Republic of the Philippines

15. The following are the characteristics of a corporation, EXCEPT

A. It is the simplest way to set up a business Department of Education
B. It has double taxation Region III
C. Standards of law need to be followed to avoid penalties. Schools Division Office of Bulacan
D. Extensive record keeping is necessary __________________ National High School

Enrichment Activities

Directions: Analyze and answer this problem solving. Write your

answer on the blank provided. Fundamentals of Accountancy,
1. Owner, Juan invested an initial capital amounting P50,000 in Business and Management 2
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.
Statement of Changes in Equity
______________________________________________________________

V References: ACTIVITY SHEET

Monfero, Reymond Patrick P., Andres, Carlsberg S., Salazar, Dani Rose C.,
Honorario Christopher B. Teaching Guide for Senior High School:
Fundamentals of Accountancy, Business and Management 2. Quezon, City:
Commission on Higher Education NAME: __________________________________________________________

Chapter 3 LC 1-2 Tarlac City GRADE AND SECTION: _________________________________________

https://www.myaccountingcourse.com/accounting-dictionary
DATE OF SUBMISSION: _________________________________________
https://www.investopedia.com/terms/i/investment.asp
https://www.kullabs.com/class-11/business-studies/partnership-firms/
advantages-and-disadvantages-of-partnership-firm
https://efinancemanagement.com/financial-accounting/advantages- (page 1)
disadvantages-corporations

(page 16)
I. OBJECTIVES 3. Partners share in the management of the business, and divide profits and
A. Content Standards losses among themselves.
A. Sole Proprietorship B. Partnership C. Corporation D. Cooperatives
The learners demonstrate an understanding of the forms of
4. The business that legally has no separate existence from its owner.
business organization, namely single proprietorship, A. Sole Proprietorship B. Partnership C. Corporation D. Cooperatives
partnership, and corporation, and the structure of a SCE of 5. Ownership is divided into common stocks or shares of stocks.
a single proprietorship that will equip him/her in the A. Sole Proprietorship B. Partnership C. Corporation D. Cooperatives
preparation of the said financial report. 6. It is a report of company’s asset, liabilities, and equity.
A. Statement of Financial Position B. Income Statement
B. Performance Standards: C. Statement of Changes in Equity D. Cash Flow Statement
The learners are able to solve exercises and problems that 7. It is a report shows a reconciliation of the beginning and ending balance of
require preparation of an SCE for a single proprietorship equity accounts.
A. Statement of Financial Position B. Income Statement
C. MELCs: C. Statement of Changes in Equity D. Cash Flow Statement
The learners prepare an SCE for a single proprietorship 8. An amount after subtracting liabilities from assets.
ABM_FABM12-Ie-9 A. Assets B. Liabilities C. Equity D. Income
9. The following accounts are equity, EXCEPT?
A. Capital B. Withdrawals C. Investments D. Prepaid Rent
D. Specific Objectives:
1. Define and discuss the different forms of business 10. Claims of the business collected and retained by the owner.
A. Assets B. Liabilities C. Equity D. Income
organization.
11. Profit distribution can be based on capital contribution or an arbitrary ratio
2. Prepare the statement of changes in equity (SCE) for a agreed upon by the partners.
single proprietorship. A. Sole Proprietorship B. Partnership C. Corporation D. Cooperatives
12. The owners are called shareholders.
A. Sole Proprietorship B. Partnership C. Corporation D. Cooperatives
 Lesson 1 –
CHAPTER 1 LESSON 3 13. It refers to the amount of money the company lost during the period.
Statement of Changes in Equity A. Capital B. Withdrawals C. Sales D. Net loss

II. CONTENT 14. Which of the following is the characteristic of a sole proprietorship?
A. It has a perpetual life.
Statement of Changes in Equity B. It is relatively easy to raise huge capital.
C. The death, insolvency or lunacy of a partner may lead to dissolution of the
business.
(page 2) D. All profits belong to owner.
(page 15)
D. GENERALIZATION:
III. PROCEDURES:
1. What are the forms of business organization? ________________________
_________________________________________________________________________
_________________________________________________________________________ A. Preliminary Activities
2. What is statement of changes in equity? ______________________________ 1. Pre-Test
_________________________________________________________________________ MULTIPLE CHOICE. Read the following items carefully. Encircle the
_________________________________________________________________________ letter of the correct answer

E. REFLECTION: 1. An entity whose assets, liabilities, income and expenses are centered
or owned by only one person. (Haddock, Price, & Farina, 2012)
This activity is to show your personal reflection on the skills and
knowledge you have learned in this LAS. Kindly complete the sentences A. Sole proprietorship B. Partnership C. Corporation D. Cooperative
below for your reflections.

I can differentiate forms of business organizations by ____________________ 2. An entity whose assets, liabilities, income and expenses are centered
_________________________________________________________________________ or owned by itself being legally separate entity from its owners. (Haddock,
_________________________________________________________________________ Price, & Farina, 2012)
_________________________________________________________________________
A. Sole proprietorship B. Partnership C. Corporation D. Cooperative
Statement of Changes in Equity is important to every business because
_________________________________________________________________________
_________________________________________________________________________ 3. An entity whose assets, liabilities, income and expenses are centered
_________________________________________________________________________ or owned by two or more persons. (Haddock, Price, & Farina 2012).
I can apply this lesson in my daily routine like ___________________________ A. Sole proprietorship B. Partnership C. Corporation D. Cooperative
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
4. It is a temporary account to record whatever asset was withdrawn
from the business by the owner
IV. ASSESSMENT (Post Test)
A. Investments B. Withdrawals C. Capital D. Sales
MULTIPLE CHOICE. Read the following items carefully. Encircle the letter
of the correct answer 5. It refers to the financial resources that businesses can use to fund
their operations like cash, machinery, equipment and other resources.
1. The following businesses are examples of corporation, EXCEPT?
A. SM B. San Miguel C. Jollibee D. Salon A. Investments B. Withdrawals C. Capital D. Sales
2. The following businesses are examples of sole proprietorship, EXCEPT?
A. Bakeries B. Dress Shops C. Salon D. Jollibee
(page 3)
(page 14)
6. It refers to item that is purchased or any mechanism with the 4. ACTIVITY D: (Performance Task)
hope that it will generate income or appreciate in value at some
Direction: Read and analyze the transactions below and answer the
point in the future.
requirement needed.
A. Investments B. Withdrawals C. Capital D. Sales The following balances were retrieved from Juan’s Janitorial Services for
the year ended December 31, 2016:
7. It is the consumption and saving opportunity gained by an
entity within a specified timeframe, which is generally Capital, January 1, 2016 Php. 500,000.00
Withdrawals 30,000.00
expressed in monetary terms.
Additional investments 50,000.00
A. Salary B. Cash C. Income D. Equity Net Loss 45,000.00
Requirement:
8. It is the future sacrifices of economics benefits that the entity Prepare Statement of Changes in Equity of Juan’s Janitorial Services for
is obliged to make to other entities as a result of past the year 2016
transactions or other past events. Rubrics in Preparing Statement of Changes in Equity (Grading System)

A. Assets B. Liabilities C. Equity D. Income

9. It is any resource owned by a business or an economic

entity. It is anything (tangible or intangible) that can be
owned or controlled to produce value and that is held by an
economic entity.
A. Assets B. Liabilities C. Equity D. Income

10. All of these accounts are included in the statement of changes

in equity, EXCEPT
A. Capital B. Income C. Investments D. Sales

11. All of these accounts are assets, EXCEPT

A. Cash B. Accounts Receivable C. Machineries D. Capital

(page 4)

(page 13)
3. ACTIVITY C: (Written Works / Task) 12. All of these accounts are liabilities, EXCEPT
A. Accounts Payable B. Notes Payable
Direction: Compute the missing amount in the statement of C. Accounts Receivable D. Loan Payable
changes in equity of Santos Trading. Write your answer on the
blank provided. 13. It increases the equity
A. Withdrawals B. Investments C. Net loss D. Loans

14. It decreases the equity

A. Withdrawals B. Investments C. Assets D. Sales
Accounts 2017 2018 2019
15. It is also known as withdrawals.
A. Capital B. Salaries C. Deposits D. Drawings

Santos, Capital 2. Reviewing Previous Lesson:

Jan 1 Php. 100,000.00 Php. 250,000.00 3._______________
Direction: Give two examples of specific account titles for each
of the following terms.
Additional
investment 0 80,000.00 25,000.00 1. Revenues
a. ___________________
b. ___________________
Net Income 50,000.00 110,000.00 50,000.00
2. Expenses
a. ____________________
Withdrawals of b. ____________________
the owner 5,000.00 2._______________ 20,000.00
3. Assets
a. ____________________
Santos, b. ____________________
Capital 1._______________ 400,000.00 230,000.00
December 31 4. Liabilities
a. _____________________
b. _____________________

5. Equity
a. ____________________
(page 12) b. _____________________
(page 5)
B. Presenting the new lesson 2. ACTIVITY B: (Written Works / task)

ACTIVITY Direction: Fill in the blanks for missing letters to identify the
1. Motivation word described/defined in each sentence. Write your answers
Directio: Give each letter in the “BUSINESS” an adjective to to the space provided.
best describe it.

B–
ANSWER QUESTIONS
U–
S–
I– _n_e__m_n_ 1. It increases the owner's capital
N–
E– _it_d_a _a_s 2. Temporary account to record
S– whatever asset was withdrawn from the
business.
S–

ANALYSIS: p _ r t _ _ r_ h _ p 3. Business entity composed of two or

Processing questions: more individuals agree to contribute
money, property, skills, labor, or other
A. What do you want to be after 10 years?
resources
________________________________________________________
________________________________________________________
B. Do you want to have your own business someday? _h__e__l_e_s 4. Owners of the corporation
________________________________________________________
________________________________________________________
_o_p_ra__on 5. An entity who has bigger in size of
C. What type of business are you planning to put up resources and capital.
someday? Why?
________________________________________________________
________________________________________________________
(page 11)
(page 6)
C. APPLICATION
1. ACTIVITY A: (Written Works / Task)
Direction: Identify the forms of business organization of following
statement. On the blank provided before each number write S if
it sole proprietorship, P if it is partnership, and C if it is a
corporation.
___________ 1. The owner has the direct control of the business
___________ 2. It has double taxation.
___________ 3. It has perpetual life
___________ 4. Lack of continuity in business organizations in the
absence of the owner.
___________ 5. All profits belong to the owner.
___________ 6. The death, insolvency or lunacy of a partner may
lead to dissolution of the partnership firm.
___________ 7. Extensive record keeping is necessary.
___________ 8. It is the simplest way to set up a business.
___________ 9. It is an entity whose assets, liabilities, income and
expenses are centered or owned by itself being a legally separate
entity from its owners.
___________ 10. It is difficult to raise capital
(page 10)
ABSTRACTION
3. Discussion of Topic
In this lesson, you will learn about the different forms of
business organization, namely the single proprietorship,
partnership, and corporation.
Forms of Business Organization
Single/ Sole Proprietorship
The simplest form of business organization is a single / sole
proprietorship whose owner is only one person. It also called
as individual ownership. This is common for small
businesses and retail stores. The owner has unlimited control
over the business and enjoys all the profits. The owner also
has unlimited personal responsibility for the losses and
debts.
Advantages of Single/Sole Proprietorship
 It is the simplest way to set up a business
 It has less administrative paperwork
 The owner has direct control of decision making
 It has minimal working capital required
 All profits belong to the owner
Disadvantages of Single/Sole Proprietorship
 The owner has fully responsible for all debts and
obligations related to his or her business.
 Creditors would normally have a right against all
owner’s asset and business
 It is difficult to raise capital
 Lack of continuity in business organizations in the
absence of the owner.
(page 7)
Partnership Preparation of Statement of Changes in Equity for Single
A partnership is a business entity composed of two or more individuals Proprietorship
who agree to contribute money, property, skills, labor, or other The Statement of Changes in Equity is the financial statement that
resources into a common fund and divide the resulting profits among presents all changes, whether increases or decreases to the owner’s
themselves. interest on the company during the period. This statement is
prepared prior to the preparation of the Statement of Financial
Advantages of Partnership Position to be able to obtain the ending balance of the equity to be
 Due to more number of partners the partnership firm has larger used in the SFP.
resources for business operations as compared to sole
proprietorship firm
 Business of a partnership firm is very well managed by all the
partners as they take interest in the daily affairs of business
because of the ownership, profit, and control.
Disadvantages of Partnership
 Liability of every partner in a partnership firm is unlimited as
any of the partners may be called upon to pay all the debts.
 It does not exist for an indefinite period of time. The death,
insolvency or lunacy of a partner may lead to dissolution of the
partnership firm.
Corporation
A corporation is an entity whose assets, liabilities, income, and
expenses are centered or owned by itself being a legally separate entity Different parts of the statement of changes in equity
from its owners. Owners are called shareholders or stockholders of the
company. A. Heading
i. Name of the Company
Advantages of Corporation ii. Name of the Statement
 It has perpetual life iii. Date of preparation (emphasis on the wording – “for the”)
 Shareholder’s liability is limited to the extent of amount
invested. B. Increases to Equity
 It is relatively easy to raise huge capital. i. Net income for the year
ii. Additional investment
Disadvantages of Corporation
 Standards of law need to be followed to avoid penalties. C. Decreases to Equity
 Extensive record keeping is necessary i. Net loss for the year
ii. Withdrawals by the owner
 It has double taxation: Corporation Tax and Dividend Tax
(page 9)
(page 8)