ALL LEVEL TWO COC QUESTIONS

PROJECT 1
 Given suppose Ato Getachew is an employee of CBE /x- company/ and his/ monthly
/salary income is birr 10,000 for the month of December 2010 and for each New Year
(January 1, 2011 ) his salary increases or growth by 10%. The budgeted variable
expenditure is 30% of salary and the remaining covers fixed expenditure and saving
plan. His personal saving plan is 5% of fixed expenditure. At the end of December 31,
the actual variable expenditure is 80% of budgeted variable expenditure, no changes to
fixed expenditure and deficit or surplus is added or deducted from personal saving, for
the month of January, variable expenditure increase or growth by 10%.
Task1.1. demonstrate personal budget for the month of December and January?
Given
December 2010
Salary Income = 10,000
Variable Expenditure (VE) = 30% of Salary income
Fixed Expenditure (FE) + Personal Saving (PS) = Remaining amount (70%)
Personal Saving (PS) = 5% of FE
Actual Variable Exepnditure (AVE) = 80% of VE

January 2011
Salary Income = Increases By 10%
VE = also Increases by 10%
No Changes to FE
No Deficit or surplus is deducted or added from PS

Solution
December 2010
VE = 10,000 x 0.3 = 3,000
FE + PS = 10,000 – 3,000 = 7,000
FE + 5% FE = 7,000 = (1 + 0.05) FE = 7,000 = 1.05 FE = 7,000

Prepared by Leta Gonfa

 FE = 7,000/1.05 = 6,666.67
PS = 5% of FE = 0.05 x 6,666.67 = 333.33
AVE = 80% x 3,000 = 2,400
APS = Income Salary – Total Actual Expenditures
= 10,000 – (6,666.67 + 3,000) = 10,000 – 9,066.67
= 600 Favorable

January 2011
Salary Income = 10,000 + 10,000 x 10% = 11,000
VE = 3,000 + 3,000 x 10% = 3,000 +300 = 3,300
FE & Ps = Constant

Ato Getachew
Personal Budget
December 31, 2010
Items Budgeted
amount
Salary Income 10,000
Fixed Expenditure 6,666.67
Variable Expenditure 3,000
Total Expenditure 9,666.67
Personal Saving 333.33
Ato Getachew
Personal Budget
January 31, 2010
Items Budgeted
amount
Salary Income 11,000
Fixed Expenditure 6,666.67
Variable Expenditure 3,300
Total Expenditure 9,966.67
Personal Saving 1,033.33

Prepared by Leta Gonfa

 Task1.2. demonstrate budget variance (budget performance report) for the month of
December?
Ato Getachew
Personal Budget
December 31, 2010
Items Estimated Actual Differenc
Budgeted Budgeted e or
amount amount Variance
Salary Income 10,000 10,000 -
Fixed Expenditure 6,666.67 6,666.67 -
Variable Expenditure 3,000 2,400 600
Total Expenditure 9,666.67 9,066.67 600
Personal Saving 333.33 933.33 600
Task1.3. describe reasons for the budget variance (surplus)?
 Combining part-time work with studying
 Taking on a part-time job or holiday wok
 Other relevant government benefits
 Comparing price for essential times
 Monitoring use of utilities
 Moving Back home
 Share accommodation
 Using Cheaper modes of transport
 Reducing Expenditure on discretionary items;- such as
 Expensive items
 Eating out
 Magazines etc.
Project 2
Assume your investment requires total capital of birr 120,000 of which you can have birr 30,000 in
your hand and borrowed the remaining amount. You expected to earn monthly revenue of birr
40,000. In order to fulfill your financial requirements, you have two alternatives: -
Alternatives 1: - you will have borrowed the deficit of capital from bank at an interest rate of 12%
for two years related service charge will be birr 2400 and account service fee of birr 2000.

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 Alternatives 2: - you will have borrowed the deficit of capital from bank at an interest rate of 13%
for three years’ period which will be settled equally at the end of period service charge will be birr
1,000.
Task 2.1. which alternatives are best? (Show your answer with calculation)
Alternatives 1
Deficit capital = Total Capital – Beg. Cash on hand + Cash Receipt = 120,000 - (30,000 + 40,000)
= 50,000
Installment Paid Amount = 50,000/2 = 25,000
Year 1
I= Prt = 50,000 x 12% x1 = 6,000
Outstanding BAL. = 50,000 – 25,000 = 25,000
Year 2
I = Prt = 25,000 x 12% x1 = 3,000
Outstanding BAL. = 25,000 – 25,000 = 0
Interest expense and other service charges at the end of 2 nd year
6,000 + 3,000 and 2,400 + 2,000 = 9,000 + 4,400 = 13,400
Loan repayment at the end of 2nd year = 25,000 x 2 = 50,000
Alternatives 2
Deficit capital = Total Capital – Beg. Cash on hand + Cash Receipt = 120,000 - (30,000 + 40,000)
= 50,000
Installment Paid Amount = 50,000/3 = 16,666.67
Year 1
I= Prt = 50,000 x 13% x1 = 6,500
Outstanding Bal. = 50,000 – 16,666.67 = 33,333.33
Year 2
I = Prt = 33,333.33 x 13% x1 = 4,333.33
Outstanding Bal. = 33,333.33 – 16,666.67 = 16,666.67
Year 3
I = Prt = 16,666.67 x 13% x1 = 2,166.67
Outstanding Bal. = 16,666.67 – 16,666.67 = 0
Interest expense and other service charges at the end of 3 rd year
6,500 + 4,333.33 + 2,166.67 and 1,000 = 13,000 + 1,000 = 14,000
Loan repayment at the end of 3rd year = 16,666.67 x 3 = 50,000

Prepared by Leta Gonfa

 NB: - Alternatives 2 is may the best one.
Task2.2. calculate estimated rate of return on your investment?
Rate of Return on Investment = Estimated Profit/Total Invested Capital x 100%
= 40,000/120,000 x 100%
= 1/3 x 100%
= 0.3333 x 100%
= 33.33%
Task2.3. Identify the source document?
 Sales invoice
 Purchase invoice
 Value added tax invoice
 Withholding invoice
 Payroll sheet
Project 3
Suppose ABC Company is a vat registered company. During the year of 2011 the company earned
birr 3,500,000 from sales vat inclusive. The company purchased materials and imported at a cost of
birr 500,000 before vat. During the year, the company paid birr 35,000 for excise tax and custom
duty of 20,000. In addition, the company incurred other expense of birr 1,000,000. The company
also charged profit tax of 30%.
Task3.1. calculate the direct tax?
Net sales = 3,500,000 – 456,521.7 = 3,043,478.3
Cost of Goods Sold = 500,000 + 35,000 + 20,000 = 555,000
Gross Profit = 3,043,478.3 – 555,000 = 2,488,478.3
Income before Tax = 2,488,478.3 – 1,000,000 = 1,488,478.3
Business Profit Tax = 1,488,478.3 x30% = 446,543.50
Direct Tax = 446,543.50
Task3.2. calculate the indirect tax?
Input Vat = 500,000 x 15% = 75,000
Output Vat = 3,500,000 x 0.15/1.15 = 456,521.7
Net Vat Payable = 456,521.7 = 381,521.7
Indirect Tax = 381,521.7 + 35,000 + 20,000 = 436,521.7
Task3.3. identify the relevant documents for taxation?
 Sales invoice

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  Purchase invoice
 Value added tax invoice
 Withholding invoice
 Payroll sheet
Project 4
Suppose selamsew an employee of XY company who earns permanent weekly salary of birr 325
during the year f 2012. The monthly budget expenditure for 2012 are as follows: -
 Rent cost…………………………………………birr 250 per month
 Transport cost………………………………..birr 100 per month
 Communication……………………………..birr 50 per month
 Maintenance…………………………………birr 60 per month
 Food cost………………………………………birr 140 per month
 Insurance cost………………………………birr 150 per month
Selamsew plans to save the following costs for 2013 for the 20/80 condominium house plan
 50% of communication cost
 30% of transport cost
 5% of maintenance cost
 10% of rent cost
 15% of food cost
 5% of insurance cost
Task1.1. prepare the annual budget of selamsew. Monthly for 2013 and increases the amount of saving
for the new 20/80 house plan.
Salary income = 325 x 4 = 1,300

Selamsew
Personal Budget
For the Year ended 2012

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 Items Monthly Annual Budget
Budget
Salary Income 1,300 1,300x12 =
15,600
Expenditures
Rent Cost 250 250x12 =3,000
Transport cost 100 100x12 = 1,200
Communication 50 50x12 = 600
Maintenance 60 60x12 = 720
Food cost 140 140x12 = 1,680
Insurance Cost 150 150x12 = 1,800
Total 750 750x12 = 9,000
Expenditures
Personal Saving 550 550x12 = 6,600
Selamsew
Personal Budget
For the Year ended 2013
Items Monthly Budget Annual Budget
Salary Income 1,300 1,300x12 =
15,600
Expenditures
Rent Cost 250 –250 x10% = 225 225x12
=2,700
Transport cost 100 -100x30% = 70 70x12 = 840
Communication 50 -50x50% = 25 25x12 = 300
Maintenance 60 –60 x 5% = 57 57x12 = 684
Food cost 140 –140 x 15% = 119 119x12 =
1,428
Insurance Cost 150 = 150 150x12 =
1,800
Total 646 646x12 =
Expenditures 7,752

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 Personal Saving 654 654x12 =
7,848

Task1.2. calculate saving percentage increase for the year?

% of PS = 654/1,300 x 100% 0r 7,848 /15,600 x 100% = 50.3%
Project 5
Assume the Mesfine industrial engineering engaged in rental construction machinery the company
imports different kinds of construction materials. In the year 2012, the company imports different
kinds of construction materials. In the year 2012, the company imported machine at a cost of birr
2,500,000 of which 60% machinery covered by credit facility from Dashen bank. The loan will be
repaid within 5 years at equal installment quarterly at a cost of 12% interest rate. The total service
charge and cost related to credit facility is 2000 for the first year and 2500 for the second year of
loan period. Assume the bank policy is simple interest rate on outstanding loans and advances.
Task2.1. calculate the principal repayment and cost of loans for the first year loan period?
 Loan amount = 2,500,000 x 60% = 1,500,000
 Installment Paid amount = 1,500,000/5x4 = 75,000
Year 1
I = Prt = 1,500,000 x 12% x 3/12 = 45,000
Outstanding Bal. = 1,500,000 – 75,000 = 1,425,000
I = Prt = 1,425,000 x 12% x 3/12 = 42,750
Outstanding Bal. = 1,425,000 – 75,000 = 1,350,000
I = Prt = 1,350,000 x 12% x 3/12 = 40,500
Outstanding Bal. = 1,350,000 – 75,000 = 1,275,000
I = Prt = 1,275,000 x 12% x 3/12 = 38,250
Outstanding Bal. = 1,275,000 – 75,000 = 1,200,000
Principal Repayment and cost of Loan = 75,000 x 4 + 2000 = 300,000 + 2000 = 302,000
Task2.2. calculate the principal repayment and cost of loan for the second year loan period?
Year 2
I = Prt = 1,200,000 x 12% x 3/12 = 36,000
Outstanding Bal. = 1,200,000 – 75,000 = 1,125,000
I = Prt = 1,125,000 x 12% x 3/12 = 33,750
Outstanding Bal. = 1,125,000 – 75,000 = 1,050,000
I = Prt = 1,050,000 x 12% x 3/12 = 31,500

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 Outstanding Bal. = 1,050,000 – 75,000 = 975,000
I = Prt = 975,000 x 12% x 3/12 = 29,250
Outstanding Bal. = 975,000 – 75,000 = 900,000
Principal Repayment and cost of Loan = 75,000 x 8 + 2500 = 300,000 + 2000 =
602,500
Task2.3. what is the outstanding balance of loan at the end of 3-year loan period?
Year 3
I = Prt = 900,000 x 12% x 3/12 = 27,000
Outstanding Bal. = 900,000 – 75,000 = 825,000
I = Prt = 825,000 x 12% x 3/12 = 24,750
Outstanding Bal. = 825,000 – 75,000 = 750,000
I = Prt = 750,000 x 12% x 3/12 = 22,500
Outstanding Bal. = 750,000 – 75,000 = 675,000
I = Prt = 675,000 x 12% x 3/12 = 20,250
Outstanding Bal. = 675,000 – 75,000 = 600,000
Task2.4. mention at list five the roles of credit facility for society?
 To obtain items immediately
 To purchase items immediately
 Minimizes the need to carry cash
 Minimizes the need to expensive items
 Improves family living level
 Allow for installment payment on expensive items
Project 6
ABC Share Company is registered and license supplier of injera to different universities in Ethiopian.
During the year 2012 the company earns as income of birr 1,500,000 and 1,800,000 from BU and
AAU respectively and including vat. The total cost of the product is 1,980,000 before vat. In
addition, the company earns 160,000 per year from other source of income with zero vat rates. In
the other hand the company incurred birr 300,000 general and administration expense for the year.
During the last month 2012 the company with hold birr 65,000 for employment income tax the
company is expected to paying 30% profit tax.
Task3.1. calculate the direct tax for the year?
Task3.2. calculate the indirect tax for the year? Task 3.1
VAT receivable (1,500,000+, 800,000)/1.15=2,869,565.22

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 3,300,000-2,869,565.22=430,434.80
VAT paid=1,980,000*.15=297,000
VAT payable=430,434.80-297,000=133,434.80
Revenue-------------------2,869,565.20
Other income--------------160,000
Total income--------------3,029,565.20
Cost of product-----------1,980,000
Gross profit---------------1,049,565.20
General and admin-----300,000
Net income before tax---749,565.20
Tax (30%) -----------------------224,869.56
Net income-------------------524,695.64
Task 3.1 Direct tax =224,869.56+65,000=289,869.56
Task 3.2 indirect tax =133,434.80
Project 7
Suppose Ato Alemu is an employee of xy company,y and his salary of birr 750 per week. In January 2015
the company paid two monthly net salaries as a bonus for each employee to the performance of the year
2015. Ato Alemu has fixed and variable expenditures. Fixed expe1nditures are university fee 100,
transport 200, and rent 300, magazine 40. And variable expenditures are cloth 50, mobile card 25,
recreation 100, and gas 70, in order to increase his saving Ato Alemu understand to change his behavior
and skill. He decided to decrease variable expenditure by 5% starting from February 2016. (the budgeted
year of the company is from January 1 to December 31)
Task1.1. calculate total saving for the month of January 2015?
Task1.2. calculate the total saving for the month of February 2016?
Task1.3. demonstrate required behavior and skill to successful budgeting?
Task 1.1 and 1.2
Description Income and Income and
expenditure expenditure
for the month for the
of Jan,2016 month of
Feb,2016

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 Income
Salary 3,000 3,000
Bones 6,000 -
Total income 9,000 3,000
Fixed expenditure
University fee 100 100
Transportation 200 200
Rent 300 300
Magazine 40 40
Total fixed 640 640
expenditure
Variable expenditure
Cloth 50 47.5
Mobile 25 23.75
Recreation 100 95
Gas 70 66.5
Total variable 245 232.75
expenditure
Total expenditure 885 872.75
Total saving 8,115 2,127.25

 Controlled spending
 Organizational skills
 Record keeping skills
 Disciplined approach to money
Task1.4. demonstrate obstacle of Ato Alemu to achieve financial goal?
 Being unemployment
 Insufficient income to afford items
 Particularly long term unemployment
 Unexpected circumstances such as
 Losing a job

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  Falling ill
 Not being to able to work

Project 8
Ato kidane plan to open a cafe after a year. The total capital needed to open the business birr 100,000. To
achieve the goal Ato kidane deposit 1000 per month starting from January 2015 up to December 31, 2015
to Dashen bank at Hawassa. During this period Ato kidane earn interest income of birr 2008 for deposited
cash at the Dashen bank. After one year (January 2016) Ato kidane give a loan proposal for deficit capital
to Dashen bank at interest rate of 10% paid quarterly at equal installment and management fee 5% of the
loan amount equally distribute.
Task2.1. calculate the deficit capital of Ato kidane, if withdrawal all deposited amount of money?
Task2.2. calculate the total interest expense and service charge at the end of the second year (2016 and
2017)
Task2.3. if the government announce budget for the year 2009e.c. birr 200 billion, ERCA plan to generate
internal revenue of 180 billion for the year 2010 E.C. Demonstrate the instrument traded on the short
term market in order to fulfill budget deficiency?
Task 2.1
Ato kidane total saving =1000*12=12,000
Interest income=2,008
Total =14,008
Capital deficient =capital needed-deposit+interest =100,000-14,008=85,992
Task 2.2 installment =85,992/3*4=7,166
Management fee of the total loan=85,992*.05=4,299.60
Management fee for two year=4,299.60/3*2=2.866.40
First year
Interest for quarter1 85,992*.10*3/4=2,149.80
Outstanding amount =85,992-7,166=78,826
Interest for quarter 2=78,826*.10*3/4=1,970.65
Outstanding amount=78,826-7,166=71,660
Interest for quarter 3=71,160*.10*3/4=1,791.50
Outstanding amount =71,660-7,166=64,494
Interest for quarter 4=64,494*.10*3/4=1,612.35

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 Outstanding amount=64,494-7,166=57,328
Total interest for first year=2,149.80+1,970.65+1,791.50+1,612.35=7,524.30
Second year
Interest for quarter1 =57,328*.10*3/4=1,433.20
Outstanding amount =57,328--7,166=50,162
Interest for quarter 2=50,162*.10*3/4=1,254.05
Outstanding amount=50,162-7,166=42,996
Interest for quarter 3=42,996*.10*3/4=1,074.90
Outstanding amount =42,996-7,166=35,830
Interest for quarter 4=35,830*.10*3/4=895.75
Total interest for second year=+1,433.20+1,254.05+1,074.90+895.75=4,657.90
Total interest and related service charge= 7,524.30+4,657.75+2,866.40=15,048.60
 Bill of exchange
 Commercial Bills
 Government Bills
 Promissory Bills (notes)
 Treasury Bills
Task2.4. demonstrate information provided to customer assuming you are bank clerk in Dashen bank?
 Customer Deeming Accounts
 Youth Accounts
 Investment Accounts
 Retirement Accounts
 Saving Accounts
Project 9
 Both Star and ABC business area sole proprietorship vat registered business. A star business
purchased items with a cost of birr 250,000 vat inclusive and sold the items to ABC business with
birr 320,000 before vat. ABC resold the products with --birr 450,000 vat inclusive. On the other
hand, STAR business incurred an operating expense and withhold em, ployment income tax of birr
50,000 and 12,000 respectively. ABC Company birr 40,000 and 11,500 respectively.
Task1.1. calculate the total direct tax liability of both company?
Task1.2. calculate the total indirect tax liability of both company?
Task1.3. list the two possible ways of stamp duty?

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 Task 1.1 Calculate direct tax for both companies
Direct tax for star
Sale---------------------------------------------------------------320,000
Cost(250,000/1.15)------------------------------------------(217,391.30)
Gross profit-----------------------------------------------------102,608.70
Other expenses------------------------------------------------ (50,000)
Income before tax ---------------------------------------------52,608.70
Business profit tax (52,608.70*.20)-3630) ------------------6,891.74

Total direct tax for star = business profit tax + employment income tax
=6,891.74+12,000=18,891.74
Direct tax for ABC
Sales (450,000/1.15)--------------------------------------------391,304.35
Cost----------------------------------------------------------------- (320,000)
Gross profit--------------------------------------------------71,304.35
Other expenses-------------------------------------------- (40,000)
Income before tax ----------------------------------------31,304.35
Business profit tax (31,304.35*.15)-1,710 ------------2,985.65
Total direct tax for star = business profit tax + employment income tax
=2,985.65+11,500=14,485.65
Total direct tax for both companies=18,891.74+14,485.65=33,377.39
Task 1.2 Indirect tax for Star
Output VAT= 320,000*.15=48.000
Input VAT =250,000/1.15*.15=32,608.70
VAT liability to paid by star company =output VAT –input VAT=48,000-32,608.70=15,391.30
Indirect tax for ABC Company
Output VAT= 320,000*.15=48.000
Input VAT =450,000/1.15*.15=58,695.65
VAT liability to paid by ABC company =output VAT –input VAT=58,695.65-48,000=10,695.65 birr
Total VAT liability to be paid by star and ABC company =15,391.30+10,695.65=26,086.65
Task 1.3

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  Collective agreement
 Contract of employment
 Award, Bonds, warehouse bond
 Power of attorney
 Documents of title to property
 Notarial acts
 Lease ,including sub-lease and transfer of similar rights
 Memorandum and articles of association of any business
 Organization ,cooperative
Project 10
 Dc manufacturing company purchased raw materials for birr 750,000 after vat and sold the
produced products by birr 1,850,000 vat including during the year of 2014. The company was
incurred total operating expense of birr 250,000 and subjected to pay 30% business profit tax. The
company was declared bonus of birr 48,000 for the year of 2014 to Ato Samuel for them. Month of
January, February and March at equal installment on January 2015. In January 2015 the earning of
Ato Samuel is 7600 and 1200 0f basic salary and overtime respectively.
Task1.1. determine direct tax liability of dc manufacturing company for the month of December
2014?
Task1.2. determine total direct tax liability of ato Samuel for the month of January 2015?
Task1.3. determine indirect tax liability of dc manufacturing for the month of dec2014?

Project 11
 Ato Biniyam net basic salary, house and transportation allowance is 3000, 1500, and 1000
respectively. 60% of his basic salary and transportation allowance is for his variable expenditures.
On the other hand, the sum of 50%of his variable expenditure and 70% of housing allowance is his
fixed expense.
Task2.1. prepare his semiannual personal budget?
Task2.2. determine the percentage of variable Expenditure and saving amount from his total
earning?
Task2.3. determine the possible ways to reduce personal budget and personal saving?
Task2.4. list the possible guidelines that are used to open customer account?

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 Task2.5. determine at list five equipment’s which you are using in opening and processing customer
account?
Task 1.1: Preparation of Semiannual Personal Budget
Description Monthly Budget Semi-Annual
Plan Budget Plan
Earnings
(Income):
Salary Income 3,000 3,000*6 = 18,000
Transportation 1,000 1,000*6 = 6,000
Allowance
House Allowance 1,500 1,500*6 = 9,000
Total Income 5,500 5,500*6 = 33,000
Variable Cost
60%*3000 + 1000 2,400 2,400*6 = 14,400
Fixed Cost
50%*2400+70%*15 2,250 2,250*6 = 13,500
00
Total Expense:
(Fixed+ Variable 4650*6 4,650*6 = 27,900
Cost)
Saving 850 5,100

Task 1.2:Determine the percentage of variable expenditure, fixed expenditure and saving
amount from total earning.
Variable Cost = 2400/5500*100 = 43.63%
Fixed Cost = 2250/5500*100 = 40.9%
Saving Rate = 850/5500*100 = 15.45%
Ways to reduce expenses may include:
 comparing prices for essential items
 using cheaper modes of transport
 share accommodation
 moving back home
 monitoring use of utilities such as

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  Electricity,
 Gas and Water
 Reducing expenditure on discretionary items such as
 Expensive clothing
 Magazines
 Eating out
Ways to increase income may include:
 Combining part-time work with studying
 Taking on a part-time job or holiday wok
 Other relevant government benefits
Task2.4. list the possible guidelines that are used to open customer account?
 Amount of initial deposits
 Other signatories to the account
 Primary account holder’s name, address and contact.
 Purpose for which the account will be used.
 Required links to other accounts held.
Task2.5. determine at list five equipment’s which you are using in opening and processing customer
account?
 Identify customer accounts needs.
 Open customer account.
 Transfer or close customer account.
 Administer the account process.

Project 12
 Ethio engineering corporation has signed road construction agreement with Ethiopian road authority to
renew the contract the main road from Addis Ababa to Dire Dawa with contract amount of birr
250,000,000. 80% of the contract amount will be financed from the loan released by commercial bank of
Ethiopian at annual interest rate of 13% to be paid as per the following term of payments.
 At the end of the 1styear……………………….10% of the liability
 At the end of the 2ndyear……………………….20% of the principal
 At the end of the 3rdyear……………………….30% of the principal
 At the end of the 4thyyear…………………….20% of the principal
 At the end of the 5thyear………………………15% of the principal

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  At the end of the 6thyear…………………….5% of the principal

Solution
Yea Principal % of Payment Interest of Remainin Total
r Payme amount 13% g Payment
nt from
Principal
1 200,000,00 10% 20,000,000 26,000,000 180,000,00 46,000,000
0 0
2 200,000,00 20% 40,000,000 23,400,000 140,000,00 63,400,000
0 0
3 200,000,00 30% 60,000,000 18,200,000 80,000,000 78,200,000
0
4 200,000,00 20% 40,000,000 10,400,000 40,000,000 50,400,000
0
5 200,000,00 15% 30,000,000 5,200,000 100,000,00 35,200,000
0 0
6 200,000,00 5% 10,000,000 1,300,000 0 11,300,000
0
200,000,00 84,500,00 284,500,00
0 0 0
Task3.1. calculate amount of loan received from commercial bank of Ethiopian?
Loan amount = 250,000,000 x 80 = 200,000,000
Task3.2. calculate the amount of principal and interest payment for the second year?
 Loan repayment = 200,000,000 x 20% = 40,000,000
 Interest = Prt = 180,000,000 x 0.13 x 1 = 23,400,000
 Total Payment = 40,000,0000 + 23,400,000 = 63,400,000

Task3.3. calculate the outstanding balance at the end of 5 thyear including interest rate?

Task3.4. calculate the total interest of the loan?

Total Interest = 26,000,000+23,400,000+18,200,000+10,400,000+5,200,000+1,300,000
=84,500,000

Prepared by Leta Gonfa

Task3.5. demonstrate safety procedures to work effectively in the financial service sector?
 Completing required documentation
 Displaying health and safety brochures
 Magazines and other materials
 Keeping workplace clean and tidy
 City Administration , legislation
 Federal and Regional state
 Office practice manual
 Follow OHS guidelines to relevant workplace.
 Undergoing operator training when using new items
Task3.6. demonstrate workplace technology?
 Client Contact systems
 Spreadsheet
 Word processing
 Database
 Accounting packages
 Email, Internet
 Custom designed financial software
Task3.7. how to support a team member in the workplace?
 Explaining/Clarifying
 Helping Colleagues
 Problem Solving
 Provide Encouragement
 Providing feedback to a team member
 Undertaking extra tasks if necessary

Project 13
Belgium plc. Paid 3000 on November 2014 for vat liability. The purchase is made before
vat. The company sales is birr 1,541,000 vats inclusive the company also paid 6000 as an
employment income tax for the month. The administrative expenses of place birr 15,000.
Task3.1. calculate direct tax liability of the company as of November?
Task3.2. calculate vat input and output?

Prepared by Leta Gonfa

 Project 14
 Ato Fantahun earns birr 9500 basic salary and his monthly expenses is given as follows: -
 Clothing expense……………………………….12%
 Food expense…………………………………….20%
 Rent expense……………………………………30%
 Education expense…………………………….5%
 Transportation expense………………….5%
Task1.1. prepare monthly and annually budget for ATO FANTAHUN?
 Ato Fantahun want to open and run new business with required capital of birr 80,520 based on his
annual saving he borrowed the remaining amount from bank at 8.5% interest rate semi –annually at
equal installment with three years.
Task1.2. calculate the amount of borrowed (received) from bank?
Task1.3. determine principal and interest repayment for first year?
Task1.4. determine the outstanding balance at the end of second year?
Task 3.1: preparing Monthly Annual Budget
S.N Expenditures Monthly Budget Annual Budget
1 Clothing 9,500 x 15% = 1,425 x 12 = 17,100
1,425
2 Food and Beverage 9,500 x 20% = 1,900 x 12 = 22,800
1,900
3 Medical 9,500 x 5% = 475 475 x 12 = 5,700
4 Rent 9,500 x 20% = 1,900 x 12 = 22,800
1,900
5 Transportation 9,500 x 2% = 190 190 x 12 = 2,280
6 Education Fee 9,500 x 10% = 950 950 x 12 = 11,400
Total 6,840 82,080
Annual Income of AtoFantahun
= Monthly Income x 12
= 9,500 x 12 = 114,000
Personal Saving
= Income – Expenditure
= 114,000 – 82,080 = 31,920
Task 3.2: Source of Information to develop the business plan

Prepared by Leta Gonfa

  Chamber of commerce
 Financial planners and financial institution representatives, business planning specialists and
marketing specialists
 accountants
 lawyers and providers of legal advice
 government agencies
 industry/trade associations
 online gateways
 business brokers/business consultants
Task 3.3:
 Amount of loan=80,520-31,920=48,600
 Installment paid amount=48,600/2*3=48,600/6=8,100
1st installment interest= 48,600*.085*1/2=2,065.5
Outstanding balance =48,600-8,100=40,500
2nd installment interest =40,500 *..085*1/2=1,721.25
Outstanding balance =40,500-8,100=32,400
Amount of principal repayment first year =8,100+8,100=16,200
Interest repayment for the first year=2,065.5+1,721.25=3,786.75
Total Principal paid =8,100*2=16,200
Total interest and principal payment =3,786.75+16,200=19,986.75
 Outstanding balance=48,600-32,400=16,200

A. Amount of Loan
= Capital – Personal saving
= 80,520 – 31,920
= 48,600
B. I= PRT
= 48,600 x 8.5% x1
= 4,131
Maturity Value of 1st Year
MV = P + I
= 16,200 + 4,131

Prepared by Leta Gonfa

 = 20,331
C. Outstanding Principal at the end of 2nd Year
= 8,100 x 4 = 32,400
Project 15
 The following is data is given for the personal income and expenditures for the kaleb demela from
January to October 2014. Ato kaleb wants to save the remaining income after all expenditures are
covered.
Descriptio J u l y augus Septembe October Novembe Decembe Total
n t r r r
C l o t h i n 137 - 1 3 7 - 1660.
g 7 7 7
House 620 648 6 1 2 703 7 0 3 7 0 3
operation 0 0 0 8 8 8
Over time 3 0 0 - 3 0 0 3 4 5 3 4 5
work
Part time - 120 - - 1 2 0
work 0 0
Basic 15,00 15,00 1 5 , 0 0 17,25
Salary 0 0 0 0
Miscellaneous 7 6 0 8 1 7 6 5 8 8 0 9 2 3 8 8 0
expense 0
Repair 153 167 1 5 3 1759. 1 8 4 1757.
expense 0 0 0 5 5 5
Utility 3 0 6 3 2 4 3 0 6 351. 3 6 9 3 5 1 .
expense 9 9
Personal
saving
 Task1.1. rearrange the above data and prepare the six-month budget for kaleb?
 Task1.2. identify the business opportunity that is available in order to establish a business?
Task1.3. identify the advantages of personal saving, investment and related risk on investment
Task 1.1
Description July August September October November December Total

Prepared by Leta Gonfa

Overtime work 300 - 300 345 - 345 1,290
Part time work - 1,200 - - 1,200 - 2,400
Salary 15,000 15,000 15,000 17,250 17,250 17,250 96,750
Clothing 1,377 - 1,377 - 1,660.50 - 4,414.50
Total income 15,300 16,200 15,300 17,595 18,450 17,595 100,440
Food and other consumption 6,120 6,480 6,120 7,038 7,038 7,038 40,176
Monthly house rent expense 2,295 2,430 2,295 2,639.25 2,767.50 2,639.25 15,066
Transport expense 765 810 765 880 923 880 5,023
Tuition fee 1,530 1,620 1,530 1,759.50 1,845 1,759.50 10,044
Utility expense 306 324 306 351.90 369 351.90 2008.80
Total expenditure 12,393 11,664 12,393 12,668.65 14,945 12,668.65 76,732.30
Personal savings 2,907 4,536 2,907 4,926.35 3,505 4,926.35 23,707.70
Task 1.2
 Coffee and tea
 Cafeteria business
 Internet house
Project 16
 The national bank borrowing interest rate from 12% to 13% and saving interest from 5% to 6%. If Alem
company borrowed birr 100,000 record the interest the interest expense after one year?

Interest =PRT=100,000*.13*1=13,000
Interest expense----------13,000
Interest payable--------------------------------13,000
Project 17
 Alem company purchased office equipment for birr 115,000 before vat. The company has five
employees to provide services. The employment income tax is birr 12,000 per month. During the
year 2012 the company earned birr 446,500 inclusive vat by providing service business. Profit taxis
birr 30,000.
Task2.1. calculate both direct and indirect tax liability for the year of 2012?

Employment income tax -=12,000*12=144,000

Profit tax =30,000

Prepared by Leta Gonfa

 Total direct tax liability =174,000
Indirect tax
Input VAT=115,000/1.15*.15=15,000
Output VAT=448,500/1.15*.15=58,500
VAT liability =58,500-15,000=43,500
Project 18
Ato Biniyam is an employee of xyz company his monthly net salary is birr 1950 during the year for the
month of January and February. The budget allocation is the month for January and February. Actual
expenditures are presented: -
Serial D e s c r i p t i o Allocated budget for Actual budget for budget for
number n February January February
1 Housing 6 7 7 7 6 7
operation 5 4 5
2 W a s h 1 3 1 0 1 3
c l o t h i n g 0 5 0
3 G i f 8 7 8
t 0 9 0
4 M i s c e l l a n e o 7 7 7
u s 0 0 0
5 C l o t h i n 2 0 1 7 2 0
g 0 7 0
6 S a v i n 7 7 7
g 0 0 0
7 E d u c a t i o 9 5 9
n 0 7 0
8 F o o 5 6 5 7 5 6
d 0 5 0
9 U t i l i t y 7 7 7
e x p e n s e 5 5 5
T o t a 1 9 5 1 9 8 1 9 5
l 0 2 0
Task4.1. prepare personal budget variance for the month of January?
Task4.2. prepare the budget allocation for the month of February?

Prepared by Leta Gonfa

Task4.3. calculate the percentage of saving for the year?
Task 4.1 and 4.2
Ato Sewnet Family
Budget performance report
For the month of January and budget allocation for February
Description Budget Actual Budget Budget for Budget allocation for
allocation expenditures for Variance February February
for January
January
Housing 675 774 (99) 675 576
operation
Food 560 575 (15) 560 545
Transportation 200 172 28 200 228
Clothing 130 105 25 130 155
Medical care 90 57 33 90 123
Education 80 79 1 80 81
Contribution 70 80 (10) 70 60
and Gifts
Saving 70 70 - 70 70
Miscellaneous 75 72 3 75 78
Task 4.3
Personal saving percentage =70/1950*100=3.6%
Project 19
 ato Mikael wants to do a business far away from ADDIS ABABA 20k.m, initially the capital was br.
90,000 br. Cash at bank 5000. He needs to reach his monthly income to 40,000br.
Option 1
Borrow the deficit capital from commercial bank of Ethiopia by 14% interest rate for the periods of 2
years that will be paid yearly with equal installment.
Option 2
Borrow the deficit from credit & saving association with 15% interest rate for the pay backperiods of
years to be paid yearly with equal installment
Option 1 Interest year1=85,000*.14*1=11,900
Interest year2=42,500*.14=5,950

Prepared by Leta Gonfa

 Total interest =11,900+5,950=17,850
Option 2
Interest year1=85,000*.15*1=12,750
In Interest year2=63,750*.15*1=9,562.50
Interest year3=42,500*.15*1=6,375
Interest year4=21,250*.15*1=3,187.50
Total interest-----------------------31,875
Rate of return=40,000/90,000*100=44.44%
Project 20
Haile networking is the ICT infrastructure acquire for birr 150,000 vat exclusive. The company has five
permanent employees they are:-
Employees B a s i c Taxable
name s a l a r y allowance
Tision Br 4,300 Br 600
alemayehu
L i d i y a 3,500 500
a b a t e n h
Genzeb 9,500 2,000
T/Mariam
J e l a l u 2,500 300
g i r m a
F i r y u n a 1500 100
S i r a j
And the company is collected & earned revenue during the year 2011 was br. 540,500 Vat inclusive
Task 3.1. Calculate direct & indirect tax liabilities?
Task 3.1 Direct taxes –employment income tax
ABC Company
Payroll sheet
For the month of June 2011
Employee name Basic Taxable Taxable Employment
salary allowance income income
Tision Br 4,300 Br 600 4,900 677.50

Prepared by Leta Gonfa

 alemayeh u
Lidiya 3,500 500 4,000 497.5
abatenh
Genzeb 9,500 2,000 11,500 2,525
T/Mariam
Jelalu 2,500 300 2,800 277.50
girma
Firyuna 1500 100 1,600 100
Siraj
Total 21,300 3,500 24,800 4,077.50

Indirect taxes
 Input VAT=150,000*.15=22,500
 Output VAT=540,500/1.15*.15=70,500
 VAT liability=70,500-22,500=48,000
Project 21
The following data was given for ATO TAMERATE and perform the following data: -
D e s c r i p t i o Estimated income and expenditures for the month of October, Actual income and expenditures for the month of October,
n 2014 2014
Food and 2 0 0 2 1 0
related 0 0
C l o t h i n 9 5 0 7 0 0
g
S a l a r y ( n e t 4 4 0 4 4 0
) 0 0
H o u s e 1 0 0 1 0 0
r e n t 0 0
P a r t 1 5 0 1 2 0
t i m e 0 0
S c h o o l 6 5 0 6 5 0
f e e s
Utility 5 0 5 0

Prepared by Leta Gonfa

expense

Task1.1. prepare personal budget report for the month of October, 2014?
Task1.2. prepare budget performance report for the month of October, 2014?
Task1.3. calculate percentage of estimated and actual saving?
Task1.4. by his annual saving ato tamerat is proposed to start new business. How do you advice and
contact feasibility study to the business?
Project 22
Brother PLC has opened and maintained current account and checking account on nib international bank
s.c. the PLC has borrowed a loan amount of birr 200,000 paid lump sum after one years at interest rate of
12% per annual.
Task1.1. calculate total amount of cash collected by NIB from brother plc. after one years?
Task1.2. Brother PLC wants to change his business and wants to cloth his account with your bank. As a
bank clerk what do you perform to cloth current account?
Task1.3. Writes the intermediately role of bank?
Tash1.4. what is the advantage of credit?
Project 23
 dawit the owner of dawit general trading engaged in the sales of spare parts of bajage vehicle with
two employees. The business is not litigable registered of vat. Therefore, it is eligible to register to
pay turn over tax during the month, the business has sold the spare parts for birr 35,000. The
following data related to his employee’s earnings for the month.
Name of Basic Over time Taxable
employees salary earnings allowance
Bethlehemabe 1 0 0 2 0 0 5 0
be 0
Yodit 5 0 0 1 0
ayele 0
Task3.1. calculate direct tax liability of the business for the month?
Task3.2. calculate Indirect tax liability of the business for the month
Project 24
yosef company books of accounts show the following balances as of august 30, 1998

Prepared by Leta Gonfa

  Cash……………………………………………. 20,000
 Supply…………………………………………. 10,000
 Prepaid insurance………………………. 20,000
 Building………………………………………150,000
 Furniture……………………………………. 20,000
 Account payable…………………………30,000
 Note payable………………………………40,000
 Revenues……………………………………100,000
The company has a plan to expand its business with required capital of birr 400,000 received acceptance
from united bank to borrow the remaining amount with 10% interest rate semi- annually for five years.
Assume you must use simple interest method to calculate the interest.
Task1.5. calculate the amount of loan received from united bank?
Task5.2. calculate the total interest amount?
Task5.3. record the necessary journal entries?
Task5.4. calculate the rate of return?

Task1.1. Write the relative investment opportunities?

Task1.2. if your customer ask you advice that he/she has birr 200,000 which will be idle the coming two
years
A, saving account
B, current account
C, time deposit in the long term
Project 25
DISCRIPTION Actual budget December Budget for December
2015 2015
S a l a r y 4 0 0 4 5 0
0 0
p a r 2 0 0 2 0 0
t i m e
C l o t h i n 5 0 0 2 0 0
g
F o o 2 0 0 6 0 0
d 0

Prepared by Leta Gonfa

Transpor 1 0 7 0 0
t 0
U t i l i t y 5 0 8 0 0
Educatio 1 0 9 0 0
n 0
Maintenanc 1 0 3 0 0
e 0
Wash 1 5 1 0
clothing 0 0
House 2 0 0 5 0 0
rent
House 1 5 1 0
operation 0 0

ADDITIONAL INFORMATION
1. Net salary increase by 15% on the month January 2016
2. All expenditures increase by on January 5%, February by 10% and march 15%
3. Par time of each month January 200, February 300, march 100
Required
Task1.1. prepare personal budget for the month of January, February and march?
Task1.1. calculate percentage of saving for each month?

Project 26

1. Vat exclusive from sales…………………… 100,000

2. Vat exclusive from purchase……………… 70,000
3. Dividend receipt income………………………10,000
4. Interest income tax on deposits……….……500
5. Excise tax……………………………………………....6000
6. Stamp duty tax……………………………………….7200
Task1.1. calculate direct tax for the month?
Task1.2. calculate indirect tax for the month?
PROJECT 27

Prepared by Leta Gonfa

Serial T y p e s o f amoun
number t a x e s t
1 Tax on income from 3 7 0
employment 0
2 B u s i n e s s p r o f i t 32,25
t a x 0
3 L i a b i l i t 21,15
y 0
4 T ax on income from renting of 81,25
b uilding 0
5 Tax on interest income on 5 3 5
deposits 0
6 T u r n o v e r 14,28
t a x 0
7 C a s 32,00
h 0
8 D i v i d e n d i n c o m e 13,00
t a x 0
9 Tax on income from 21,00
royalties 0
1 C a p i t a 9 0 0
0 l 0
1 Tax on gain of transfer of certain investment 5 1 5
1 property 0
1 E x c i s e 36,28
2 t a x 0
1 V a l u e a d d e d 73,35
3 t a x 0
1 Rendering technical service outside 10,00
4 Ethiopia 0
1 L a n d u s e 9 8 0
5 t a x 0
1 C u s t o m 42,00
6 d u t y 0
1 T aLeta
Prepared by x o n income from rent of
Gonfa 11,26
7 property 0
Required
Task 1.1. Calculate total direct taxes?
Task 1.2. Calculate indirect taxes?
Task 1.3. Demonstrate the role of tax in Ethiopian economy?
Project 28
 Addis Ababa city inaugurates to create job opportunities for unemployment youth to discuss how to
organize and manage medium enterprises to textile Argo processing industry to effectively and
efficiently achieve the goal of the enterprises through participating with others. Based on the given
information perform the following tasks?
Task 2.1. Demonstrate the challenges in work with others?
Task 2.2. Demonstrate how to solve problems and conflicts with others?
Task 2.3. Demonstrate the strategies or opportunities to improve the enterprise goal?
Project 29
 Waliya boutique is a merchandize business is planning to sell 60 quantities of cloths and 90
quantities of shoes with br. 500 and br. 600 per unit respectively for the month of meskerem 2018.
And the shop incurred the following expenses for the month: salary expense br. 20,000, advertising
expense br. 12,000, utilities expense br. 4000, debt payment br. 2,600, commission expense br.
9500. And additionally the shop earns revenue of br. 15,000 by renting his building. However,
because of poor management the shoe actual sales were 75% of the quantity of cloth and 80% of
quantity of shoe.
Instruction:
Task 3.1. prepare budget for the month of meskerem 2018?
Task 3.2. prepare performance budget report for the month of meskerem 2018?
Task 3.3. demonstrate obstacles of your budget?
Project 30
 Ato gebru borrowed money for the expansion of his business from the following banks: -
 From awash bank borrowed br. 180,000 at interest rate of 12% for 3 years paid semi-annually
at equal installment.
 From dashen bank borrowed br. 240,000 at interest rate of 12% for 2 years paid for quarterly
at equal installment.
 From credit and saving association borrowed br. 100,000 at interest rate of 14% for 4 years
paid annually at equal installment.

Prepared by Leta Gonfa

  Service charge per year for awash bank br. 1000, for dashen bank br. 1200 and for credit and saving
association br. 1400.
 Based on the above information perform the following tasks?
Task 4.1. calculate the total interest expenses and service charge at the end of the first year for the
three loans. (awash, dashen, credit association)?
Task 4.2. calculate the total interest expenses and service charge at the end of the second year for
the loans. Awash and credit association?
PROJECT 31
Ato Belayneh receives 3000 birr from the supermarket he is working in as a salary. He has the
following expenditures. 800 birr for food, 430 birr for clothing, 70 birr for car gas expense and 200
birr recreation.
Task 1.1 calculates personal saving?
i t e actual income & estimated income&
m expenditures expenditures
incom 9 0 2 1 0
e % 0
c l o t 1 0 0 8 0 0
h %
f o o d 8 5 4 0 0
%
g a 5 0 2 0 0
s %
recreatio 7 0 1 2
n % 0
Task 1.2. Calculate the actual income and expenditure?
Task 1.3. Calculate actual saving and estimated saving?
Task 1.4. Calculate percentage of actual saving against estimated saving?

Task 2.2 and 2.3 compute the amount of actual income and expenditure on March 32, 2015
Actual income and expenditures Estimated income and
March 31,2015 expenditures March 31,2015
Income 0.9*2100=1890 Birr 2100
Clothing 1*700=700 Birr 700

Prepared by Leta Gonfa

Food 0.85*400=340 Birr 400
Car 0.5200=100 Birr 200
Recreation 0.7*120=84 Birr 120

Saving 666.00 680.00

 The amount of actual saving= 666
 The amount of estimated saving=680
Task 2.4 calculate the percentage of actual against estimated saving % of actual saving=666/680=97.94
Project 32
ABC is merchandising business enterprise engaged in the buying and selling of products. The enterprise
purchase and sell with birr 86,250 and birr 115,000 respectively. The enterprise has two permanent
employees:
name of basic overtim
employees salary e
GETACHEW 1 5 0 3 0 0
0
BEHAILU 8 0 0 4 0 0
TASK 1.1. Calculate direct tax liability
Task1.2. calculate indirect tax?
NO Name of employee Basic Over Taxable income tax
salary time
earnings
1 Ato Tola Ayansa Birr 1500 Birr 300 127.50
2 Ato Tesfaye Kuma Birr 800 Birr 200 40.00
Total direct tax 167.50

Task 1.2 determine the amount of indirect tax liability for this month
Output VAT= 115000-(115000/1.15=BIRR 15,000.00
INPUT vat= 86250.00
Task 1.3 explain direct tax and indirect taxes
Direct taxes- a tax collected directly from the tax payers
EXAMPLE - personal income
-business profit tax
-Tax on rental building

Prepared by Leta Gonfa

 -Tax on interest income
- Tax on reality, game of chance.
Indirect taxes - a tax collected indirectly from the consumer indirect tax-
turn over tax
EXAMPLE - VAT
- Custom duty
- excise tax
Project 33
Hyrax plc. Wants to establish a business enterprise with an initial capital of birr 100,000. The investor has
40,000 birr deposit and borrows the remaining amount from Dashin bank with an interest rate of 10% that
will be repaid after a year. You can working as a clerk in Dashen bank. Task 3.1
calculates the cash and interest to be collected from Hyrax plc. After a year.
Project 34
XYZ manufacturing imported material 2,500,000.00 purchase local / br 1000,000.00 before vat for
production of glove in 2014 the local custom duty charges are birr 200,000.00 birr paid to tax authority the
factory sales 30,000.00 glove at birr 150.00 each before vat including 2%sales commission the company
Paid 53,000.00 administrative expense and employee income tax of 30,000.00 imported martial are
exempted from vat and withholding tax business profit tax is 30% .
Task1.1 calculate net profit
Task 1.2 calculate direct and indirect tax?
Task 1.3 identify relevant document to taxation
MDF Manufacturing PLC
Income Statement
For the year of 2014
Sales -------------------------------------------------------- Br. 4,411,764.71
Cost of Goods
Imported ……………………….. Br. 2,500,000.00
Local Items ……………………… 1,000,000.00
Custom Duty Charge ………… 200,000.00 3,700,000.00
Gross Profit 711,764.71
Less: Administration Expense 53,000.00
Net Income 658,764.71
Deduct: Business Income Tax (30%) 197,629.41
Net Profit 461,135.30

Prepared by Leta Gonfa

Task 1.2
Direct Taxes:
 Employment Income Tax …………………………. Br. 30,000.00
 Business Income Tax ……………………………….. 197,629.41
Total Direct Taxes Br.227, 629.41
Indirect Taxes:
Output VAT = Br. 4,500,000.00* 0.15 =675,000.00
Input VAT = 1,000,000.00*0.15 = (150,000.00) 525,000.00
 VAT Payable …………………………….. Br. 525,000.00
 Customs Duty ………………………….. 200,000.00
Total Indirect Taxes Br.725,000.00
Task 1.3
 Sales Invoice
 Payroll Sheet
 Purchase Invoice
 Tax Return Statement
 Withholding Invoice
Project 35
DL Hotel present loan proposal to Dashen bank and bank providing three credit option shames to the loan
the first option is to borrow birr 230,000.00 home mortgage to be paid with 8 year at equal installment at
the rate of 15%sami annual the second option at borrow 450,000.00 for 30 months at equal installment at
rate of 13%sami annual and birr 300,000.00 for a year equal installment at rate of 12.5%semi annul
respectively The bank agreed with the company and the loan disbursed with additional service charge of
birr 27,500.00 /one time borrowing cost for the three loan/
Task2.1 calculate interest expense and other service charge at the end of first year ?
Task2.2 calculate total loan repaid at the end of second year?
Task2.3.demonstrate document required opening bank account at AIB by the company?
Task 2.4 what is the advantage of credit facility
Solution:
Option 1. Number of payments = 8 years x 2 =16 Installment Payments
Installment payment amount = Br.230,000.00/16 =Br.14, 375.00
1st Period interest =Br.230,000.00*15%/2*1= 17, 250.00
Outstanding Balance =Br.230, 000.00 – 14,375.00=Br. 215,625.00
2nd Installment interest =Br. 215,625.00*.15/2= 16,171.88

Prepared by Leta Gonfa

 Outstanding Balance = Br. 215,625.00– 14,375.00=201,250.00 Total
Interest Expense for 1st Year = Br 17, 250.00+16,171.88=Br. 33,421.88
Option 2. Number of payments = 2.5 years x 2 =5 Installment Payments
Installment payment amount = Br.450,000.00/5 =Br.90, 000.00
1st Period interest =Br.450,000.00*13%/2*1= 29,250.00
Outstanding Balance =Br.450, 000.00 – 90,000.00=Br.360, 000.00
2nd Installment interest = Br.360, 000.00*0.13/2= 23,400.00
Outstanding Balance = Br. 360, 000.00– 90,000.00=270,000.00
Total Interest Expense for 1st Year = Br 29,250.00+23,400.00 =Br.52, 650.00
Option 3. Number of payments = 1 year x 2 =2 Installment Payments
Installment payment amount = Br.300,000.00/2 =Br.150, 000.00
1st Period interest =Br.300,000.00*12.5%/2*1= 18,750.00
Outstanding Balance = Br.300, 000.00- Br.150, 000.00 =Br.150, 000.00
2nd installment interest = Br.150, 000.00*0.125/2= 9,375.00
Outstanding Balance = Br. 150, 000.00– 150, 000.00=0.00
Total Interest Expense for 1st Year = Br 18,750.00+9, 3 75.00 =Br.28, 125.00
Task 2.1
Total Interest Expense =Interest Expense of 1st Option + 2nd Option +3rd
Total Interest Expense + Other Charges= (Br. 33,421.88+ 52, 650.00+
28, 125.00) +27,500.00
= Br. 114,196.88+27, 500.00 =Br. 141,696.88
Task 2.2
Total loan repaid at the end of second year
Option One: Br.14, 375.00*4 =57,500.00
Option Two: 90,000.00*4 =360,000.00
Option Three: 150,000.00*2= 300,000.00
Total loan repaid at the end of 2nd year= Br. 717,500.00

Task 2.3
 Amount of Initial Deposit
 Valid and Renewed License
 Account holders signature
 Contact Address detail
 TIN Certificate
 Valid and Renewed ID Card of Authorized Person
 Memorandum and Articles of Association

Prepared by Leta Gonfa

  Name, Address, E-Mail, etc.
Task 2.4
 To operate a new business, developing business, solving problem etc.
 Emergency
Business Opportunities:
 Expected financial viability
 Skills of operator
 Amount and types of finance available
 Returns expected or required by owners
 Likely return on investment
 Life style issues
.Finance required
Project 36
Abebe at employees of 3f furniture company earn a monthly net income of birr 15,000.00 25% of the total
income used to cover his fixed expense and the remaining income is used to cover his variable expense
and saving, saving is 15% of the variable expense for the month December 2014 the actual variable cost is
85% the budget variable expense variable expense budget deficit Surplus added to personal saving it is
net income will be expected increased 20% February month
Task 3.1 prepare budget performance report to the month of December 2014?Task 3.2 prepare personal
budget of March 2015?
Task 3.3 calculate total saving at the end of March 2015 and identify the related investment opportunity?
Tasks 3.4 identify investment risk of personal saving?

Prepared by Leta Gonfa