Question

Assignment I (20%)
Summation Data on the date of your final exam of Principles of accounting I
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
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; an 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 General journal
b) Post the journal entries to accounts
c) Prepare and complete a worksheet based on the following additional information (Adjustments)
i. Cost of supplies remained unconsumed on March 31 is Br 900
ii. The amount paid on March 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

Answer 1

Answer:

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Answer 2

Answer:

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

Explanation: