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FUNDAMENTALS in ACCOUNTANCY BUSINESS MANAGEMENT 2

GRADE 12

STATEMENT OF COMPREHESIVE INCOME

QTR 1 WK 2

What I need to know:

LEARNING COMPETENCIES

The learners:

1. identify the elements of the SCI and describe each of these items for a service business and a merchandising business . ABM_FABM12- Ic-d-5

2. prepare an SCI for a service business using the single-step approach ABM_FABM12-Ic-d-6

What I know:

LEARNING TASK 1a

INTRODUCTION
LEARNING TASK 1 -Now that you have read the brief introduction of Statement of Comprehensive Income you can answer the statement below.
Write the correct word or words to complete the statement.

________1. An example to this is gains or losses on hedging derivatives

_______2.An approach used on preparing statement of comprehensive income that shows expense by its nature.

_______3.An increases in economic benefits during the period in the form of inflows or enhancements of assets or decreases of liabilities that result
in increases in equity

_______4.This occurs when revenue is less than expenses.

_______5.It arises in the course of the ordinary activities of a business and is referred to by a variety of different names including sales, fee, interest,
and etc.

_______6.The difference between an Income Statement and SCI …

_______7.The nature of business for a single step statement of comprehensive income

_______8.The nature of business for a multi-step statement of a comprehensive income

_______9.the expenses to be given to the company’s employees for the services they have rendered.

______10.The expenses usually referred to by Meralco, Maynilad and PLDT

What’s New

• STATEMENT OF COMPREHENSIVE INCOME – Also known as the income statement. Contains the results of the company’s operations
for a specific period of time which is called net income if it is a net positive result while a net loss if it is a net negative result. This can be
prepared for a month, a quarter or a year. (Haddock, Price, & Farina, 2012)

• Temporary Accounts Also known as nominal accounts are the accounts found under the SCI. They are called such because at the end of
the accounting period, balances under these accounts are transferred to the capital account, thus having only temporary amounts and
resulting to zero beginning balances at the beginning of the following year.(Haddock, Price, & Farina,2012)
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• Examples of temporary accounts include revenues, sales, utilities expense, supplies expense, salaries expense, depreciation expense,
interest expense.

• Differentiate the single-step and multi-step format of the SCI

• Single-step – Called single-step because all revenues are listed down in one section while all expenses are listed in another. Net income is
computed using a “single-step” which is Total Revenues minus Total Expenses. (Haddock, Price, & Farina, 2012) 

• Multi-step – Called multi-step because there are several steps needed in order to arrive at the company’s net income. (Haddock, Price, &
Farina, 2012)

•  The two are only formats and will yield the same amount of net income/loss

What In:

DEVELOPMENT
LEARNING TASK 2

Write TRUE if the statement is correct and FALSE if the statement is incorrect. If your answer is false, write the word or phrase that makes the
statement incorrect and rewrite the correct answer.

______1. The revenue earned by a service business for rendering services for a fee is commonly referred to as Service Income or Service Revenue.

______2. A Statement of Comprehensive Income may be presented using a “multi-step statement” presentation only?

______3. Revenue includes both income and gains.

______4. If expenses are greater than income, the difference is net loss.

______5.The revenue earned by the merchandising business from its sales of goods is commonly referred to as Sales.

______6. Income increases economic benefits during the period in the form of inflows of cash from rendering services.

______7. The statement of Comprehensive Income shows information on an entity’s financial performance during the period.

______8. A Statement of Comprehensive Income that shows expenses by its function is referred to as prepared using a single-step approach.

______9. Expenses encompass both expenses and losses.

_____10.The statement of profit and loss and other comprehensive income is synonymous to the income statement.
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What’s More :

ENGAGEMENT
LEARNING TASK 3a. Solve for the unknown (Remember the formula Income minus Expenses plus Comprehensive Income is equal to Net Income
or Net Loss

What Can I do:

Learning Task 3b

Instructions: 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

 Note: Learners can use any business name and the end of the current year for the heading.

What Can I do

Learning Task 3c
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Instruction: Prepare a Statement of Financial Position for the company in report form.

You were hired by Mr. Apollo Alcazar, the owner of ALCATWIN, he wants you to prepare his sari-sari store’s Statement of Financial Position. In
order to prepare the statement, you identified the following assets and liabilities of Mr. Alcazar. 

• His sari-sari store has cash deposited in a bank account amounting to P50,000 

• His sari-sari store had a lot of uncollected sales from customers amounting to P75,000 

• The total amount of merchandise left inside the store is P30,000 

• He already paid one year’s rent in advance amounting to P12,000

• The value of all the company’s furniture amounted to P100,000 

• He bought merchandise from his supplier amounting to P25,000 and the supplier agreed that payment can be made 2 months after year-
end 

• SSS, Philhealth and Pag-ibig Payables for his one employee totaled P5,000

• The sari-sari store had outstanding liabilities to utility companies amounting to P3,000

• He had a loan from the bank amounting to P50,000 to be paid in 3 years

What I Have Learned :

• A statement of comprehensive income consist of all revenues, gains and losses that causes the equity account to change at the end of the
accounting period, that could be an increase or a decrease. The difference between an Income Statement and Comprehensive income is
the later consists of comprehensive income such as gains or loss of hedging derivatives, translation of currency exchange rate and
unrealized gains and losses on a postretirement benefits.

• The elements of comprehensive income are (1) Heading; (2) Income; (3) Expenses; and the (4) Result of operation, (net income or net
loss).

• There are two methods in the preparation of SCI, according to nature; and the according to function. This module explained the former
method which is according to nature which is better for a single proprietorship

Assessment

LEARNING TASK 4 :
Directions: Analyze the transactions of Tiny Bubbles Co, put an emoji smiley if it is part in the preparation of Statement of Comprehensive
Income and NA if it is not part in the preparation of SCI.

Tiny Bubbles, a parlor owner, asks you to prepare her statement of comprehensive income for the month of August with the following transactions.

1. Her company has cash deposited in a bank account amounting to P50,000 as her initial capital

2. She bought parlor furniture set amounting to Php75, 000.00 by paying 20% down and the balance in 12 monthly installments.

3. Supplies expense for the month is Php20,000.00

4. She paid two month’s rent amounting to Php24,000.00

5. Her total income for the month of August is Php120, 000.00 cash.

6. She paid one staff for Php5,000.00 a month

7. The business paid Php4,500.00 for the light, water and internet connection.

8. She has trade receivables amounting to Php25,000.00 for services rendered

9. She had a loan from the bank amounting to Php100,000.00 to be paid in 5 years

10. Paid transportation expenses amounting to Php2,500.00.00

REFERENCE

• Teaching Guide in Senior High School Fundamentals of Accountancy Business and Management 2, donated by the Commission on
Higher Education in Collaboration with the Philippine Normal University to Department of Education