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    Statement of Financial Position 2

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    Daphne Gesto Siares
    The document discusses the statement of financial position (SFP), also known as the balance sheet. It defines the SFP as a statement that shows the financial condition of a business by presenting the three accounting elements - assets, liabilities, and owner's equity or capital - as of a particular date. The document then explains the two forms of the SFP - the report form, which lists asset accounts first followed by liability and equity accounts, and the account form, which places assets on the left side and liabilities and equity on the right side. It concludes by providing examples of current and noncurrent asset and liability accounts and instructing the reader to prepare sample SFPs for a sole proprietorship business using both forms.

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    © All Rights Reserved
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    Statement of Financial Position 2

    Uploaded by

    Daphne Gesto Siares
    34 views25 pages
    The document discusses the statement of financial position (SFP), also known as the balance sheet. It defines the SFP as a statement that shows the financial condition of a business by presenting the three accounting elements - assets, liabilities, and owner's equity or capital - as of a particular date. The document then explains the two forms of the SFP - the report form, which lists asset accounts first followed by liability and equity accounts, and the account form, which places assets on the left side and liabilities and equity on the right side. It concludes by providing examples of current and noncurrent asset and liability accounts and instructing the reader to prepare sample SFPs for a sole proprietorship business using both forms.

    Original Title

    STATEMENT-OF-FINANCIAL-POSITION-2

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    The document discusses the statement of financial position (SFP), also known as the balance sheet. It defines the SFP as a statement that shows the financial condition of a business by presenting the three accounting elements - assets, liabilities, and owner's equity or capital - as of a particular date. The document then explains the two forms of the SFP - the report form, which lists asset accounts first followed by liability and equity accounts, and the account form, which places assets on the left side and liabilities and equity on the right side. It concludes by providing examples of current and noncurrent asset and liability accounts and instructing the reader to prepare sample SFPs for a sole proprietorship business using both forms.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    34 views25 pages

    Statement of Financial Position 2

    Uploaded by

    Daphne Gesto Siares
    The document discusses the statement of financial position (SFP), also known as the balance sheet. It defines the SFP as a statement that shows the financial condition of a business by presenting the three accounting elements - assets, liabilities, and owner's equity or capital - as of a particular date. The document then explains the two forms of the SFP - the report form, which lists asset accounts first followed by liability and equity accounts, and the account form, which places assets on the left side and liabilities and equity on the right side. It concludes by providing examples of current and noncurrent asset and liability accounts and instructing the reader to prepare sample SFPs for a sole proprietorship business using both forms.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 25

    FUNDAMENTALS OF

    ACCOUNTANCY,
    BUSINESS, AND
    MANAGEMENT 2
    At the end of the topic;
    1. Identify the elements of the SFP
    and describe each of these items
    for a single/sole proprietorship
    business
    2. Prepare an SFP for a single/sole
    proprietorship business using
    the report form
    3. Prepare an SFP for a single/sole
    proprietorship business using
    the account form
    STATEMENT OF FINANCIAL POSITION (SFP)
    • Also known as the balance sheet
    • This statement for reference. includes the amounts of the
    company’s total assets, liabilities, and owner’s equity which in
    totality provides the condition of the company on a specific
    date. (Haddock, Price, & Farina, 2012)
    • Statement that shows the financial condition of the business as
    of a particular date
    • It presents the three (3) accounting elements which are
    Assets, Liabilities and Owner’s Equity or Capital
    STATEMENT OF FINANCIAL POSITION (SFP)
    1. Report Form – A form of the SFP that shows asset accounts first
    and then liabilities and owner’s equity accounts after. (Haddock,
    Price, & Farina, 2012)The balance sheet shown earlier is in report
    form.
    2. Account Form – A form of the SFP that shows assets on the left
    side and liabilities and owner’s equity on the right side just like
    the debit and credit balances of an account. (Haddock, Price, &
    Farina, 2012)
    REPORT FORM
    ACCOUNT FORM
    REMEMBER
    Group accounts under;
    Current Assets

    Noncurrent Assets

    Current Liabilities
    Noncurrent Liabilities
    Owner’s Equity
    REMEMBER
    Current Assets – Assets that Current Liabilities – Liabilities that
    can be realized (collected, fall due (paid, recognized as
    sold, used up) one year revenue) within one year after
    after year-end date yearend date.
     Examples include Cash, Examples include Notes Payable,
    Accounts Receivable, Accounts Payable, Accrued
    Merchandise Inventory, Expenses (example: Utilities
    Prepaid Expense, etc. Payable), Unearned Income, etc.

    Current Assets are arranged based on which asset can be realized


    first (liquidity). Current assets and current liabilities are also
    called short term assets and shot term liabilities.
    REMEMBER
    Noncurrent Assets – Assets Noncurrent Liabilities – Liabilities
    that cannot be realized that do not fall due (paid,
    (collected, sold, used up) one recognized as revenue) within
    year after yearend date. one year after year-end date.
    Examples include Property, Examples include Loans
    Plant and Equipment Payable, Mortgage Payable, etc.
    (equipment, furniture,
    building, land), Long Term
    investments,Intangible
    Assets etc.

    Noncurrent assets and noncurrent liabilities are also called long


    term assets and long term liabilities.
    LET’S WORK ON THIS… a group
    task…
    Collaboratively answer the
    following questions. Group
    representative will present
    output in class
    1. Learning is Fun Company had current assets amounting to Php 100,000. Noncurrent
    assets for the year totaled Php 76,000. How much is the company’s total assets
    2. Happy Selling Company’s total liabilities amounted Php 10,000. Total equity had an
    ending balance of Php 20,000. How much is total assets?
    3. Happy Selling’s had the following accounts at year end: Cash-250,000, Accounts
    Payable-70,000, Prepaid Expense-15,000. Compute for the company’s current assets.
    4. Happy Selling’s Accounts Receivable amounted to Php 500,000. Prepaid Expense and
    Unearned Income totaled Php 30,000 and Php 10,000 respectively. Cash balance
    amounted to Php 100,000 while Accounts Payable and Inventory totaled to Php 20,000
    and Php 10,000 respectively. How much is the company’s current assets? Current
    liabilities?
    5. Company’s Total Liabilities and Equity amounted to Php 285,000. Total noncurrent
    assets ended at Php 85,000. Cash totaled Php50,000. Inventory amounted to
    Php100,000. Assuming the company had no other assets, how much is Accounts
    Receivable?
    6. Total assets amounted to Php575,000. Total equity amounted to Php 250,000. Accounts
    Payable amounted to Php 50,000 while Unearned Income totaled Php 85,000.
    Assuming there are no other current liabilities, compute for the company’s noncurrent
    liabilities.
    Learning is Fun Company had
    current assets amounting to Php
    100,000. Noncurrent assets for the
    year totaled Php 76,000. How
    much is the company’s total
    assets?

    Answer: P176,000
    Happy Selling Company’s total
    liabilities amounted Php 10,000.
    Total equity had an ending
    balance of Php 20,000. How much
    is total assets?

    Answer: P30,000.
    Happy Selling’s had the following
    accounts at year end: Cash-
    250,000, Accounts Payable-70,000,
    Prepaid Expense-15,000. Compute
    for the company’s current assets.

    Answer: P265,000
    Happy Selling’s Accounts Receivable
    amounted to Php 500,000. Prepaid Expense
    and Unearned Income totaled Php 30,000
    and Php 10,000 respectively. Cash balance
    amounted to Php 100,000 while Accounts
    Payable and Inventory totaled to Php 20,000
    and Php 10,000 respectively. How much is
    the company’s current assets? Current
    liabilities?

    Answer: P640,000 and P30,000


    Company’s Total Liabilities and Equity
    amounted to Php 285,000. Total noncurrent
    assets ended at Php 85,000. Cash totaled
    Php50,000. Inventory amounted to
    Php100,000. Assuming the company had no
    other assets, how much is Accounts
    Receivable?

    Answer: P50,000
    Total assets amounted to Php575,000. Total
    equity amounted to Php 250,000. Accounts
    Payable amounted to Php 50,000 while
    Unearned Income totaled Php 85,000.
    Assuming there are no other current
    liabilities, compute for the company’s
    noncurrent liabilities.

    Answer: P190,000
    Task : Prepare a Statement of Financial
    Position using the following accounts
    (one in report form and one in account
    form):
    Cash – 5,000
    Loans Payable – 77,500
    Accounts Receivable – 2,600
    Supplies – 2,300
    Equipment – 17,000
    Owner’s equity – 40,000
    Accounts Payable – 22,400
    Building – 113,000
    REPORT FORM
    ACCOUNT FORM

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