STATEMENT

OF CHANGES
IN EQUITY
(SCE)
ZYRIECE CAMILLE M. CENTENO
LEARNING OBJECTIVES
At the end of this lesson, the learners must be able to:

• Recall the key features of a statement of changes in equity (SCE);

• Identify the different forms of business organizations;

• Prepare the statement of changes in equity for a single proprietorship.

BUSINESS ENTITY CONCEPT

The transactions must be

distinguished and differentiated from
the transaction of the owners.

Business transactions → financial

statements

Personal transactions → records of

the owners
TYPES OF BUSINESS SOLE
PROPRIETORSHIP

ORGANIZATIONS One owner

CORPORATION
PARTNERSHIP

Two or more Stockholders

owners
SOLE P ROP RIE TORSHIP

• Single Proprietorship

• Relatively easy to manage

• Limited resources; unlimited

liabilities
 MR. SNACKSTORE FOOD CART
Statement of Changes in Equity
For the Year Ended December 31, 2014
PARTNE RSHIP

• Two or more persons

contribute money

• Relatively easy to manage

• Larger source of capital and

resources

• Unlimited liabilities
 ABC PARTNERSHIP
Statement of Changes in Partners’ Equity
For the Year Ended December 31, 2014
C O R P O R AT I O
N • Independent owners

• Stock is the corporation’s unit of ownership

• Longer existence of 50 years

• Unlimited resources

• Stringent requirements for registration

• Double taxation
 BASIL CORPORATION
Statement of Changes in Equity
December 31, 2015
PREPARATION OF
STATEMENT OF
CHANGES IN
EQUITY
FOR SINGLE
PROPRIETORSHIP
I L L U S T R AT I V E
PROBLEM
The beginning capital of Ren Ren
Merchandising is ₱ 280,000. During
the year the owner made an
additional investment of ₱ 22,200
and withdrew ₱ 30,000 for personal
use. Net income during the year
amounted to ₱ 407,800. Prepare the
Statement of Changes in Equity for
the year ended December 31, 2016.
 Ren Ren Merchandising
Statement of Changes in Equity
For the Year Ended December 31, 2016
Ren, Equity, Beginning ₱ 280,000
Add: Additional Investment ₱ 22,200
Add:Net Income 407,800 430,000
Total ₱ 710,000
Less: Drawings 30,000
Ren, Equity, Ending ₱ 680,000

The ending capital of ₱ 680,000 will be the equity in

the statement in financial position.
Thanks!
Do you have any questions?

www.facebook.com/centenozyriece.19
https://twitter.com/zyriece_camille
centenozyriece@mseuf.edu.ph

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