Coc Level 4 All

Level 4 /version 1/
Project One: - Progress Payroll

XYZ COMPANY
PAYROLL REGESTER /SHEET
FOR THE MONTH OF APRILL 2013
N Name of Basic Over Gross Income pension Total Net Pay
o employees salary time earning tax deduction
1 Tirusew 2067.5
2 Nigatu 23798
3 Getasew 943.5
4 Yemariam 155.4
5 Nitsuh
Total
Additional information
 Tirusew and Nigatu have paid same income tax for the month
 Tirusew pension contribution is 22.64% of her income tax
 The total employer pension contribution of Nitsuh is equal to Yemariam pension Contri
 Getasew pension contribution is 28.74% of his income
 Pension contribution of employer and employees are 8% and 6%
Task 1.1 Finalizes the Incomplete Payroll Register Sheet
Task 1.2 if salary is paid in may (next month) journalize
A. salary and other benefit
B. payment of liabilities and
C. payroll tax of company pension contribution
Project one [B]:- Progress Payroll
Different professions their name and other employment information regarding their data
for the month of April 2013.
Employees Basic over Gross Income Pensi Total Net Sig.
name salary time earning Tax on Deduct pay
1 Tirusew 735
2 Nigatu 2379
3 Geleta
4 yemariam 155.4
5 Negtah
1, Tirusew and Nigatu have the same paid income tax for the month
2, Tirusew pension contribution is 150% of Geleta pension contribution
3, the total (employer and employees) pension contribution of Negath is equal to that of
Yemeriam pension contribution
Account & Budget Service Level = Iv

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Solution to Sample One
Answer for Project One [A]: - Progress Payroll
Tirusew :- Yemariam
Pension=22.64%*2067.5=468.082 Basic Salary=155.4/7%=2220
Basic salary= pension/ rate Income Tax= 2220*15%-142.5
= 468.082/7%= 6686.89 = 190.5
Negatu Nitsuh
Basic salary= 6685.885-2379= 4307.885 Pension= Pension/ Total Rate
Income tax= 6686.885*25%-565= 1106.72 = 155.4/18% = 863
Pension= pension*rate= 4307.88*7%= 301.55 Inc.Tax=863.33*10%-60 = 26.33
Getasew
Pension= 28.74%*943.5= 271.1619
Basic alary=pension/rate= 271.1619/7%= 3873.74
Xyz Company
Payroll Register /Sheet
For The Month of Aprill 2013
N Employee Basic Over Gross Income pensio Total Net pay sig
o name salary time earning tax n deduction
1 Tirusew 6685.89 - 6686.88 2067.5 468.10 2535.58 4151.30
2 Nigatu 4307.89 2379 6686.88 1106.72 301.55 1408.27 5278.61
3 Getasew 3873.74 - 3873.74 943.5 271.16 1214.67 2659.08
4 Yemariam 2220 - 2220 190.5 155.4 345.90 1874.10
5 Nitsuh 863.33 - 863.33 26.33 60.43 86.76 776.57
Total 17,950.84 2379 20,330.83 4334.55 1256.63 5591.184 14,739.65
Task 1.2. A. To record salary and other benefits
Salary Expense -------------------20,330.83
Employment income tax payable-----------4334.55
Pension contribution payable----------------1256.63
Salary payable---------------------------------14,739.65
To record Payroll Tax payable of Company Pension Contribution
Payroll/pension/ expense-----------------------------1914.7031
Pension contribution payable (17,951.83*11%) ------------1914.7031
Task 1.2. B. To record payment of liabilities
Salary payable----------------------------------14,739.65
Cash ----------------------------------------20,330.83
Task 1.2. C. to record payroll tax of company pension contribution
Pension contribution payable (17,951.83*11%) ------------1914.7031
Cash…………………………………………………………………………1914.7031
Answer for Project One [B]
Tirusew yemariam
Basic salary=735/7%=10,500 Basic Salary=155.4/7%=2220
Income tax=10,500*30%-955=2195 Income Tax=2220*15%-142.5=190.5
Nigatu Nitsuh
Basic salary=10,500-2379=8121 Basic salary= 155.4/18%=863.33
Income tax=10,500*30%-955=2195 Income Tax=863.33*10%-60=26.33
Pension=8121*7%=568.47 pension=863.33*7%=60.4331
Geleta
Pension=150%*735=1102.5
Basic Salary=1102.5/7%=15,750

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XYZ COMPANY
PAYROLL REGESTER /SHEET
FOR THE MONTH OF APRILL 2013
S Employee Basic Over Gross Income Total
pension net pay sig
N name salary time earnings tax deduction
1 tirusew 10,500 - 10,500 2195 735 2930 7570
2 nigatu 8121 2379 10,500 2195 568.47 2763.47 7736.53
3 Getasew 15,750 - 15,750 4012.55 1102.5 5115 10,635
4 Yemariam 2220 - 2220 190.5 155.4 345.90 1874.1
5 Nitsuh 863.33 - 863.33 26.33 60.43 86.76 776.57
Total 37,454.33 2379 39,833.33 8619.33 2621.80 11,241.133 28,592.20
Task 1.2. A. To record salary and other benefits
Salary Expense -------------------39,833.33
Salary payable--------------------------------28,592.20
To record Payroll Tax payable of Company Pension Contribution
Payroll/pension/ expense-----------------------------4119.97
Pension contribution payable (37,454.33*11%) -----------4119.97
Task 1.2. B. To record payment of liabilities
Salary payable--------------------------------28,592.20
Cash ----------------------------------------39,833.33
Task 1.2. C. to record payroll tax of company pension contribution
Pension contribution payable ((37,454.33*11%) ------------4119.97
Cash…………………………………………………………………………4119.97
PROJECT 2 [A]:- PREPARE FINANCIAL REPORTS
Cash 14190
Fees receivables
Prepaid insurance 3725
Supplies 675
Pre-paid advertising 1000
Salary payable
Unearned rent
Income summary
Fees earned 62250
Salaries expense 41700
Advertising expense 10340
Supplies expense
Insurance expense
Rent income 9100
Data need for the year end adjustment is as follows
1. Unbilled fees on June30 birr 7750
2. Insurance expired during the year birr 2100
3. Supplies inventory on 30,birr 190
4. Of pre-payment br 1000 advertising in Ethiopian Herald newspaper 75% has been used
5. Salary accrued is birr 1140
6. Rent in advance that will not be earned birr 700
Task 2.1 journalize the necessary Adjustment
Task 2.2 prepare income statement
Task 2.3 prepare balance sheet
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PROJECT [ B]:- PREPARE FINANCIAL REPORTS
Assume the following unadjusted balances for Rose Company LTD owned and operated by
Ato Demeke
Fees receivables
Supplies 675
Pre-paid advertising 1000
Salary payable
Unearned rent
Income summary
Fees earned 62250
Salaries expense 41700
Advertising expense 10340
Supplies expense
Insurance expense
Rent income 9100
Data need for the year end adjustment is as follows
1. Unbilled fees on June30 birr 7750
2. Insurance expired during the year birr 2100
3. Supplies inventory on 30,birr 190
4. Of pre-payment birr 1000 advertising in Ethiopian Herald newspaper 75% has been used
5. Salary accrued is birr 1140
6. Rent in advance that will not be earned birr 700
Task 2.1 journalize the necessary Adjustment
Task 2.2 prepare income statement
Task 2.3 prepare balance sheet
Answer for Project 2 [A]
Task 2.1: Adjusting entries
Fee receivable-----------------7750
Fee earned--------------------------7750
Insurance expense------------2100
Prepaid insurance-----------------2100
Supplies used=675-190=480
Supplies expense----------------485
Supplies--------------------------------485
Advertizing used=1000*75%=750
Advertizing expense------------------750
Prepaid advertizing---------------------750
Salary expense---------------------1140
Salary payable-------------------------1140
Cash---------------------------------700
Unearned rent-----------------------700

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Task 2.2. Prepare Income statement
Xy Company
Income Statement
For The Year December 31, 2014
Fee earned-----------------------------------------------------------------------70,000
Less ፡-operating expense:
Salary expense--------------------------42840
Advertizing expense---------------------11,090
Supplies expense---------------------------485
Insurance expense-------------------------2100
Total operating expense---------------------------------------------------- (56,515)
Income from operation--------------------------------------------------------13,485
ADD: Other Income---------------------------------------------------------------9100
Net income-----------------------------------------------------------------------22,585
To get beginning capital = Total Debit-Total Credit
Debit Accounts Credit Accounts
Cash---------------------------14,190 Fee Earned--------------62,250
Prepaid Insurance------------3725 Rent Income-------------- 9100
Supplies------------------------ 675
Prepaid advertizing-----------1000
Salary expense---------------41,700
Advertizing expense--------10,340
Total debit 71,630 Total Credit 71,350
Beginning capital = total debit-total credit Ending capital = beginning capital+ net income
=71,630-71350=280 =280+22,585=22,865
Task 2.3. Prepare Balance sheet
Xy Company
Balance Sheet
December 31, 2014
Asset Liability
Cash-------------------------14,890 Salary payable------------------1140
A/R--------------------------7750 Unearned rent-----------------700
Prepaid insurance---------1625 Total liability-------------------1840
Supplies----------------------190 CAPITALS
Prepaid advertizing--------250 XY. Capital-----------------22,865
Total Asset--------------- 24,705 Total liability & capital------24,705
Or [Ending capital= total asset-total liability =24,705-1840 =22,865]
Answer for Project 2[B]:
Task2.1 prepare Adjusting entries
Fee receivable-----------------7750
Fee earned--------------------------7750
Insurance expense------------2100
Prepaid insurance-----------------2100
Supplies used=675-190=480
Supplies expense----------------485
Supplies--------------------------------485
Advertizing used=1000*75%=750
Advertizing expense------------------750
Prepaid advertizing---------------------750
Salary expense---------------------1140
Salary payable-------------------------1140
Cash---------------------------------700
Unearned rent-----------------------700
5
XY COMPANY
INCOME STATEMENT
FOR THE YEAR DECEMBER 31, 2014
Fee earned-------------------------------------------------------------------------70,000
Less፡- operating expense:
Salary expense----------------------------42840
Advertizing expense---------------------11,090
Supplies expense-------------------------485
Insurance expense-----------------------2100
Total operating expense-------------------------------------------------------- (56,515)
Income from operation-----------------------------------------------------------13,485
ADD: other income----------------------------------------------------------------9100
Net income-------------------------------------------------------------------------22,585
To get beginning capital = Total Dr –Total Cr
Debit Accounts Credit Accounts
Prepaid insurance---------3725 Fee earned-----------------62,250
Supplies------------------------675 Rent incomes----------------9100
Prepaid advertizing-------1000
Salary expense------------41,700
Advertizing expense-----10,340
Total debit= 57,440 Total Credit =71,350
Beginning capital = Total Debit-Total Credit Ending capital = beginning capital+ net income
=57,440-71350= (13,910) = (-13,910) + 22,585=8675
Task 2.3. Prepare Balance sheet
XY COMPANY
BALANCE SHEET
DECEMBER 31, 2014
Asset liability
Cash-----------------------------700 Salary Payable--------------------1140
A/R------------------------------7750 Unearned Rent-------------------700
Prepaid Insurance------------1625 Total Liability--------------------1840
Supplies-------------------------190 Capitals
Prepaid Advertizing----------250 XY CAPITAL---------------------8675
Total Asset----------------- 10,515 Total Liability & Capital------10,515
Project Three: - Prepare Operational Budget
Product A Product B
Describe inventory ending for each month 20000 10000
Established beginning inventory for January 21000 9000
Selling price per unit 50 70
 Estimated sales unit
Product JANUARY FEBRUARY MARCH TOTAL
Area 1 A 6500 6900 6600 20000
B 1950 1500 1500 4950
Area2 A 2500 3000 4500 10000
B 500 600 1500 2600
 For the production of A and B kiltie steel factory uses the following raw material
materials Unit cost A B
Sand 0.5 20 kilogram 15k.g/unit
Steel 1 10kilogram 15k.g/unit
Chemical 5 10litter 15litter /unit

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Task 3.1prepare sales budget for the current quarter
Task 3.2prepare production budget for current quarter
Task 3.3 prepare raw material purchase budget for current quarter
Answer for Project 3
Task 3.1prepare sales budget for the current quarter
ABC manufacturing company
Sale budget
For first quarter of 2010
Product A Product B
Description Location
Jan Feb Mar Total Jan Feb Mar Total
Estimated
Area 1 6500 6900 6600 20000 1950 1500 1500 4950
Unit Sale (Q) Area 2 2500 3000 4500 10000 500 600 1500 2600
Total sales at Both Areas 9000 9900 11100 30000 2450 2100 3000 7550
Selling Price per Unit (SP) 50 50 50 70 70 70
Sales Budget 450000 495000 555000 1500000 171500 147000 210000 528500
Task 3.2 prepare production budget for current quarter
Production Budget
Product A Product B
Description
Estimated Unit Sale at Both Area 9000 9900 11100 30000 2450 2100 3000 7550
Add:- Desired Ending Inventory 20000 20000 20000 60000 10000 10000 10000 30000
Total FG needed to be Available 29000 29900 31100 90000 12450 12100 13000 37550
Less:-Estimated beg inventory 21000 20000 20000 61000 9000 10000 10000 29000
Production Budget 8000 9900 11100 29000 3450 2100 3000 8550
Task 3.3 prepare raw material purchase budget for current quarter
Raw material purchase budget
Sand Steel Chemical
Description Month RM QFG RM RM
QFG TRMFGP TRMFGP QFGP TRMFGF
PU P PU PU Grand Total
Raw material Jan 8000 20 160000 8000 10 80000 8000 10 80000 320000
needed for Feb 9900 20 198000 9900 10 99000 9900 10 99000 396000
Product A Mar 11100 20 222000 11100 10 111000 11100 10 111000 444000
TOTAL 580000 290000 290000 1160000
Raw material Jan 3450 15 51750 3450 15 51750 3450 15 51750 155250
needed for Feb 2100 15 31500 2100 15 31500 2100 15 31500 94500
Product B Mar 3000 15 45000 3000 15 45000 3000 15 45000 135000
TOTAL 128250 128250 128250 384750
Sum of Product A & B 708250 418250 418250 1544750
Cost / unit Raw Material × 0.5 ×1 ×5
T. cost of Raw material Birr 354125 Birr 418250 Birr 2091250 Bir2863625
Note = QFG ----- FG Needed for Production
= RMPU ---- Raw Material require per unit of FG
=TRMFP ---- Total Raw material needed to be purchased
OR

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Raw material purchase budget
Product A Product B
Description
Sand Steel Chemical Sand Steel Chemical
Total FG Needed for Production 29000 29000 29000 8550 8550 8550
Raw Material require per unit of FG product 20 10 10 15 15 15
Total Raw material needed to be purchase 580000 290000 290000 128250 128250 128250
cost Per unit of Raw Material 0.5 1 5 0.5 1 5
Total cost of Raw material purchased 290000 290000 1450000 64125 128250 641250
Total cost of RM for Both A+ B =Total

Sand = 290000 +64125 =354125
Steel =290000+128250 =418250
Chemical=1450000+641250=2091250
Total = Br 2863625
Project Four Bank Reconciliation
Printer corporation employees the voucher system in controlling expenditures and
disbursements. All cash receipts are deposited each Wednesday & Friday in night depository
after bank hours. Various document and records and are reproduced as follows.
1. CASH IN BANK ACCOUNT
Balance as of april1----------------------------------------7817.40
CASH RECIEPTS JOURNAL
Total cash in bank debt column for April -----------7829.58
2. DUPLICATEDEPOSIT TICKETS Data and amount of each issued in April
Data Amount Date Amount Date Amount
April 1 848.63 April 10 971.71 Aprill22 897.34
Aprill3 914.04 April 15 957.85 Aprill24 942.71
Aprill8 840.5 April 17 946.74 Aprill29 510.06
3. CHECK REGISTER :- Number and amount of each chek issued in April
Check No Amount Check no Amount check no amount
740 287.50 747 void 754 249.75
741 555.15 748 490.90 755 172.75
742 501.90 749 640.13 756 113.95
743 671.30 750 376.77 757 907.95
744 506.88 751 299.37 758 359.60
745 117.25 752 537.01 759 601.50
746 298.66 753 380.95 760 486.39
Total amount of checks issued in April --------------------------------------- Brr8555.66
4. APRIL BANK STATMENT
Balance as of aprill1 7947.20
Deposits and other credits 10562.77
Checks and other debits (8232.21)
Balance as of April 30 10367.76
5. DATE AND AMOUNT OF EACH DPOSIT IN APRIL
Date Amount Date Amount Date Amount
April1 690.25 april9 840.5 april18 946.74
April2 848.63 april11 971.71 april23 897.34
April4 914.04 aprill16 975.85 april25 942.71

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6. Checking accompanying April bank statement , Name and amount of each check
rearranged in numerical
Check no amount check no amount check no amount
731 162.15 744 506.88 751 299.37
738 251.4 745 117.25 752 537.01
739 105.7 746 298.66 753 380.95
740 2875 748 490.90 754 249.75
741 555.15 749 640.13 756 113.95
742 501.90 750 376.77 757 907.95
743 671.30 760 486.39
7. BANK MEMORANDOMS ACCOMPNYIGY APRIL BANK STATEMENT
Date description and amount of each memorandum.
Date Description Amount
April 4 bank credit memo from note collected
Principal 2500
Interest 125
April 24 bank debit memo for each check returned B/c of NSF 311.80
April 30 bank debit memo service changes 24.50
8. BANK RECONCILATION FOR PRECEDING MONTH
PRINTER CORPORATION
BANK RECONCILATION
MARCH 31,2015
Balance per bank statement 7947.20
+deposit for march 31, not recorded by bank 690.25
Deduct outstanding check
No. 731 162.15
No. 736 345.95
No. 738 251.40
No. 739 60.55
Adjusted balance
Balance per depositor 7832.50
deducted service charge (15.10)
adjusted balance 817.40
Answer for Project Four
PRINTER CORPORATION
BANK RECONCILIATION
APRIL 30, 2014
Balance Per Bank Statement----------------------------------------------------------------- 10,367.76
Add:-Deposit In Transit-------------------------------------------------------------------------- 510.06
Sub- Total----------------------------------------------------------------------------------- 10,877.82
Less:- Outstanding Check
Check No 736------------------------------345.95
Check No 755------------------------------172.75
Check No 758------------------------------359.60
Check No 759------------------------------601.50 1480----------------- (1479.80)
Adjusted Balance-------------------------------------------------------------------------9398.02
Balance Per Depositor---------------------------------------------------------------------------7091.32
Add: Note Collected By Bank--------------------2500
Interest Income----------------------------- 125
Bank Error----------------------------------- 18------------------------------------------ 2643
Sub-Total---------------------------------------------------------------------------------------9734.32
Less: NSF--------------------------------------------311.80
Bank Service Charge-----------------------24.50------------------------------------- (336.30)
Adjusted Balance----------------------------------------------------------------------------------9398.02

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Task2 .Record the necessary journal entries
Cash -----------------------2643 Account Receivable-----------311.80
Note receivable -------------2500 Bank Service charge-----------24.50
Interest Income ------------- 125 Cash ---------------336.30
Account payable-------------- 18
Project Five: - Job Order Costing
HYZ is manufacturing firm producing a product using a raw material of Sand, Steel and
Chemical in the Month of January under the following three jobs.
1. Material purchase on account
Sand 500
Steel 790
Chemical 4500
2. Direct Material Issued &Factory Labor Cost
Material direct labor cost
Jobg1 277.5 160
Jobg2 780 210
Jobg3 3900 175
3. factory overhead is 60% of direct labor cost
4. finished goods sold for birr 7200
Task 5.1rescore the necessary journal entries
Task 5.2 calculate each job cost
Task 5.3 calculate gross profit
Answer for Project Five:
Task 5.1. Journal entries
To record materials purchase on account To record work in process materials
Purchase---------------5790 Work in process-----------4957.5
A/P-----------------------5790 material-----------------4957.5
To record direct labor cost
Work in process------------545
Salary payable-----------545
To record factory overhead To Record Sales of Goods
Work In Process---------------327 A/R-----------------------7200
Factory Overhead------------------327 Sales-----------------------7200
(To get factory overhead=60%*545=327)
Direct Direct Factor Total Product
Jobs
Material Labor Cost Overhead Cost
Job#1 227.5 160 96 483.5
Job#2 780 210 126 1116
Job#3 3900 175 105 4180
Total 4907.5 545 327 5779.5
Record Cost Of Goods Sold
Cost of goods sold----------------5779.5 OR Finished goods---------5779.5
Finished goods------------------------5779.5 work in process-------------5779.5
Task 5.3. To get gross profit
Gross profit=sales-cost of goods sold
=7200-5779.5=1420.5

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Project Six: - Business Transaction
The following were selected from amount the transaction completed by DATA a vat
register merchandising from during January of the current year
1. received cash from sales of furniture br 250000
2. paid entertainment expense br 5000
3. purchase raw material for br 49000 for cash
4. paid utility expense br 20000
5. sales of furniture on account br 80000
6. paid salary expense br 28000
7. paid supplies expense br 20000
Project Six A: Journal Entries
1. Cash--------------------------------250,000
Sales---------------------------------------217,391.30
Vat payable------------------------------32,608.70
2. Entertainment expense-----------------5000
Cash---------------------------------------------5000
3. purchase----------------------------------49,000
Cash------------------------------42,608.70
Vat receivable-----------------------6391.30
4. Utility expense-----------------20,000
Cash----------------------------------20,000
5. A/R-----------------------------80,000
Sales------------------------------69,565.22
Vat payable---------------------10,434.78
6. Salary expense---------------28,000
Cash---------------------------------28,000
7. Supplies expense--------------20,000
Cash----------------------------------20,000
Task 6.2. To get output vat (V/P) & input vat (V/R)
Output vat (V/P) =32,608.70+10,434.78=43,043.48
Input vat (V/R) =6391.30
Vat liability= output vat – input vat
=36,652.18
Data Merchandize Company
Income Statement
During The Current Year Annually
SALES----------------------------------------------------------------------227,826.08
LESS: Operating Expenses
Utility expense-----------------------20,000
Salary expense-----------------------28,000
Supplies expense-------------------20,000
Total operating expense----------------------------------------------- (68,000)
Net income before tax------------------------------------------------ 159,826.08
BPT (159,826.08*30%) ---------------------------------------------- (47,947.824)
Net income after tax----------------------------------------------------111,878.25

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Project Six B: - Business Transaction
The following were selected from amount the transaction completed by DATA a vat
register merchandising from during January of the current year
1. received cash from sales of furniture br 300000
5. sales of Office Equipment on account br 90000
7. Suplies expense during the month br 25000
8. Doubtfull Account Expense For The Period br 10000
Answer For Project Six B:
Task 6.1 journal entries
1. Cash--------------------------------300,000
Sales-------------------------------------260,869.57
Vat payable------------------------------39,130.43
Cash---------------------------------------6000
3. Purchase-------------------------------50,000
Cash------------------------------43,478.26
Vat receivable-----------------------6521.74
4. Salary expense-----------------50,000
Cash----------------------------------50,000
5. A/R-----------------------------90,000
Sales------------------------------78,260.87
Vat payable---------------------11,739.13
8. utility expense---------------30,000
Cash---------------------------------30,000
Cash----------------------------------25,000
10. Doubt full account expense----------------10,000
Allowance for doubt full account---------------10,000
Output vat (V/P) =39,130.43-11739.13=50,869.56
=50,869.56 – 6521.74 =44,347.82
Task 6.3. Income statement
Income Statement
During The Current Year Anuary
SALES----------------------------------------------------------------------339,130.44
Utility expense-----------------------50,000
Salary expense-----------------------30,000
Total operating expense------------------------------------------------ (105,000)
Net income before tax--------------------------------------------------234,130.44
BPT (234,130.44*30%) ----------------------------------------------- (70,239.132)
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Project Seven: Maintain Inventory Records
Fir tax manufacturing is the following information in relation to commodity
July inventory 15 unit @ 30
July for sales 5unit @ 35
July 10 purchase 10 units @ 32
July 11 sales 12 unit @ 39
July 22 sales 3 unit @ 40
July 30 purchase 10 units @ 33
Task 7.1 if the company used perpetual inventory system & FIFO costing method
a) profit determine cost of goods sold
b) determine ending inventory on hand at the end of year
c) determine amount of gross
Task 7.2 if the company used periodic system & LIFO costing method
a) profit determine cost of goods sold
b) determine ending inventory on hand at the end of year
c) determine amount of gross
Answer For Project 7
Task 7.1. Perpetual inventory system & FIFO Method
Date Purchase Cost Of Goods Sold Inventory
Q UC TC Q UC TC Q UC TC
July 1 15 30 450
July 7 5 30 150 10 30 300
10 30 300
July 10 10 32 320 10 32 320
10 30 300
July 11 2 32 64 8 32 256
July 22 3 32 96 5 32 160
5 32 160
July 30 10 33 330 10 33 330
Qty:20 650 Q: 20 cost :610 QTY: 15 EI:490
OR
A.Cost of goods sold =beginning inventory +net purchase – ending inventory
= 450+650-490=610
B. Ending inventory = beginning inventory +net purchase-cost of goods sold
=450+650-610=1100-610=490
C. To get gross profit
Sales = 5*35 =175 GROSS PROFIT= Sales- cost of goods sold
= 12*39=468 = 763-610= 153
= 3*40 =120
Total sales = 763
Task 7.2. Periodic system & LIFO
A. Cost of goods sold B. Ending inventory (on hand)
10*33=330 Cost of Ending Inventory 15*30=450
10*32=320 C. Gross profit = sales - cost of goods sold
20 unit= 650 = 763 – 650= 113

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Knowledge Based
1. Normal loss depends on: -
A. Types of material C. nature of operation E. all of the above
B. Nature of material D. other technical factor F. none of the above
2. A production that does not meet quality standards: -
A. Spoilage B. Defective goods C. quality products D. A&B are correct
3. Production that can produced from a common raw material in manufacturing process: -
A. Normal goods B/. joint product C. by product D. joint products
4. Which of the following is an indirect labor?
A. Store keeper B. cleaner C. sales man D/. all E. all
5. Which of the following is a characteristic of a budget?
A. Quantitative B. Budget entity C. future originated D/. all of the above
6. A detail plan which express in terms of money?
A. Ordinary plan B/. budget C. skill D. none
7. Master budget is: -
A. Specific budget C. Performa statement E. All of the above
B. Principal budget D/. B & C are correct F. none of the above
8. A budget that shows expected sales for coming period in br. & unit of produced?
A. Production budget B/. sales budget C. purchase budget D. none
9. A formal prediction of quantities expected to be sold in budget period?
A. Sales budget B/. sales forecasting C. sales discount D. sales allowance
10. Fund is: -
A. Cash B/. cash plus other resources C. sales D. Borrowing
11. Which one is not categorized under non- for profit organizations (NFP)?
A. Government organization C. health organization
B. Educational organization D/. partnership business
12. In NFP organization net assets means: -
A. Assets - liability C. Asset - Capital
B. Revenue- expense D. Assets - Expense
13. It is used to account for all financial resource they state not required to accountable
for in some other fund:
A. Internal service fund C/. general fund
B. Capital project fund D. enterprise fund
14. Abay dam hydro power project is found under: -
A. Enterprise fund C. general fund
B. Capital project fund D. internal service fund
15. Which one of the following is a user of auditing?
A. Business organization C. governmental organization
B. NFP organization D/. all of the above
16. Errors which are counter balance by another omitted even if same amount in the
same direction: -
A. /Errors of omission C. compensatory errors
B. Clerical errors D. errors of commissions
17. Are auditors employed by local, regional & a federal government agency?
A. Internal auditors C. external auditor
B. /Governmental auditor D. none

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18. One of the following is an indirect tax type?
A. Profit tax C. tax on lottery
B. Dividend tax D/. excise tax
19. Which one of the following is not a source of finance for government?
A. Tax Revenue C. borrowing E. All of the above
B. Selling of goods & services D. donation F. None of the above
20. The term used to describe the excess of department & nonprofit over direct
departmental expenses:
A. Net loss C. departmental margin
B. Net income D. none of the above
21. Commercial bank of Ethiopian (home office) bought & sends office furniture to
Mexico branch br. 80,000 what will be the journal entries?
A. Purchase------------------------------80,000
Office furniture------------------------------------80,000
B. Investment in Mexico branch-----------------80,000
Office furniture--------------------------------------80,000
C. /Investment in Mexico branch------------------80,000
Home office----------------------------------------80,000
D. Home office-------------------------------------80,000
Cash---------------------------------------------80,000
MATCHING WITH ANSWERS
1. ASSERTION A. Evidence
2. Independent person B. Unbiased person
3. Symbol of accounting C. Debit and credit
4. Vendor D. Supplier
5. Announcing product E. Sales quotes
6. Joint product F. Joint costs
7. Material ledger card G. Same as subsidiary ledger
8. Spoilage H. It decreased number of items
9. Efficiency I. Effectiveness
10. Data J. Raw fact
11. Sender K. Encoder
12. Information L. Well organized data
13. Business Product M. Profitable work
14. Integrity N. Work ethics
15. Team O. Recruitment committee

15
/Version 2/
Project one/payroll
The following data relates to XY Company’s worker each is expected to work 160 homers
per month details about basic salary. Overtime deductions for the month of December 2014
are given below. Pension rate is 7% and 11% for Employees Employer respectively.
N Name of employee Basic OT OT earning Pension
o Salary hour
1 Kebebush Tilahun 10 6 am-10pm 364
2 Getahun Abebe 15 10pm-5am 406
3 Geday Mola 9 Rest days 476
4 Waqie Lemessa - 553
Task1.Prepare payroll register sheet under tax & pension laws Ethiopia
Task 2. Show necessary journal entries required on December 31 2014.
Task 3. Shows journal entries to records payments of withholding taxes.
Solution for Project One
Task 1.1 Prepare payroll register sheet under tax & pension laws Ethiopia
Before preparing payroll register sheet it is necessary to go through the following three major
steps with specific tasks or activities.
Step 1:-Calculation of Gross Earning (GE) and Taxable Income (TI) for each employees given
Step 2:-Calculation of Total Deductions for each employees given
Step 3:- calculation of net pay for each employees given
Step 1:-Calculation of Gross Earning (GE) & Taxable Income
In order to calculate gross earning first; compute Basic Salary (BS) of each employees and
covert OT hours into Birr value that is also referred to as Over Time Earning (OTE)
I. Computation of Basic Salary =
SN Employees' Name BS=P/PR Pension(P) Pension Rate(PR)

1 Kebebush Tilahun 5200 364 7%
2 Getahun Abebe 5800 406 7%
3 Geday Mola 6800 476 7%
4 Waqie Lemessa 7900 553 7%
II. Conversion of OT hours into Birr value only for 3 Employees = ∗ ∗
Note
i.OTR = Over Time Rate that is the duration of the overtime hours worked
ii.OTH = Over Time Hour that is the total over tome hour worked by each employee
iii. BSPH =Basic Salary Per Hour, it is the rate of salary per hour =
SN Employees' Name Basic salary OTR OTH BSPH=BS/160 OTE

1 Kebebush Tilahun 5200 1.25 10 32.5 406.25
2 Getahun Abebe 5800 1.5 15 36.3 815.63
3 Geday Mola 6800 2 9 42.5 765

16
 First Calculation of Gross Earning (GE)  GE =BS +OTE
SN Employees' Name Baisc salary OTE Gross Earning
1 Kebebush Tilahun 5200 406.25 5606.25
2 Getahun Abebe 5800 815.63 6615.63
3 Geday Mola 6800 765 7565
4 Waqie Lemessa 7900 - 7900
 Second Calculation of Taxable Income (TI)  = −
 Since there is No information about Non Taxable income Gross Earning and Taxable Income
Will Be Equal
SN Employees' Name Basic salary OTE Gross Earning TI
1 Kebebush Tilahun 5200 406.25 5606.25 5606.25
2 Getahun Abebe 5800 815.63 6615.63 6616.63
3 Geday Mola 6800 765 7565 7565
4 Waqie Lemessa 7900 7900 7900
Step 2:-Calculation of Total Deductions TD

Under the second step for this project only Employment Income Tax (EIT) deduction needs
calculation because deduction for pension contributions already given and there is no
information in relation with other deductions
 First we need to calculate EIT using a deduction method formula commonly applied for
each Taxable employment income under progressive tax system
Where 1.EIT =Employment Income Tax
2. TI =Taxable income
EIT =TI *TR -D
3. TR =Tax Rate from Schedule A Tax Table
4. D =Deduction in the Table
SN Employees' Name TI EIT =TI*TR-D
1 Kebebush Tilahun 5200 5200*20%-403.5=735
2 Getahun Abebe 5800 5800*25% -565=855
3 Geday Mola 6800 6800*25%-565=1135
4 Waqie Lemessa 7900 7900*25%-565=1410
 Then we can calculate Total Deduction (TD) TD = EIT Ded + Pension Ded
SN Employees' Name EIT Deduc +Pension Dedu

1 Kebebush Tilahun 735+364 =1099
2 Getahun Abebe 855+406=1261
3 Geday Mola 1135+476=1611
4 Waqie Lemessa 1410+553=1963

17
Step 3:-Calculation of Net Pay  (Net Pay=Gross E -T. Ded
Sn Employees’ Name  GE – T D = Net Pay

1. Kebebush Tilahun  5606.25 – 1099 = 4507.25
2. Getahun Abebe  6615.63 – 1261= 5354.63
3. Geday Mola  7565.00 – 1611= 6954.00
4. Waqie Lemessa  7900.00 – 1963 =5937.00
Task1.Prepare payroll register sheet under tax & pension laws Ethiopia
XY company
PAYROLL SHEET
December 31 2014.
Employee Earning Employee Deduction
sn Employee Name Net pay
BS OT GE EIT Pension T. Ded
1 Kebebush Tilahun 5200 406.3 5606 735 364 1099 4507.3
2 Getahun Abebe 5800 815.6 6616 855 406 1261 5354.6
3 Geday Mola 6800 765 7565 1135 476 1611 5954
4 Waqie Lemessa 7900 7900 1410 553 1963 5937
Total 25700 1986.9 27687 4135 1799 5934 21753.9
Task 2. Show necessary journal entries required on December 31 2014.
a. Salary Expense -------------------27687
Cash (Net Pay) ------------------------21753.9
EIT Payable -----------------------------4135
Pension Contr Payable ---------------1799
b. Payroll expense ---------------------2827
Pension conrt payable --------------------2827
Employer pension contribution (25700 *11% =2827)
Task 3. shows journal entries to records payments of withholding taxes.
Pension conrt payable (2827+1799) -----------------------4626
EIT Payable----------------------------------------------------4135
Cash --------------------------------------------------------8761
Project 2 Bank Reconciliation
The following data relates to DA Company for the month of July 2014. The bank
statement at end of the month showed a balance of br 23,195.85. The depositor’s book
balance on the same date showed a balance of br 22,009.85
A. The following cheek ware outstanding during the month
Check no 567 840
Check no 689 354.25
Check no 574 451.30
B. Memorandums returned with bank statement reveals that the Bank has collected a
customer’s note for br 800 and add to customers account.
C. Debit memorandums show that a service charge of br 2.50 & NSF of br 200 were
debited by the bank
D. from deposits of daily cash receipt recorded by the company a deposit of July 31,
amounted to br, 1057.05, did not appear on bank statement
Instruction: Perform the following activities based on the case
Task.1.Prepare bank reconciliation for the month of July

18
Solution for Project Two
Task.1.Prepare bank reconciliation for the month of July
DA Company
Bank Reconciliation
For the month of July 2014
Cash Balance as per bank statement ------------------------------------ br 23,195.85.
Add: deposit in transit ---------------------------------------------------------- br, 1057.05,
Subtotal --------------------------------------------------Br 24252.90
Deduct:- outstanding cheek
Check no 567 -------------------------------------- 840
Check no 689 -------------------------------------- 354.25
Check no 574 -------------------------------------- 451.30 ------ (Br 1645 .55)
Corrected Balance-------------------------------------------------------- Br 22607.35
Cash Balance as per depositor’s book -------------------------------------br 22,009.85

Add: Note Receivable -------------------------------------------------------------------------- Br 800
Subtotal -----------------------------------------------------------------Br22809.85
Deduct:- Service Charge ------------------------------------br 2.50
NSF ------------------------------------------------ br 200------------------- (Br202.50)
Corrected Balance ------------------------------------------------------------ Br 22607.35
Cash ------------------------ Br 800
Note Receivable --------------------- Br 800
Account Receivable ----------- br 200

Service Charge ---------------- br 2.50
Cash --------------------------- Br202.50
Project 3:- Product job costing information
The following transaction occur during the month of June with in OZAC manufacturing
plc to produce three types of Table
1. Raw material purchase
Timber …………………………..br 650
Metal ………………………….br 900
Cotton ………………………….br 4650
2. Material issued and direct labor charge to production
Product Direct Material Direct Labor
Table 1. 377.50 310
Table 2. 930 360
Table 3. 4050 325
3. Factory overhead is 83% of direct labor cost
4. Finished goods were sold for br 8200
5. All goods produced were sold
Instruction: Task 1. Record the necessary journal
Task 2. Calculate cost of each product
Task 3. Calculate gross profit
Solution for Project 3
Task 1. Record the necessary journal

19
a. When Raw material purchase
Raw material Inventory (contro) ---------------7200
Account Payable (Cash) -------------------7200
(650+900 +4650 =7200)
b. When Material issued and direct labor charge to production
Work In Process Inventory ----------------------7178.35
Raw material Inventory(control) -------- ----5357.50
Wage or Salary Payable ----------------------- 995.00
MOH control (995*83%)---------------------- 825.85
c. When all Goods in process Finished
Finished goods Inventory ---------------------- 7178.35
Work In Process Inventory ------------------------7178.35
d. When All Finished goods were sold
Cash or Account Receivable ----------- 8200
Sales-------------------------------- 8200
Cost of goods sold -------------------7178.35
Finished goods Inventory------------7178.35
Task 2. Calculate cost of each product
OZAC manufacturing plc
JOB sheet
S For the month of Dece 2010
N Product Direct Material Direct Labor Factory Overhead Total cost
1 Table 1 377.50 310 310*83% =257.3 944.8
2 Table 2 930 360 360*83% =298.8 1588.8
3 Table 3. 4050 325 325*83% =269.75 4644.75
Total 5357.50 995.00 825.85 7178.35
Task 3. Calculate gross profit
Gross Profit = Sales –Cost of Goods Sold
= 8200 -7178.35
=1021.65
Project 4 Prepare Operational Budget
XY Company manufactures two production table and chair.
Inventory Table Chair
Desired inventory ending for each month 2000 1000
Estimated begging inventory for January 1000 1500
Sells price per unit 120 80
Estimated Sales unit
January February March Total
Table 4000 2000 1000 7000
Chair 3000 1500 4000 8500
Selling price per unit is br
Timber Metal
Estimate beging inventory for Jan 6000 3000
For the production, the company use raw materials
Materials Unit Products
Cost Metal Timber
Table 5 -- 5m/Unit
Chair 15 3m/unit --
Required
20
1. Prepare sales for the current quarter
2. Prepare production budget for current quarter
3. Prepare raw material production budget for current quarter
Solution for Project 4
Task1 Prepare sales for the current quarter
XY Manufacturing Company
Sale Budget
For the Month of January, February and March
Descriptions January February March
Table Chair Table Chair Table Chair
Estimated Sale Unit 4000 3000 2000 1500 1000 4000
Times: Anticipated Unit price 120 80 120 80 120 80
= Sale Budget in Birr 480000 240000 240000 130000 120000 320000
Task2 Prepare production budget for current quarter
Production Budget
Table Chair
Description
Estimated Sale Unit 4000 2000 1000 7000 3000 1500 4000 8500
Plus:- Desired ending inventory 2000 2000 2000 6000 1000 1000 1000 3000
Total Finished goods inventory 6000 4000 3000 13000 4000 2500 5000 11500
Less:- Estimated beging inventory 1000 2000 2000 5000 1500 1000 1000 3500
Units of FG to be produced 5000 2000 1000 8000 2500 1500 4000 8000
Task 3 Prepare raw material production budget for current quarter
Raw Material Budget
Timber for Table Metal for Chair
Description
Units of FG to be produced 5000 2000 1000 8000 2500 1500 4000 8000
Raw material per unit of FG 5 5 5 5 3 3 3 3
T R M needed for production 25000 10000 5000 40000 7500 4500 12000 24000
Plus:- Desired ending RM 8000 8000 8000 24000 4000 4000 4000 16000
Total Raw Material Needed 33000 18000 13000 64000 11500 8500 16000 40000
Less:-Estimate beging Raw M 6000 8000 8000 22000 3000 4000 4000 11000
Raw Materl To be Purchased 27000 10000 5000 42000 8500 4500 12000 29000
Raw material cost per unit r 5 5 5 5 15 15 15 15
Total cost of Raw Material 135000 50000 25000 210000 127500 67500 180000 435000

21
Project 5:-Prepare Financial Report
The account listed below appears in the partial balance the month ended December 31,2013
Cash 31100
Merchandise inventory 8400
Account received 15000
Supplies 2500
Account payable 13000
x-capital 32000
x-drawing 2500
Income summary -
Sales 67000
Purchase expense 46000
Delivery expense 1600
Insurance expense -
Supplies expense -
a. Merchandise inventory December 31, 26000
b. Supplies inventory December 31. Br 1300
c. The remaining balance of prepaid insurance on Decer 31. 2800
Required: 1. Prepare income statement 2. Prepare balance sheet
Solution for Project FIVE
a. Entry to close ending inventory and open Beginning Inventory
I. Income Summary ...............................8400
Merchandise inventory (beginning)........ 8400
II. Merchandise inventory(Ending) ............... 26000
Income Summary ...............................26000
b. Supplies of inventory Decber 31. Br 1300 C. Balance of prepaid insurance on Dec 31.2800
Supplies Expense ............. 1200 Insurance expense ...........2200
Supplies .........................12000 Prepaid Insurance...........2200
Xxzz Company
Adjusted Trial balance
For the month December 31, 2013
Account Title Debits Credits
Cash 31000
Merchandise inventory 26000
Account received 15000
Supplies 1300
Account payable 13000
x-capital 32000
x-drawing 2500
Income summary 8400 26000
Sales 67000
Purchase expense 46000
Delivery expense 1600
Insurance expense 2200
Supplies expense 1200
Total 138000 138000

22
Task 1 Prepare income statement
Xxzz Company
Income statement
For the Year Ended December 31,2013
Revenue
Sales.................................................................................................. Br67000
Less:-Cost of Good Sold
Beginning Inventory cost........... 8400
Purchase cost .............................. 46000
MAFS............................................... 54400
Less:- cost of Ending Inv. .......... (26000)
Cost of Good Sold.................................................................... (Br28400)
Gross Profit......................................................................... Br 38600
Less:- Operating Expenses
Delivery expense .................1600
Insurance expense................2200
Supplies expense................. 1200
Total Expense .................................................................. (Br5000)
Net Income............................................................................ Br33600
Ending Capt = Beginning capt + Net Income – Drawing
= Br 32000 + 33600 – 2500
= Br 63100
Task 2 Prepare balance sheet
Xxzz Company
Balance Sheet
December 31,2013
Assets Liability and Capital
Cash........................................... Br 31000 Account Payable .................. 13000
Merchandise Inventory ........ 2600 Capital
Account Receivable............... 15000
Supplies ................................... 1300 X- Capital ........................... 63100
Prepaid Insurance................. 2800
Total Assets ....................... Br76100 Total Liab & Capital........ Br 76100
Project 6 :-Maintain Inventory record
The following selected data for particular commodity has taken from XY Company.
January 1, inventory, 100unit @br 8
January 12, purchase, 400 unit @br 11
April 23, purchase, 100 unit @br 12
May 21 sold, 300 unit @br 20
The physical count on December 31 show that 300 were on hand
Instruction:
1. XY Company uses periodic inventory system and LIFO costing method calculates cost of
inventory on hand cost of merchandise sold and gross profit.
2. XY Company uses perpetual inventory system and FIFO costing method calculates cost of
inventory on hand cost of merchandise sold and gross profit.

23
Solution for Project Six
 Task1 if XY Periodic Inventory System and LIFO costing method
January 1, inventory, 100unit @br 8 = Br 800
January 12, purchase, 400unit @br 11 = 4400
April 23, purchase, 100 unit @br 12 = 1200
MAFS --------- 600 unit =Br 6400
 LIFO costing method
a. Cost OF goods Sold b. Cost o Ending Inventory(CEI)
CGS =100 @ 12 =1200 CEI =100@8 =800
=200 @ 11 =2200 =200@11=2200
Total CGS = Br3400 Total CEI =Br3000
 Gross profit. Calculates(GP)
GP = Sale – CGS
=300@20 -3400
=6000-3400
=Br2600
Task 2 If XY uses Perpetual Inventory System And FIFO Costing Method
Date Purchase Cost of Goods Sold Inventory Balance

1-Jan 100 8 800
100 8 800
12-Jan 400 11 4400 400 11 4400
100 8 800
400 11 4400
23-Apr 100 12 1200 100 12 1200
100 8 800 200 11 2200
21-May 200 11 2200 100 12 1200
CGS = Br800 +2200 CEI =2200 +1200 GP = 300*20 -3000
= Br3000 =Br 4000 =6000 -3000
=Br3000
Knowledge Based
1. Companies need to follow tax laws in discharging tax liability:
A. PAY tax on employment on yearly base C. Pay VAT on quarterly & yearly bases
B. Pay 2% profit tax on sale of good D. Pay 15% profit tax on sale of goods
2. Operational budget may not include
A. Sales budget C. Cash for cast budget
B. Production budget D. Material purchase budget
3. Planning step in compilation of work activity with planed objectives
A. Setting objectives C. Implement work plan
B. Planed schedule work activity D. Monitor work activity
4. Opportunity for improvement are monitored, codes are used & schedule are adjusted
A. Identify daily work requirement C. Monitor and manage work
B. Develop effective work habit D. Evaluate work performance
5. During period of increasing or inflation which of the following results a higher
amount of inventory as the end of period
A. FIFO method C. LIFO method
B. Average method D. Moving average method
24
6. When participating in internal or external for a presentation is clear sequential and
delivered within a predetermined time and difference is are respected to improve to
improve communication skills
A. Utilized specialized communication skills C. Quality assurance
B. Quality standards D. Conduct interview
7. The banker accountant debited a customer account in error and prepared bank
reconciliation. The error should be adjusted by:
A. Adding to depositors balance C. Adding to bank balance
B. Deducting from depositors D. Deduction from bank balance
8. Levies, fines and other taxes may include ;
A. Speeding fine C. Withholding taxes
B. VAT D. Rental income tax
9. Balance of supplies account before for adjusting entries show 60,000 and inventory
supplies at the end of the end of the period shows 36,500. Supply is recorded as
expenses at the time of purchase of supplies. At end of the period the entry is;
A. Debit supplies and credit supplies
B. Credit supplies expense and debit supplies
C. Credit supplies expense and debit supplies
D. Debit supplies expense and credit supplies
10. In Ethiopian tax system small business shops pays
A. Business income and progressive rate
B. Business income and regressive rate
C. Employment income and progressive rate
D. Rental income and progressive rate
11. Developing & refine system for continues improvement in operational include except;
A. Establish parameters of current improvement system.
B. Distinguish between breakage improvements continuous improvements
C. Review system for in comparability with improvements strategy
D. Develop continuous involvements practice
12. At the beginning of the period 50,000 birr in installed to ATM machine during the
period the accountant insures that 12,000 note is damaged or note used. The amount
of money read for payment at the end of the period is
A. 50,000 B. 38,000 C. 12,000 D. 62,000
13. EBA companies engaged in selling different items to customers and purchase
materials from different supplies. Verifying validity accuracy of payment request may
include the following except:
A. Payment requests are matched to order or other supporting information to insure
validly of payment and to comply with internal control requirements.
B. supporting documentation is checked to insure its correct and complete and un
authorization of request is confirmed with any discrepancies up without delay
C. confirmation of goods or service supplies is obtained where required to validate
request for payment
D. All payments are coded and allocated to account accurately with payment is
matched against invoice or other relevant documentation.

25
14. In preparing payroll the accountant first do;
A. Record payroll data
B. Arrangements of payroll and individual pay advice is obtained
C. Arrangements for payment are made
D. payroll preparation takes place within designated time line
15. In using spread sheet software to complete business taxes
A. Enter, check & amend data in accordance with organizational & task requirements
B. Import and export data b/n in compatible spread sheet & adjust various documents
in accordance with software and system procedures
C. Use manual, user documentation & online help to overcome problems spread sheet
design and production
D. Preview adjust and print spread sheet as per organizational & production
16. One of the following element helps manager makes decision in legal context
A. Identify compliance requirements C. Schedule and planning
B. Financial auditing D. Technical requirement
17. Pervasive formula of accounting A=L+C is mainly shown in one of the following
financial statement
A. Cash flow statement C. Income statement
B. Capital statement D. Balance sheet
18. Even through companies under taking computerize accounting system in
possible accounting cycle which stilt need the manual intervention of an
accountant.
A. Classifying C. Identifying and recording
B. Summarizing D. Analyzing
19. DER Co is a VAT register company purchased construction material and to
service •for birr 500,000 and 600,000 respectively including vat on the month
June 2005. The of VAT and month of payment with-no penalty
A. VAT payable 13,043.50 during July 2005.
B. VAT receivable 13,043.56 during 2005
C. VAT receivable 15,000.50 during June2005
D. VAT payable 15,000.50 during July 2005
20. Waqjira Hagos has been paying monthly income tax birr '1234.85 to the tax office.
Monthly pension contribution that has been deducted from his basic salary is
26.34% his monthly income tax using the current pension proclamation (i/e 6 & 8)
what is Wakjira monthly net pay? (Assume to overtime and other taxable allowance)
A. 5421 B. 4215.3 C. 3860.89 D. 1897.35
21. Cash received but not earned is an example of;-
A. Accrued expense B. Accrued revenue C. Accruals D. Deferral

26
1. Data Raw fact
2. Vendor Supplier
3. Sender Encoder
4. Assertion Evidence
5. Integrity Work ethics
6. Joint product Joint cost
7. Efficiency Effectiveness
8. Business product Profitable work
9. Amounting a product Sales quotes
10. Information Well organized data
11. Team information Recruitment committee
12. Independent person Unbiased person
13. Symbol of accounting Debit and credit
14. Spoilage It decreased number of
15. Material ledger card The same as subsidiary ledger

27
/Version 3/
Exercise:- One Process Payroll
Tack-talk Company engaged with IT activities and has four permanent employees who have
different professions.
S/ Name of employee Basic Overtime Overtime Credit Allowa
N salary hours days Association nce
1 Melaku tilahun 5000 8 Weekend 1750 500
2 Olga Jigsa 650 150 100
3 Gidey Gere 2350 4 holyday 230
4 Belachew Tadesse 3600 12 holyday 400
 Allowance is not taxable for all employees.
 All employee are regular and are worked 40hours per week
 Employee & employer are accepted to contribute 6 % & 8% to pension.
Task 1 prepare payroll document/ resisted sheet as of April 30
Task 2 if paid in May (next month). Journalize
 Salary and other benefits
 Payment of payable.
 Payroll tax or contribution of pension by company.
Solution for Exercise One
S Employee Basic Allo Over Gross Income Pension Credit Total Net Pay
N Name Salary wan Time Earning Tax Associ Deduc
1 Melaku 5000 500 500 6000 810 350 1750 2910 3090
2 Olga 650 100 - 750 5 45.50 150 200.50 549.50
3 Gedey 2350 230 146.88 2726.88 232.03 164.5 - 396.53 2330.34
4 Belachew 3600 400 675 4675 552.50 252 - 804.50 3870.50
Total 11,600 1230 1321.88 14,151.88 1599.53 812 1900 4311.53 9840.34
1. Salary expense ------------ 14,151.88
EIT payable --------------------------------------1599.53
Pension Contr. Payable----------------------- 812
Payable to Credit Association-----------------1900
Net pay /Cash -----------------------------------9840.34
2. Pension expense ----------------------------- 1276
Pension Contr. Payable ---------------------- 1276
3. EIT payable --------------------------------------------1599.53
Pension Contr. Payable (812+1276) ---------------2088
Payable to Credit Association------------------------1900
Cash -----------------------------------------------------------5587.53
Exercise Two:-Prepare operational budget
3F-Manufactures three product A, B, & C. The factory has the following information at
beginning of current year
A B C
Desired inventory unit (Each Month) 60,000 70,000 65,000
Estimated Beg inventory (Each Month) 51,000 45,000 41,000
Sells price per unit 30 35 40

28
Estimated sales unit Area 1 Area 2
A 30,000 30.000
B 20.000 50.000
C 26.000 56.000
Required: Task1 Prepare sales
Task 2 Prepare production budget
Solution for Exercise 2:
Task 1. Sales budget
Description Area Product A Product B Product C
Area1 30000 20000 26000
Estimated Unit Sale at both area Area2 30000 50000 56000
Both 60000 70000 82000
Selling Price per Unit in birr 30 35 40
Sales Budget in birr 1800000 2450000 3280000
Task2. Production budget
Item Production A Production B Production C
estimated sales unit 60,000 70,000 82,000
ADD: desired ending inventory 60,000 70,000 65,000
Total need 120,000 140,000 147,000
LESS: estimated beginning inventory (51,000) (45,000) (41,000)
Production 69,000 95,000 106,000
Exercise Three: Produce Job Costing Information
During the month of February the following transaction will occur to produce products.
1. Direct materials purchased birr 25.000
2. Direct materials used birr 21.000
3. Direct labor cost birr 35.000
4. Inventory
 Beginning inventory finished goods 16,000
 Beginning inventory raw materials is birr 13,000
 Ending inventory finished goods birr 18,000
5. Factory overhead cost is 80% of direct labor cost.
6. Sales is birr 117.000
Required: Task 1 Calculate cost of goods manufactured
Task2 Calculate cost of goods sold Task 3 Calculate gross profit
Solution for Exercise Three
Beginning inventory raw materials------------13,000
ADD: direct material purchased----------------25,000
Total raw materials available for uses----------38,000
LESS: ending inventory raw materials------ (17,000)
Raw materials used--------------------------------21,000
Task 1. Cost of goods manufactured= Direct Materials Used+ Direct Labor+ Factory Overhead
= 21,000+35,000+28,000= 84,000
Task 2.To get Cost of goods sold
Beginning inventory finished goods--------------16,000
ADD: cost of goods manufactured ---------------84,000
LESS: ending inventory finished goods-------- (18,000)
Cost of goods sold---------------------------------82,000
Task 3.Gross profit = sales- cost of goods sold
= 117,000- 82,000= 35,000
29
Exercise four: bank reconciliation
The cash account for nation travel agency at may 31, 2002 of the current year indicated
balance of br.13,215.80 the bank balance statement indicated 19,513.90 on may 31, 2002
the following are recording items.
a. Checks outstanding totaled br.7, 070.10.
b. A deposit of br.3, 915.20 representing receipt of May 30, 2002 had been to appear on
the bank statement.
c. The bank had collected 3,120 on interest bearing note left for collection the face of the
note was br.3, 000.
d. a check for 69 had been recorded erroneously in the check rebutter as 96.
e. A check drawn had been recorded for 42 erroneously charged by the bank as 24.
f. Bank service charged for may to 21.80.
Required
A. Prepare bank reconciliation for the month may 30, 2002.
B. Prepare necessary journal entries.
Solution for Exercise Four
National travel agency
Bank reconciliation
May 31, 2002
Balance per bank statement---------------------------------19,513.90
ADD: deposit in transit-------------------------------------- 3915.20
Sub- total---------------------------------------------------- 23,429.10
LESS: outstanding check-----------------7070.10
Bank error------------------------------18 -------(7088.10)
Adjusted balance-----------------------------------------Br16,341.00
Balance Per Depositor-------------------------------------13,215.80
ADD: note collected by bank-----------3000
Interest income----------------------120
Bank error----------------------------27 ------------- 3147.00
Sub- total---------------------------------------------------- 16,362.80
Less: service charge-------------------------------------- (21.80)
Adjusted balance----------------------------------------- Br16,341.00
Task 4.1.Journal entries
To record note collected & interest& depositor error To record service charge
Cash--------------------------3147 Miscell expense--------21.80
Note receivable----------------3000 Cash----------------------21.80
Interest income--------------------120
Account payable-------------------27
Exercise five: Maintain Inventory Record
Fire fax manufacturing company has the following information in relation to commodity D2
for July: Inventory
July 1………………………............. 20units at hr. 50
Sales
July 7 …………………………..10units
July 18 ………………………… 5units
July 27...............................10 units
Purchases
July 3…………………………………20 units at br. 51
July 20 ………………………………15 units at br. 52

30
Required:
A. If Fire fax company used perpetual inventory system & LIFO costing method.
Determine cost of goods sold &ending inventory.
B. If the company used periodic inventory system and FIFO costing method. Determine
cost of goods sold & ending inventory
Date Purchased Cost Of Goods Sold Inventory
July 1 20*50= 1000
July 3 20*51= 1020 20*50= 1000
20*51= 1020
July 7 10*51= 510 20*50= 1000
10*51= 510
July 18 5*51= 255 20*50= 1000
5*51= 255
July 15*52= 780 20*50= 1000
20 5*51= 255
15*52= 780
July 27 10*52= 520 20*50= 1000
5*51= 255
5*52= 260
QTY= 35 unit, Qty= 25 Qty= 30
purchase cost = 1020+78 = 1800 CGS= 510+255+520= 1285 ending inv = 1000+255+260 =1515
Task 5.2.periodic inventory system (LIFO)
Cost of goods sold ending inventory (on hand)
20*50 = 1000 15*51= 765
5*51 = 255 15*52= 780
25 units = 1255 30 unit =1545
Excursive Six: Business Tax Requirement
HORREC is a privet company registered in Ethiopia that does not maintain book of
account. During the period of 2012 the company leases a building for birr 4500 per
month. The company Employed Professor Admasu Zerhun as regular employee and paid
5400 birr per month and also he is lecturer in AAU and paid birr 7060 per month.
Required: A. Determine amount of monthly employment income tax that is collected
from Professor Admasu by HOREC payable to ERCA.
B. Determine the taxable income and rental liability paid by HORREC to ERCA
Income tax paid from salary of Adamu in AAU
7060*25%-565= 1200
2. Income tax that should be paid together
12,460*35%-1500= 2861
Income tax collected from pro. Adamsu zerihun by HOAREC
2861- 1200= 1661
Task 6.1.Taxable income= 4500*12= 54,000*80= 43,200
Rental income tax liability= 43,200*20%-3630= 5010
Knowledge Based
1. Companies need to follow tax laws in discharging tax liability so that they can be able to:
A. PAY tax on employment on yearly base
B. Pay 2% profit tax on sale of good
C. Pay vat on quarterly and yearly bases
D. Pay 15% profit tax on sale of goods

31
2. EBG PLC involved in trade of merchandise inventory business following Ethiopian fiscal
year from July to June. The PLC paid birr 120,000 rents at the beginning of January 1 for
the yearly rent. In preparing financial statement of the company at the end of the year
A. Rent prepayments are adjusted to birr 60000
B. Bad and debt full debts are adjusted if there is written off
C. Record general journal entries for balance day adjustment are mandatory
D. Adjust only expense and revenue accounts for prepayments and accounts
3. In Ethiopian tax system tax bases & rates for business income tax of small shops pays
A. Business income and progressive rate
B. Business income and regressive rate
C. Employment income and progressive rate
D. Rental income and progressive rate
4. In Verifying validity and accuracy of payment request of companies:
A. Funds are released prior to authorization of payments
B. Payment requests are matched to payment order for none purchase order payments
C. All payments are coded and allocated to account
D. Companies with hold 2% profit taxes for birr 9000 equipments sales
5. Financial institution should be monitored by:
A. Commercial bank C. Ministry of bank
B. National bank D. industry minister
6. Break through improvement:-
A. Review system for compatibility only
B. Explore opportunities which happened in the past
C. Develops and refines system for improvement in operation
D. Set parameter of pas external improvement
7. Financial budget that helps to finance the project
A. Sales budget C. Production budget
B. Cash forecasting budget D. Material usage budget
9. Costs are trace or allocate to the product is:-
A. Cost Accumulation C. Cost Assignment
B. Cost Allocation D. None Of The Above
10. During period of increasing or inflation which of the following results a higher amount
of inventory as the end of period
A. FIFO method C. LIFO method
B. Average method D. Moving average method
11. Levies, fines and other taxes may include ;
A. Speeding fine C. Withholding taxes
B. VAT D. Rental income tax
12. CBE Addis Branch monitors work activity of each officers: the feedback made by
the bank may not included
A. Setting realistic and attainable objectives
B. Work activities are monitored & compared with set objectives
C. Work performance are monitored
D. Deviations from work activities are reported
13. The sales person of drug store maintain petty cash of birr 14000. Payments documents of
sales person found to be birr 11,000 for utilities, birr 2000 for postage, birr 150 for taxi,
birr 550 loading and unloading & birr in currencies. Which of the following is correct to
the sales person?
A. Petty cash can be replenish at birr 13,650
B. Petty cash can be replenish at birr 13,500
C. Cash overage of birr150
D. Cash shortage of birr50
32
14. The auditor of CBE found a total of birr 350,000 loaded on the ATM machine at ARAT
KILLO Branch at the beginning of the period and the ATM paid birr 310000.He found
Damage note of birr 5000 on the machines. What is the amount of cash remaining in
the machine at the end of the day Ready for payments?
A. 40000 B. 45000 C. 35000 D. 35000
15. The Balance of supplies account for adjusting entries show birr 60,000. At the end of the
month the inventory of supplies shows 36,500. Supply is recorded as expense at the time
of purchase. The adjusting entry At the end of the month is/are;
A. Debit supplies expense and credit supplies for birr 23500
B. Credit supplies expense and debit supplies for birr 23500
C. Credit supplies expense and debit supplies for birr 36500
D. Debit supplies expense and credit supplies for birr 36500
16. The accounting clerk of United Bank records the withdrawal of birr 35000 by a customer
from saving account as a collection for settlement of mortgage. The entry to correct the
recording should be
A. Debit Mortgage receivable & credit customer account by 35000
B. Credit Mortgage receivable & Debit balance customer account by 70000
C. Debit customer account and credit cash by 35000
D. Debit customer account and credit cash by 70000
17. DEY PLC is one of the prominent customer in Dashen Bank and receive loan of birr
540,000 at 10% simple interest rate t be paid with ten years monthly. During the first
year of loan period birr 54000 principal payments were made. At the beginning of the
second year DEY unable to pay his debt for three months and the bank write warning
letters to pay the debt. What is the amount of payment at the end of fourth month of
the second year?
A. Birr 25650 B. Birr 16200 C. Birr 34200 D. Birr18000
18. A Planning steps that requires a comparison of implemented activity with planed objectives
A. Setting objectives C. Monitor planned work activity
B. Planed schedule work activity D. Implement planned activity
19. Companies Develop & refine system for continues improvement in operational include all;
A. Review system for in comparability only
B. Explore opportunities which happen in the past
C. Distinguish breakage through improvements continuous
D. Set parameters of past external improvement
20. The process by which Opportunities for improvement are monitored, relevant codes of
practice are used & work schedule are adjusted for small and medium business operation
A. Identify daily work requirement C. Develop effective work habit
B. Monitor and manage work D. Evaluate work performance
21. When participating in internal or external for a presentation is clear sequential and
delivered within a predetermined time and difference in view is are respected in
improving communication skills in the work place is
A. Utilized specialized communication skills C. Quality assurance
B. Quality standards D. Conduct interview.
22. The Banker accountant debited a customer account in error and prepared bank
reconciliation. The error should be adjusted by:
A. Adding to depositors balance C. Adding to bank balance
B. Deducting from depositors D. Deduction from bank balance

33
MATHING
1. Compensation ----------------------------- Several Payment / Change
2. Bank Reconciliation ----------------------- Show Cash Difference
3. Customer Tax -------------------------------Indirect Tax
4. Depreciation --------------------------------Balance Day Adjustment
5. Record Account Data ---------------------Spread Sheet
6. Doubtful Account ------------------------- Adjustment Are Receivable Pre Value
7. Measurement Performance -------------- Profit And Loss Statement
8. Lodgment Schedule ----------------------- Fright Benefit Tax
9. Triple Bottom Principle ------------------ Sustainable Issue For Financial Service Industry
10. Rolling For Cuts Industry ---------------- Budget For Next Period
11. Analyze And Verify Source Document --Discrepancies B/N Money Paid
12. Net Pay --------------------------------------- Amount Pay After Deduction Of Expense
13. Difference ------------------------------------ Dissimilarity
14. Quality Standard ---------------------------- Frame Work / Improvement

34
/Version 4/
Project One:- A. Cost Volume Analysis
Addis chamber of commerce is planning for Easter trade exhibition at one of the two possible
venues/locations.
A. Addis Ababa exhibition center which has fixed rental cost of birr 2000 plus a charge birr 80
per person for its own catering of meal service of drink and entertainments.
B. Millennium Hail which have fixed rental cost of birr 6000 that the chamber of commerce
can hire a career for meals , waits and waitresses to serve drink and meal at birr 60 person.
The chamber of commerce budgets birr 3500 in cost for administration and marketing the
band will cost fixed amount of birr 2500. Tickets to this prestigious event will be 120 per
person all the drinks served and prizes given away at event will be donated /sponsored
Required
A. Compute breakeven point for each location in term of ticket sold.
B. Compute the operating income of the even if (a) 150 attend and (b) 300 attended and
comment on the result
C. At what level of ticket sold will the two venues have same operation income
Project t one A:
1) TO get the breakeven point for each location we must know total fixed costs for each
locations:
ADDIS ABABA EXHIBITION CENTER
Total fixed cost= rent cost+ administration+ band cost
= 2000+3500+2500
=8000
Unit of contribution margin= unit selling price- unit variable cost
=120-80=40
Breakeven point= total fixed cost/UCM= 8000/40=200 ticket sold
MINIELLIUM HALL
Total fixed cost= 6000+3500+2500=12,000
UCM= 120-60=60
Breakeven point= 12,000/60=200 ticket sold
2) Operating income of Addis Ababa exhibition center
150 attend, Operating income = total revenue-total cost (TR-TC)
= usp*number of tickets – (uvc*number of tickets + total fixed cost)
= 120*150 – (80*150+8000)
= 18,000- (12,000+8000)
= 18,000-20,000 =2000 loss
300 attend operating income== total revenue-total cost (TR-TC)
=usp*number of tickets – (uvc*number of tickets + total fixed cost)
=120*300-(80*300+8000)
=36,000-(24,000+8000)
=36,000-32,000 =4000 income
Operating income of Millennium hall
150 attend operating income= 120*150-(60*150+12,000)
=18,000-(9000+12,000)
=18,000-21,000=3000 loss
300 attend operating income =120*300-(60*300+12,000)
=36,000-(18,000+12,000)
=36,000-30,000=6000 loss
3) Operating income of AA exhibition center = operating income of Millennium hall
35
Profit=Total revenue-total cost=total revenue-total cost
PQ-TC=PQ-TC
PQ-(QVC+TFC) = PQ-(QVC-TFC)
PQ-QVC-TFC= PQ-QVC-TFC
Q (P-VC) -TFC=Q (P-VC)-TFC
Q (120-80) - 8000= Q(120-60)-12,000
40Q- 8000 = 60Q-12,000
40Q-60Q=-12,000+8000
-20Q= -4000
-20 -20
Q=4000/20=200 tickets
Project One:- B. Cost Volume Analysis
Adika plc plans trade exhibitions at one of the following two possible venues/ locations
A. LAFTO mall with fixed rental cost of br.13,000 & br.130/person for additional services
B. MERKATO market center with fixed rental cost of br.6, 600 for additional services
br.120 per person.
It’s promotion and administration cost is br.8, 000 and bald cost is br.7, 000 ticket will be
sold birr 200 per person
Required
Task 1- calculate total ticket sold at a breakeven point for each location
Task 2- compute operating income and comment on the results if
A, 200 attend
B, 400 attend
C, 500 attend
Task 3- calculate the numbers of ticket where the two have same operating income
Solution for Project one B
LAFTO
Total fixed cost= rent cost+ promotion & administration+ band cost
= 13,000+8000+7000 =28,000
Unit of contribution margin= unit selling price- unit variable cost
=200-130=70
Breakeven point= total fixed cost/UCM
=28,000/70=400 ticket sold
MERKATO
Total fixed cost= 6600+8000+7000
=21,600
UCM= 200-120=80
Breakeven point= 21,600/80=270 ticket sold
A. Operating income of LAFTO
200 attend Operating income= total revenue-total cost (TR-TC)
= usp*number of tickets- uvc*number of tickets+ total fixed cost
= 200*200-130*200+28,000
= 40,000- 26,000+28,000
= 40,000-54,000=14,000 loss
400 attend operating income=200*400-130*400+28,000
=80,000-52,000+28,000
=80,000-80,000=0
=100,000-65,000+28,000
=100,000-93,000=7000 income

36
B. Operating income of MERKATO
200 attend operating income= 200*200-120*200+21,600
=40,000-24,000+21,600
=40,000-45,600=5600 loss
400 attend operating income =200*400-120*400+21,600
=80,000-48,000+21,600
=80,000-69,600=10,400 loss
=100,000-60,000+21,600
=100,000-81,600=18,400 loss
Operating income of LAFTO= operating income of MERKATO
Profit=Total revenue-total cost
PQ-TC=PQ-TC
PQ-(QVC+TFC) =PQ-(QVC-TFC)
PQ-QVC-TFC=PQ-QVC-TFC
Q (P-VC)-TFC=Q (P-VC)-TFC
Q (200-130)-28,000=Q (200-120)-21,600
70Q-28,000=80Q-21,600
70Q-80Q=-28000+21,600
-10Q= -6400
-10 -10
Q=6400/10=640tickets
Project Two :-Prepare Financial Reports
Three year ago Olanna Berhanu stablish MBO private company as 30 2010 the end of
the current fiscal year the MBO company trial balance is as follow
MBO
TRIAL BALANCE
JUNE 30, 2010
Cash 3,425
Fees receivable 7,000
Supplies 1,270
Office equipment 51,650
Accumulated depreciation 9,700
Account payable 925
Unearned fees 1,250
MBO capital 29,000
MBO drawing 5,200
Fess earned 59,125
Rent expense 4,200
Utility expense 2,715
Wage expense 22,415
Miscellaneous 1505
Total 100,000 100,000
ADDITIONAL INFORMATION
The following data are given as additional for the trial balance of MOB
A. Supplies on hand on June 30, 2010 are birr 380
B. Insurance premium expired during the year are birr 315
C. Deprecation of equipment during the year birr 4590
D. Wage accrued but not paid at June 30, 2010 is birr 440
E. Accrued fee earned but recorded at June 30,2010 is birr 1,000
F. Unearned fee on June 30, 20120 are birr 750
37
Task 2.1 journalize adjusting entries
Task 2.2 prepare income statement & owners’ equity & balance sheet
Task 2.3 journalize closing entries
Task 2.4 prepare post-closing trial balance
Solution For Project Two
Task 2.1. Adjusting entries
A. Supplies used= 1270-380=890
Supplies expense-------------------890
Supplies-------------------------------890
B. Insurance expense----------------315
Prepaid insurance-------------------315
C. Depreciation expense-----------4590
Accumulated depreciation of equipment------4590
D. Wage expense-----------------440
Wage payable------------------------440
E. Fee receivable------------------1000
Fee earned---------------------------1000
F. Unearned fee------------------500
Fee earned-------------------------500
Task 2.2.Income statement
MBO
INCOME STATEMENT
JUNE 30, 2010
Fee earned---------------------------------------------------------------------60,625
Less: operating expense
Rent expense--------------------------------------4200
Utility expense------------------------------------2715
Wage expense-----------------------------------22,855
Miscellaneous expense--------------------------1505
Supplies expense---------------------------------890
Insurance expense--------------------------------315
Depreciation expense---------------------------4590
Total operating expense--------------------------------------------------- (37,070)
Net income---------------------------------------------------------------------23,555
MBO
OWNER EQUITY STATEMENT
JUNE 30, 2010
Beginning capital---------------------------------------29,000
Add: net income-------------------23,555
Less: drawing----------------------- (5200)
Increasing owner equity-------------------------------18,355
Ending capital--------------------------------------------47,355

38
MBO
BALANCE SHEET
JUNE 30, 2010
Asset
Cash----------------------------------------------------------------------3425
Fee receivable----------------------------------------------------------8000
Supplies ------------------------------------------------------------------380
Prepaid insurance-------------------------------------------------------305
Office equipment-------------------------------------51,650
Less: Accumulated depreciation---------------- (14,290) ------37,360
Total asset--------------------------------------------------------------------------------------49,470
Liability
Account payable-----------------------------------------------------925
Wage payable--------------------------------------------------------440
Unearned fee---------------------------------------------------------750
Total liability----------------------------------------------------------2115
Capital
MBO capital-----------------------------------------------------------47,355
Total liability & capital------------------------------------------------------------------------49,470
Project Three: A. Revenue Realization
In the fiscal year of operation glorious company a dealer of house hole appliance a
installment sale of birr 300,000 with the returned cost of birr 180,000 of merchandise sold,
the Installment account receivable are over three year as follows
1styear birr 140,000
2ndyear birr 100,000
3rdyear birr 60000
Task 3.1 what will be the gross profit to be recognized for the each year of installment based
on “point of sales method”
Task 3.2 what will be the gross profit to be recognized for the each year of installment
based on “installment method”
Solution Project Three A.
Task 3.1.Point of sales
1St year 2nd year 3rd year
Installment sale----------------300,000 - -
Cost of goods sold------------ (180,000) - -
Gross profit---------------------120,000 - -
Task 3.2.Installment method
First To get gross profit rate= gross profit =120,000 = 0.4 OR 40%
Sales = 300,000
1st year 2nd year 3rd year
Gross profit rate 40% 40% 40%
Cash collections 140,000 100,000 60,000
Gross profit 56,000 40,000 24,000
Project Three B. Revenue Realization
The total installment sales of x company for first year (2007) is birr 200,000 and cost of
installment sales is br.150, 000 collections of cash from installment are
1. 2007 br.60,000
2. 2008 br.100,000
3. 2009 br.40,000
Task 1- calculate gross profit recognized for each year under point of sales method
Task2- calculate gross profit recognized for each year under installment sales method
39
Solution for Project Three B
Task 3.1. using Point of sales
2007 2008 2009
Installment sale-------------------------200,000 - -
Cost of goods sold------------ ------- (150,000) - -
Gross profit------------------------------50,000 - -
Task 3.2. using Installment method
Installment sale - Cost of goods sold = Gross profit
200,000 - 150,000 =50,000
To get gross profit rate gross profit =50,000= 0.25 OR 25%
Sales = 200,000
2007 2008 2009
Gross profit rate 25% 25% 25%
Cash collections 60,000 100,000 40,000
Gross profit 15,000 25,000 10,000
Project Four[A]:- Maintain Inventory Record
ABC PLC has recorded of the following inventory
January 1 inventory 200 units @ Br 9
January 10 purchase 300 units @ Br 10
Additional Information
 At end of the month fiscal count show that 300 unit are on hand
 Assume company use periodic system as well as FIFO inventory method
Task 4.1 what will be the cost of goods sold and ending inventory
Tasks 4.2 assuming that selling price of birr 15 for the merchandise inventory calculate the
gross profit of ABC company for the of June
Task 4.3 the company has incurred birr 2500 general expense include br 900 entertainment
expense during the fiscal year calculate the business profit tax using 30% tax rate
Solution For Project Four: A
Task 4.1.Cost of goods sold Ending inventory (on hand)
200*9 = 1800 200*11 = 2200
300*10 = 3000 100*12 = 1200
200*11 = 2200 300units = 3400
700 unit =7000
Task 4.2. Before we are going to determine the gross profit we should to know the gross sales
Sales in birr= unit*selling price= 700*15= 10,500
Gross profit= sales - cost of goods sold
= 10,500-7000= 3500
Task 4.3. Calculate the business profit tax
ABC Plc
Income Statement
During The Fiscal Year
Sales----------------------------------------------------------------- 10,500
Less: cost of goods sold----------------------------------------- (7000)
Gross profit----------------------------------------------------------3500
Less: operating expense (2500-900) -------------------------- (1600)
Net income before tax--------------------------------------------- 1900
BPT (1900*30%) ---------------------------------------------------- (570)
Net income after tax------------------------------------------------ 1330
So the business profit tax is 1900*30%= 570

40
Project Four [B]Maintain Inventory record
March 1 inventory 100 units @ br.16
March 8 purchase 150 units @ br.17
March 24 purchase 200unit @ br.19
The physical count shows inventory on hand of 250 units at end & The Company uses
periodic inventory system and LIFO cost inventory method
Task 1- calculate cost of goods sold and cost of inventory on hand
Task 2- calculate gross profit assuming sale price of br.25
Task 3- calculate profit tax of 30% assume the company incurred operating expense of
br.2, 500 including entertainment expense br.1,000.
Solution for Project Four B:
Task 4.1. Cost of goods sold Ending inventory (on hand)
200*19 = 3800 150*17= 2550
300*18 =5400 100*16 = 1600
500 unit =9200 250units= 4150
Task 4.2. Before we going to determine the gross profit we should to know the gross sales
Sales in birr = unit*selling price= 500*25= 12,500
Gross profit = sales- cost of goods sold
= 12,500-9200 = 3300
ABC PLC
INCOME STATEMENT
DURING THE FISCUAL YEAR
Sales-----------------------------------------------------------------12,500
Gross profit----------------------------------------------------------3300
Less: operating expense (2500-1000) ------------------------ (1500)
Net income before tax---------------------------------------------1800
BPT (1800*30%) --------------------------------------------------- (540)
Net income after tax------------------------------------------------1260
Project Five:-Bank Reconciliation
Cash in bank account for ABC company at august indicate a balance of birr 18,443.90 during
august the total cash deposit was birr 30,465.75 and check written totaled birr 31,770.25 the
bank statement indicate a balance of birr 26,465.50 on august 31, comparison of the bank
statement the cancelled checks and the accompanying memorandum with the records revealed
the following reconciling items.
a. Check outstanding totaled birr 8,003.84
b. A deposit of birr 2,148.21 representing receipt of August 31, had been made too late to
appear on the bank statement
c. Ten bank had collected for ABC company birr 3,650 on a note left for collection the
face of the note was birr 3500
d. A check for birr 84.20 returned with statement had been record bay ABC company as
birr 8.42. The check was for payment of obligation to FANO computer on account.
e. A check for birr 470 returned with the statement had been incorrectly charged by bank
as birr 740
f. Bank service charge for august amounted to birr 18.75
Task 5.1 prepare bank reconciliation as of august 31
Task 5.2 journalize the necessary entries the account have been closed
41
Solution For Project Five:
ABC Company
Bank Reconciliation
At august 31,200x
Balance per bank statement------------------------------------------26,465.50
ADD: deposit in transit------------------------------2148.21
Bank error-------------------------------------270 --------- 2418.21
Sub- total----------------------------------------------------------------28,883.71
Less: outstanding check--------------------------------------------- (8003.84)
Adjusted balance-------------------------------------------------------20,879.87
Balance per depositor----------------------------------------------------17,324.4
ADD: note collected by bank---------------------------------3500
Interest income-----------------------------------------150-----3650
Sub- total------------------------------------------------------------------20,974.4
Less: bank service charge------------------18.75
Book error--------------------------75.78-------------------- (94.53)
Adjusted balance---------------------------------------------------------20,879.87
Note Depositor Balance = beginning balance +total cash deposit – total checks written
= 18,433.90+30, 30,650.75-31,770.25=17,324.4
To record note collected by bank & interest income & record service charge & depositor error
Cash---------------------3650 Miscellaneous Expense-----18.75
Note receivable------------3500 Account payable------------75.78
Interest income------------150 Cash--------------------94.53
Project six:-A. Process payroll
N Employee name Basic Allowance Over Over time
o salary Representation Fuel time worked
1 Alex habtamu 5,500 1000 200L 6hr weekend /2/
2 Aman kebede 3,000 500 200L 6hrs holiday /2.5/
3 Yodit Tsfaye 800 - 100L 2hrs 6am-10pm/1.25/
4 Gebru Solomon 1,200 700 - -
5 Kebebde zenebe 900 600 50L 6hrs weekend /2/
Additional Information
 The employees work 160 hrs monthly as regular working hours
 Yodit is casual employee
 Alex & Aman agreed 10% & Yordit 5% of basic salary to saving & credit associations
 The fuel allowance is tax exempted up to birr 1000
 Fuel price is 20 birr per liters
Task 6.1 prepare payroll register for month April 2013
Task 6.2 journalize the necessary entries and go’s agency

42
Solution for Project Six A
To prepare payroll register for month April 2013Addis Trading
ABC Company
Payroll Register
For The Month Of April 30, 2013
S Employe Basic Represtn Fuel Over Gross Taxable Income Pensi Credit Total Net Pay
N e Name Salary Allowance Allowan Time Earning Income Tax on Assoat Deduc
1 Alex 5500 1000 4000 412.5 10,912.5 9912.5 2018.75 385 550 2953.75 7958.75
2 Aman 3000 500 4000 281.25 7781.25 6781.25 1130.31 210 300 1640.312 6140.94
3 yodit 800 - 2000 12.5 2812.5 1812.5 129.37 - 40 169.37 2643.13
4 Gebru 1200 700 - - 1900 1900 142.5 84 - 226.5 1673.5
5 Kebede 900 600 1000 67.5 2567.5 1567.5 96.75 63 - 159.75 2407.75
Total 11,400 2800 11,000 773.75 25,973.75 21,973.76 3517.68 742 890 5149.68 20,824.1
To get the fuel allowance in terms of birr for each employees
1. Alex fuel allowance= 200L*20= 4000br 4. For Gebru No fuel allowance is given
2. Aman fuel allowance= 200L*20= 4000br 5. Kebede fuel allowance= 50L*20= br 1000
3. Yodit fuel allowance= 100L*20= 2000 br
Over time for only worked employees Taxable income = GE-Non-taxable allowance
Alex OT= 5500/160*6hrs*2 =412.5 ALEX TI=10,912.5-1000= 9912.5
Aman OT= 3000/160*6hrs*2.5=281.25 AMAN TI= 7781.25-1000= 6781.25
Yodit OT= 800/160*2hrs*1.25= 12.5 YODIT TI= 2812.5-1000= 1812.5
Gebru was not worked GEBRU TI= 1900 -0= 1900
Kebede OT= 900/160*6hrs*2=67.5 KEBEDE TI= 2567.5-1000= 1567.57
Credit association
1. Alex = 5500*10%= 550 2.YODIT= 800*5%= 40 3. Aman= 3000*10%= 300
To record when the salary is payable (end of the month)
Salary expense--------------------------25,973.75
EIT payable---------------------------------------3517.68
Pension payable---------------------------------742
Credit association-------------------------------890
Salary payable------------------------------------20,824.07
To record employer pension contribution
Payroll tax expense = 10,600*11%= 1166
Pension expense---------------------1166
Pension payable-----------------------1166
To record when paid on the next month (beginning of the new month)
EIT payable-------------------------------3517.68
Pension payable--------------------------742
Credit association------------------------890
Salary payable-------------------------20,824.07
Cash -----------------------------------
Project six:-B. Process payroll
The following payroll data for the month of July 2014 was for Addis trading.
s/n Employees Basic Representation Fuel Over time Working
Name salary Allowance allowance Hours Duration
1 Abele K. 3,000 150 150 lit 8 hr Weekend
2 Dereje A. 2,800 300 100 lit 0 -
3 Gere G. 4,000 250 60 lit 6hr 10 pm- 6 am
4 Bontu T. 2,000 - 0 7hr Holiday
5 Senait A. 4,300 200 50 lit 10hr Holiday

43
a. All employees work 8hr per day and 160 hr per month.
b. Bontu is casual employees.
c. Abebe, dereje and Gere contributed 10% of basic salary for credit association
d. Senait contributed 5% of basic salary for credit association.
e. Fuel allowance up to 1,000 birr exempted for tax and price of fuel is 20 per unit.
Task 6.1 prepare payroll register for month April 2013
Task 6.2 journalize the necessary entries and gov’t agency
Solution for Project Six B
Task 6.1. Payroll register
ADDIS TRADING
PAYROLL REGISTER
FOR THE MONTH OF APRIL 30, 2013
S Employe Basic Representa fuel over taxable income pensi credit total net pay
N Name Salary Allowance allow time income tax on Assoation deduction
1 ABEBE 3000 150 3000 300 5450 797.5 210 300 1307.5 5142.5
2 DEJENE 2800 300 2000 - 4100 517.5 196 280 993.5 4106.5
3 GEGRE 4000 250 1200 225 4675 632.5 280 400 1312.5 4362.5
4 BONTU 2000 - - 218.75 2218.75 190.312 - - 190.312 2028.44
5 SENAIT 4300 200 1000 671.87 5171.87 727.97 301 215 1243.97 4927.905
total 16,100 900 7200 1415.62 21,615.62 2865.78 987 1195 5047.78 20,567.84
To get the fuel allowance in terms of birr for each employees

1. ABEBE fuel allowance= 150*20= 3000br 4. Bontu no fuel allowance not given
2. DEJENE fuel allowance= 100*20= 2000br 5. senait fuel allowance= 50*20= 1000br
3. GERE fuel allowance= 60*20= 1200br
Over time for only worked employees & Taxable income = GE-Non-taxable allowance
Alex OT= 3300/160*8hrs*2=300 ABEBE TI=6450-1000= 5450
Dejeene not worked DEJENE TI= 5100-1000= 4100
Yodit OT= 4000/160*6hrs*1.5= 225 GERE TI= 5675-1000=4675
Bontu OT= 2000/160*7hrs*2.5= 218.75 BONTU TI= 2218.75-0= 2218.75
Senait OT= 4300/160*10hrs*2.5=671.87 SENAIT TI= 6171.87-1000=5171.87
Credit association
1. Alex = 3000*10%= 300 3. YODIT= 4000*10%= 400
2. Aman= 2800*10%= 280 4. SENAIT = 4300*5%= 301
To record salary payable(end of the month) & To record employer pension contribution
Salary expense--------------- 25,615.62 Pension expense---------------1410
EIT payable--------------------2865.78 Pension payable------------1410
Pension payable--------------- 987 (14,100*11%= 1410)
Credit association------------- 1195
Salary payable------------------20,567.84
To record when paid on the next month(beginning of the new month)
EIT payable--------------------------2865.78
Pension payable---------------------2397
Credit association--------------------1195
Salary payable--------------------20,567.84
Cash----------------------------------------27025.62

44
KNOWLEDGE BASED
Section A:- Multiple choice
1. which one of the following are correct step of partnership liquidation
A. Sales Of Assets, Payment Of Liabilities Distribute Of Cash To Partners.
B. Payment Of Liabilities Sales Of Assets Distribute Of Cash To Partners
C. Distribute Of Cash To Partners Payment Of Liabilities Sales Of Assets
D. Payment Of Liabilities Distribute Of Cash To Partners Sales Of Assets,
2. Which of the following is not considered as a cost f manufacturing?
A. Direct Materials C. Factory Overhead
B. sales Salary D. Direct Labor Cost
3. An enterprise issued a br. 5000, 60 day, 12% non interest bearing note to the bank, the
bank accrues the note at 12% the proceeds are :
A. 4900 B. 5000 C. 5100 D. 5600
4. 4Which of the following is not a characteristic of job order costing?
A. costs are accumulated by job
B. costs are accumulated by department
C. in job order cost system
D. The WIP inventory at the end of the accounting period is the sum of the job
Cost sheet for partially completed jobs
E. costs is recorded at the end of job
5. The master budget process usually begins with the:
A. production budget C. Capital budget
B. B. operating budget D. sales budget
6. The account maintained by a manufacturing business for inventory goods in the process
of manufactures is:
A. Finished Goods C. WIP
B. Raw Material D. Factory Overhead
7. An enterprise issued a br. 5000, 60 day, 12% note to the bank, the amount due at
maturity is:
A. 4900 B. 5000 C. 5100 D. 5600
8. Payroll register sheet is:
A. pay period refers to the length of time covered by each payroll payment
B. the day in which wage or salaries are paid to employees
C. the l8ist of employees of a business along with each employee gross earnings
D. less sensitive by employees
9. The following are users of accounting information except:
A. Manager’s C. Employee’s
B. Financial Institution D. Budget
10. The inventory cost method used to determine cost of goods sold and cost of inventory
on hand for perishable goods:
A. LIFO C. weighted average Method
B. FIFO D. Cost
11. Under the perpetual inventory costing method, the need of counting actual inventory is:
A. To Calculate Cost Of Goods Sold C. To Calculate Gross Profit
B. To Calculate Cost Of Inventory On Hand D. For Cross Checking
Given information Bokra company purchase commodity A for resale during Octob 2014;
October 1. Inventory-------------------------------------20unit@br.25
5. sales-------------------------------------------8units@br.30
9. Purchase ------------------------------------10units@br.30
19. sales-----------------------------------------14units@br.37
23. sales-----------------------------------------4units@br.48
30. purchase------------------------------------10units@br.35

45
12. Assume BORKA Company uses periodic inventory system and LIFO costing method
calculates cost of goods sold at the end of November?
A. 150 B. 950 C. 680 D. 800
13. Based on given Data above, assume BORKA COMPANY uses periodic inventory system
& LIFO costing method. Calculate inventory on hand at end of November:
A. 800 B. 950 C. 680 D. 150
14. based on given on given Data above, assume BORKA COMPANY uses periodic inventory
system and LIFO costing method , calculate gross profit at the end of November:
A. 150 B. 800 C. 680 D. 950
15. based on given in question number 14, assume BORKA COMPANY uses periodic
inventory system and FIFO costing method , calculate the cost of goods sold:
A. 950 B. 600 C. 680 D. 150
16. a statement shows the financial progress of an enterprise:
A. Capital Statement C. Income Statement
B. Balance Sheet D. Cash Flow Statement
17. A bank erroneously made payment by check br. 2510 as 2105. This error affects:
A. Balance Of Seller C. Balance Of Buyer
B. Bank Statement D. Balance Per Depositor
18. Monetary plan refers to:
A. Plan C. Sales
B. Purchase D. Budget
19. Units not yet completed in manufacturing firm are:
A. Overheads C. WIP
B. finished goods D. raw materials
Section B. matching
Column A Column B
1. Unearned revenue A. revenue is realized regardless of cash collection
2. Internal control system alternate current or voltage
3. WIP inventory B. same tax rate regardless of tax base
4. Computerized accounting system C. debit part of balance sheet is less than credit
5. Job cost sheet part in a work sheet
6. Accrual basis accounting D. Nominal account
7. Job order costing E. rate declines as the tax base increases
8. Budgeting F. Unique accounting document under job costing
9. Drawing account G. High tax rate, as the tax base increases
10. Proportional taxation H. save time and cost
11. Net loss I. using vouchers
12. Progressive taxation j. revenue
13. Indirect labor cost K. inventories to be completed next period
14. Regressive taxation L. liability
15. Outstanding checks M. process costing
N. prime costs
O. sanitary
P. monetary expression of plan
Q. costs are assigned by specific job
R. winding up process of partners
S. bank reconciliation

46
/Version 5/
Project one:-Process Payroll
Suppose XY- Company employed ato Solomon as permanent employee. The
following data relates to Solomon for the month of hidar 2005
1. Basic salary br.4,000
2. Transport allowance br.5,000 (exempted)
3. Position allowance br.300
4. Remuneration for distance education br.1,000
5. Teaching materials preparation payment br.5,000
6. Overtime work duration 8:30 pm – 2:00 am on Monday and regular working
hours is 40 hrs/week 10pm 11pm 12pm 1am 2am 3am 4am5am 6am
7. Pension for Employee 7% and Employer 11%
8. 10% of basic salary is deducted for credit and saving association
9. One month salary is contributed for Abay dam Contribution to be paid for year
Required
1) Calculate Gross Earning & Income Tax & Pension
2) Calculate Net Pay
3) Record Entry For Salary Expense& For Payment Of Income Tax & Pension
Solution for Project one
Total Allowance = P.Allowance +T.allowance + R.allowance +Teach material Allow
= 5000+300+1000+5000
= 11300
OTE = OTH*OTR*BSPH
= [(1.30*1.25) + (4*1.5)]* 4000/160
= (1.875 +16.6) *25
= 18.475*66.67
= 1231.73
1) Calculate Gross Earning
GE=Basic Salary+ Allowance+ OTE Taxable Income = Gross E – Non-Taxable In
=4000+11300+1231.73 =16531.73 -11000
=16531.73 =5531.73
2. Calculate Income Tax & Pension
EIT= TI*TR –D Pension =Basic Salary*rate
=5531.73 *25%-565 = 4000*7
= 817.93 =280
Credit & Saving Association =40000*10% Abay DAM =4000/12
=400 = 333.33
Total Deduction =817.93+280+400+333.33
=1831.26
3. Calculate Net Pay
Net Pay =Gross Earning –Total Deduction
=16531.73 - 1831.26
=14700.47

47
4. Record Entry For Salary Expense
Salary Expense ---------------------------16531.73
Pension contr payable -------------------- 280.00
Employment Income Tax -------------------817,93
Credit &Saving Association--------------- 400.00
Abay DAM--------------------------------------333.33
Cash(net pay)---------------------------------14700.47
5. Pension contr payable -------------------- 280.00
Employment Income Tax -------------------817.93
Credit &Saving Association----------------- 400.00
Abay DAM--------------------------------------333.33
Cash ---------------------------------------1831.26
Project Two: - Prepare Financial Report
Selected accounts from the ledger of ABC Company at the end of the fiscal year of
2013 are as follows. The account balance is shown before and after adjustment:
Before Adjustment After Adjustment
Fee receivable ---------------- ---- 7000
Supplies------------------------ 2980 900
Prepaid insurance------------ 4720 2120
Wage payable----------------- ---- 2425
Advertising payable--------- ---- 3300
Unearned rent------------------ 5200 400
Fee earned--------------------- 129600 136600
Wage expense----------------- 63,280 65,705
Insurance expense---------- -------- 2600
Advertising expense---------- 16,200 19,500
Supplies expense------------- 2080
Rent income-------------------- 4800
Instruction:
Task 1.1. Prepare income statement for the fiscal year?
Task 1.2. Journalize closing entries of the nominal accounts on December 31, 2013?
Solution for Project Two፡
ABC Company
Income statement
For the year ended dec 31 2017
Fee earned------------------------136,600
Rent income----------------------- 4800
Total income --------------------------------------------- 141400
Wage expense--------------------- 65,705
Insurance expense--------------- 2600
Advertising expense--------------- 19,500
Supplies expense------------------- 2080
Total expense -------------------------------------------- (92485)
Net Income--------------------------------------------------br48915
Task 1.3. Journalize closing entries of the nominal accounts on December 31, 2013?
a. To close revenue accounts
Fee earned------------------------136,600
Rent income----------------------- 4800
Income summary ----------------------141400
b. To close expenses accounts
48
Income summary ---------------92485
Wage expense--------------------- 65,705
c. To close Income summary account
Income summary---------------48915
ABC Capital -------------------48915
Project three ፡ Bank reconciliation
The following data are accumulated for use in reconciling the bank account of Tekeze
Company for June 30, 2008.
A. Balance per bank statement at June 30, br. 7929.50
B. Balance per depositor’s records at June 30, 6017.05
C. Check outstanding br. 2510.40
D. A check for 230 in payment of a voucher was erroneously recorded in the check
register as br. 320
E. Deposit in transit, not recorded by the bank 671.25
F. Bank debit memorandum for service charges 16.70
Instruction፡ under this task the candidate is expected to prepare the following tasks.
Write the required data on the worksheet
Task 1.1. Prepare bank reconciliation on June 30, 2008?
Task 1.2. Journalize the necessary journal entries?
Solution for project Three
Task 1.1. Prepare bank reconciliation on June 30, 2008?
Tekeze Company
Bank reconciliation
At June 30, 2008.
Cash Balance as per bank statement, --------------------- br. 7929.50
Add;- Deposit in transit, not recorded by the bank ------------------ 671.25
Sub Total ----------------------------------------------------------- Br8600.75
Less:- Check outstanding --------------------------------------------------- (br. 2510.40)
Corrected Balance ------------------------------------------------- Br6090.35
Cash Balance as per depositor’s records ------------------- Br 6017.05
Add;- Depositor’s erroneously recorded(320 -230)-------------------- Birr 90
Sub Total -----------------------------------------------------------Br 6107.05
Less: - Bank service charges -------------------------------------------------- (16.70)
Corrected Balance ------------------------------------------------ Br6090.35
Task 1.2. Journalize the necessary journal entries?
a. Cash -------------------------90
Voucher Payable -----------90
b. Bank service charges -----------16.70
Cash --------------------------------------16.70
Project four Calculate taxes and fees and handle foreign currency
ABAY company purchased cleaning chemicals on account at 85,900 Great Britain pound FOB
shipping freight 2,800 from UK to Djibouti port and br.55, 000 from Djibouti to customers
ware house in additional the company paid br.862, 000 custom duty taxes and br.500 insurance.
Bank deduct 3% service charge from foreign currency penalty was br.15, 000.
GBP – 30.60
49
USD – 21
Required
Task 1- calculate service charge payment
Task 2- calculate amount of money paid only to supplies of chemical
Task 3- calculate total cost of chemical
Task 4- journalize entry for purchase of chemical and payment of liability
Task 5- journalize entry fright cost
Required
Task 1- calculate service charge payment (85,900 *30.6) = 2628540 *3% = 78856.2
Task 2- calculate amount of money paid only to supplies of chemical
Amount of Money Paid Supplies Chemical =Fob Value * Exc rate
= 85,900*30.6
= 2628540
Task 3- calculate total cost of chemical
Fob Value (85,900 *30.6) --------------------------------2,628,540
Freight cost (2800+55000) --------------------------------- 57,800
Custom duty taxes------------------------------------------ 862,000
Insurance-----------------------------------------------------------500
Bank service charge (2628540 *3%) ---------------------- 78856.2
Penalty ------------------------------------------------------- br.15, 000
Total ----------------------------------------------------------3,642,696.2
Task 4- journalize entry for purchase of chemical and payment of liability
Purchase -------------------2,628,540
Account Payable -----------2,628,540
Account Payable -----------2,628,540
Cash---------------------------------2,628,540
Task 5- Entry for the Payment on Cash for freight, Insurance br.862, 000 custom and Bank
service charge & Penalty
Transportation in ----------------------- 57,800
Insurance -------------------------------------500
Bank service charge ----------------------78856.2
Penalty ------------------------------------ 15, 000
Cash------------------------------------152156.2
Project Five A. Job Orders Costing
Mesfin industrial engineering specializes in production of car and uses job order costing system.
The following data summarize the operations related to production for November the first month
of operation. Write the required data on the worksheet:
A. Materials purchased on account br. 21,750
B. Materials request allowed and factory labor
Jobs Materials Factor Labor
Job no1 2750 1700
Job no2 3800 2000
Job no3 2990 1450
Job no4 5950 3800
Job no5 3250 1900
Job no6 900 600
Job no 6 for factory use 595 500
C. Factory Overhead Costs Incurred On Account Br. 4300
D. Depreciation Of 1450
E. Factory Overhead Rate Is 60% Of Direct Labor Cost
F. Jobs Completed No. 1,2,3and 4
G. Jobs 1,2 and 4 Were Shipped & Customer Were Billed For 7900, 10500 & 18100 Respectively
50
Instructions:
Task 1.1. Prepare entries to record the above transactions summarized
Task 1.2. Determine the account balance for work in process and finished goods
Task 1.3. Prepare schedule of unfinished jobs to support the balance in work in process account
Task 1.4. Prepare schedule of completed jobs on hand to support the balance in finished good
account
Solution for project six
Task 1.1. Prepare entries to record the above transactions summarized
A. Entries To Record Materials Purchased On Account
Raw Materials Inventory ------------ 21,750
Account Payable -----------------21,750
B. Entries to Record Materials request allowed and factory labor Incurred
WIP ------------------------------ 19335
MOH incurred -------------------- 305
Raw Materials Inventory ------------19645
WIP -----------------------------11350
MOH----------------------------- 100
Factory labor cost -------------------------11450
C. MoH incurred ---------------------------- 4300
Account payable ----------------------------4300
D. MoH incurred ---------------------------- 1450
Accumulated depreciation on plant---- 1450
Mesfin industrial engineering
JOB SHEET
At First month of Oper
Job DM DL FOH Applied Total
Job 1 2750 1700 1020 5470
Job2 3800 2000 1200 7000
Job3 2990 1450 870 5310
Job4 5950 3800 2280 12030
Job5 3250 1900 1140 6290
Job6 595 500 300 1395
Total 19335 11350 6810 37495
E. Factory Overhead Rate Is 60 % Of Direct Labor Cost
WIP ------------------------ 6810
MOH Applied --------------------- 6810
(MOH incurred 11350*60% = 6810)
F. Jobs Completed No. 1,2,3 and 4(5470+7000+5310+12030=29810)

FG Inventory ---------------29810
WIP Inventory-----------------------29810
G. Jobs 1, 2 and 4 Were Shipped And Customer Were Billed For 7900, 10500 And 18100
Respectively
A/R ---------------------36500
Sales ---------------------------------36500
CGS ----------------------- 24500
FG Inventory ----------------- 24500
(Job1+Job2+Job4=5470 +7000+12030=24500)
Task 1.2 determine the balance of WIP and the Balance of FG

51
WIP balance job5 and Job6 -----------32185
FG balance Job 1,2,3 & 4-------------- 29810
Task1.3. Prepare schedule of unfinished jobs to support the balance in the work in
process account

Schedule for UN FINISHED
Job DM DL FOH Aplied Total
Job5 3250 1900 1140 6290
Job6 595 500 300 1395
Total 16345 9900 5940 32185
Task 1.4. Prepare schedule of completed jobs on hand to support the balance in the
finished good account
SCHEDULE for FINISH GOODS
Job DM DL FOH Aplied Total
Job 1 2750 1700 1020 5470
Job2 3800 2000 1200 7000
Job3 2990 1450 870 5310
Job4 5950 3800 2280 12030
Total C G Manufactured 29810
MOH Incurred MOH Applied
305 6155 6810
100
4300 655 over applied
1450
6155
Project Five B. Job Order Costing

During the month of January, the following transaction will occur to produce products:
1. raw material purchases
 Lime stone--------------------------br.800
 Sand-----------------------------------990
 Cement powders (chemicals) -----5400
2. material issued and direct factor labor cost used
Direct Material Direct Labor
Job #x-----------327.50 170
Job #y------------870 240
Job #z-----------3920 195
3. Factor overhead is 70% of direct labor cost
4. All goods already produced are sold, the finished products sold for br. 8700
Instruction: under this project the candidate is expected to perform the following tasks. Write
the required data on the worksheet:
Task 1.1. Record the necessary journal entry for the above transaction?
52
Task 1.2. Calculate the cost of each job?
Task 1.3. Calculate the amount of gross profit?
Solution for Project five B.
Task 1.1. Record the necessary journal entry for the above transaction?
1. Raw Material Inventory ---------------------------7190
Account Payable ----------------------------- 7190
2. WIP Inventory -------------- 5722.5
Direct material Inventory ---------5117.5
Factory Labor ----------------------- 605
3. WIP Inventory -------------------------- 423.5
MOH Aplied -----------------------------------------423.5
4. FG Inventory ---------------------6146
WIP Inventory ---------------------------6146
A/R -----------------------8700
FG Inventory -------------------8700
CGS ------------------------6146
FG --------------------------6146
Task 1.2. Calculate the cost of each job?
Job DM DL MOH Total

JOBX 327.5 170 119 616.5
JOBY 870 240 168 1278
JOBZ 3920 195 136.5 4251.5
TOTAL COST 5117.5 605 423.5 6146
Task 1.3. Calculate the amount of gross profit?
GP= SALES – CGS
= 8700-5976
=2724
Project Six A. Transaction
Dec 1, purchase building materials with 2,000,000 VAT inclusive.
Dec 8, paid br.100, 000 to machine rent with VAT exclusive.
Dec 14, paid br.10, 000 to purchase fuel used for machine
Dec 20, received br.3, 000,000 fees a first payment with VAT exclusive
Dec 21, vat credit cruised foreword from perilous moth br.9, 000
Required
Task 1- Record the above entries journal entry from ABC Company.
Task 2- Calculate net vat receivable or vat payable for the month.
Task 3- Prepare Income statement for tax purpose and calculate profit tax 30%. ss
Solution for Project six A.
Task 1- record the above entries journal entry from Abs Company.
A. Dec 1, purchase building materials with 2,000,000 VAT inclusive.
Purchase -----------------173913.0435
VAT receivable ------------26086.957
Cash -----------------------200,000
B. Dec 8, paid br.100, 000 to machine rent with VAT exclusive.
Prepaid rent ----------------------100,000
53
VAT receivable ------------------- 15000
Cash ------------------------------ 315000
C. Dec 14, paid br.10, 000 to purchase fuel used for machine
Utilities expense------------- 10,000
Cash ------------------------------10,000
D. Dec 20, received br.3, 000,000 fees a first payment with VAT exclusive
Cash --------------------------3,450, 000
VAT Payable ----------------- 450000
Fees earned ------------------ 3000000
E. Dec 21, VAT credit foreword from previous month br.9, 000
Task 2- calculate net vat receivable or vat payable for the month.
OUT PUT VAT= VAT payable +VAT credit Forward
=450000 +9000
=459000
INPUT VAT= VAT Receivable
=26086.957 + 15000
41086.957
Net VAT = Out Put VAT –Input VAT
=459000 - 41086.957
=417913.043
Task 3- prepare income statement for tax purpose and calculate profit tax 30%.

54
Project six B Transaction
The following were selected from among the transactions completed by DAT, a VAT
registered merchandize firm, during January of the current year:
1. purchase merchandize for cash birr 600,000
2. sold merchandize for cash br. 560,000
3. sold merchandize on account br. 1,000,000
4. purchase merchandize on account from AB company br. 300,000
5. sold merchandize for cash br. 400,000
6. paid entertainment expense br. 46,000
7. paid utility expense br. 20,000
8. paid salary expense br. 28,000
9. paid advertising expenses br. 60,000
10. doubtful account expenses br. 45,000
Required:
Task 1.1. Record the necessary journal entries related to the transactions?
Task 1.2. Determine the VAT?
Task 1.3. Prepare profit and loss statement assuming business profit is 30%?
Sample Six
General Information
THDS Brewery is private limited company (PLC) established according to the Ethiopian
commercial code. It is engaged in brewery business. The company partners are ATO Tafa,
ATO habtamu, ATO dinesaw and ATO sewenet. The company started its operation on Hamle
1,2000 After getting operational licence from the Ethiopia ministry of trade and industry.
Right before the business started its operation of Hamle 1, 2000 the partners ATO Tafa , ATO
habtamu , ATO dinesaw and ATO sewnte made cash investment of birr 20,000, birr
30,000,birr 40,000,birr 50,000,birr respectively. They agreed to operate it as co-owners.
Besides, they agreed that ATO Tafa, ATO habtamu, ATO dilnesaw and ATO sewenet work on
a daily bases with the business for 5, 4, 3 and 2 hours, respectively. They have also, agreed to
share profit from business affairs in to ratio of 1:3:5:7 to ATO Tafa, ATO habtamu, ATO
dilnesaw and ATO sewnet respectively. The following selected information is taken from the
financial manual of the company.
1. The company fiscal year runs from Hamel 1 to sene 30
2. The company uses straight line deprecations method for all its plant assets.
3. The company uses first in first out (FIFO) method and periodic inventory system to
account for costs of all kind of inventory.
4. The company uses the accrual basis of accounting
5. Any amount in excess of birr 5000 is considered material
6. The company pays salary at the end of each month. .
7. Employee retirement fund contribution
Contributor Rate
 Employee 7%
 Employer 11%
55
8. Ethiopian employment income tax schedule:
Income tax
Income tax (birr) Deduction
rate
0-600 0% -
601 1650 10% 60
1651 3200 15% 142.5
3201-5250 20% 302.5
5251-7800 25% 565
7801-10900 30% 955
Over 10900 35% 1500
9. Ethiopia labor law over time work compensation rates
Over time work period Hourly compensation rate
6:00 AM to 10:00PM 1.25
10:00PM to 6:00 AM 1.50
Weekends 2:00
Public holiday 2:50
Project One:--Bank Reconciliation and Related Journal Entry

On sene 30 2001 the cash at bank account of THDS brewery plc. Showed at normal balance of
birr 26,347.40 on the same data the bank statement disclose a normal balance of birr
28,925.00 the following information is obtained during the course of examination of various
document of the company and the bank.
I. Outstanding deposit at sene 30 2001 totaled birr 7680.00
II. The service charge for the month of was birr 72.40
III. The bank collection a birr 5720.00 note on behalf of the depositor. The face value of the
note was birr 5000.00
IV. Outstanding check’s at sene30 2001 totaled birr 4840.00
V. A non-sufficient fund check of birr 2500.00 was return with bank statement of sene 2001
VI. A check No 666 issued in payment of accrued interest for birr 450.00 was record by
depositor in the check register as birr 540.00
VII. A check for birr 750.00 paid by the bank was report at the bank statement as birr 570.00
Instruction
A. prepare bank reconciliation at Sene 30 2001.
B. record the necessary journal entry at Sene 30 2001 in the book of the depositor
Solution to Project One:
A. prepare bank reconciliation at Sene 30 2001
THDS brewery plc
Bank reconciliation
sene 30 2001
Balance per bank staqtement----------------------------------28,925
ADD: outstanding check-----------------------------------------7680
Sub- total---------------------------------------------------------36,605
LESS: outstanding check--------------------4840
Bank error---------------------------- 180----------- (5020)
Adjusted balance------------------------------------------------31,585
Balance per depositor------------------------------------------28,347.40
ADD: note collected by bank---------------5000
Interest income----------------------720
Depositor error-----------------------90-------------- 5810
56
Sub- total---------------------------------------------------------34,157.40
LESS: NSF---------------------------------------2500
Service charge--------------------------- 72.40------ (2572.40)
Adjusted balance-------------------------------------------------31,585
B. record the necessary journal entry at Sene 30 2001 in the book of the depositor
Cash--------------------------5810
N/R---------------------------5000
Interest income-----------720
A/P----------------------------90
A/R--------------------------------2500
Miscellaneous expense-----72.40
Cash-------------------------------2572.40
Project Two. Inventory Cost Determination
The following select information related to inventory or raw material is taken from the accounting
record of THDS brewery PLC for Sene 2001
Sene 1 inventory consists of 3000 units purchase at birr 9 each

4 used 2000 units at birr 10 each
17 purchase 2000 units at birr 10 each
26 used 2000 units
30 purchase 1000 units at birr 11 each
Instruction:
A. Determine the cost of raw material on hand and cost of raw material used as of Sene 30
2001 assuming that the raw material inventory on hand is 1800 unit
B. Prepare the necessary inventory adjusting entry as sene 30 2001
C. Determine the cost of raw material on hand and the cost of raw material used as of sene
30 2001 assuming that the company uses last in first out (LIFO) perpetual and physical
inventory shows 1800 unit of raw material remained on hand
D. Assuming case ‘’c’’ above and there is no inventory recording error, prepare inventory
adjusting entries as of sene 30 2001
Solution for Project Two:
A. Calculate cost of raw material on Hand and Cost of raw material used using FIFO method
and Periodic Inventory System
Sene 1, 2001 Beginning Raw Material---3000 units @9 =27000
17, 2001 Raw material Purchase ---2000 units@10 =20000
30, 2001 Raw material Purchase -- 1000 units@11 = 11000
MAF use – 6000 units Brr 58000
Cost of Raw Material on Hand Using FIFO Cost of raw material used
1000@11 = 11000 3000@9=27000
800@10 = 8000 1000@10=10000
Cost of RM on hand =1800 unit =19000 Cost of RM Used=4000unit=37000
B. Prepare necessary inventory adjusting entry for sene 30,2001
Since the company uses periodic inventory system, adjustments are necessary for beginning
inventories that must be excluded and replaced by ending inventory. The following is an
adjustment
Manufacturing summary ---------27000
Raw material inventory (beginning) ------27000
Raw material inventory (ending) ------19000

57
Manufacturing summary -------------19000
C. Calculate cost of raw material on Hand and Cost of raw material used using LIFO method
and Perpetual Inventory System
Cost of RM Purchase Cost of RM Used Inventory Balance
Date
Sen1 3000 9 27000
sene4 2000 9 18000 1000 9 9000
1000 9 9000
sene17 2000 10 20000
2000 10 20000
Sene26 2000 10 20000 1000 9 9000
1000 9 9000
Sene30 1000 11 11000
1000 11 11000
Beg RM Bal=3000 Units Q Ending =2000 Units
Q= 4000 Unit
QRM Purchase=3000units Cost of R M on Hand
Cost of M.Used
Cost of Purchased RM = 9000+11000
=20000 +18000 =38000
= 20000+11000 =31000 = 20000
D. Assuming case C above and there is no inventory recording errors, prepare inventory
adjusting entries for Sene 30,2001
 To adjusting 200 units of inventory difference (between physical Raw material inventory on
Hand 1800 units and perpetual Raw material inventory record balances 2000 units)
Cost of material manufactured used --------- 2200
Raw Material on hand (shrinkage) ------------ 2200
(200 units of raw material shortage /shrinkage =200@11=2200)
Cost of material manufactured used Raw Material on hand
Before Adjust 38000 Before Adjust; 20000 2200 for
shrinkage
Plus: - shrinkage; 2200
40200 17,800
Project Three:- Determining and Recording Deprecation
THDS brewery PLC purchase a delivery truck at a cost of birr 270,000 on Meskerem 1 2001
The delivery truck has an estimated useful life of 8 years or 800,000 kilometer and selvage
value of birr 30,000.
Instruction
A. Calculate deprecation expanse for the fiscal period ended sene 30 2001 & sene 30 2002
B. Calculate depreciation expense for each of the fiscal period ended sene 30 2001 and sene
30 2002 assuming that the company uses the double-declining balance method
Solution for Project Three
A. Using straight line method
Annual depreciation= Cost of Asset- Selvage Value/useful life
= 270,000- 30,000/8 years
=30,000 (If the plant asset had placed at work on Hamle 1 2000)
 For partial year from Meskerem 1,2001, to sene 30, 2001
Depreciation = 30,000*10/12= 25,000
 For sene 30, 2002 depreciation = 270,000 - 30,000/8 years
= 30,000
B. using double declining balance method
Yearly Depreciation expenses = Book value * DDB rate
DDB rate= 100%/8= 12.5%*2= 25%
 Annual Full year depreciation = 270000 *25%
58
= 67500
 For partial of a year from Meskerem 1,2001, to sene 30, 2001
Depreciation expenses = 270000 *25% *10/12
= 56250
(B/c the plant asset had placed at work on Meskerem 1, 2001)
Depreciation Expense for sene 30, 2002 = (270, 000 – 56250)*25%)
= 213750*25%*
= 53437.5
Project Four:- Payroll Processing And Related Journal Entry
THDS brewery plc. Filed its monthly payroll registered with the Ethiopian revenue & custom
authority Debebe is a research team leader working with THDS he is supported to work 8
hour a day from 8 AM to 5PM from Monday to Friday in total for 160 hour month in sene
2001 Debebe worked for 8 hour from 6 AM to 7:30AM and for 5 hour from 12PM to 5AM he
monthly earned basic salary and position allowance of birr 3600 and 800 respectively
(assume position allowance non-taxable)
Instruction: - for the month of Sene 2001 calculate debe’s
1. Gross earning
2. Employment income tax
3. Contribution to the employee retirement fund
4. Net pay
Solution for Project Four
I. For the of Sene calculate
A. Gross earning(GE)
OTE =TOTH *OTR*BSPH GE =BS+ Allowance + OTE
= [(8*1.25) + (5*1.5)]*3600/160 =3600+800+ 393.75
= [10 + 7.5]* 22.5 = 4793.75
= 393.75
B. Employment Income Tax (EIT)
Taxable Income = Gross Earning – Non taxable EIT =TI*Rate-D
= 4793.75 -800 = 3993.75*20%- 302.5
= 3993.75 = 496.25
C. Contribution pay for retirement fun
Pension Fund = Basic Salary *7%
=3600*7% = 252
D. Net pay = GE –Total Deduction
=4793.75 -748.25 = 4045.5
2. Prepare journal entries at sene 30, 2001
Salary expenses ---------------4793.75
EIT Payable ---------------------- 496.25
Pension Contr payable---------- 252
Cash (Net Pay) -------------------4045.5
Pension expense----------- 396
Pension contrib. payable-------396
Project Five: -: - Determination Of Cost and Contribution Margin.
THDS brewery Plc. Procedure premier beer called ‘’feshta’’ variable costs per case consist of
birr 30 direct material birr 10 direct labor and 20 overhead costs on the other hand average
monthly fixed brewing cost consist of birr 100,000 factory building rent birr 10,000 insurance
birr 400,000 deprecation of factory facility and birr 190,000 other brewing costs the average
monthly fixed selling and administration costs are birr 270,000 and birr 150,000 respectively
the other variable costs is a birr 12 sales commission per case of beer sold which is payable to
59
hotel and distribution outlets he average monthly production volume is 34,000 case a case
contains 25 bottles of beer.
Instruction
A. Determine brewing cost per bottle of beer
B. determine contribution margin per bottle of beer if per bottle selling price is birr 6.40
Solution for Project five:
To get brewing cost per bottle of beer
Total fixed cost of Manufacturing related to production in a month
= 100,000+10,000+400,000+190,000
= 700,000
Total fixed cost of manufacturing related to non production in a month
= 270000+150000
= 420000
Total fixed cost in a month = 700000+420000 =1,120,000
Total fixed cost per bottle = 1,120,000/25*34000
=1.32 per Bottle
VC per case related to production = 30 + 10 + 20 = 60
Variable cost per case related to sales commission =12
Total Variable cost per case =72
Total Variable cost in a month = Variable Cost Per case* production volume in a month
= 72*34,000
= 2,448,000
[Total Variable Cost per bottle=2,448,000/25*34,000 =2.88]
Total cost = Total fixed cost in a month + Total variable cost in a month
= 1,120,000 + 2,448,000
= 3,568,000
Total Cost per bottle = 3,568,000/25*34,000
= 3,568,000/850,000
= 4.2 per bottle
B. Contribution Margin per Bottle = selling price per bottle - Variable Cost per Bottle
= 6.40 -2.88
= 3.52 per Bottle
Project Six :- Determination Breakeven Quantity and Revenue
THDS brewery plc. Procedure premier beer called ‘’feshta ‘’ variable brewing costs per case are birr
60.00 while average monthly fixed brewing and selling and administrative costs are birr 700,000 and
birr 420,000 respectively the other variable cost is birr 12 sales commission per case of beer sod which
is payable to hotel and distribution outlets.
1. Determine sales price per case if breakeven sales per month is 16,000 case
2. The company is how selling about 34,000 cases of feshta per month at 160 per case birr. The
advertising manager of the company believes that sales volume of feshita can be increased by 10% if
selling price is reduced to birr 150 while all other variable remain constant should the selling price per
case be reduce to birr 150? Why?
By the approximation how much should be the minimum percentage increase in sales volume of fishita to
accept the plan in ‘’b’’ above?
Solution for Project six:
TO GET SELLING PRICE PER CASE
BEP = TFC/UCM= 16,000 = 700,000/UCM
1120000/16,000 = 70 UCM
UCM = selling price per case - variable cost per case therefore:
SPPC= UCM +VCPC = 70 + 72 = 142

60
Case 1 Selling volume = 34,000 Case 2 Selling Volume Increase By 10% = 37,400
Selling (34,000*160) -------------5,440,000 Selling (37,400*150) --------5,610,000
Variable cost (34,000*72) -- (2,448,000) Variable cost (37,400*72) -- (2692800)
Contribution margin------------ 2992000 Contribution Margin--------- 2,917,200
Fixed cost------------------------ (1,120,000) Fixed Cost---------------------- (1,120,000)
Net income---------------------- 1,872,000 Net Income--------------------1,797,200
The answer is no, because the results for case 2 net income or contribution margin less than from case 1
C. by 13% of the percentage increases the sales volume of fesheta that accept the plan B by this ways:
Plan B
If Seles volume increase mini of 13% = 34,000*13% +34,000= 38,420
Selling (38,420*150) -------------------------------5,763,000
Variable cost (38,420*72) --------------------- (2,766,240)
Contribution margin------------------------------2,996,760
Fixed cost------------------------------------------ (1,120,000)
Net income-----------------------------------------1,876,760
Project Seven:- Distribution Partnership Profit Determining Balance
For the year ended sene 30 2001, THDS brewery plc. Report a net profit of birr 240,000
Instruction
A. distribute the net profit for the current year to the partner of THDS
B. Determine the capita balance of each partner as of sene 30 2001 assuming that THDS
brewery plc. Incurred birr 60,000 net loss by the end of the current period and the partner
share profit as follow
I. Yearly salary allowance of birr 7000 birr 5000 birr 3000 and birr 1000 to ato Tafa ,ato
habtamu , to deilnesaw and ato sewenet respectively
II. Yearly 10% interest allowance on capital balance of each partner at the beginning of
each fiscal year
III. Remaining balance equality
Project seven: distributing partnership profit and determining capital balance
A. To distribute the net profit
ATO TAFA= 240,000*1/16= 15,000 =15,000
ATO HABTAMU= 240,000*-3/16=15,000 =45,000
ATO DILNESAW= 240,000*5/16= 15,000=75,000
ATO SEWNET= 240,000*7/16= 15,000= 105,000
B. To get capital balance
Tafa Habtamu Delnesaw Sewnet Total
Salary allowance------------------- 7000 5000 3000 1000 16,000
Interest (10% of capital balance) 2000 3000 4000 5000 14,000
Remaining equally-------------- 7500 7500 7500 7500 30000
Total 16,500 15,500 14,500 13,500 60,000

61
Sample 7
Project ONE: - Job Order Costing
HYZ is manufacturing firm producing a product using a raw material of Sand, Steel and
Chemical in the Month of January under the following three jobs.
5. Material purchase on account
Sand 500
Steel 790
Chemical 4500
6. Direct Material Issued &Factory Labor Cost
Material direct labor cost
Jobg1 277.5 160
Jobg2 780 210
Jobg3 3900 175
7. factory overhead is 60% of direct labor cost
8. finished goods sold for birr 7200
Task 5.1rescore the necessary journal entries
Task 5.2 calculate each job cost
Task 5.3 calculate gross profit
Answer for Project
Task 5.1. Journal entries
To record materials purchase on account To record work in process materials
Purchase---------------5790 Work in process-----------4957.5
A/P-----------------------5790 material-----------------4957.5
To record direct labor cost
Work in process------------545
Salary payable-----------545
To record factory overhead To Record Sales of Goods
Work In Process---------------327 A/R-----------------------7200
Factory Overhead------------------327 Sales-----------------------7200
(To get factory overhead=60%*545=327)
Direct Direct Factor Total Product
Jobs
Material Labor Cost Overhead Cost
Job#1 227.5 160 96 483.5
Job#2 780 210 126 1116
Job#3 3900 175 105 4180
Total 4907.5 545 327 5779.5
Record Cost Of Goods Sold
Cost of goods sold----------------5779.5 OR Finished goods---------5779.5
Finished goods------------------------5779.5 work in process-------------5779.5
Task 5.3. To get gross profit
Gross profit=sales-cost of goods sold
=7200-5779.5
=1420.5

62
Project TWO: - Process Business Tax requirements
The following were selected from amount the transaction completed by DATA a vat register
merchandising from during January of the current year
1) received cash from sales of furniture br 300000
5. sales of Office Equipment on account br 90000
7. Suplies expense during the month br 25000
8. Doubtfull Account Expense For The Period br 10000
Answer For Project
Task 6.1 journal entries
1. Cash--------------------------------300,000
Sales-------------------------------------260,869.57
Vat payable------------------------------39,130.43
Cash---------------------------------------6000
3. Purchase-------------------------------50,000
Cash------------------------------43,478.26
Vat receivable-----------------------6521.74
4. Salary expense-----------------50,000
Cash----------------------------------50,000
5. A/R-----------------------------90,000
Sales------------------------------78,260.87
Vat payable---------------------11,739.13
6. utility expense---------------30,000
Cash---------------------------------30,000
Cash----------------------------------25,000
8. Doubt full account expense----------------10,000
Allowance for doubt full account---------------10,000
Output vat (V/P) =39,130.43-11739.13=50,869.56
=50,869.56 – 6521.74 =44,347.82
Task 6.3. Income statement
Income Statement
During The Current Year Anuary
SALES----------------------------------------------------------------------339,130.44
Utility expense-----------------------50,000
Salary expense-----------------------30,000
Total operating expense------------------------------------------------ (105,000)
Net income before tax--------------------------------------------------234,130.44
BPT (234,130.44*30%) ----------------------------------------------- (70,239.132)
63
Project Three:-Process Payroll
Different professions names, Incomes and other employment information are given
below for the month of April 2013.
Employees Basic over Gross Income Pensio Total Net Sig.
name salary time Earning Tax n Deduct pay
1 kedir 4219.875 4219.875 2557.5 295.39
2 Mohammed 2579.5 4219.875
3 Abebe 619
4 Siraj
5 Lidiya 1115.5
1. Kedir and Mohammed have the same paid income tax for the month
2. Kedir Basic Salary is 165 times of his income tax
3. the total (employer and employees) pension contribution of Siraj is equal to that
of Abebe pension contribution
4. Lideya pension contribution is 25% of her income tax
Solution
Kedir Mohammed
Basic Salary =165 *2557.5 (GE) TI = Basic Salary (BS) + OTE
=4219.875 4219.875 = BS +2579.5
Pension contr =4219.875*0.07 BS = 4219-2579.5 =1640.375
=295.39 Pension =1640.375* =114.82625
Abebe Siraj
Pension =BS*7% pension
619 =BS*0.07
BS=619/0.07
=8842.86
EIT= TI*TR-D
=8842.86*30%-955
= 1697.86
Project four Prepare Operational Budget
XY Company manufactures two production table and chair.
Inventory Table Chair
Estimated begging inventory for January 1000 1500
Sells price per unit 120 80
Estimated Sales unit
January February March Total
Table 4000 2000 1000 7000
Chair 3000 1500 4000 8500
Selling price per unit is br
Timber Metal
64
Estimate beging inventory for Jan 6000 3000
For the production, the company use raw materials
Materials Unit Products
Cost Metal Timber
Table 5 5m/Unit 3M/unit
Chair 15 3m/unit 2M/unit
Required
1. Prepare sales budget for the current quarter
2. Prepare production budget for current quarter
3. Prepare raw material production budget for current quarter
Project FIVE Maintain Inventory record
March 1 inventory 100 units @ br.16
March 24 purchase 200unit @ br.19
The physical count shows inventory on hand of 250 units at end & The Company uses
periodic inventory system and LIFO cost inventory method
Task 1- calculate cost of goods sold and cost of inventory on hand
Task 2- calculate gross profit assuming sale price of br.25
Task 3- calculate profit tax of 30% assume the company incurred operating expense of
br.2, 500 including entertainment expense br.1, 000.
Solution for Project :
Task 4.1. Cost of goods sold Ending inventory (on hand)
200*19 = 3800 150*17= 2550
300*18 =5400 100*16 = 1600
500 unit =9200 250units= 4150
Task 4.2. Before we going to determine the gross profit we should to know the gross sales
Sales in birr = unit*selling price= 500*25= 12,500
Gross profit = sales- cost of goods sold
= 12,500-9200 = 3300
ABC PLC
INCOME STATEMENT
DURING THE FISCUAL YEAR
Sales-----------------------------------------------------------------12,500
Gross profit----------------------------------------------------------3300
Less: operating expense (2500-1000) ------------------------ (1500)
Net income before tax---------------------------------------------1800
BPT (1800*30%) --------------------------------------------------- (540)
Net income after tax------------------------------------------------1260
Project SIX:-Bank Reconciliation
Cash in bank account for ABC company at august indicate a balance of birr 18,443.90 during
august the total cash deposit was birr 30,465.75 and check written totaled birr 31,770.25 the
bank statement indicate a balance of birr 26,465.50 on august 31, comparison of the bank
statement the cancelled checks and the accompanying memorandum with the records revealed
the following reconciling items.
a. Check outstanding totaled birr 8,003.84
65
b. A deposit of birr 2,148.21 representing receipt of August 31, had been made too late to
appear on the bank statement
c. Ten bank had collected for ABC company birr 3,650 on a note left for collection the
face of the note was birr 3500
d. A check for birr 84.20 returned with statement had been record bay ABC company as
birr 8.42. The check was for payment of obligation to FANO computer on account.
e. A check for birr 470 returned with the statement had been incorrectly charged by bank
as birr 740
f. Bank service charge for august amounted to birr 18.75
Solution For Project
ABC Company
Bank Reconciliation
At august 31,200x
Balance per bank statement------------------------------------------26,465.50
ADD: deposit in transit------------------------------2148.21
Bank error-------------------------------------270 --------- 2418.21
Sub- total----------------------------------------------------------------28,883.71
Less: outstanding check--------------------------------------------- (8003.84)
Adjusted balance-------------------------------------------------------20,879.87
Balance per depositor----------------------------------------------------17,324.4
ADD: note collected by bank---------------------------------3500
Interest income-----------------------------------------150-----3650
Sub- total------------------------------------------------------------------20,974.4
Less: bank service charge------------------18.75
Book error--------------------------75.78-------------------- (94.53)
Adjusted balance---------------------------------------------------------20,879.87
Note Depositor Balance = beginning balance +total cash deposit – total checks written
= 18,433.90+30, 30,650.75-31,770.25=17,324.4
To record note collected by bank & interest income & record service charge & depositor error
Cash---------------------3650 Miscellaneous Expense-----18.75
Note receivable------------3500 Account payable------------75.78
Interest income------------150 Cash--------------------94.53
Project Two: - Prepare Financial Report
Selected accounts from the ledger of ABC Company at the end of the fiscal year of 2013 are
as follows. The account balance is shown before and after adjustment:
Before Adjustment after Adjustment
Fee receivable ---------------- ---- 7000
Supplies------------------------ 2980 900
Prepaid insurance------------ 4720 2120
Wage payable----------------- ---- 2425
Advertising payable--------- ---- 3300
Unearned rent------------------ 5200 400
Fee earned--------------------- 129600 136600
Wage expense----------------- 63,280 65,705
Insurance expense---------- -------- 2600
Advertising expense---------- 16,200 19,500
Supplies expense------------- 2080
Rent income-------------------- 4800

66
Task 1.1 Prepare income statements for the fiscal year?
Task 1.2 Journalize closing entries of the nominal accounts on December 31, 2013?
ABC Company
Income statement
For the year ended dec 31 2017
Fee earned------------------------136,600
Rent income----------------------- 4800
Total income --------------------------------------------- 141400
Wage expense--------------------- 65,705
Total expense -------------------------------------------- (92485)
Net Income--------------------------------------------------br48915
Task 1.2 Journalize closing entries of the nominal accounts on December 31, 2013?
d. To close revenue accounts
Fee earned------------------------136,600
Rent income----------------------- 4800
Income summary ----------------------141400
e. To close expenses accounts
Income summary ---------------92485
Wage expense--------------------- 65,705
f. To close Income summary account
Income summary---------------48915
ABC Capital -------------------48915

67

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Level 4 /version 1/

Project One: - Progress Payroll

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

ABC manufacturing company

Total cost of RM for Both A+ B =Total

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Step 1:-Calculation of Gross Earning (GE) & Taxable Income

SN Employees' Name BS=P/PR Pension(P) Pension Rate(PR)

SN Employees' Name Basic salary OTR OTH BSPH=BS/160 OTE

Account & Budget Service Level = Iv

Step 2:-Calculation of Total Deductions TD

SN Employees' Name EIT Deduc +Pension Dedu

Account & Budget Service Level = Iv

Sn Employees’ Name  GE – T D = Net Pay

Account & Budget Service Level = Iv

Cash Balance as per depositor’s book -------------------------------------br 22,009.85

Account Receivable ----------- br 200

Account & Budget Service Level = Iv

Task2 Prepare production budget for current quarter

Task 3 Prepare raw material production budget for current quarter

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Date Purchase Cost of Goods Sold Inventory Balance

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

To get the fuel allowance in terms of birr for each employees

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

Account & Budget Service Level = Iv

F. Jobs Completed No. 1,2,3 and 4(5470+7000+5310+12030=29810)

Account & Budget Service Level = Iv

Mesfin industrial engineering

Project Five B. Job Order Costing

Job DM DL MOH Total

Account & Budget Service Level = Iv

Project One:--Bank Reconciliation and Related Journal Entry