Reference no: EM132843567
Part one: Accounting cycle for service giving company
On March 1, 2012, TahirMuktar, a famous businessman in Addis Ababa, 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 2012.
a) Chart of accounts
Universal Garage
Chart of Accounts
100 ASSETS
110 CURRENT ASSETS
111 Cash
112 Accounts Receivable
114 Supplies
116 Prepaid Rent
117 Prepaid Insurance
120 PLANT ASSETS
121 Land
123 Machinery
123.1 Accumulated Depreciation-Machinery
125 Office Equipment
125.1 Accumulated Depreciation-Office Equipment
200 LIABILITIES
210 CURRENT LIABILITIES
211 Account Payable
213 Salaries Payable
216 Interest Payable
220 NON-CURRENT LIABILITIES
221 Long-term Bank Loan
300 OWNER'S EQUITY
301 Tahir, Capital
302 Tahir, Drawings
303 Incomes Summary
400 REVENUES
401 Fees Earned
410 Other Income
500 EXPENSES
501 Salary Expenses
502 Supplies Expenses
503 Rent Expenses
504 Insurance Expenses
505 Depreciation Expenses
506 Interest Expenses
510 Miscellaneous Expenses
b) Transactions
March 1- Received the following assets from its owner, Tahir:
Cash....................................... Br, 8,300
Supplies ................................. 2,000
Office Equipment................... 10,000
March 2 Borrowed Br 5,000 from Dashen Bank
March 3 Paid Br 1,800 for rent on a building leased for business purposes
March 3 Purchased welding and other repair machinery for Br 3,600 cash
March 4 Paid Br 200 for a radio advertisement
March 8 Sold for Br 200 cash; old office equipment with a recorded cost of Br 200
March 13 Paid weekly salary Br 1,200
March 16 Received Br 4,400 from services rendered on cash
March 20 Paid weekly salary Br 1,200
March 20 Delivered service on credit, Br 6,000
March 21 Purchased additional repair machinery on account for Br 2,000 from Sámi-Engineers
March 23 Received Br 5,000 additional cash investment from its owner
March 24 Repaid Br 1,000 bank loan and paid Br 100 interest on bank loan
March 26 Purchased supplies for Br 800 cash
March 27 Paid Br 100 for customer entertainment and other items
March 27 Paid weekly salary Br 1,200
March 31 Paid Br 500 for electricity and other utilities consumed during the month
March 31 Received Br 4,200 cash from credit customers
March 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 560and Br 1,900 respectively
iv. Universal Garage usually pays Br 1,200 for employee's salary every Saturday for a six-daywork week ended on that day
v. Interest on bank loan accrued but not paid on March 31 total Br 100
d) Journalize and post adjusting entries
e) Prepare financial statements for the month
f) Journalize and post closing entries
g) Prepare post-closing trial balance
h) Make ratio analysis by using Balance sheet and income statement of universal garage
Part Two: Managerial Accounting
1. Wolif Products Company accumulated the following data for the year 2011.
Jan 1, 2011 Dec 31, 2011
Inventories:
Finished Goods $ 52,000 $ 54,000
Work in Process 29,600 27,800
Raw materials 14,200 15,000
Direct labor 95,000
Raw material purchase s 138,000
Indirect labor 15,300
Indirect materials and supplies 10,800
Factory utilities 18,600
Depreciation expense- Factory 14,000
Factory rent 18,000
Payroll taxes- Factory wages 8,100
Repairs and maintenance 6,000
Insurance expense- Factory 6,800
Miscellaneous factory expenses 5,200
Sales 710,000
Sales discount 12,000
Selling expenses 95,600
General expenses 75,300
Interest expenses 7,000
Required:
1. Calculate the manufacturing costs for the year.
2. Prepare a statement of cost of goods manufactured.
3. Prepare an income statement (assume an income tax 25%)
Attachment:- Financial and Managerial Accounting.rar