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    A) Chart of Accounts: "Universal Garage" Which Is Organized As A Sole Proprietorship. The Business Is Established

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    dereje solomon
    Tahir Muktar opened a sole proprietorship car repair business called Universal Garage in Addis Ababa, Ethiopia on March 1, 2002. Throughout the month, Universal Garage engaged in various business transactions including purchasing assets, taking out a bank loan, earning revenue from service fees, paying expenses, and distributing profits to the owner. Financial statements were prepared for Universal Garage for the month of March 2002 that included a worksheet, adjusting entries, closing entries, and a post-closing trial balance.

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    A) Chart of Accounts: "Universal Garage" Which Is Organized As A Sole Proprietorship. The Business Is Established

    Uploaded by

    dereje solomon
    363 views7 pages
    Tahir Muktar opened a sole proprietorship car repair business called Universal Garage in Addis Ababa, Ethiopia on March 1, 2002. Throughout the month, Universal Garage engaged in various business transactions including purchasing assets, taking out a bank loan, earning revenue from service fees, paying expenses, and distributing profits to the owner. Financial statements were prepared for Universal Garage for the month of March 2002 that included a worksheet, adjusting entries, closing entries, and a post-closing trial balance.

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    Tahir Muktar opened a sole proprietorship car repair business called Universal Garage in Addis Ababa, Ethiopia on March 1, 2002. Throughout the month, Universal Garage engaged in various business transactions including purchasing assets, taking out a bank loan, earning revenue from service fees, paying expenses, and distributing profits to the owner. Financial statements were prepared for Universal Garage for the month of March 2002 that included a worksheet, adjusting entries, closing entries, and a post-closing trial balance.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    363 views7 pages

    A) Chart of Accounts: "Universal Garage" Which Is Organized As A Sole Proprietorship. The Business Is Established

    Uploaded by

    dereje solomon
    Tahir Muktar opened a sole proprietorship car repair business called Universal Garage in Addis Ababa, Ethiopia on March 1, 2002. Throughout the month, Universal Garage engaged in various business transactions including purchasing assets, taking out a bank loan, earning revenue from service fees, paying expenses, and distributing profits to the owner. Financial statements were prepared for Universal Garage for the month of March 2002 that included a worksheet, adjusting entries, closing entries, and a post-closing trial balance.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 7

    On March 1, 2002, Tahir Muktar, a famous businessman in Addis, opened a business named

    “Universal Garage” which is organized as a sole proprietorship. The business is established


    to render car repair, maintenance and related services for fees. Below are chart of accounts for
    and selected transactions completed by Universal Garage in March 2002.
    a) Chart of accounts
    Universal Garage
    Chart of Accounts
    100 ASSETS 300 OWNER'S EQUITY
    110 CURRENT ASSETS 301 Tahir, Capital
    111 Cash 302 Tahir, Drawings
    112 Accounts Receivable 303 Incomes Summary
    114 Supplies
    116 Prepaid Rent 400 REVENUES
    117 Prepaid Insurance 401 Fees Earned
    120 PLANT ASSETS 410 Other Income
    121 Land
    123 Machinery 500 EXPENSES
    123.1 Accumulated Depreciation-Machinery 501 Salary Expenses
    125 Office Equipment 502 Supplies Expenses
    125.1 Accumulated Depreciation-Office Equipment 503 Rent Expenses
    200 LIABILITIES 504 Insurance Expenses
    210 CURRENT LIABILITIES 505 Depreciation Expenses
    211 Account Payable 506 Interest Expenses
    213 Salaries Payable 510 Miscellaneous Expenses
    216 Interest Payable
    220 NON-CURRENT LIABILITIES
    221 Long-term Bank Loan

    b) Transactions
    Mar 1 Received the following assets from its owner, Tahir:
    Cash....................................... Br, 8,300
    Supplies ................................. 2,000
    Office Equipment................... 10,000
    2 Borrowed Br 5,000 from Dashen Bank
    3 Paid Br 1,800 for rent on a building leased for business purposes
    3 Purchased welding and other repair machinery for Br 3,600 cash
    4 Paid Br 200 for a radio advertisement
    8 Sold for Br 200 cash an old office equipment with a recorded cost of Br 200
    13 Paid weekly salary Br 1,200
    16 Received Br 4,400 from services rendered on cash
    20 Paid weekly salary Br 1,200 include transactions for other income
    20 Delivered service on credit, Br 6,000
    21 Purchased additional repair machinery on account for Br 2,000 from Sámi-Engineers
    23 Received Br 5,000 additional cash investment from its owner
    24 Repaid Br 1,000 bank loan and paid Br 100 interest on bank loan
    26 Purchased supplies for Br 800 cash
    27 Paid Br 100 for customer entertainment and other items
    27 Paid weekly salary Br 1,200
    31 Paid Br 500 for electricity and other utilities consumed during the month

    1
    31 Received Br 4,200 cash from credit customers
    31 Paid Tahir Br 1,800 for personal uses

    Required:
    a) Journalize the above transactions in a two-column journal
    b) Post the journal entries to “T” accounts
    c) Prepare and complete a worksheet based on the following additional information
    i. Cost of supplies remained unconsumed on Mar 31 is Br 900
    ii. The amount paid on Mar 3 is for a three-month rent
    iii. The amounts of depreciation for machinery and office equipment are estimated to
    be Br 560 and Br 1,900 respectively
    iv. Universal Garage usually pays Br 1,200 for employee's salary every saturday for
    a six-day work week ended on that day
    v. Interest on bank loan accrued but not paid on March 31 total Br 100
    d) Prepare financial statements for the month
    e) Journalize and post adjusting entries
    f) Journalize and post closing entries
    g) Prepare post-closing trial balance

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    Answer

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