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    Statement of Changes in Equity Reviewer

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    Sean Arvy Samson
    The purpose of the Statement of Changes in Equity is to show the movements in the capital or equity of a business over an accounting period. For a sole proprietorship, it includes the opening capital balance, additional investments, net income or loss, and any withdrawals. The closing capital balance becomes the opening balance for the next period. Sample statements are provided for a sole proprietorship, partnership (showing each partner's equity), and corporation (showing components such as share capital, share premium, retained earnings, and treasury shares).

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    Statement of Changes in Equity Reviewer

    Uploaded by

    Sean Arvy Samson
    139 views3 pages
    The purpose of the Statement of Changes in Equity is to show the movements in the capital or equity of a business over an accounting period. For a sole proprietorship, it includes the opening capital balance, additional investments, net income or loss, and any withdrawals. The closing capital balance becomes the opening balance for the next period. Sample statements are provided for a sole proprietorship, partnership (showing each partner's equity), and corporation (showing components such as share capital, share premium, retained earnings, and treasury shares).

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    Statement of Changes in Equity Reviewer (2)

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    The purpose of the Statement of Changes in Equity is to show the movements in the capital or equity of a business over an accounting period. For a sole proprietorship, it includes the opening capital balance, additional investments, net income or loss, and any withdrawals. The closing capital balance becomes the opening balance for the next period. Sample statements are provided for a sole proprietorship, partnership (showing each partner's equity), and corporation (showing components such as share capital, share premium, retained earnings, and treasury shares).

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    139 views3 pages

    Statement of Changes in Equity Reviewer

    Uploaded by

    Sean Arvy Samson
    The purpose of the Statement of Changes in Equity is to show the movements in the capital or equity of a business over an accounting period. For a sole proprietorship, it includes the opening capital balance, additional investments, net income or loss, and any withdrawals. The closing capital balance becomes the opening balance for the next period. Sample statements are provided for a sole proprietorship, partnership (showing each partner's equity), and corporation (showing components such as share capital, share premium, retained earnings, and treasury shares).

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    Statement of Changes in Equity (Reviewer)

    What is the purpose of Financial Statement?

    Provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users
    in making economic decisions.

    Forms of Business Organization

    • Sole Proprietorship
    -he is the owner but he can hire employees; its about ownership not about how many people are working in the company.
    • Partnership
    -two or more people combining all their assets and resources. Whatever the net income will be divided among themselves
    • Corporation
    -the ownership is divided into share of stocks. The ownership depends on how many shares you own or hold.

    For a sole proprietorship type of business, the Statement of Changes in Equity includes the following items:
    Capital balance at the start of the accounting period.
    Any additional investments and contributions by the owner.
    Net income enjoyed or net loss suffered by the company.
    Any withdrawals by the owner.
    Capital Balance at the end of the accounting period (adjusted capital balance).

    REMEMBER!

    The capital balance of the end of the accounting period is the beginning balance on the next accounting period.
    Capital Statement for Sole Proprietorship

    RECOGNITION COMPANY
    Statements of Changes in Equity
    For the year ended December 31, 20X8

    Capital, December 31, 20X7 P 2,789,647


    Add: Additional Investment by the owner 400,000
    Add: Net Income 789,674
    Less: Withdrawals by the owner - 50,000
    Capital, December 31, 20X8 P 3,929,348

    Capital Statement for Partnership

    Triple J Partnership
    Statement of Changes in Equity
    For the year ended December 31, 20X8

    Jimin Jin Jungkook Total


    Capital, January 1, 20X8 P 45,000 P 24,000 P 16,000 P 85,000
    Add: Additional Contributions 12,000 12,000 10,000 34,000
    Add: Net Income 31,500 31,500 25,000 88,000
    Less: Withdrawals - 5,000 - 10,000 - 5,000 - 20,000
    Capital, December 31, 20X8 P 83,500 P 57,500 P 46,000 P 187,000
    Capital Statement for Corporation

    Goto Mami Lothle Corporation


    Statement of Changes in Equity
    For the year ended December 31, 20X8

    Share Share Retained Treasury


    Capital Premium Earnings Shares Totals
    Capital, January 1, 20X8 P 20,000,000 P 16,000,000 P 15,000,000 P- 4,000,000 P 47,000,000
    Issuance of share capital P 5,000,000 P 6,000,000 11,000,000
    Purchase of treasury - 1,000,000 - 1,000,000
    Net Income 8,000,000 8,000,000
    Cash Dividends - 2,000,000 - 2,000,000
    Capital, December 31, 20X8 P 25,000,000 P 22,000,000 P 21,000,000 P - 5,000,000 P 63,000,000

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