Reference no: EM132999607

Question 1. On March 1, 2020, 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 2020.

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
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
20 Received Br500 royalties for idle repair machinery it leased to other businesses
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
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
Post the journal entries to "T" accounts