Infolink University College Hawassa Campus

Faculty of Business; Department of Accounting & Finance

Final examination for the course of Public finance and taxation
Items formats

 Academic year :2012 EC  Multiple items: 20%

 Year : 3rd  Matching items:10%
 Time allowed : 1:30hr  Short answer: 15 %
 Instructor : Gurmu Ephrem  Total weight: 45 %
General Instruction

 Switch off your mobile phone

 Make sure that exam has 3 consecutive pages with 34 question
 Write your Name and ID NO clearly and neatly
 Write your answer on the provided answer sheet only and use only CAPITAL LETTERS
 Write your answer clearly and neatly, unreadable answer will be invalid.
 Try all questions
 Cheating and attempt to cheat is forbidden
ANSWER SHEET
Name ______________________________Id. No. __________________ Sec. _____ Sign.
__________
Program: Regular Extension Week End Year: 3rd
Part One: Multiple choices (20%)
1.________2.________3.________4.__________5._________6._______7._______8.______9._
10._______11._______12.______13._________14.________15.______16.______17._____18._
19._______20._______
Part Two: Matching (10%)
1 2. 3. 4. 5. 6. 7. 8. 9. 10.
part Three use the attached paper
No Parts Max. Achievable Point Achieved point (%) Remark
. (%)INSTRUCTOR ONLY
FOR
1 Multiple choice 20
2 Matching 10
3 Work out 15
Total 45

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Part I: Multiple choose

Instruction: choose the correct answer and write your answer on the space provided

(1) An allowance paid for the purpose of transfer employee down word without any
delinquency
[A] Cash indemnity B) Hardship C) desert allowance D) Position allowance
(2) An allowance paid for the purpose of uncomfortable area of atmosphere
[B] Cash indemnity B) Hardship C) desert allowance D) Position allowance
(3) An employee benefit that used for determining the other type of additional benefit
[A] Basic salary C. Housing Allowance
[B] Hardship allowance D. cash indemnity
(4) Non-taxable allowance of an employee
[A] Position allowance C. Educational allowance
[B] Per diem D. Hardship allowance
(5) Tax rate that imposed on an income earned from game
[A] 10% B) 15% C) 5% D) 20%
(6) Not allowable expense of business to determined income tax
[A] Capital expenditure B) Additional Investment C) Declared dividends D) All
(7) . Allowable expense for business to income tax purpose
[A] direct costs of producing the income
[B] General administrative expenses connected with the business activity
[C] Premiums payable on insurance directly connected with the business activity
[D] Depreciation of business plant E) ALL
(8) . Tax rate imposed on the body of a business
[A] 40% B) 35% C) 30% D) 25%
(9) A business that earn Income before tax Br 60,000.00 impose income tax amount by a rate of
[A] 25% B) 30% C) 35% D) 20%
(10) XYZ company is VAT registered business. During the period of Jan,2012 purchased
merchandise by invoice price Br 200,000 with paid VAT of Br 30,000 and resold the same
product to Br 350,000 with received VAT of Br 52,500. What is the amount of VAT
receivable at time of purchase and Payable at time of sales
[A] Br 30,000 & 52,500 B) 52,500 & 30,00 C) 30,000 &22,500 D) E) None
(11) . Not Fully taxable benefit
[A] Position allowance C) transportation Allowance
[B] Medical Allowance D) cash indemnity
(12) Ato worku is an employee of Federal government that earning transportation allowance
of Br 1200 and is basic salary is Br 2300. An amount of transportation allowance that to
be taxable
[A] Br 200 B. Br 1000 C. Br 625 D) Br 1200

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(13) Not a liable person for payment of employee income tax
[A] Diplomatic C) Ambassadors
[B] Foreign citizen working In Ethiopia for more than 183 days D) none
(14) Per hour payment rate for Over time activities performed during 12:00AM morning to
10:00 PM mid night
[A] Regular hrs X 1.25 C) Regular Hr X1.5
[B] Regular Hr X 2. D) Regular Hr x2.5
(15) A benefit paid to employee for the purpose of his/her contribution to the successes of
business entity
[A] Over time B) Severance pay C) Bonus D) Job searching E) none
(16) A type of tax imposed for the purpose of secured society from using of harm fully
product
[A] VAT B) excise Tax C) TOT tax D) custom duty tax
(17) Partial taxable and non Taxable allowance
[A] Transportation allowance C) Provident fund paid 15%
[B] Position allowance D) Hardship
(18) Dr. Hambisa Hinsermu is an employee of Semera University; his monthly basic salary is
Br 9,500.00 with addition of desert Allowance of 2,500.00.The Temperature of the area is
33.5℃. The Taxable amount of desert allowance
[A] Br 2,500 B) Br 1,550 C) Br 950 D) Br 9,500
(19) Not an Allowable expense for business income tax
[A] Direct cost for business activities
[B] Depreciation of asset used for related income
[C] Gift and donation made to non authorized organization
[D] Administration expense E) All
(20) Indirect tax
[A] VAT C). Business income tax
[B] Employee Income D) Property tax.

Part II: Matching

(1) Taxable business income rate of body A . 5%
(2) Income from rendering of technical services B. 10%
(3) Income from games of chance C. 15%
(4) Interest Income D. 5%
(5) Educational A1lowance E. Fully none taxable
(6) Employee taxable income of Br 8,300 F. 15%-1710
(7) Business taxable income of Br 20,000 G . Disturbance of an employee
(8) Hardship allowance H. 30%-955
(9) Representative allowance I. partial taxable & none taxable
(10) Severance pay J. paid after 5 years service

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Party II : Work out

Q1. The under-mention employee is an employee of CB since from Sep1, 2004.Obligated

monthly hour is170hrs. The bank and an employee contribute a pension fund of 11 % and 7 %
respectively. During the month of June 2010 an employee earn the following benefit.

 Name: Sifan
 Position: Chief cashier
 Basic salary: Br 8,700
 Housing allowance Br : 1,500.00
 Position allowance: Br 780.00
 Transportation allowance: 900
 Desert allowance: 1200.00(34 ℃
 Medical allowance Br 2000.00
 Hardship allowance Br 780.00

OT work

 4 hours during the period (12:00 AM to 10:00PM)

 8 hours on holiday

Requires: Determine

 Gross earn  Amount of tax

 Taxable and non-taxable benefit  Pension fund

 Total deduction with saving and  Prepare a journal entry that require
credit association of Br 500.00, for a payment did by withhold the
advance salary Br 300.00 deduction amount

Q2. A business annual Income statement show the following

Sales Br 823,000.00, sales Return and Allowance Br 18,000, Cost of Goods sold Br
511,250.00, operational expense with depreciation Br 211,330.00
Requires: Determine the amount of income tax of the year ended sene ,2008 by
assumption of
1. Individual business

2. Body

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