichment
and enhancement (Reflect Upon, Time to Surf)

INSTRUCTIONAL DESIGN
Subject Area: Fundamentals of Accountancy Business Management 2

12
Grade Level: _____________
First
Quarter: _______________
Week: __________
1
Guide to the Parent:
Learners may require your guidance in following the directions and answering the questions
in each part of the activity. Make sure that they will answer each part of the activities.
Guide to the Learner:
This plan is developed to guide you in your learning journey. Follow the steps in every
activity, answer all the assessment given. Please be guided with your class schedule even if
you are at home.
Content Standard: The learners 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.
Performance Standard: 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.
Most Essential Competencies: The learners identify the elements of the SFP and describe each
of them prepare an SFP using the report form and the account form with proper classification
of items as current and noncurrent
DAY/Lesson Objectives Materials to be Activities Assessment

Number/TOPIC included in the
Learning
1. Identify the Self-learning What I can Short answer
Day 1 – 5 elements of the SFP module do? multiple choice
2. Describe each of
Lesson 1 the elements of the SFP Try This Problem Solving
3. Classify the
Statement of elements of the SFP Enrichment
Financial into current and
Position noncurrent items.
elements, 4. Prepare an SFP
using the report form
SFP Forms and the account form
with proper
classification of items
as current and
noncurrent.

WEEKLY HOME LEARNING TASK
Grade: _________
12
Week: _________
1 Quarter:_____________
1
Learning Area: Fundamentals of Accountancy Business Management 2
Day and Time Learning Competency Learning Tasks

➢ Identify the elements of Solve exercises and problems
the SFP and describe that require preparation of
Week 1 each of them. an SFP for a single
Day 1 to 5 ➢ prepare an SFP using the proprietorship with proper
report form and the classification of accounts as
account form with current and noncurrent using
proper classification of the report form and the
items as current and account form.
noncurrent
Lesson 1: Statement of Financial Position

Elements of Statement of LC CODES:
1st QUARTER: WEEK 1
Financial Position, SFP Forms ABM_FABM12-Ia-b-1-4
Expected Learning Outcome/s:

1. Identify the elements of the SFP
2. Describe each of the elements of the SFP
3. Classify the elements of the SFP into current and noncurrent items.
4. Prepare an SFP using the report form and the account form with proper
classification of items as current and noncurrent.
What’s In?
Statement of financial position also known as the balance sheet. The SFP consists of the
amounts of the company’s total assets, liabilities, and owner’s equity which in totality provides
the condition of the company on a specific date. The date of this statement is always “as of”
the end of the period.
Permanent Accounts – as n name suggest, these accounts are permanent in the sense that
their balances remain intact from one accounting period to another.
Contra Assets – are those accounts that are presented under the assets portion of the SFP but
are reductions to the company’s assets. Ex. Accumulated depreciation and allowance for
doubtful accounts.

What’s New?
Elements of Statement of Financial Position
Figure 1:
Liabilities Assets
Equity
An asset is the resources or things of value that are owned by a company as the result
of company transactions, while liabilities are Obligations of a company or organization.
Amounts owed to lenders and suppliers, the equity reflects residual claims or net assets of the
owners of the business entity.
Classification of Assets: Current and Non-current Assets
• Cash and other resources that are expected to turn to cash or to be used up
within one year of the balance sheet date. (If a company's operating cycle is
longer than one year, an item is a current asset.
• Noncurrent assets are a company's long-term investments for which the full
value will not be realized within the accounting year
Current Asset Examples:
1. Cash and Cash Equivalents – include bill and coins on hand, bank accounts and
operating funds.
2. Trade Accounts Receivables- are amounts owed by customers to the business entity.
3. Notes Receivables – are evidenced by a promissory note. Three elements of notes
Receivable, first is a principal amount, second maturity dates last is the corresponding
interest.
4. Interest Receivables – are amount collectible due to the cost of borrowing money.
5. Financial Assets at Fair Value Through Profit of Loss (FAFVPL) – These assets are
conventionally called trading securities, FAFVPL are either debt or equity instruments
of another entity held by the reporting entity.
6. Inventories – includes three items as part of inventories, first are goods for resell in the
normal course of business (finished goods), second goods in the process of production
as inventories (goods in process), last includes materials and supplies to be consumed
in the production process as inventories (raw materials).
7. Supplies and Other Prepaid Assets- includes supplies to be consumed by the business
and prepaid rent.

Non-current Asset Examples:
1. Property Plant and Equipment (PPE) – fixed assets used in the normal operating cycle
or production of the business, (e.g. building, manufacturing plants, manufacturing
equipment, vehicles, furniture and fixture and leasehold improvements).
2. Intangible assets – are those assets meeting the definition of an asset but without
physical substance (e.g. trademarks, patents, and copyrights).
3. Investment properties – are long-lived assets not used in production.
4. Biological assets – are living plants and animals held by the business for resale or for
breeding.
Classification of Liabilities: Current and Non-current Liabilities
• Current Liabilities - Obligations due within one year of the balance sheet date.
• Non-current Liabilities - are a company's long-term investments for which the full value
will not be realized within the accounting year.
Current Liabilities Examples
1. Trade Accounts Payable – are open accounts relating to purchase of goods and/or
raw materials.
2. Notes payable- are evidenced by a promissory note, notes payable will have principal
amount, maturity date and interest rate.
3. Interest Payable – interests are considered cost for borrowing money.
4. Other Accrued Expenses – expense incurred but not yet paid. (e.g. salaries, rent and
utilities).
5. Income Tax Payable – is computed at 30% of the corporate income, for sole proprietors,
however, their taxable income is subjected to the graduated tax rates.
Non-current Liabilities Examples
1. Long-term Debt - these accounts represent bank loans as a source of financing for the
entity, long term debt can be span from 5 years to almost 25 years, it also includes
mortgage payable if certain properties are held as collateral for such loans.
2. Bonds Payable – are contracts of indebtedness sold to certain individuals.
Equity
Equity reflects the residual claims or net assets of the owners of the entity. Equity comes
from two sources, first comes directly from the owners in the form of investments of capital,
second comes from the income of the business from its normal operation.
The net income/net loss of the business from its operation can be determined by using
Revenues – Expenses = Net Income/(Net Loss) equation.
A business earns revenue when it sells its products or its services, matching principle
states that no revenue can be earned without incurring corresponding expenditures, the
capital account of the equity represents the net investments of the business.

What More?
Preparation of the Key Parts of Statement of Financial Position
1. Prepare the Statement Heading it includes name of the company, name of the
statement and date covered.
LOPEZ TRADING COMPANY
STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2019
2. Prepare the asset section
Assets
Current Assets
Cash Php100,000.00
Accounts Receivable Php 500,000.00
Less: Allowance for doubtful accounts (50,000.00) 450,000.00
Accrued Income 300,000.00
Inventory 200,000.00
Prepaid Expenses 50,000.00
Total Current Assets Php1,100,000.00
Non-Current Assets
Long term Investment Php1,250,000.00
Intangible Assets 500,000.00
Plant, Property and Equipment
Cost Php1,000,000.00
Less Accumulated Depreciation )300,000.00) 700,000.00
Total Non-current Assets Php1,450,000.00
Total Assets Php3,550.000.00
3. Prepare the liabilities section
Liabilities
Current Liabilities
Accounts Payable Php250,000.00
Accrued Expenses 100,000.00
Unearned Income 80,000.00
Notes Payable 1,150,000.00
Total Current Liabilities Php1,580,000.00
Non-current Liabilities
Mortgage Payable Php500,000.00
Loans Payable 1,000,000.00
Total Non-current Liabilities Php1,500.000.00
Total Liabilities Php3,080,000.00
4. Prepare owner’s equity section

Owner’s Equity
Lopez Capital Php470,000.00

5. Ensure that the accounting equation is balanced
LOPEZ TRADING COMPANY

STATEMENT OF FINANCIAL POSITION
AS OF DECEMBER 31, 2019
Assets
Current Assets
Cash Php 100,000.00
Accounts Receivable 500,000.00
Less: Allowance for doubtful accounts (50,000.00) 450,000.00
Accrued Income 300,000.00
Inventory 200,000.00
Prepaid Expenses 50,000.00
Total Current Assets Php1,100,000.00
Non-Current Assets
Long term Investment Php 1,250,000.00
Intangible Assets 500,000.00
Plant, Property and Equipment
Cost Php1,000,000.00
Less Accumulated Depreciation (300,000.00) 700,000.00
Total Non-current Assets Php1,450,000.00
Total Assets Php3,550.000.00
Liabilities
Current Liabilities
Accounts Payable Php 250,000.00
Accrued Expenses 100,000.00
Unearned Income 80,000.00
Notes Payable 1,150,000.00
Total Current Liabilities Php1,580,000.00
Non-current Liabilities
Mortgage Payable Php 500,000.00
Loans Payable 1,000,000.00
Total Non-current Liabilities Php1,500.000.00
Total Liabilities Php3,080,000.00
Owner’s Equity
Lopez Capital Php 470,000.00
Total Liabilities and Owner’s Equity Php 3,550.000.00
Forms of Statement of Financial Position
1. Report Form – shows assets accounts first and then liabilities and owner’s equity
accounts after, the example of report form is shown above.
2. Account form – shows assets on the left side and liabilities and owner’s equity on the
right side just like the debit and credit balances of an account. Example is shown below

o A Statement of Financial Position literally presents a company’s position when it comes
to the resources it owns, obligations claimed against it and the owner’s residual
interest.
o The elements of Statement of Financial Position are assets, liabilities and equity,
o Assets are classified as current assets and non-current assets
o Liabilities are classified as current liabilities and non-current liabilities
o SFP has two forms Report Form and Account Form
What I Can Do?
Exercise 1: Classification of Accounts: Classify the following accounts whether they are assets,
liability or equity accounts. For asset and liability accounts, classify whether they are current
and non-current. Sample answer is provided on the first number.
Account Element Classification

Ex. Accounts Payable Liability Current
1. Accounts Receivable
2. Cash
3. Cash in Bank
4. Note Payable
5. Finished Goods
6. Goods in Process
7. Property and Equipment
8. Salaries payable
9. Prepaid Rent
10. Interest payable

Try This!
Statement of Financial Position Preparation: Gethsemani Trading Company
Below are the accounts of Gethsemani Trading Company for the year ended
December 31, 2019.
Accounts payable 100,000.00

Accounts receivable 140,000.00
Capital 1,840,000.00
Cash 1,000,000.00
Inventories 450,000.00
Long-term debt 300,000.00
Notes Payable 100,000.00
Notes Receivable 100,000.00
Property and Equipment 550,000.00
Supplies and other prepayments 100,000.00
Instructions: Prepare a statement of financial position in report and account forms and
label its parts. After which, answer the following questions:
1. How much is the total current assets of the entity?

2. How much is the total non-current assets of the entity?
3. How much is the total current liabilities of the entity?
4. How much is the total non-current liabilities of the entity?
5. How much is the total assets of the entity?
Assessment
Short Answer. Identify the types of current and non-current assets, current and non-current
liabilities in the given examples below.
_______1. Bills and coins inside a restaurant’s cash register.

_______2. ABC company sells supplies to DEF company on credit
_______3. DEF Company buys supplies and issue a note to ABC Company
_______4. ABC Company received notes from DEF Company
_______5. WL Food Products buys corn as their raw materials.
_______6. Holy Cross Credit Cooperative pays its rent in 3 months advance.
_______7. Fatima University uses its hospital facilities for on the job training of Fatima
University Medical Students.
_______8. XYZ company applied and granted a 5-year loan at BDO Unibank
_______9. Taxes paid by the entity on the 15th day of April of the succeeding year.
_______10. ABC Company pays salaries of its employees.
Problem Solving.
1. Learning is Fun Company had current assets amounting to Php 100,000.00 Non-current
assets for the year totaled Php 76,000.00. How much is the company’s Total Assets?
2. Happy Selling Company’s total liabilities amounted Php10,000.00. Total Equity had an
ending balance of Php20,000.00. How much is total assets?

3. Happy Selling’s had the following accounts at year end: Cash 250,000.00, Accounts
Payable Php70,000.00, Prepaid Expense Php15,000.00. Compute the company’s current
assets.
Enrichment
1. Company’s total liabilities and equity amounted to Php285,000.00. Total Non-current

assets ended Php85,000.00. Cash totaled Php50,000.00. Inventory amounted to
Php100,000.00. Assuming the company had no other assets, how much is the accounts
receivable?
2. Total assets amounting to Php575,000.00. Total Equity amounted to Php250,000.00.
Accounts Payable amounted to Php 50,000 while unearned income totaled Pph85,000.00.
Assuming there are no other current liabilities, compute for the company’s non-current
liabilities

12
Grade Level: _____________
First
Quarter: __________________
2
Week: __________
you are at home.
Content Standard: The learners demonstrate an understanding of the service income and
operating expenses of a service business as well as sales, contra sales, purchases, contra
purchase accounts, cost of goods sold and general administrative and selling expenses of a
merchandising business that will equip him / her in the preparation of the SCI for both service
and merchandising businesses.
Performance Standard: The learners shall be able to solve exercises and problems that
require preparation of SCI for a service business and a merchandising business.
Most Essential Competencies: The learners identify the elements of the SCI and describe each
of these items for a service business and prepare an SCI for a service business using the single-
step approach.
DAY/Lesson Objectives Materials to Activities Assessment

Number/TOPIC be included
in the
Learning

1. Recall the key Self-learning What I can Short answer
Day 1 – 5 features of SCI. module do? multiple choice
2. Identify the
Lesson 2 elements of the SCI for Problem Enrichment
single step approach Solving
Statement of 3. Describe each of
Comprehensive the elements of SCI for Try This
Income, a service business
Elements of the using the single step
Single Step approach.
Format of SCI 4. Prepare and SCI
for a service business
using single -step
approach.
12
Grade: _________
Week: _________
2 Quarter:_____________
1

➢ Identify the elements of Solve exercises and
the SCI problems that require
Week 2 ➢ describe each of these preparation of SCI for a
Day 1 to 5 items for a service service business.
➢ business.
➢ Prepare an SCI for service
business using the single-
step approach
Lesson 2: Statement of Comprehensive Income

Elements of the Single Step LC CODES:
1st QUARTER: WEEK 2
Format of SCI ABM_FABM12-Ic-d-5-7
1. Recall the key features of SCI.

2. Identify the elements of the SCI for single step approach
3. Describe each of the elements of SCI for a service business using the single step
approach.
4. Prepare and SCI for a service business using single -step approach.
What’s In?
Statement of Comprehensive Income also known as the income statement. The SCI contains
the results of the company’s operation for a specific period of time which is called net income

if is a net positive result while a net loss if it a net negative result, this can be prepare for a
month, quarter or a year.
Temporary accounts – also known as a nominal account are the accounts found under the
SCI. They are such because of the end of the accounting period balances under these
accounts are transferred to the capital account, thus having the temporary amounts and
resulting to zero beginning balances of the following year. Examples of Temporary Accounts
include revenues, sales, utilities expense,
What’s New?
Key Features of Statement of Comprehensive Income
1. The Title – The SCI as a financial report, it must be properly identified and date. An
appropriate title or heading includes the name of the entity, the title of the report and
the period covers.
2. Revenues – arises in the course of the ordinary activities of an entity and is referred to
by a variety of different names including sales, fees, interest, dividends, royalties and
rent. Revenues earned by the business vary according to the nature of entity.
3. Expenses – arising in the course of the ordinary activities of the entity include for
example, cost of sales, wages and depreciation. They usually take the form on an
outflow or reduction of assets such as cash and cash equivalents, inventory, property,
plant and equipment. Revenues earned by the businesses matched with expenses.
4. Gains and losses – Gains represent other items that meet the definition of income and
may or may not, in the course of the ordinary activities of any entity, if a law firm sells
office printer for Php5,000.00. Losses represents other items that meet the definition of
expenses and may or may not, arise in the course of the ordinary activities of the entity.
5. Other items – other items included in the computation of the total comprehensive are
income taxes and items of comprehensive income. Income tax is the sum of money
payable to the government
What More?
Single Step Method of the SCI – is called single step because all revenues are listed down in
one section while all expenses are listed in another. Net income is computed using a single-
step which is Total Revenue minus Total Expenses. Multi Step Method of SCI is called because
there are several steps needed in order to arrive at the company’s net income. Below is a
sample Preparation Single Step format of the Statement of Comprehensive Income for a
Service Organization:
Statement of Comprehensive Income for Castillo Law Office
1. Draft the appropriate title.
CASTILLO LAW OFFICE

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED DECEMBER 31, 2019

2. The total revenue from the Trial Balance.
Professional Fee Php 247,000.00
3. The total operating Expenses
Operating Expenses
Representation Expense Php 25,000.00
Salaries Expense 15,000.00
Rent Expense 10,000.00
Permit and Licenses Expenses 10,000.00
Utilities Expense 8,000.00
Office Supplies Expense 3,000.00
Depreciation Expense 1,000,00
Interest Expense 500.00
Total Operating Expenses Php 72,5000.00
4. Determine the effect of other items.
CASTILLO LAW OFFICE

Professional Fee Php 247,000.00
Less: Operating Expenses

Representation Expense Php 25,000.00
Permit and Licenses Expenses 10,000.00
Prepare owner’s
Office equity
Supplies section
Expense 3,000.00
Depreciation Expense 1,000,00
Interest Expense 500.00
Total Operating Expenses Php 72,500.00
NET INCOME Php 175,000.00
What I Have Learned?
o A Statement of Comprehensive Income is like a moving video clip. This financial

statement tells the reader about the performance and activities of the company for
a certain period of time.
o SCI presents the revenues and expenses incurred by the company for a certain period
of time.
o Revenue and expenses are the key elements of SCI
o To derive a net income/net loss, expenses are deducted to the company’s revenue.
o The date of the SCI is always for the period ended.

o The key features of SCI are the title of the statement, revenue, expenses, gains/losses
and other items such as income tax
o In preparation of the SCI the entity may use the single-step method or multi-step
method depending on the nature of the business entity.
What I Can Do?
Problem Solving:
1. Manuela Salon generated a revenue amounting to Php200,000.00. Expenses for the

year totaled Php85,000.00. How much is the company’s net income for the year?
2. Rebecca Dental Clinic generated a service revenue amounting Php500,000.00 and
incurred the following expense for the year, rent expense Php60,000, utilities expense
Php36,000.00, clinic supplies expense Php50,000.00. How much is the total expenses for
the year? Determine the net income
Try This!
Statement of Comprehensive Income: De Castro Legal Office

The following are the accounts of De Castro Legal Office for January 31, 2020.
Professional Fees 1,000.000.00

Supplies Expense 150,000.00
Depreciation Expense 120,000.00
Insurance Expense 40,000.00
You were employed by the entity as its bookkeeper in its 1 st month of operations. You
are now to prepare the necessary financial statements for the current month.
Instructions:
1. Determine the net income
2. Prepare a statement of comprehensive Income using single step method.
Assessment
Multiple Choice: choose the letter of the best answer
1. Which is an appropriate date for a statement of comprehensive income?

a. As at December 31, 2015
b. For the period ended December 31, 2015
c. Either a or b
d. Neither a or b

2. Which of the following is an element of a statement of comprehensive income?
a. Cash equivalents
b. Mr. Sabalza Capital
c. Mr. Bustillos Drawing
d. Professional Fee
3. Which of the following is an element of a statement of comprehensive income?
a. Notes payable
b. Notes receivable
c. Interest receivable
d. Interest expense
4. Which of the following is not an element of a statement of comprehensive income?
a. Interest expense
b. Rent expense
c. Depreciation expense
d. Long-term loan Payable
5. Which of the following is not an element of a statement of comprehensive income?
a. Supplies expense
b. Service revenue
c. Sales revenue
d. Plant, property and equipment
6. Which of the following is only ancillary to the entity’s operation?
a. Professional fees charged by a law firm
b. Sales revenues earned by a variety store
c. Sales revenue earned by a department store
d. Gain on sale of property, plant and equipment
7. Select below the most appropriate description of a statement of comprehensive
income’s key feature?
a. A statement of comprehensive income is like a picture the depicts static image of
an entity.
b. A statement of comprehensive income is like a moving video the depicts a moving
scene of an entity.
c. A statement of comprehensive income contains assets, liabilities and equity.
d. A statement of comprehensive income is date “As at December 31, 2015.
8. Which of the following is the correct net income/net loss formula?
a. Expenses-revenue=net loss/net income
b. Revenue-expenses=net income/net loss
c. Either a or b
d. Neither a or b
9. Which method of SCI Manuela Salon use if all the revenue is listed in one section and
all the expenses in another section?
a. Single step method
b. Multi-step method
c. Either a or b
d. Neither a or b
10. J. Santos Trading prepares a SCI the provides clearer picture of its profit-generating
activities.
a. Single step method
b. Multi-step method
c. Either a or b
d. Neither a or b

Enrichment
Ace Advertising Agency:

The following are the accounts of Ace Advertising Agency for December 31, 2017:
Professional Fees 1,250.000.00

Supplies Expense 187,500.00
Insurance Expense 50,000.00
Gain on sale of equipment 100,000.00
You were employed by the entity as its bookkeeper in its 1 st year its of operations. You
are now to prepare the necessary financial statements for the current month.
Instructions:
1. Determine the net income

2. Prepare a statement of comprehensive Income

12
Grade Level: _____________
First
Quarter: __________________
3
Week: _________
you are at home.
Content Standard: The learners demonstrate an understanding of the service income and
operating expenses of a service business as well as sales, contra sales, purchases, contra
purchase accounts, cost of goods sold and general administrative and selling expenses of a
merchandising business that will equip him / her in the preparation of the SCI for both service
and merchandising businesses.
require preparation of SCI for a service business and a merchandising business.

Most Essential Competencies: The learners identify the elements of the SCI and describe each
of these items for a merchandising business and prepare an SCI for a merchandising business
using the multistep approach.
DAY/Lesson Objectives Materials Activities Assessment

Number/TOPIC to be
included
in the
Learning
1. Identify the elements of Self- What I can Assessment

Day 1 – 5 the SCI for multi-step learning do?
approach module Problem
Lesson 3 2. Describe each of the Try This solving
elements of SCI for a Enrichment
Statement of merchandising business
Comprehensive using the multi-step
Income, approach
Elements of the 3. Prepare and SCI for a
Multi-Step service business using single -
Method of SCI step approach.
Grade: _________
12
Week: _________
3 Quarter:_____________
1

➢ Identify the elements of Solve exercises and
the SCI problems that require
Week 3 ➢ describe each of these preparation of SCI for a
Day 1 to 5 items for a merchandising merchandising business.
business.
➢ Prepare an SCI for
merchandising business
using the multi- step
approach.
Lesson 2: Statement of Comprehensive Income

Elements of the Multi-Step LC CODES: ABM_FABM12-
1st QUARTER: WEEK 3
Method of SCI Ic-d-5-7
1. Identify the elements of the SCI for multi-step approach

2. Describe each of the elements of SCI for a merchandising business using the multi-
step approach
3. Prepare and SCI for a service business using single -step approach.

What’s In?
Multiple Step Method or multi-step method of Statement of Comprehensive Income is exact

opposite of Single Step method, as it provides details on how the cost of goods sold or
manufactured was calculated. It presents relevant data on sales returns ad discounts granted
plus any other sources of income aside from its main income-earning activity.
What’s New?
1. The income statement should be properly labelled with the name of the business from
which the net income or net loss was derived or incurred. The heading should make it
clear to the reader that the information being provided is only for a particular period
2. Begin with presenting income as it is gross amount, which means there are now
valuation reduction made against the reported income, any reduction should be
separately before deducting the cost of goods.
What More?
Key Terms:
1. Sales returns – this account is deducted to sales in order to record returns of customer
or allowances for such returns. Sales returns occur when customers return their products
for reasons such as but not limited to defects or change of preference.
2. Sales discounts – is a reduction in the price of a product or service that is offered by the
seller, in exchange for early payment by the buyer.
3. Purchases – amount of goods bought during the current accounting period.
4. Contra Purchases – an account that is credited being “contrary to the normal balance
or purchases accounts. Ex. Purchase discount and purchase returns.
5. Purchase discount- account used to record early payments by the company to the
suppliers of merchandise.
6. Purchase returns- account used to record merchandise returned by the company to
their supplier.
7. Freight in – this account used to record transportation costs of merchandise purchased
by the company.
8. Freight out- is the transportation cost associated with the delivery of goods from a
supplier to its customers. Freight out is consider as selling expenses.
9. Administrative expenses –these expenses are not directly related to the merchandising
function of the company but are necessary for the business to operate effectively.
10. Selling expenses- expenses that are directly related to the main purpose of
merchandising business.
Steps in the Preparations of Multi-Step Method of Statement of Comprehensive Income for

Merchandising entity.

1. Draft the Appropriate Heading
RED CORNER SHIRTS

2. Determine the Revenues (sales less sales discounts and sales return and allowance to
derive net sales)
Note 1 – Net Sales

Sales 15,000,000.00
Less: Sales Discounts (120,000.00)
Sales Returns and Allowances (10,000.00)
Net Sales 14,870.000.00
3. Determine the net purchases, Cost of Sales and Gross Profit
Net Purchases (Note 2)

Purchases 8,000,000.00
Add: Freight-in 200,000.00
Less: Purchase discounts (100,000.00)
Purchase Returns and Allowances (10,000.00)
Net Purchase 8,090,000.00
Net of Sales (Note 3)

Inventory 1/1/2019 2,000,000.00
Add: Net Purchase (Note 2) 8,090,000.00
Total Goods Available for Sale 10,090,000.00
Less: Inventory, 12,31, 2019 1,070,000.00
Cost of Sales 8,340,000.00
Gross profit is computed as the difference between the net sales and cost of sales. In
case the cost of sales is larger than the net sales, such amount is called gross loss.
Net Sales (Note 1) 14,870,000.00

Less: Cost of Sales (Note 3) 8,340,000.00
Gross Profit 6,530.000.00
4. Determine the selling expenses

Salaries, rent, utilities and depreciation pertain to both selling and administrative
expenses, assuming that the allocation of the following expenses are 80%
administrative expenses and 20% selling expenses. Refer to allocation schedule below:
Allocation of Expense
Nature Total Selling 20% Administrative 80%
Salaries expense 1,000,000.00 200,000.00 800,000.00
Rent Expense 500,000.00 100,000.00 400,000.00
Utilities Expense 240,000.00 48,000.00 192,000.00
Depreciation Expense 120,000.00 24,000.00 96,000.00
Selling Expenses
Selling Expenses (Note 4)

Freight-Out 500,000.00
Selling Expenses 872,000.00
Finally, selling expense can now be places in the statement of comprehensive income.
Red Corner Shirts

Statement of Comprehensive Income
For the year Ended December 31, 2019
Net Sales (Note 1) 14,870,000.00

Cost of Sales (Note 3) 8,340,000.00
Gross Profit 6,530,000.00
Selling Expenses (Note 4) 872,000.00
5. Determine the Administrative Expenses
Administrative Expenses (Note 5)

Repairs and Maintenance 100,000.00
Depreciation 96,000.00
Permit and Licenses 10,000.00
Administrative Expense 1,598,000.00
Administrative expenses can now be placed in the working statement of comprehensive

income.
6. Determine the net income (Gross Profit less Selling expenses and Administrative
expenses to derive net income/net loss)
(Short Version)
Net Sales (Note 1) 14,870,000.00

Cost of Sales (Note 3) 8,340,000.00
Selling Expenses (Note 4) 872,000.00
Administrative (Note 5) 1,598,000.00
NET INCOME/TOTAL 4,060,000.00

COMPREHENSIVE INCOME
RED CORNER SHIRT
STATEM ENT OF COM PREHENSIVE INCOM E
FOR THE PERIOD ENDING DECEM BER 31, 2019
Note 1 - Net Sales

Sales 15,000,000.00
Less: Sales Discounts 120,000.00
Sales Returns and Allowances 10,000.00
Net Sales 14,870,000.00
Note 2 - Net Purchases

Purchases 8,000,000.00
Add Freight - In 200,000.00
Less: Purchases Discounts 100,000.00
Purchase Returns and Allowances 10,000.00
Net Purchases 8,090,000.00
Note 3 - Cost of Sales

Inventory 1/1/2019 2,000,000.00
Add: Net Purchases 8,090,000.00
Total Goods Available for Sale 10,090,000.00
Less: Inventory 12/31/2019 1,750,000.00
Cost of Sales 8,340,000.00
Note 4 - Selling Expenses

Freight-Out 500,000.00
Selling Expense 872,000.00
Note 5 - Adminstrative Expenses

Repairs and M aintenance 100,000.00
Permit and Licenses 10,000.00
Administrative Expense 1,598,000.00
NET INCOME 4,060,000.00
Formula to get net income/net lost

Net Income/Net Loss = Gross Profit - Selling Expenses and Administrative expenses
o The multiple-step method of SCI segregates the operating revenues and operating
expenses from the nonoperating revenues, nonoperating expenses, gains, and losses.
The multiple-step income statement also shows the gross profit (net sales minus the
cost of goods sold).
o The steps in preparing SCI are as follows, first draft the appropriate title, second
determine the revenue or sales, third determine the net purchases, cost of sales and
gross profit, fourth determine the administrative expenses and lastly determine the
selling, fifth determine the net income
What I Can Do?

The following are the accounts of Clarabelle Merchandising for December 31, 2019.
Accordingly, 20% of rent, depreciation and utility expenses pertain the sales office while the
rest pertains to the administrative office. Answer the questions below based on the given data.
Sales 5,000,000
Salaries expense 100,000 Answer the following questions:
Supplies Expense 150,000 1. How much is the net sales for the year?
Depreciation Expense 120,000 2. How much is the cost of sales for the year
Utilities Expense 80,000 3. How much is the gross profit for the year?
Insurance Expense 40,000 4. How much is the Selling Expenses?
Rent Expense (180,000) 5. How much is the Administrative Expenses?
Beginning Inventory 100,000 6. How much is the net income for the year?
Purchases (3,000.000)
Ending Inventory (200,000)
Sales Discount (10,000)
Try This!
Statement of Comprehensive Income: Luwalhati Merchandising
The following are the accounts of Luwalhati Merchandising for December 31, 2019.
Sales 2,500,000.00
Salaries Expense (50,000.00)
Supplies Expense (75,000.00)
Depreciation Expense (60,000.00)
Utilities Expense (40,000.00)
Insurance Expense (20,000.00)
Rent Expense (90,000.00)
Beginning Inventory 50,000.00
Purchases (1,500,000.00)
Ending Inventory (100,000.00)
Sales Discount (50,000.00)
You were employed by the entity as its bookkeeper in its 1st year of operations. You can
now prepare the necessary financial statements for the current year. Accordingly, 15%
of rent, depreciation, and utility expenses pertain to the sales office while the rest
pertains to the cooperate office.
Instructions:
1. How much is the net sales of the year?
2. How much is the cost of sales for the year?
3. How much is the gross profit for the year?
4. How much is the net income for the year?
5. Prepare a statement of comprehensive income?

Assessment
Answer the following questions:
1. At the end of the first month of operations for Juan’s Service Company, the business
had the following accounts: Cash, Php19,000; Prepaid Rent, Php500; Equipment,
Php5,000 and Accounts Payable Php2,000. By the end of the month, Jackson's had
earned Php20,000 of Revenues, Php1,000 of Utilities Expenses and Php1,500 of
Salaries Expenses. Calculate the net income to be reported by the company for
this first month.
2. During October, a sari-sari store had the following transactions involving revenue
and expenses. Did the firm earn a net income or incur a net loss for the period?
What was the amount?
Paid Php1,200 for rent
Provided services for Php2,750 in cash
Paid Php250 for telephone service
Provided services for Php1,900 on credit
Paid salaries of Php1,675 to employees
Paid Php350 for office cleaning service
3. Compute for the Cost of Goods Sold using the following:

Sales – 15,000
Purchases – 2,000
Purchase returns – 200
Purchase discounts – 200
Freight in – 100
Beginning inventory – 1,000
Ending inventory – 500
Enrichment
Prepare a multi-step Statement of Comprehensive Income using the following:
Sales – 20,000
Cost of Goods Sold – 10,000
General and administrative expenses – 4,000
Selling expenses – 2,000
You may use any business name and the end of the current year for the heading.

12
Grade Level: _____________
First
Quarter: __________________
4
Week: _________

you are at home.
Content Standard: The learners demonstrate an understanding of the forms of business

organization, namely, single proprietorship, partnership, and corporation, and the structure of
a SCE of a single proprietorship that will equip him / her in the preparation of the said financial
report.
require preparation of an SCE for a single proprietorship..
Most Essential Competencies: The learners prepare an SCE for a single proprietorship.
DAY/Lesson Objectives Materials to be Activities Assessment

Number/TOPIC included in the
Learning
1. Recall the Self-learning What I can do? Assessment
Day 1 – 5 key features of a module
statement of Try This Problem solving
Lesson 3 changes in
equity (SCE) Enrichment
Statement of 2. Discuss
Changes in different forms of
Equity, business
organization;
Steps in 3. Prepare and
Preparing SCE SCE for a single
for Sole proprietorship
Proprietorship
Grade: _________
12
Week: _________
4 Quarter:_____________
1

Week 4 ➢ Prepare an SCE for a Solve exercises and
Day 1 to 5 single proprietorship. problems that require
preparation of an SCE for a
single proprietorship

Lesson 3: Statement of Changes in Equity
Steps in Preparing SCE for LC CODES:
1st QUARTER: WEEK 4
Sole Proprietorship ABM_FABM12-Ie-8-9
1. Recall the key features of a statement of changes in equity (SCE)

2. Discuss different forms of business organization;
3. Prepare and SCE for a single proprietorship
What’s In?
Preparing a statement of changes in equity (SCE) for a sole proprietorship is relatively

straightforward, the elements of SCE for a sole proprietorship include the beginning capital,
additional income, net income and withdrawals.
Key Terms
1. Statement of Changes in Equity - The statement explains the changes in a company's

Share Capital, accumulated reserves and retained earnings over the reporting period. It
breaks down changes in the owners' interest in the organization, and in the application of
retained profit or surplus from one accounting period to the next. Line items typically
include profits or losses from operations, dividends paid, issue or redemption of shares,
revaluation reserve and any other items charged or credited to accumulated other
comprehensive income.
2. Initial Investment – the very first investment of the owner of the company.
3. Additional investment – increases to owner’s equity by adding investment by the owner.
4. Withdrawals – decreases the owner’s equity by withdrawing assets by the owner
What’s New?
Steps in Preparation of the Statement of Changes in Equity for Sole Proprietorship
1. Heading includes name of the company, name of the statement and date of the
preparation (emphasis on the wording – “for the”.
CASTILLO LAW OFFICE

STATEMENT OF CHANGES IN EQUITY
FOR THE MONTH ENDED DECEMBER 31, 2019
2. Determine the beginning balance of capital (equity). Assuming that there is no

beginning balance of the equity since the start of the business operation is the current
year.

3. Determine the amount of investment (initial or additional).
Initial Investment Php500,000.00
4. Determine the amount of net income. We determine the net income of the company
based on the Statement of Comprehensive income. Assuming that Castillo Law office
has Php175,000 on their SCI.
Net Income Php175,000.00
5. Determine the balance of the drawing (withdrawal) account.
Jaybee Castillo Drawing Php25,000.00
6. Determine the ending balance of the capital or owner’s equity account.

CASTILLO LAW OFFICE
FOR THE MONTH ENDED DECEMBER 31, 2019
Initial Investment Php 500,000.00

Add: Net Income 175,000.00
Less: J Castillo – Withdrawal (25,000.00)
J Castillo Capital Ending Php 650,000.00
What More?
Increase and decrease in equity.
Increase in equity. When an increase occurs in a company's earnings or capital, the overall
result is an increase to the company's owner’s equity balance. Decrease in equity. A decrease
in the owner's equity can occur when a company loses money during the normal course of
business and owners need to move equity into normal business operations. It also decreases
when an owner withdraws money for personal use.
CARL RJ COMPANY
FOR THE YEAR ENDED DECEMBER 2019
Carl Capital, January 1, 2019 Php100,000.00

Increases
Add:
to equity
Net Income for the year 2019 50,000.00
Additional Investment 25,000.00 75,000.00
Sub Total Php175,000.00
Less:
Decreases Carl Drawing (withdrawal for the year) 30,000.00
to equity Carl, Capital, December 31, 2019 Php145,000.00

o All changes whether increases or decreases owner’s equity must be reported on the
Statement in Changes in Equity
o Net income and additional investment increase the Owner’s equity while withdraw by
the owner and net loss decreases its equity.
What I Can Do?
Case Study (Computation and Task Based)

In 2019 Den Cio, the owner of the Dencio Trading has a beginning capital balance of
Php504,000.00. During the year, Dencio Trading earned a net income of Php50,400.
Furthermore, Den Cio withdrew Php37,800 from Dencio Trading for his personal use
Requirement:
1. How much is the balance of Den Cio’s ending capital as of December 31, 2015?
2. Prepare a statement in changes in owner’s equity for Dencio Trading.
Try This!
The following balances were retrieved from the records of Juan’s Janitorial Services for the
year ended December 31, 2016:
Capital, January 1, 2016 P 500,000

Withdrawals 100,000
Additional Investments 50,000
Net Loss 45,000
Prepare the Statement of Changes in Equity
Assessment
Answer the following questions:
1. Owner, Juan invested an initial capital amounting P50,000 in order to put up his
janitorial services company. During the first year of operations (2016), the company
had a loss of P25,000. Because of this, Juan invested additional capital amounting to
P50,000 in 2017. In the second year (2017), the company had a net income of P100,000
and Juan withdrew P10,000 for personal use. Compute for the ending capital balance
of Juan for the year 2017.
2. Owner Juana invested P100,000 to start her laundry business. During the first year of
operations (2016), the company had a net income of P15,000. Juana invested
additional P100,000 to grow the business. In 2017, the business earned P50,000. As of

December 31, 2017, Juana’s capital balance is P200,000. How much is Juana’s
withdrawal?
Enrichment
Duran CPA is owned by Ms. Lyn Duran. Ms Lyn’s capital balance as of January 1, 2019 is
Php300,000.00. Duran CPA earned a net income of Php112,500. During 2019, Ms. Lyn withdraw
cash of Php75,000. Ms. Lyn’s capital balance as of December 31, 2019 amounted to
Php475,000.
1. How much is the additional investment of Ms. Lyn Duran in 2019

2. Prepare a statement of changes in owner’s equity for Duran CPA
References
• https://www.accountingcoach.com/blog/
• https://www.investopedia.com/terms/n/
• https://finance.zacks.com/
• https://smallbusiness.chron.com/
• https://en.wikipedia.org/wiki/
• Fundamentals of Accountancy Business Management 2; Vibal Publishing; Beticon,
Domingo, Yabut
• CHED in collaboration with the PNU Teaching Guide for SHS – FAMB2
• Fundamentals of Accountancy Business Mangement 1, REX, Joselito G. Florendo
Writer
JOSELYN G. DELA CRUZ

Lawang Bato National High School


Fundamentals of Accountancy Business Management 2: Learning Packet

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This learning packet contains the

materials intended for the first four

DepEd – SDO Valenzuela

As we continue to confront the issues brought about the pandemic, we in the

New normal in education used various teaching-learning modalities and platforms.

1 | Fundamentals of Accountancy Business Management 2: Grade 12: 1st Quarter

Yes we can do it! DepEd Valenzuela is partnering with you, parents/guardians to

2 | Fundamentals of Accountancy Business Management 2: Grade 12: 1st Quarter

Connecting to the Real World

Flex Your Brain!

3 | Fundamentals of Accountancy Business Management 2: Grade 12: 1st Quarter

Suggested weekly schedule are as follows:

Second Day : Do the difficult activities (Going for an Extra Mile)

Third Day : Do the exercises on the DepEd Learner’s Module

(For enhancement or remediation, online consultation for those with

4 | Fundamentals of Accountancy Business Management 2: Grade 12: 1st Quarter

Subject Area: Fundamentals of Accountancy Business Management 2

Guide to the Parent:

Guide to the Learner:

DAY/Lesson Objectives Materials to be Activities Assessment

5 | Fundamentals of Accountancy Business Management 2: Grade 12: 1st Quarter

Day and Time Learning Competency Learning Tasks

Lesson 1: Statement of Financial Position

Expected Learning Outcome/s:

6 | Fundamentals of Accountancy Business Management 2: Grade 12: 1st Quarter

Elements of Statement of Financial Position

Classification of Assets: Current and Non-current Assets

Current Asset Examples:

7 | Fundamentals of Accountancy Business Management 2: Grade 12: 1st Quarter

Classification of Liabilities: Current and Non-current Liabilities

Current Liabilities Examples

Non-current Liabilities Examples

8 | Fundamentals of Accountancy Business Management 2: Grade 12: 1st Quarter

Preparation of the Key Parts of Statement of Financial Position

2. Prepare the asset section

3. Prepare the liabilities section

4. Prepare owner’s equity section

9 | Fundamentals of Accountancy Business Management 2: Grade 12: 1st Quarter

LOPEZ TRADING COMPANY

Forms of Statement of Financial Position

10 | Fundamentals of Accountancy Business Management 2: Grade 12: 1st Quarter

What I Can Do?

Account Element Classification

11 | Fundamentals of Accountancy Business Management 2: Grade 12: 1st Quarter

Statement of Financial Position Preparation: Gethsemani Trading Company

Accounts payable 100,000.00

1. How much is the total current assets of the entity?

_______1. Bills and coins inside a restaurant’s cash register.

12 | Fundamentals of Accountancy Business Management 2: Grade 12: 1st Quarter

1. Company’s total liabilities and equity amounted to Php285,000.00. Total Non-current

Subject Area: Fundamentals of Accountancy Business Management 2

Guide to the Parent:

Guide to the Learner:

DAY/Lesson Objectives Materials to Activities Assessment

13 | Fundamentals of Accountancy Business Management 2: Grade 12: 1st Quarter

WEEKLY HOME LEARNING TASK

Day and Time Learning Competency Learning Tasks

Lesson 2: Statement of Comprehensive Income

Expected Learning Outcome/s:

1. Recall the key features of SCI.

14 | Fundamentals of Accountancy Business Management 2: Grade 12: 1st Quarter

Key Features of Statement of Comprehensive Income

Statement of Comprehensive Income for Castillo Law Office