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

### Lesson Plan: Purchase of Business **Grade Level**: Senior Secondary 3 **Subject**: Financial Accounting **Topic**: Purchase of Business **Duration**: 90 minutes --- #### **Objective** By the end of this lesson, students will be able to: 1. Define the term "purchase of business." 2. Identify the key components involved in the purchase of a business. 3. Understand the accounting treatment for purchasing a business. 4. Record necessary journal entries related to the purchase of a business. 5. Prepare a basic balance sheet post-acquisition. --- #### **Materials** - Textbook - Whiteboard and markers - Projector and computer (for presentation slides) - Handouts (Case study and exercise) - Calculators --- #### **Lesson Outline** **Introduction (10 minutes)** - Welcome students and take attendance. - Brief recap of the previous lesson. - Introduce today's topic: Purchase of Business. **Lecture and Discussion (30 minutes)** - **Definition**: Explain what is meant by the "purchase of business." - Buying another company's assets or shares - Acquiring control over the other company - **Key Components**: - **Assets**: Tangible and intangible - **Liabilities**: Outstanding debts and obligations - **Goodwill**: Defined and explained - **Accounting for Purchase**: - Types of considerations (cash, shares, other assets) - Explanation of mergers, acquisitions, and consolidation **Case Study (15 minutes)** - Handout a simplified case study of a business acquisition. - In groups, have students identify the assets, liabilities, and goodwill involved in the purchase. - Discuss the findings as a class. **Journal Entries (20 minutes)** - Demonstrate on the whiteboard how to make journal entries for: - Purchase of assets - Assumption of liabilities - Goodwill calculation and entry - Provide students with common scenarios, and let them practice entries in pairs. **Balance Sheet Preparation (10 minutes)** - Show how the acquired assets, liabilities, and goodwill appear on the balance sheet. - Quick walkthrough on adjusting the pre-existing balance sheet of the buying company to reflect new acquisitions. **Practice Exercise (10 minutes)** - Distribute an exercise worksheet with a scenario. - Have students work individually to create journal entries and a balance sheet. - Review answers collectively towards the end. **Q&A and Recap (5 minutes)** - Answer any remaining questions from students. - Recap the key points of the lesson. --- #### **Assessment** - Formative: Participation during discussion, accuracy in practice exercises, involvement in case study. - Summative: Collect and grade practice exercise worksheet. --- #### **Homework** - Assign a scenario-based homework where students have to analyze a hypothetical business acquisition, list necessary journal entries, and prepare a post-acquisition balance sheet. --- #### **Extension Activity** - Look into recent news about company mergers or acquisitions and discuss in the next class to connect theory with real-world applications. --- ### **Notes for Next Lesson** - Review any difficult concepts based on student performance in practice exercises. - Introduce the next topic in the curriculum, potentially linking it to today's lesson for continuity. --- ### **End of Lesson Plan**