Lesson Plan for Senior Secondary 3 - Financial Accounting - Purchase Of Business Account

**Lesson Plan: Purchase of Business Account** **Class Level: Senior Secondary 3** **Subject: Financial Accounting** **Duration: 90 minutes** **Topic: Purchase of Business Account** **Objectives:** 1. Understand the concept of the purchase of a business. 2. Identify and record the necessary journal entries for the purchase of a business. 3. Analyze the impact on financial statements. 4. Calculate and record goodwill or capital reserve. **Materials Needed:** - Whiteboard and markers - Projector and laptop - Handouts with sample balance sheets and journal entry templates - Calculators - Notebooks and pens **Lesson Outline:** **1. Introduction (10 minutes)** - Briefly discuss the significance of business acquisitions in the commercial world. - Explain what a purchase of a business account involves. - State learning objectives for the lesson. **2. Lecture and Explanation (20 minutes)** - Define the key terms: purchaser, vendor, purchase consideration, and goodwill. - Explain the steps involved in purchasing a business: - Valuation of assets and liabilities - Calculation of purchase consideration - Recording in the books of accounts - Discuss the format of the purchase account. **3. Detailed Examples (30 minutes)** - Provide an example of a business acquisition, using sample numbers for assets, liabilities, and purchase consideration. - Demonstrate on the whiteboard how to: - Record the purchase consideration - Handle the assets and liabilities transferred - Calculate goodwill or capital reserve based on the difference between the purchase consideration and the net assets. - Show journal entries needed for recording these transactions: - Debit assets - Credit liabilities - Debit/credit the purchase consideration as needed to balance the accounting equation - Discuss the impact of these transactions on the financial statements. **4. Guided Practice (15 minutes)** - Distribute handouts with a different example scenario (based on created balance sheets and purchase consideration). - Instruct students to work through the necessary journal entries and calculations in pairs. - Walk around and provide assistance, ensuring students understand the process. **5. Group Discussion (10 minutes)** - Bring the class back together and discuss the example used in guided practice. - Ask volunteers to explain the steps and their results. - Correct any misunderstandings and clarify doubts. **6. Independent Practice/Homework (5 minutes)** - Assign a worksheet with multiple scenarios for the purchase of businesses. - Instruct students to complete the journal entries and calculate goodwill as homework. **7. Summary and Conclusion (5 minutes)** - Recap the main points of the lesson: the purchase of business concepts, steps to be followed, journal entries, and their impacts. - Highlight the importance of accurate financial recording in the purchase of a business. - Open the floor for any last questions or clarifications. **Assessment:** - Observe student participation during the guided and group discussion. - Evaluate the homework assignment for understanding and accuracy. - Include questions on the topic in future quizzes/tests to assess long-term retention and understanding. **Reflection:** - After the class, reflect on the effectiveness of the lesson plan. - Note areas where students seemed confused or had questions for future improvement. - Consider additional resources or examples that could enhance understanding.