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    Lesson 3 - The Statement of Changes in Equity - Activity

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    Emeldinand Padilla Motas
    The document contains 6 problems related to sole proprietorships, partnerships, and corporations. Problem 1 asks to prepare the Statement of Changes in Equity for Cookie Fantasy Bakeshop for years ending 20X1 and 20X2. Problem 2 asks to compute the net income for The Playdate Kiddie Gym using capital balances provided. Problem 3 provides capital account balances and profit sharing ratios for MNO Partnership and asks to prepare the Statement of Changes in Equity.

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    Lesson 3 - The Statement of Changes in Equity - Activity

    Uploaded by

    Emeldinand Padilla Motas
    1K views2 pages
    The document contains 6 problems related to sole proprietorships, partnerships, and corporations. Problem 1 asks to prepare the Statement of Changes in Equity for Cookie Fantasy Bakeshop for years ending 20X1 and 20X2. Problem 2 asks to compute the net income for The Playdate Kiddie Gym using capital balances provided. Problem 3 provides capital account balances and profit sharing ratios for MNO Partnership and asks to prepare the Statement of Changes in Equity.

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    Lesson 3_The Statement of Changes in Equity_Activity

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    The document contains 6 problems related to sole proprietorships, partnerships, and corporations. Problem 1 asks to prepare the Statement of Changes in Equity for Cookie Fantasy Bakeshop for years ending 20X1 and 20X2. Problem 2 asks to compute the net income for The Playdate Kiddie Gym using capital balances provided. Problem 3 provides capital account balances and profit sharing ratios for MNO Partnership and asks to prepare the Statement of Changes in Equity.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    1K views2 pages

    Lesson 3 - The Statement of Changes in Equity - Activity

    Uploaded by

    Emeldinand Padilla Motas
    The document contains 6 problems related to sole proprietorships, partnerships, and corporations. Problem 1 asks to prepare the Statement of Changes in Equity for Cookie Fantasy Bakeshop for years ending 20X1 and 20X2. Problem 2 asks to compute the net income for The Playdate Kiddie Gym using capital balances provided. Problem 3 provides capital account balances and profit sharing ratios for MNO Partnership and asks to prepare the Statement of Changes in Equity.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Let’s Solve

    Problem 1: Sole Proprietorship

    On February 15, 20X1, Evelyn Ferrer opened Cookie Fantasy Bakeshop. She invested
    75,000 to purchase an oven and bakery supplies. The business generated a net income of 37,545 in
    20X1. Moreover, Evelyn used 15,000 from the account of Cookie Fantasy to pay the electricity and
    phone bills of her house.

    Evelyn invested an additional 13,400 and 17,650 on March 16, 20X2 and August 19, 20X2,
    respectively. Net income for 20X2 was reported at 48,950. Evelyn’s drawings account has a balance
    of 20,000 on December 31, 20X2.

    Required: Prepare Cookie Fantasy Bakeshop’s Statement of Changes in Equity for the year ended
    December 31, 20X1 and December 31m 20X2. See format below:

    Balance, January 2, 20X1

    Balance, December 31, 20X1

    Balance, December 31, 20X2

    Problem 2: Compute for the Net Income


    1 Fundamentals of Accountancy, Business and Management 2: Statement of Changes in Equity
    The Playdate Kiddie Gym is owned and managed by Cris Roxas. The balance of the Cris
    Roxas, Capital is 765,430 and 857,340 on December 31, 20X1 and December 31, 20X2,
    respectively. Net income for 20X2 is 115,465. Cris did not make additional contribution to the
    business in 20X2. Determine the balance of Cris Roxas, Drawings account on December 31, 20X2.

    Problem 3: Partnership

    The following are taken from the accounting records of MNO Partnership.

    December 31, 20X3


    Mario, Capital 58,960
    Nancy, Capital 63,200
    Olga, Capital 64,890

    The partnership generated net income of 75,400 in 20X4. According to the partnership
    contract, the profit and loss sharing ratios are as follows: Mario (25%), Nancy (37.5%) and Olga
    (37.5%).

    The following were transactions with the partners during the year:

    EDUCARE COLLEGE, INC.


    Senior High School Department
    Accountancy and Business Management
     Mario made additional contribution of 7,640.
     Nancy withdrew 5,000 from the business.
     Olga contributed 12,000 but withdrew 5,430.

    Required: Prepare the partnership’s Statement of Changes in Equity.

    Problem 4: Partnership

    The following are taken from the accounting records of JKL Partnership.

    December 31, 20X3 December 31, 20X4


    Jaime, Capital 54,900 64,900
    Kristine, Capital 53,200 63,900
    Lally, Capital 44,890 50,890

    The partnership generated net income of 51,600 in 20X4. According to the partnership
    contract, Jaime, Kristine and Lally shared profit and loss equally. The partnership contract allows
    each partner to withdraw 1,000 monthly. Jaime and Kristine each contributed 5,000 during the year.
    Lally did not make any contributions during the year.

    Required:

    1. Prepare the partnership’s Statement of Changes in Equity.


    2. Determine if any of the partners violated the partnership contract provision on drawings.
    2 Fundamentals of Accountancy, Business and Management 2: Statement of Changes in Equity

    Problem 5: Corporation

    The retained earnings of PQR Inc. shows a January 1, 20X2 balance of 199,760. The Board
    of Directors of PQR Inc. distributed cash dividends of 11,000 to the company’s stockholders. As of
    December 31, 20X2, the retained earnings reported a balance of 280,990. Determine PQR’s net
    income for 20X2.

    Problem 6: Corporation

    At the start of the fiscal year, STU Company has 100,000 shares of its 10 par value common
    stock. The stocks were initially issued at 18 per share. On June 16, the company issued additional
    20,000 shares at 20 per share.

    STU has retained earnings of 245,600 at the beginning of the fiscal year. The company
    reported net income of 89,540. On September 30, cash dividends of 60,000 were distributed to
    stockholders.

    Required: Prepare the Statement of Changes in Equity for STU Company for the fiscal year ended
    October 30, 20X3.

    EDUCARE COLLEGE, INC.


    Senior High School Department
    Accountancy and Business Management

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