a. $770,000 c.

$390,000 Republic of the Philippines

b. $115,000 d. $402,000 Department of Education
12. G Company had $800,000 in net sales, $350,000 in gross profit, Region III
and $200,00 in operating expenses. Cost of goods sold equals: Schools Division Office of Bulacan
a. $150,000 c. $800,000 National High School
b. $450,000 d. $350,000 _________________________
13. P company had cash sales of $94,275, credit sales of $83,450,
sales returns and allowances of $1,700, and sales discounts of
$3,475. Net sales for this period are:
a. $94,275 c. $172,550
b. $174,250 d. $176,025
14. An increase in net assets from a peripheral activity.
FUNDAMENTALS OF ACCOUNTANCY,
a. Gain c. income BUSINESS, AND MANAGEMENT 2
b. Loss d. expense
15. A multiple-step income statement shows detailed computations of
net sales and reports subtotals for various groups of items.
a. True c. False
b. Sometimes True
Enrichment Activities
d. Sometimes false Statement of Comprehensive
Research problems about single step approach in income Income
statement. Create an income statement for you. Including
estimate accounts when you have a service company.

References:
ACTIVITY SHEET
Fundamentals of Accountancy, Business, and Management 2
First Edition, Dani Rose C. Salazar, 2017
Teaching guide for Senior High School Fundamentals of NAME:
Accountancy, Business, and Management 2, the commission on
Higher education in collaboration with the Philippine Normal GRADE AND SECTION:
University
Accounting Coach: Income Statement Explanation DATE OF SUBMISSION

(Page 1)
(Page 16)
I. OBJECTIVES
2. Smile Company generated revenues amounting to P 466, 133. Expenses
A. Content Standards
for the year is P 283, 693. How much is the company’s net income?
The learners demonstrate an understanding of the service income a. P 182. 440 c. P 182, 404
and operating expenses of a service business as well as sales, contra b. P 182, 044 d. P 182, 444
revenue, purchases, contra purchase accounts, Cost of Goods Sold 3. Expenses that support overall operations of the business
and general administrative and selling expenses of a merchandising a. Cost of goods cold c. operating expense
business that will equip him/her in the preparation of the SCI for b. Nonoperating expense d. comprehensive expense
both service & merchandising businesses. 4. Which of the following would be classified as other income or other
expense?
B. Performance Standards:
a. Advertising expense c. interest expense
The learners shall be able to solve exercises and problems that b. Transportation out d. cost of merchandise sold
require preparation of SCI for a service and merchandising business 5. _____________ is subtracted from net sales to arrive at the gross profit.
a. Cost of goods cold c. operating expense
C. MELCs: b. Nonoperating expense d. comprehensive expense
1. Identify the elements of the SCI and describe each of these items 6. A retailer's revenues.
for a service and merchandising business ABM_FABM12-Ic-d-5 a. Sales c. Income
2. Prepare and SCI for a service business using the single-step
b. Net d. Gross
approach ABM_FABM12-Ic-d-5
7. The expense associated with debt
3. Prepare and SCI for a merchandising business using the multi-
a. Interest c. revenue
step approach ABM_FABM12-Ic-d-7
b. Sales d. Income
D. Specific Objectives:
8. An accounting year beginning on July 1 and ending on June 30 is referred
1. Understand the purpose of the Statement of Comprehensive
Income to as a _________ year.
2. Identify the elements of the Statement of Comprehensive Income a. Fiscal c. Accounting
3. Understand the Single- Step Statement of Comprehensive Income b. Centered d. Matched
4. Prepare a Single-Step Statement of Comprehensive Income for a 9. On a multiple-step income statement, interest expense is reported as a
Service Company ________________ or other expense.
5. Able to define the difference between single step and multi-step a. Operating c. nonoperating
6. Prepare an SCI using multi step b. Income d. Sales
II. CONTENT 10. Accrual accounting requires that expenses be __________ with revenues.
a. Matched c. Opposite
 Lesson 2 – Statement of Comprehensive b. Advance d. Behind
Income 11. C company had $800,000 in sales, discounts of $12,000, sale returns and
allowances of $18,000, cost of goods sold of $380,000, and $275,000 in
operating expenses. Gross profit equals:
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E. REFLECTION: III. PROCEDURES:
A. Preliminary Activities
What is the purpose of SCI? 1. Pre-Test
MULTIPLE CHOICE. Read the following items carefully. Encircle the
letter of the correct answer
1. What is the meaning of SCI?
a. Statement of Comprehensive Income
b. Statement of Comprehend Income
c. Statement of Collected Income
d. Statement of Collective Income
Can you enumerate the elements of an SCI? 2. Is a statement that reports the results of operations of the business
for one accounting period
a. SCI c. SCP
b. SCA d. SCO
3. Which of the following is NOT showed in an SCI?
a. Revenue c. Losses
b. Gains d. Asset
4. is the format used to prepare an income statement where revenues,
V. ASSESSMENT expenses, and net income are presented into a single subtotal?
a. Single step c. Single pot
MULTIPLE CHOICE. Read the following items carefully. Encircle the
b. Single stop d. Single staff
letter of the correct answer
5. Also called operating income
1. The income statement heading will specify which of the following? a. Revenues c. Recall
a. A point in time b. Rebel d. Gain
b. A period of time 6. Uses only one subtraction to arrive at net income
c. A time a. Single-step c. Single-tap
d. A span of time b. Multi-step d. Multitask
7. Alternative way of writing SCI
a. Single-step c. Single-tap
b. Multi-step d. Multitask

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8. Also called as profit and loss statement Rubrics for grading the income statement
a. SCI c. SFP
b. SCO d. SPF Complete but
9. It segregates the operating expense from the nonoperating Not complete Completed and
not correct
revenues, nonoperating expenses, gains, and losses (5pts) correct (25pts)
(15pts)
a. Single-step c. Single-tap The name of the
b. Multi-step d. Multitask The name of Either the
business is correct
the business name of the
10. If the net is negative the bottom line is labeled as? and placed on the
and the business or
a. Net income c. Net outcome The name of first line of the
month of the the month of
b. Net loss d. Net gain business, etc. Income Statement
statement is statement is
11. If the net is positive the bottom line is labeled as? heading. The
missing in incorrect
a. Net income c. Net outcome month is included
the heading missing.
b. Net loss d. Net gain correctly
12. Amounts earned by a company in its main operating activities Most of the
operating
are
expenses
a. Revenue c. Loss The Total
have been
b. Gain d. Expense Total The operating Operating
entered, but
13. The income statement line gross profit will appear on which Operating expenses are expenses is
at least 1
income statement format? Expenses missing entered
expense is
a. Single-step c. Single-tap accurately.
missing and
b. Multi-step d. Multitask skew the
14. Under the accrual basis of accounting, revenues are recognized total.
in the accounting period in which
a. Cash is received c. Revenue is earned The gross
Gross profit is
b. Revenue is lost d. Cash is released profit is not
Gross profit accurately
calculated or
15. Net Sales minus the Cost of Goods Sold equals calculated/entered
is incorrect.
a. Gross Profit c. Income
b. Operations income d. Net income

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ACTIVITY D 2. Reviewing Previous Lesson:
A portion of the adjusted trial balance for the A Company is shown Matching Type
below. Match the accounts on the table with the appropriate elements of the
Statement of Financial Position.
Sales (net of $8,000 sales discounts and $24,500 sales returns and Property, Plant, and
Long-term payable Notes Payable
allowances) $417,500 Equipment
Cost of goods sold $210,000 Accounts receivable Accounts Payable Cash
Salaries Expense 38,000
Depreciation expense-building 40,000 Owner’s Capital Unearned Income Notes Receivable
Advertising Expense 12,300
Office Supplies expense 3,500 Prepaid expense Accrued expense Inventory
Gains on disposal of store equipment 3,000
Interest Expense 1,000
Assets Liabilities Equity
Required:
a. Prepare a single-step statement
b. Prepare a multiple-step income statement

B. Presenting the new lesson

ACTIVITY
Preparing a Personal SCI
a. Compute for your monthly allowance
Daily allowance x Number of days in a month
Note: If there is no regular allowance just estimate.
b. List where you spend your allowance
Example: Load, Food, Transportation, etc.
Note: Compute for a monthly basis to match the monthly
allowance.
c. Deduct the amount you spend to your allowance. Write on the
space provided.
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 C. INDEPENDENT ACTIVITIES
ACTIVITY A. Answer the following questions.
1. What is the cost of goods sold?

2. What are the operating expense?

ACTIVITY B. Unscramble the letters by the clues provided.

1. Amounts earned through a company’s main activities.
SNURVEEE
2. Costs used up in order to earn revenues.
XSEENSPE
3. The largest expense on a retailer’s income statement is usually its
_________ of goods sold.
SCOT
4. The income statement is also known as the statement of _________.
SPORIEATNO
ANALYSIS:
5. On a multiple-step SCI, interest expense is reported as a _______ or
Processing questions: other expense.
A. How can you relate the monthly allowance as revenue? TOREPAINGONN
And the money you spent as expenses?
_____________________________________________ ACTIVITY C. Provide the requirements of the problem.
_____________________________________________ Autumn Company is a barbershop, for the month of July 20X1 the
_____________________________________________ company earned a total of P 1 583, 463. In order to operate the
company spent P 36, 490 advertising, P 375, 411 cost of goods, P 40,
B. Relate your extra money as the net income. 000 on rent, P 456, 333 salaries, and the equipment depreciate to P
_____________________________________________ 18, 593.
_____________________________________________ Required:
Single Step Income Statement
_____________________________________________

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 Sample Products Co. 3. ABSTRACTION
Statement of Comprehensive Income DISCUSSION OF THE TOPIC
For the Five Months Ended November 30, 20X1 Introduction to Income Statement
Income Statement is one of the major financial statements. It is
Sales P 4, 800, 000
sometimes called as the profit & loss statement (P&L), statement of
Cost of goods sold 3, 600, 000
earnings or statement of income. It is important because when the
Gross Profit 1, 200, 000 accrual basis of accounting is used it shows the profitability of a
company during the time interval specified.
Operating Expenses Note: Keep in mind that the SCI shows revenues, expenses, gains,
Selling expense and losses
Advertising expense 96, 000 Elements of Income Statement
Commissions expense 240, 000 336, 000 A. Revenues and Gains
Administrative expense 1. Revenues from primary activities/Operating Revenues
Office supplies expense 168, 000 2. Revenues or Income from secondary activities/nonoperating
Office equipment expense 120, 000 288, 000 revenues
Total operating expense 624, 000 3. Gains (Gain on the sale of the long-term assets)- Transactions
that is outside of the primary activities, nets of two amounts.
Operating Income 576, 000 B. Expenses and Losses
1. Expenses involved in primary activities – expenses that are
Nonoperating or other incurred in order to earn normal operating revenues, should
Interest revenues 240, 000 appear on the SCI in the same period sales are reported.
2. Expenses from secondary activities/Nonoperating Expenses
Gain on sale of investments 144, 000
3. Losses (Loss on the sale of long-term asses)
Interest expense 24, 000
Note: If the net amount of revenues and gains minus expenses and
Loss from lawsuit 72, 000
losses is positive, the bottom line of the SCI is labeled as Net Income,
Total nonoperating 288, 000 if negative then it is Net Loss.
The primary activities of a manufacturer are producing products and
Net Income P 864, 000 selling them. For retailers, manufacturers, wholesalers, and
distributors, the revenues resulting from their primary activities are
Table 3. Example of multi-step SCI for a merchandising company referred to as Sales or Sales Revenues.
Advantages of using Multi-step SCI The primary activities of a company that provides services involve
 Clearly states gross profit amount many readers of financial acquiring expertise and selling that expertise to clients. For companies
statements monitor a company’s gross margin (gross profit as a providing services, the revenues are called Service Revenues or Fees
percentage of net sales earned.
 Presents the subtotal operating income, indicates the profit earned Single Step Income Statement
from the company’s primary activities of buying & selling Single step income statement is one of the two commonly used
merchandise formats for SCI. Uses only one subtraction to arrive at net income.
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 The bottom line of a multi-step SCI reports the net amount for all
the items on the income statement
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 Step 2: Operating expenses are subtracted from gross profit to have
Net Income = (Revenues + Gains) – (Expenses + Losses) operating income.
Operating Income = Gross Profit – Operating Expense
Pinoy Smile Dental Clinic
Statement of Comprehensive Income Step 3: The net amount of nonoperating revenues, gains, nonoperating
For the month of November 30, 20X9 expenses and loses is combined with operating income to arrive at net
REVENUE income/net loss.
Professional Fees P 635,742 Net Income = Operating Income + Nonoperating Income
Other Services 158,774
Total Revenues and Income 794,516 Sample Products Co.
Statement of Comprehensive Income
EXPENSES For the Five Months Ended November 30, 20X1
Dental Supplies 287,660 Revenues and Gains
Salaries 96,554 Sales Revenues P 4, 800, 000
Rent 18,000 Interest Revenues 240, 000
Utilities 12,000 Gain on sales of assets 144, 000
Depreciation 8,530 Total Revenues and Gains 5, 184, 000
Repairs and Maintenance 4,987
Total Expenses 427,641 Expenses and Losses
Cost of Goods Sold P 3, 600, 000
Net Income P 366,875 Commission Expense 240,000
Table 1. Example of Single Step SCI for a service company. Office supplies expense 168, 000
Office equipment expense 120, 000
Multi-Step Income Statement Advertising expense 96, 000
Multi-step income statement is an alternative way of writing SCI. It Interest expense 24, 000
uses multiple subtractions in computing the net income. It segregates Loss from Lawsuit 72, 000
the operating expense from the nonoperating revenues, nonoperating Total Expenses and Losses 4, 320, 000
expenses, gains, and losses. Also shows the gross profit (Net sales
minus the cost of goods sold). Net Income P 864, 000
Using the multi-step SCI there are three steps needed to arrive at the
bottom-line net income. Table 2. Example of single step SCI for a merchandising company
Step 1: Cost of goods sold is subtracted from net sales to arrive at the Contra Revenue Account- expected to have a debt balance. In other
gross profit. words, its expected balance is contrary to-or opposite of-the usual
credit balance in a revenue account. Example is Sales Return and
Gross Profit = Net Sales – Cost of Goods Sold
Allowances and Sales Discount.
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