Reference no: EM132843559

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