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FABM2 Module 3 - Statement of Changes in Equity

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Pascual Edwin
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190 views

FABM2 Module 3 - Statement of Changes in Equity

Uploaded by

Pascual Edwin
Copyright
© © All Rights Reserved
Available Formats
Download as PDF or read online on Scribd
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HIGHER SCHOOL NG UMAK ‘ABM AND LANGUAGE DEPARTMENT UNIVERSITY OF MAKATI Course THe Tite Fundamentals of ‘Accountancy, Business & ‘Statement of Changes in Equity (SCE) Management 2 earning Objectives __| 1. discuss the different forms of business organization, ‘Atthe end ofthe lesson, the 2. differentiate the SCE for each form of business organization; and) students should be able to: _[ 3. prepare an SCE fora single proprietorship. “The accounting for assets and Liabilities remains the same regardless of the form of business organization, What changes is the accounting for equity. Recall the following forms of business organization: jane = Formation! [ Fopm of business | Opnusnls ei ieationw ‘organization 2 2 = oa individual Registered wi T._ Sole proptie Ses see proprietor) More than one (ie, partners) Formed by ‘contractual agreement. Registered with the SEC. ion ® More than one. Formed by ene (ie,, stockholders)|_ operation of law Registered with the SEC. rative More thanone ‘Formed in ere (Le, members) accordance with the Cooperative Code. Registered with the CDA. ‘The Balance shests (Statement of Financial Position) of the diferent forms of business organization are shown below. Notice the similarities and diferences: 2. Partnership Exhibit 1: Sole/Single Proprietorship Assers, sion eagesty pnt dreamer -ea000| Me Be caput +100.000 a Sgn TOTAL EQUITY SS I TOTAL LiApLrMS @ poUrry ~~ ev0004 Exhibit 3: Corporation Cashand cash ul ‘re and other receivables Exhibit 4 Cooperatives STATI = The Statement of Changes in Equity provides information on the changes o EMENT OF CHANGES IN EQUITY equity" during the perio. ‘¢_Transactions tht cause changes in equt Transactions Tffect on Oroner’s equity T. Additional investment or| > Increase contribution tothe business by the 2 Withdrawals or deawings from) > Decrease the business by the owner, 3. Eaming of profit by the business. | > Increase ‘L_Incurrence ofloss by the business. | > Decrease Example of Statement of Changes in Equity Boy Astig Laundry Shop Statement of Changes in Equity For the period ended December 31, 20x1 Astig, Capital-beg Additional investment Drawings Profit Astig, Capital end.

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