AUBREY JUSTINE VARGAS

NADIA BAJAR

MA. CELESTINE TAO-ON

DARWIN CAYABAN

• The case study was based from Abjamesola tailoring services

located at baranggay Paciano, Rizal, Calamba City, Laguna.

The business has been operating for about 5 years.

• The target audience of this case study report is ACT101-9

students. The reason is to give these students further ideas

about accounting records of a service business.

• The tailoring service business is managed and owned by Mrs.

Carmi Jamesola together with his husband. The business has 2

workers.

• The business has a net income of P120,272 per year

• The group had chosen to gather data from a tailoring service

business with its business name as Abjamesola Tailoring

Services. This business is open to accept repair of garments and

other tailoring services. It has been competing with other local

tailoring services for about 5 years and is able continue and

exist even today. Abjamesola Tailoring Services is located at

Baranggay Paciano, Rizal, Calamba City, Laguna.

• The expense of Abjamesola Tailoring Services usually comes

from its sewing materials. These sewing materials are bought in

bulk which generates big expenses within a day, but this is also

a good strategy to cut down transportation expenses.

• Bulk orders coming from its customers increases the business

profit of Abjamesola Tailoring Services, but not every month do

this business receive bulk orders. There are times in which it only

receives small orders, but still these orders accumulate and

produce profit at the end of the month.

• The total costs and expenses of the business is P335,728.

• The net income of the business for a given period is P120,272.

• In this section of our case study, we researched about different studies concerning or related to our case study about ABjamesola. Here is what we found:

• In a website talking about an international tailoring business named Master Tailor Ltd, the managing director, Harold Rose, told in an interview that tailors should treat their suppliers as partners and consistency is everything. “Quality and service should never be compromised”. Every garment is manufactured by one of Europe’s top tailoring houses using the latest technology. If I thought any other tailoring system produced better quality and value I would be using it. I used to be a large employer, but now I outsource everything, from bookkeeping to warehousing, and can even track every garment through the production process. It’s like having my own factory without the people or buildings. I treat all my suppliers as trading partners – without them I wouldn’t have any customers. I have the same attitude towards the Bank. Over the six years I have been trading as Master Tailor, the Bank has been flexible and cooperative in all its dealings, and has helped my business grow. I feel very fortunate that I enjoy what I do.”, is what Harold Rose said about his suppliers.

• In the document, “Bespoke Tailoring in London’s West End” last March 2006 made by the city planning group of Westminster, in their case study, they spoke about how they toured 4 tailoring businesses in which they were given the chance to see what their business is doing and how it looked like. In these case studies, they mentioned how each shop was planned, the number of employees they have (and how many of them are tailors and/or cutters), their clients and their recommendations on how each store will improve their business. This study helped them to better understand a tailoring business and how well they are progressing in their area.

• These case studies showed us how tailoring businesses run even though these are based outside our country. Their results showed how these businesses survive in this modern world where almost everything is machine made and how they manage their businesses financially.

• The data which is used in the case study were given by the owner of Abjamesola Tailoring Services. This includes the assets (equipments purchased thru credit), the liabilities and the capital of the business.

• The purpose of this study is to state the financial statement/income statement, balance sheet/statement of financial position and changes in owner’s equity of business name ABjamesola Tailoring Services.

• This study also examines the cash outflow and inflow of the said business. To record all the transaction that ABjamesola tailoring and how the business gets their income per month and how they get their capital when they start their business.

• The table below contains the accounting information of

Abjamesola Tailoring Services:Assets Liability Capital

(Revenue)

Capital

(Expense)

Current Asset

Cash

83,642

Accounts Receivable

31,500

Non-current Assets

Equipment

28,000

Contra-Assets

Accumulated Depreciation

5,000

Allowance for Bad Debts

2,000

Accounts Payable

7,870

Utilities Payable

2,400

Service Revenue

456,000

Supplies Expense

12,000

License Fee

13,723

Rent Expense

60,000

Salary Expense

96,000

Utility Expense

144,000

Tax Expense

3,000

• As seen on the tailoring business’ financial statements, profit

trend is constantly increasing. The business continues to gain

revenues despite its expenses.

• Profitability of the business is based on its income statement

which shows the results of every operation. It has the ability to

earn income and sustain growth in both short and long term

since the business gained a net income more than its capital. The

progress of income of this business reflects its service revenues.

• Balance sheet or statement of financial position indicates the

financial condition of the business as of a given point of time.

The business’ ability to pay obligations to its creditors and its

capability of having a positive cash flow, or gaining a net

income, is about average. This doesn’t mean that this business

will never have any difficulty in paying its obligations; it just

denotes that, as of that particular balance sheet date, the

business could reasonably pay its debts or obligations. As for

any businesses, debts could be easily paid off if revenues

continue to expand greatly since it is very important to improve

profitability at a comparable rate to the debt increases.

• Since the business’ profit trend is increasing, the business’

stability is above average. It means that it has the ability to

remain in business without having to encounter any substantial

losses.

• On the case study we have done on ABjamesola, a tailoring

service business, their trend of profit is increasing. It is because

they have high service revenue and their expenses, even though

there are many, are little compared to their income. We

conclude that their business is “in” or it means they really sell to

people. We recommend for this business to continue their very

good job. Also we recommend them to reuse their wastes or

make them into something new and sell them for extra income.

For example, they can recycle excess garments into pot holders.

These small earnings will accumulate and generate income.

• Mrs. Carmi Jamesola

• Lao Ong, F.,(2012). Fundamentals Of Accounting Textbook for

Beginners. 839 EDSA, South Triangle, Quezon City: C & E

Publishing, Inc.

• http://www.nw-businesssense.com/case-studies/Master-

Tailor.html