Statement of Changes in Equity - SHS Module 3
Statement of Changes in Equity - SHS Module 3
Statement of Changes in Equity - SHS Module 3
CHANGES IN EQUITY
LEARNING OBJECTIVES
Last session, we learned…
This information, along with other information in the notes to financial statements, assists users in predicting the entity’s
future cash flows and, in particular, their timing and certainty.
Forms of Business Organization
• Sole Proprietorship (Owner)
• Partnership (Partner)
• Corporation (Shareholder)
Statement of Changes in Equity
For sole proprietorship type of business, the Statement of Changes in Equity
includes the following items:
1. Capital balance at the start of accounting period.
2. Additional investments and contributions by the owner.
3. Net income generated or net loss suffered by the company.
4. Withdrawals by the owner.
5. Capital balance at the end of accounting period (Adjusted Capital Balance)
Statement of Changes in Equity
Beginning Capital
Additional Investments
Net Income
Net Loss
Withdrawals
Ending Capital
Statement of Changes in Equity
Tearenteapitea, a sole proprietorship milk tea business owned by Bunny Quintana, has been
operating successfully 2 years now. The capital of the owner at the start of the accounting
period, January 1, 2019, amounted to P250,000. During the year, the owner decided to raise
the capital balance by P150,000 worth of additional investment in the form of assets
Furniture and Fixtures. The shop enjoyed tremendous sales and reported net income
amounting to 220,000. Bunny, however, withdrew P80,000 cash for a personal use. No
other equity activities have been noted during the year.
Required: Prepare the entity’s Statement of Changes in Equity for the year ended December 31, 2019.
Statement of Changes in Equity
Tearenteapitea
Statement of Changes in Equity
For the year ended December 31, 2019