Lesson Title: Elements of SFP

Learning Target: The learners will be able to identify the elements of the SFP and describe
each of them. (DepEd-MELC, DICES)
Values/Graduate Attribute: The learners will become just and graced citizens performing
fairness and eliminating bias; and decisive in making financial decisions for the future
acquisitions and plans of the business.
References: Learning to Succeed in Business with Accounting Vol. 2 – Dr. Marivic Valenzuela –
Manalo, Fundamentals of ABM 2 – Dani Rose C. Salazar, DepEd TG for FABM2

Concept Notes:

Statement of Financial Position (SFP), previously referred to as Balance Sheet,

reports the resources available for the company to use, obligations that the company is
required to settle, and the equity that belongs to the owners of the company.

The SFP reports the total assets, total liabilities, and total owner’s equity of the
business. It follows the accounting equation, A = L + OE; that is, total assets should be equal
with total liabilities and owner’s equity.

There are two acceptable formats of SFP: account form and report form

Account Form follows the general ledger T-Account format. Assets on the left and
Liabilities and Equity on the right.

The second format of SFP is report form which is like a simple listing – assets are
listed first, followed by liabilities, and finally the equity.

Parts of the SFP:

1. Heading
a. Name of the Company
b. Name of the Statement
c. Date of preparation
2. Assets – classified as current and non-current
3. Liabilities – classified as current and non-current
4. Owner’s Equity
Exercise:

Directions. Read each statement carefully and answer the questions that follow. Show your
computation.

1. If total assets are Php17,000 and owner's equity is Php10,000, what is the amount of
total liabilities?

2. If the total assets is Php75,000 and total liabilities is Php16,000, how much is the
owner’s equity?

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 (payable in six months); and Maria’s
Equipment, Php9,500 (payable in two years).

3. How much is the total current assets of Juana’s Delivery Service?

4. How much is the total current liabilities of Juana’s Delivery Service?
5. How much is the total non-current assets of Juana’s Delivery Service?