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 Europes 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. Its like having my own
factory without the people or buildings. I treat all my suppliers as trading
partners without them I wouldnt 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 Londons 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 owners 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

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

Accumulated Depreciation
5,000
Allowance for Bad Debts
2,000

 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 doesnt 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/MasterTailor.html