Fabm2 Q3 Module1

SENIOR HIGH SCHOOL
Fundamentals of
Accountancy, Business and
Management 2
Quarter 3 - Module 1
Statement of Financial Position
i
Fundamentals of Accountancy, Business and Management 2 – Grade 11
Quarter 3- Module 1: Statement of Financial Position
Revised Copy 2021
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Development Team of the Module
Developer/Compiler:
CHRISTOPHER Z. RODRIGUEZ – Teacher III, Mabolo National High School
Content Editors:
ROY C. GENARES - Principal I, Sirao Integrated School
JONAH B. BACALSO - Head Teacher VI, Cebu City National Science HS
AL RICHARD L. CABALLES – Head Teacher III, Malubog Integrated School
Language Editors:
MARIA FE S. MACUL - MT II / School Head, Buhisan Night High School
JESUSIMA B. JUMALON – Principal I, Punta Princesa Night HS
Reviewer:
MARITES V. PATIÑO EdD – EPSvr, Mathematics
Management Team:
RHEA MAR A. ANGTUD EdD - Schools Division Superintendent
BERNADETTE A. SUSVILLA EdD – Asst. Schools Division Superintendent
GRECIA F. BATALUNA – Chief EPS, CID
MARITES V. PATIÑO EdD - EPSvr, Mathematics
VANESSA L. HARAYO – EPSvr, LRMS
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SENIOR HIGH SCHOOL
Fundamentals of
Accountancy, Business and
Management 2
Quarter 3 - Module 1
iii
Introductory Message
Welcome to the Fundamentals of Accountancy, Business and Management 2 on
Statement of Financial Position!
This module was designed to provide you with opportunities for guided and
independent learning at your own pace and time. You will be enabled to process the
contents of the learning resource while being an active learner.
This module has the following parts and corresponding icons:

This part includes an activity that aims to
check what you already know about the
What I Know
lesson to take.
(Pre-Test)
This will give you an idea of the skills or

What I Need to Know competencies you are expected to learn in
(Objectives) the module.
This is a brief drill or review to help you

What’s In link the current lesson with the previous
(Review/Springboard) one.
In this portion, the new lesson will be

introduced to you in various ways; a story,
What’s New
(Presentation of the Lesson) a song, a poem, a problem opener, an
activity or a situation.
This section provides a brief discussion of
the lesson. This aims to help you discover
What is It
(Discussion) and understand new concepts and skills.
This section provides activities which will
What’s More help you transfer your new knowledge or
(Application) skill into real life situations or concerns.
What I Need to This includes key points that you need to

Remember remember.
(Generalization)
This comprises activities for independent
What I Can Do practice to solidify your understanding and
(Enrichment Activities) skills of the topic.
This is a task which aims to evaluate your
Assessment level of mastery in achieving the learning
(Post Test) competency.
This contains answers to the following:
Answer Key • What I Know
• What’s In
• What’s More
iv
At the end of this module you will also find:
References This is the list of all sources used in developing

this module.
The following are some reminders in using this module:

1. Use the module with care. Do not put unnecessary mark/s on any part of
the module. Use a separate sheet of paper in answering the exercises.
2. Don’t forget to answer What I Know before moving on to the other activities
included in this module.
3. Read the instructions carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your
answers.
5. Finish the task at hand before proceeding to the next.
6. Return this module to your teacher/facilitator once you are through with
it.
If you encounter any difficulty in answering the tasks in this module, do not
hesitate to consult your teacher or facilitator. Always bear in mind that you
are not alone.
We hope that through this material, you will experience meaningful learning
and gain deep understanding of the relevant competencies. You can do it!
About the Module

This module was designed and written with you in mind. It is here to help you master
about Statement of Financial Position. The scope of this module permits it to be used
in many different learning situations. The language used recognizes the diverse
vocabulary level of students. The lessons are arranged to follow the standard
sequence of the course. But the order in which you read them can be changed to
correspond with the textbook you are now using.
This module is divided into four lessons, namely:

Lesson 1 – Elements of the Statement of Financial Position
Lesson 2 – Classification of the Elements of the Statement of Financial
Position into Current and Non-current items
Lesson 3 – Statement of Financial Position Using the Report Form
Lesson 4 – Statement of Financial Position Using the Account Form
After going through this module, you are expected to:

• identify and describe the elements of Statement of Financial Position;
• classify elements of the Statement of Financial Position into current and non-
current items;
• prepare Statement of Financial Position using the Report Form with proper
classification of items as current and non-current; and
• prepare Statement of Financial Position using the Account Form with proper
classification of items as current and non-current.
ii
v
What I Know (Pretest)
Instruction: Choose the letter of the correct answer to the following items. Write
them on a separate sheet of paper.
1. Company A had a total accounts receivable of Php 110,000, inventories Php

85,000, prepaid expenses Php 20,000, non-current liabilities Php 80,000,
equity Php 100,000, accounts payable Php 50,000, accrued expenses and
unearned income Php 50,000 and Php 85,000 respectively. Assuming there
are no other current liabilities, how much is the company’s non-current
assets?
A.100,000 C. 185,000
B.150,000 D. 200,000
2. Company B’s accounting records show a total Liabilities and Equity

amounting to Php 260,000, non-current assets at Php 105,000, cash
Php40,000, inventory Php 70,000 and prepaid expenses Php 10,000.
Assuming the company had no other assets, how much is the cost of the land?
A. 25,000 C. 35,000
B. 40,000 D. 115,000
3. Company C had a total non-current asset of Php 25,000, cash Php 50,000,
accounts receivable Php 50,000, total liabilities and equity of Php 200,000
and Ph 50,000 respectively. Assuming the company had no other assets,
how much is the notes receivable?
A. 75,000 C. 275,000
B. 125,00 D. 325,000
For items 4-10. The following records were
ii found in the books of account of CZAR
Trading for the year ended December 31, 2019.
Accounts Payable 195,000

Prepaid Expenses 10,000
Interest Payable 10,000
Cash on Hand 60,000
Equipment 300,000
Loans Payable 1,500,000
Income Tax Payable 50,000
Cash in Bank 300,000
Building 1,000,000
Notes Receivable 100,000
Accrued Expenses 100,000
Unearned Income 20,000
Petty Cash Fund 5,000
Accounts Receivable 70,000
Land 900,000
Notes Payable 100,000
Furniture and Fixtures 80,000
1
Goodwill 100,000
Drawings 45,000
Inventories 50,000
4. How much is the total assets of the company?

A. 475,000 C. 2,975,000
B. 595,000 D. 2,380,000
5. How much is the total current assets?

A. 475,000 C. 1,500,000
B. 595,000 D. 1,975,000
6. How much is the total non-current assets?

A. 887,600.00 C. 2,380,000
B. 2,209,000.00 D. 2,340,000
7. How much is the total liabilities?

A. 475,000 C. 1,500,000
B. 595,000 D. 1,975,000
8. How much is the total non-current liabilities?

A. 1,400,000 C. 2,200,000
B. 1,500,000 D. 2,380,000
9. How much is the total equity?

A. 1,000,000 C. 1,975,000
B. 1,045,000 D. 2,200,000
10. How much is the total current liabilities?
A. 475,000 C. 1,500,000
B. 595,000 D. 1,975,000
For items 11-15, Read the two statements carefully per item and analyze if they
correspond to the given statement inside the box.
If only statement I is true, then write A.

If only statement II is true, then write B.
If both statements are true, then write C.
If both statements are false, then write D.
11. Statement I - If an entity has notes payable over a 3-year period, that is
a long-term liability but if the notes payments that are due during the
current year are considered the current portion of long-term debt.
Statement II - Obligations that are due and payable less than a year are
current assets.
12. Statement I - A person who owns a business with many branches can
prepare a single set of financial statements.
Statement II – Small businesses, such as sari-sari stores have little or no use
of accounting.
13. Statement I - Permanent accounts are real accounts.
Statement II - Contra Assets accounts are nominal accounts.
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14. Statement I - Current assets and current liabilities are also called short-
term assets and short-term liabilities.
Statement II - Assets that cannot be realized (collected, sold, used upon year
after year-end date is non-current.
15.Statement I - For accrual, this is what the owners of an entity have invested
in an enterprise. It represents what the business owes to its owners.
Statement II - Fixed asset when it expects to realize the asset or intends to
sell or consume it, in its normal operating cycle; it holds the asset primarily
for the purpose of trading.
Lesson Elements of the Statement of

1 Financial
3 Position
What I Need to Know
At the end of this lesson, you are expected to:
o identify and describe the elements of the Statement of Financial
Position.
What’s In
In Grade 11, Accounting Cycle starts from identifying and analyzing transactions,
journalizing, posting, preparation of unadjusted trial balance, worksheet, adjusting
entries, adjusted trial balance, financial statements preparation, closing entries and
post-closing trial balance. One of the financial statements being prepared is the
Statement of Financial Position where the three elements are presented. To recall the
accounts in this statement, let us perform the activity below.
Activity 1.1 Statement of Financial Position
Accounts
Instruction: Complete the table by placing all the
accounts found in the box below in each of the
following columns. Write your answer on a separate
sheet of paper.
Assets Liabilities Equity
Accounts Payable Marketable Securities

Clip art 1: shorturl at/cvBHX Drawings Accounts Receivable
Cash on Hand Loans Payable
Prepaid Expenses Retained Earnings
Notes Payable Trademark
Inventories Land
Income Tax Payable Accrued Expense
Petty Cash Fund Accrued Income
SSS Premium Payable Unearned Income
What’s New
4
Financial statements are written records that convey the business activities and the
financial performance of a company used by investors, market analysts, and
creditors to evaluate a company's financial health and earnings potential (Murphy,
2020). Financial statements preparation is the 8thstep in the Accounting Cycle after
the adjusted trial balance and before the closing entries. One of these statements is
the Statement of Financial Position or balance sheet which reports the
company's assets, liabilities and owner’s equity at a given point in time.
ASSETS LIABILITIE EQUITY

S
The 3 elements of the Statement of Financial Position
What Is It
Assets, Liabilities and Equity are the elements of the Statement of Financial Position.
What are ASSETS?
Asset is a resource controlled by the entity as a result of past events and from which
future economic benefits are expected to flow to the entity (IASB Framework, 2016).
What are the examples of ASSETS?
Cash and cash equivalents(cash on hand, cash in bank, petty cash fund, change cash
fund, commercial paper, marketable securities, money market funds, treasury bills),
accrued income, ,trade receivables, inventories, prepaid expenses, land, building,
vehicle, equipment, furniture and fixtures, leasehold improvements, intangible
assets(computer software, franchise agreements, trademarks, patents, copyrights
etc.), investments properties, biological assets (plantation, dairy, fruit trees etc.
Intangible assets are presented in the statement of financial position after deducting
the related accumulated amortization.
What are LIABILITIES?
Liabilities are obligations of an entity arising from past transactions or events, the
settlement of which may result in the transfer or use of assets, provision of services
or other yielding of economic benefits in the future.
What are the examples of LIABILITIES?
Examples are accounts payable, notes payable, accrued expenses, unearned

income/prepaid income, SSS and Phil-health premium payable, interest payable,
withholding tax payable, income tax payable, loans payable, mortgage payables, etc.
What is an EQUITY?
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Equity is the residual interest in the assets of the entity after deducting all the
liabilities (IASB Framework,2018). It is what the owners of an entity have invested in
an enterprise. It represents what the business owes to its owners. It is also a
reflection of the capital left in the business after assets of the entity are used to pay
off any outstanding liabilities. For drawings account, this is contra owner’s equity
account used to record the withdrawals of cash or other assets made by an owner
from the enterprise for his personal use.
Assets, liabilities and equity are permanent or real accounts because these are not
closed at the end of the accounting period. It carries the ending balance to the
beginning of the next year and is measured cumulatively.
What are the examples of accounts that are included in the Equity?
Examples of accounts that are present in the equity are capital balance beginning,
additional investments, retained earnings and drawings.
What’s More
Activity 1.2: Elements of the Statement of Financial Position

I. Identify the following words and phrases as Assets, Liabilities or Equity. Write
your answers on a separate sheet of paper.
_____1. Prepaid Expenses _____11. SSS Premium Payable
_____2. Cash in Bank _____12. Accounts Receivable

_____3. Unearned Income _____13. Accrued Income
_____4. Inventories _____14. Mortgage Payable
_____5. Marketable Securities _____15. Biological Assets
_____6. Accrued Expenses _____16. Computer Software
_____7. Land _____17. Notes Payable
_____8. Drawings _____18. Furniture and Fixtures
_____9. Accounts Payable _____19. Notes Receivable
_____10. Retained Earnings _____20. Income Tax Payable
What I Need to Remember
There are three elements in the Statement of Financial Position

namely Assets, Liabilities and Equity. These three elements are
permanent or real accounts because they are not closed at the
end of the accounting period. Instead, it carries the ending
balance to the beginning of the next year and is measured
cumulatively.
Classification of the Elements of the

Lesson
Statement of 6Financial Position into
2
Current and Non-current Items
What I Need to Know

o classify elements of the Statement of Financial Position into current and non-
current items
What’s In
In lesson 1, you have learned about the elements of the Statement of Financial
Position as Assets, Liabilities and Equity. To recall such elements, let us perform the
activity below.
Activity 2.1 Elements of the Statement of Financial
Position
Instruction: Write A for Assets, L for Liabilities and E for Equity.
1.Prepaid Expenses 6.Land

2.Accrued Expenses 7.Unearned Income
3.Patents 8.Retained Earnings
4.Inventories 9.Equipment
5.Petty Cash Fund 10.Drawings
Clip art 1: shorturl at/cvBHX
What’s New
Classification of the Statement of

Financial Position into Current and
Non-current Items
Asset Liabilities Equity

Current Current
Non-current Non-current
Clip art 2: shorturl .at/hjDP7
What Is It
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Within the assets segment, accounts are listed from top to bottom in the order of
their liquidity – that is, the ease with which they can be converted into cash. They
are divided into current assets which can be converted to cash in one year or less
and non-current or long-term assets which cannot be. Assets are classified into
current assets and non-current assets (Hayes, 2020).
IFRS, IAS 1(International Financial Reporting Standards, International Accounting

Standards 1) states that:
An entity shall classify current asset when it expects to realize the asset or intends
to sell or consume it, in its normal operating cycle. It holds the asset primarily for
the purpose of trading and it expects to realize the asset within twelve months after
the reporting period.
Examples are:
Cash and cash equivalents(cash in bank, petty cash fund, change cash fund,
commercial paper, marketable securities, money market funds, treasury bills), accrued
income, trade receivables, inventories(raw materials, work in progress and finished
goods), prepaid expenses, etc.
IFRS, IAS 16 (International Financial Reporting Standards, International Accounting

Standards 16) states that:
…an entity shall classify non-current assets when these benefits are expected to
last more than one year from the reporting date. Non-current assets are also known
as fixed assets or property plant and equipment.
Examples are:
Land, building, vehicle, equipment, furniture and fixtures, leasehold improvements,

intangible assets (goodwill, computer software, franchise agreements, trademarks,
patents, copyrights etc.), investments properties, biological assets (plantation, dairy,
fruit trees etc.). Intangible assets are presented in the Statement of Financial Position
after deducting the related accumulated amortization.
Within the liabilities segment, accounts are listed based on how soon they are to be
paid from shortest term to longest term which can help you understand what is due
and when. Liabilities are classified into current and non-current.
Current Liabilities refers to a company's short-term financial obligations that are

due within one year or within a normal operating cycle (Tuovila, 2020).
Examples are:
accounts payable, accrued expenses, unearned income/prepaid Income, Pag-ibig, SSS

and Phil-health premium payable, interest payable, withholding tax payable, income
tax payable, notes/loans payable, etc.
Non-Current Liabilities are debts payable more than one year.
8
For example, if a business takes out notes, loans or mortgage payable over a 2-year
period, that is a long-term liability. However, the notes, loans or mortgage payments
that are due during the current year are considered the current portion of long-term
debt and are recorded in the short-term liabilities section of the Statement of
Financial Position (Adam Hayes, 2019).
Equity is the residual interest in the assets of the entity after deducting all the
liabilities (IASB Framework, 2018).
Equity is what the owners of an entity have invested in an enterprise. It represents
what the business owes to its owners. It is also a reflection of the capital left in the
business after assets of the entity are used to pay off any outstanding liabilities. For
drawings account, this is contra owner’s equity used to record the withdrawals of
cash or other assets made by an owner from the enterprise for his personal use.
What’s More
Activity 2.2: Classification of Assets

I. Identify the following words and phrases as Current Assets, Non-current
Assets, Current Liabilities or Non-current Liabilities. Write your answer on a
separate sheet of paper.
_____1. Delivery Truck ____11. Unearned Income
_____2. Computer Software ____12. Inventories
_____3. SSS Premium Payable ____13. Accrued Income
_____4. Copyright ____14. Land
_____5. Leasehold Improvements ____15. Biological Assets
_____6. Petty Cash Fund ____16. Accrued Expense
_____7. Cash Equivalents ____17. Prepaid Expense
_____8. Land ____18. Accounts Payable
_____9. Patents ____19. Change Cash Fund
_____10. Accounts Receivable ____20. Notes Receivable
In a Statement of Financial Position, assets are classified into

current and non-current. The first can be easily converted to
cash within a year while the second takes a longer time to be
converted or realized. On the other hand, liabilities are also
classified into current and non-current. The first are due and
payable within one year while the second are due and payable
over a long period of time.
Equity is the residual interest in the assets of the entity after
deducting all the liabilities.
Lesson Statement of Financial Position

3 using9 the Report Form
What I Need to Know
o determine the accounting equation; and
o prepare Statement of Financial Position using the report form with proper
What’s In
In previous lessons, you have learned the 3 elements of the Statement of Financial
Position such assets, liabilities and equity. Assets and liabilities are classified into
current and non-current items, equity was also identified. To recall such elements
and classifications, let us perform the activity below .
Activity 3.1 Elements and Classifications of the

Instruction: Do what is being asked and write your
answer on a separate sheet of paper.
I. Indicate the following elements of the Statement
of Financial Position as Assets, Liabilities and
Equity.
___________1. Prepaid Expenses
___________2. Accrued Expense
___________3. Computer Software
___________4. Drawings
___________5. Petty Cash Fund
II. Indicate the following classification of the

Statement of Financial Position as current
assets, non-current assets, current liabilities
and non-current liabilities.
___________1. Notes Payable (1.5 years)
___________2. Unearned Income
___________3. Biological Assets
___________4. Inventories
___________5. Mortgage Payable
What’s New
10
Preparation of the Statement of Financial Position using the Report Form with proper
How does it look like?

How do I prepare Statement of
Financial Position using the
Report Form with proper
classification of items as current
and non-current?
Clip art 2: shorturl.at/hjDP7
Sample Statement of Financial Position for a single proprietorship using a report

form.
ABC Trading
As of December 31, 2019
ASSETS
Current Assets
Cash in XYZ bank 400,000
Cash Equivalents 70,000
Allowance for Doubtful
Accounts 2,100 47,900
Raw Materials 30,000
Work in Progress 50,000
Finished Goods 90,000
Office Supplies 6,000
Prepaid Insurance 9,000
Total Current Assets 852,900
Non-Current Assets
Land 700,000
Building 1,100,000
Less: Accumulated Depreciation-
Building 22,000 1,078,000
Equipment 50,000
Less: Accumulated Depreciation-
Equipment 12,000 38,000
Trademarks 100,000
Less: Accumulated Amortization-
Trademarks 40,000 60,000
Total Non-Current Assets 1,876,000
Total Assets 2,728,900
Liabilities
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Current Liabilities
Accrued Utilities 15,000
Accrued Salaries 100,000
SSS Premium Payable 15,000
Withholding Tax Payable 30,000
Phil-health premium Payable 10,000
Total Current Liabilities 640,000
Non-Current Liabilities
Mortgage Payable 400,000
Total Non-Current Liabilities 1,400,000
Total Liabilities 2,040,000
Equity
R. Equity 688,900
Total Liabilities and Equity 2,728,900
What Is It
Before you prepare a Statement of Financial Position using the Report Form,
let’s adhere first the accounting equation as:
ASSETS EQUITY
LIABILITIES
= +
=
Calculating the Equation:

1. Total all assets on the balance sheet for the period
2. Total all liabilities, which should be a separate listing on the balance sheet.
3. Locate total owner’s equity and add the number to total liabilities.
4. Total assets will equal the sum of liabilities and total equity.
Calculating the equation could either be:

Total Liabilities = Total Assets –Total Equity
Total Equity = Total Assets – Total Liabilities
12
Take note:
• The accounting equation shows the company's balance sheet where the total
of all the company's assets equals the sum of the company's liabilities and
owner’s equity.
• Assets represent the valuable resources controlled by the company.
• The liabilities represent their obligations.
• Both liabilities and owner’s equity represent how the assets of a company
are financed.
• Financing through debt shows as a liability, and financing through
investments or additional investments appear in the owner’s equity.
There are two accounting formats to be used in preparing a Statement of Financial

Position.
1. Report Form presents all the accounts vertically. (lesson 1 of this module)
1. Account Form presents the asset accounts on the left side and liabilities and
equity accounts on the right side. (lesson 2 of this module)
The most common accounting format being used by the business today is a report
form.
The following steps should be followed in order to prepare a Statement of Financial
Position using a report form and account form.
Step 1: Heading should include; name of the company, name of the financial
statement and reporting date and period.
When to use “As of “for the month/year ended in the heading of the financial
statements? Use “as of” for financial statements with “balance”, like Trial Balance,
Balance Sheet (Statement of Financial Position) and Post Closing Trial Balance).
ABC Trading
Step 2: Prepare the assets section

2.1 List all current assets
2.2 List all non-current assets
Step 3: Add up the current and non-current assets totals and label this amount
total assets.
Current Assets
Allowance for Doubtful Accounts 2,100 47,900
Total Current Assets 852,900
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Non-Current Assets
Land 700,000
Building 1,100,000
Less: Accumulated Depreciation-Building 22,000 1,078,000
Equipment 50,000
Less: Accumulated Depreciation- Equipment 12,000 38,000
Trademarks 100,000
Less: Accumulated Amortization-Trademarks 40,000 60,000
Total Non-Current Assets 1,876,000
Step 4: Prepare the liabilities section.

4.1 List all current liabilities
4.2 List all non-current liabilities
Step 5: Add up the current and non-current liabilities totals and label this
amount total liabilities.
Liabilities
Current Liabilities
Total Current Liabilities 640,000
Non-Current Liabilities
Total Non-Current Liabilities 1,400,000
Step 6: Calculate the owner's equity. (Total Assets – Total Liabilities)

Equity 688,900
========
Step 7: Add the Total Liabilities and Total Owner's Equity figures.
Title the sum Total Liabilities and Owner's Equity.

Equity 688,900
Total Liabilities and Equity 2,728,900
========
What’s More
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Now it’s your turn!
Activity 3.2: Report Form
Instruction: Based on the financial data given below, prepare a Statement of
Financial Position using a report form. Use a separate sheet of paper.
Below are the accounts of 3R’s Marketing as of December 31, 2019.

Land 300,000
Cash in XYZ Bank 300,000
Marketable Securities 50,000
Allowance for Doubtful Accounts 5,000
Building 500,000
Loans Payable 350,000
Accumulated Depreciation-Building 40,000
Accumulated Depreciation-Funiture and Fixtures 10,000
Trademark 50,000
Accounting equation is very much crucial in preparing Statement

of Financial Position where Assets = Liabilities + Capital. Steps
must be carefully followed in preparing it in order to arrive to
accounting equation. The accounting format used in preparing
Statement of Financial Position in this lesson is a report form,
that is to present all the accounts vertically.

Lesson using the Account Form with
4 Supporting Schedules
15
What I Need to Know

o prepare Statement of Financial Position using the account form with
proper classification of items as current and non-current with supporting
schedules.
What’s In
In lesson 3, you have learned how to prepare statement of financial position using
the report form. Steps must be carefully followed in preparing it in order to arrive to
the accounting equation. To recall such preparation, let us perform the activity
below.
Activity 4.1: Report Form
Instruction: Do what is being asked.
Following the steps in preparing a Statement of
Financial Position, make your own simple Statement of
Financial Position using a report form.
Rubrics
What’s New
16
Preparation of the Statement of Financial Position using the Account Form with
proper classification of items as current and non-current with supporting schedules.
How does it look like?

How do I prepare Statement
of Financial Position using
the Account Form with
supporting schedules?
Clip art 2: shorturl.at/hjDP7
Sample Statement of Financial Position for a single proprietorship in an account

form with supporting schedules.
ABC Trading
Assets Liabilities
Current Assets Current Liabilities
Cash Equivalents (Note1) 355,000 Accounts Payable 140,000
Accounts Receivable 47,900 Interest Payable 10,000
Notes Receivable 150,000 SSS Premium Payable 15,000
Inventories (Note 2) 170,000 Income Tax Payable 50,000
Office Supplies 6,000 Income Tax Payable 300,000
Prepaid Insurance 9,000 Total Current Liabilities 515,000
Total Current Assets 737,900 Non-Current Liabilities
Non-Current Assets Loans Payable 1,400,000
Property. Plant & Equip (Note 3) 1,816,000 Total Liabilities 1,915,000
Intangible Assets (Note 4) 60,000 Equity
Total Non-Current Assets 1,876,000 R, Capital 698,900
Total Assets 2,613,900 Total Liabilities and Equity 2,613,900
Supporting Schedules:
Note 1 - Cash and Cash Equivalents
355,000
Note 2-Inventories
Total Inventories 170,000
Note 3-Property, Plant and Equipment

Furniture
Land Building Total
& Fixtures
Cost 700,000 1,100,000 50,000 1,850,000
Less: Accumulated Depreciation - 22,000 12,000 34,000
Net Book Value/Carrying Value 700,000 1,078,000 38,000 1,816,000
Note 4-Intangible Asset
Trademarks
Cost 100,000
Less: Accumulated Depreciation 40,000
Carrying Value 60,000
17
What Is It
Still the accounting equation will be applied and the steps in preparing
Statement of Financial Position will also be the same but this time the account form
will be used with supporting schedules.
Supporting schedules are additional details about balance sheet entries that are
made as supplements. They help break down general categories of assets and
liabilities into more detail.
Supporting schedules can offer greater disclosure to balance sheets. While the assets
and liabilities on a balance sheet are often broken down into broad categories,
supporting schedules can offer up insight by detailing specifics about the broad
categories (Bartoslak, D. 2018).
Supporting schedules for Statement of Financial Position are:
➢ Note 1: Cash and Cash Equivalents
Note 1 - Cash and Cash
Equivalents
470,000
➢ Note 2: Inventories
Note 2-Inventories
Total Inventories 170,000
➢ Note 3-4: Non-current Assets

o Property Plant and Equipment
Note 3-Property, Plant and Equipment
Furniture
Land Building Total
& Fixtures
Cost 700,000 1,100,000 50,000 1,850,000

Less: Accumulated
Depreciation - 22,000 12,000 34,000
Net Book
Value/Carrying
Value 700,000 1,078,000 38,000 1,816,000
o Intangible Assets
Note 4-Intangible Asset
Trademarks
Cost 100,000
Less: Accumulated
Depreciation 40,000
Carrying Value 60,000
18
➢ Note 5: Non-current Liabilities.
Current Portion xx
Non-current Portion xx
Total xx
===
What’s More
Now it’s your turn!

Activity 4.2: Account Form
Instruction: Based on the financial data given below prepare a Statement of
Financial Position using an account form with supporting schedules. Write your
answers on a separate sheet of paper.
This record shows the account balances of MVP Trading as of December 31, 2019.
Land 900,000
Building 1,000,000
Accrued Interest Income 4,500
Cash on Hand 60,000
Delivery Truck 500,000
Phil-health Premium Payable 10,000
Cash in Metro Savings Bank 300,000
Equipment 300,000
Inventories 50,000
Trademarks 100,000
19
The accounting format used in preparing Statement of

Financial Position in this lesson is a report form, that is to
present the asset accounts on the left side and liabilities and
equity accounts on the right side. On the other hand,
supporting schedules are additional details about balance
sheet entries that are made as supplements. They help break
down general categories of assets and liabilities into more
detail.
What I Can Do
Activity 4.3: Assets and Liabilities
Instruction: Do what is being asked and write your answer on a separate sheet
of paper.
A. ASSETS FOR REAL.

Look around your home and list down 5 items which you think are your
current and non-current assets.
B. LIABILITIES FOR REAL.
In this time of pandemic, do your parents have a liability to the creditors? If
yes, what kind of liability? Are they current or non-current?
Activity 4.4: Account Form-Schedules

Instruction: Prepare a Statement of Financial Position using an account form with
supporting schedules. Use a separate sheet of paper.
Trial Balance of MPK Manufacturing as of December 31, 2019.
Cash on Hand 250,000

Prepaid Rent 8,000
20
Land 700,000
Building 800,000
Machineries 200,000
Accumulated Depreciation-Machineries 40,000
Accumulated Depreciation-Furniture and
Fixtures 5,000
Patents 50,000
Accumulated Amortization-Patents 10,000
Notes Payable (Ten months) 300,000
Loans Payable (current portion 28,000) 1,400,000
Rodriguez, Equity 535,600
21
Assessment (Posttest)
Instruction: Choose the letter of the correct answer to the following items. Write
them on a separate sheet of paper.
1. Company’s total accounts receivable Php 110,000, inventories Php 85,000,

prepaid expenses Php 20,000, total non-current liabilities, Php 80,000, total
equity, Php 135,000, accounts payable, Php 50,000 while accrued expenses
and unearned income, Php 50,000 and Php 85,000. Assuming there are no
other current liabilities, how much is the company’s notes receivable?
A.100,000 C. 185,000
B.150,000 D. 200,000
2. Company’s total liabilities and equity , Php 260,000, total non-current

ended at Php 105,000, cash Php 40,000, inventory, Php 70,000 and prepaid
expenses, Php 10,000. Assuming the company had no other assets, how
much is accounts receivable?
A.30,000 C. 35,000
B.45,000 D. 115,000
3. Company’s total non-current assets ended at Php 25,000, cash, Php 50,000,
accounts receivable, Php 50,000, total Liabilities and Equity, Php 200,000 and
P 50,000. Assuming the company had no other assets, how much is the
inventory?
A.75,000 C. 275,000
B.125,000 D. 325,000
For items 4-10. Below are the account balances of XYZ Company as of December
31, 2019.
Cruz, Equity 666,600
Land 700,000
Trademarks 80,000
Patents 100,000
Delivery Van 500,000
Building 1,000,000
Accumulated Depreciation-Delivery Van 100,000
Accumulated Depreciation-Furniture and Fixtures 5,000
Accumulated Amortization-Patents 20,000
22
Accumulated Amortization-Trademarks 16,000
Cash on Hand 90,000
Cash in ABC Bank 350,000
4. How much is the total assets of the Company?

A. 887,600 C. 2,209,000
B. 2,000,000 D. 3,096,000
5. How much is the total current assets?

A. 887,600 C. 2,209,000
B. 1,400,000 D. 3,096,600
6. How much is the total non-current assets?

A. 887,600 C. 2,430,000
B. 2,209,000 D. 3,096,600
7. How much is the total liabilities?

A. 887,600 C. 2,430,000
B. 2,209,000 D. 3,096,600
8. How much is the total non-current liabilities?

A. 1,400,000 C. 3,096,600
B. 2,000,000 D. 2,200,000
9. How much is the total equity?

A. 430,000 C. 887,600
B. 666,600 D. 2,209,000
10. How much is the total carrying value of fixed assets?
A. 887,600 C. 2,200,000
B. 1,400,000 D. 2,209,000
23
For items 11-15, Read the two statements carefully per item and analyze if they
correspond to the given statement inside the box.
If only statement I is true, then write A.

If only statement II is true, then write B.
If both statements are true, then write C.
If both statements are false, then write D.
11. Statement I - Obligations that are due and payable less than a year are
current assets.
Statement II - If an entity has notes payable over a 3-year period, that is
a long-term liability but if the notes payments that are due during the
current year are considered the current portion of long-term debt.
12. Statement I – Small businesses, such as sari-sari stores have little to no

use of accounting.
Statement II - A person who owns a business with many branches can
prepare a single set of financial statements.
13. Statement I - Contra Assets accounts are nominal accounts.

Statement II - Permanent accounts are real accounts.
14.Statement I - Assets that cannot be realized (collected, sold, used upon year
after year-end date is non-current.
Statement II - Current assets and current liabilities are also called short-
term assets and short-term liabilities.
15. Statement I - Current asset when it expects to realize the asset or intends to
sell or consume it, in its normal operating cycle; it holds the asset primarily
for the purpose of trading.
Statement II - For equity this is what the owners of an entity have invested
in an enterprise. It represents what the business owes to its owners.
24
Answer Key
Remember: This portion of the module contains all the answers. Your HONESTY is
required.
Activity 3.2 (Report Form)
25
Activity 4.1
Preparation of the Statement of Financial Position using a report form may vary.
Activity 4.2 (Account Form)
References
Textbook
Beticon, J., et al. Accountancy, Business and Management2.Vibal
Inc.2016. page 4, pp.6-7.
Monfero, R.P., et al. Teaching Guide for Senior High School. Fundamentals
of Accountancy, Business and Management. The Commission on
Higher Education. Diliman, Quezon City. 2016. pp.14-20
Websites
Bartoslak, David. Supporting Schedules on Balance Sheet. Retrieved
from July 06,2020
fromhttps://study.com/academy/lesson/supporting-schedules-on-
balance-sheets.2019
26
Hayes, Adam. Balance Sheet, retrieved from July 3, 2020 from
https://www.investopedia.com/terms/balance sheet.asp. 2020
Hayes, Adam. Business Essentials Retrieved from June 9, 2020 from
https://www.investopedia.com/terms/l/assets/liability.asp. 2019
Murphy, Chris. Financial Statements. Retrieved from July 23, 2020
from https://www.investopedia.com/terms/f/financial-
statements.asp. 2020
Tuovila, A. Corporate Finance and Accounting, retrieved June 9,
2020fromhttps://www.investopedia.com/terms/c/currentliabilities.a
sp. 2020
https://www.iasplus.com/en/news/2018/03/cf
https://www.iasplus.com/en/meeting-notes/iasb/2016/july/conceptual-
framework
https://accounting-simplified.com
https://courses.lumenlearning.com
https://www.investopedia.com
Cliparts
Clipart 1: retrieved from shorturl.at/cvBHX on July 9, 2020.
Clipart 2: retrieved from shorturl.at/hjDP7 on July 9, 2020.
Congratulations!
You are now ready for the next module. Always remember the following:
1. Make sure every answer sheet has your

o Name
o Grade and Section
o Title of the Activity or Activity No.
2. Follow the date of submission as agreed with your teacher.
3. Keep the modules with you.
4. Return them at the end of the school year.
27

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SENIOR HIGH SCHOOL

Development Team of the Module

Printed in the Philippines by DepEd Cebu City Division, ROVII

This module has the following parts and corresponding icons:

This will give you an idea of the skills or

This is a brief drill or review to help you

In this portion, the new lesson will be

What I Need to This includes key points that you need to

References This is the list of all sources used in developing

The following are some reminders in using this module:

About the Module

This module is divided into four lessons, namely:

After going through this module, you are expected to:

1. Company A had a total accounts receivable of Php 110,000, inventories Php

2. Company B’s accounting records show a total Liabilities and Equity

Accounts Payable 195,000

4. How much is the total assets of the company?

5. How much is the total current assets?

6. How much is the total non-current assets?

7. How much is the total liabilities?

8. How much is the total non-current liabilities?

9. How much is the total equity?

If only statement I is true, then write A.

Lesson Elements of the Statement of

Accounts Payable Marketable Securities

ASSETS LIABILITIE EQUITY

The 3 elements of the Statement of Financial Position

What are ASSETS?

What are the examples of ASSETS?

What are LIABILITIES?

What are the examples of LIABILITIES?

Examples are accounts payable, notes payable, accrued expenses, unearned

Activity 1.2: Elements of the Statement of Financial Position

_____1. Prepaid Expenses _____11. SSS Premium Payable

_____2. Cash in Bank _____12. Accounts Receivable

What I Need to Remember

There are three elements in the Statement of Financial Position

Classification of the Elements of the

At the end of this lesson, you are expected to:

1.Prepaid Expenses 6.Land

Classification of the Statement of

Asset Liabilities Equity

IFRS, IAS 1(International Financial Reporting Standards, International Accounting

IFRS, IAS 16 (International Financial Reporting Standards, International Accounting

Land, building, vehicle, equipment, furniture and fixtures, leasehold improvements,

Current Liabilities refers to a company's short-term financial obligations that are

accounts payable, accrued expenses, unearned income/prepaid Income, Pag-ibig, SSS

Non-Current Liabilities are debts payable more than one year.

Activity 2.2: Classification of Assets

What I Need to Remember

In a Statement of Financial Position, assets are classified into

Lesson Statement of Financial Position

Activity 3.1 Elements and Classifications of the

II. Indicate the following classification of the

How does it look like?

Sample Statement of Financial Position for a single proprietorship using a report

Calculating the Equation:

Calculating the equation could either be:

There are two accounting formats to be used in preparing a Statement of Financial

Step 2: Prepare the assets section

Step 4: Prepare the liabilities section.

Total Assets 2,728,900

Total Liabilities 2,040,000

_1. Prepaid Expenses _11. SSS Premium Payable

_2. Cash in Bank _12. Accounts Receivable