Level IV Code 1

Project One
Tec. IT Company engaged with IT activities having five employees who have different
professions. Their names and other important information regarding their payroll data for the
month of April 2013 are presented as follows:
No Name BS OT GE IT PC TD NP Sign
1 Tirusew Beamlak 2,067.50
2 Nigatu Tsehay 2,379.0
0
3 Geletaw Temesgen 943.50
4 Yemariam Abat 155.40
5 Nitsuh Adamu
Total

Additional Information
 Tirusew and Nigatu have paid the same Income Tax for the month.
 Tiruswe’s pension contribution is 22.64% of her income tax.
 The total (employer’s and employee’s) pension contribution of Nitsuh is equal to that of
Yemariam’s pension contribution.
 Geletaw’s pension contribution is 28.74% of his income tax.

Required
A. Finalize the incomplete payroll register given above
B. If salary is paid in May next month, Journalize:
a. Salary and other benefits
b. Payment of payables
c. Payroll tax or company pension contributions
Project Two
The accounts listed below appear in the ledger of Yedil Kebir Company at June 30, the end of
the fiscal year. None of the year-end adjustments have been recorded.
Fees Receivable ………………..
Supplies ………………….…….675.00
Prepaid Insurance ……………….3, 725.00
Prepaid Advertising ……………..
Salaries Payable …………………
Unearned Rent ………………….
Income Summary ………………
Fees Earned …………….62, 250.00
Salary Expense …………41,700.00
Advertising Expense ………10,340.00
Insurance Expense ………...
Supplies Expense ………….
Rent Income ……………… 9,100.00

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Additional Information
a. Unbilled fees at June 30, Birr 7,750.00
b. Inventory of supplies at June 30, Birr 190.00
c. Birr 2,100.00 of insurance has expired during the year
d. Of a prepayment of Birr 1,000.00 for advertising space in Ethiopian Herald News Paper,
75% has been used and the remainder will be used in the following year.
e. Salaries accrued at June 30, Birr 1,140.00
f. Rent collected in advance that will not be earned until the following year, Birr 700.00

Required
1. Pass the necessary adjusting entries based on the above information
2. Prepare profit and loss statement, and Balance Sheet

Project Three
Pointer PLC has the following financial information for April 30, 2012:
Cash at bank account of the depositors record:
 Cash in bank account as of April 1, 2012 -----------------------------7,817.40
 Cash receipt journal as of during April 30, 2012 ---------------------7,829.50
Deposit tickets collected from bank
Date Amount
April 1, 2012 848.63 April 24, 2012 946.74
April 3, 2012 914.04 April 22, 2012 897.34
April 8, 2012 840.50 April 24, 2012 942.71
April 10, 2012 971.71 April 29, 2012 510.06
April 15, 2012 957.85

Check Register
Check Number Amount
740 287.50 753 1,217.33
741 555.15 754 249.75
742 501.90 755 172.75
743 671.30 757 1,021.90
744 506.88 758 359.60
746 415.91 759 601.50
748 490.90 760 486.39
750 1,016.90

Bank Statement for April

 Balance as of April 1, 2012 ………………..……………………..7,947.20
 Deposits and other credits ……………………………………… 10,652.77
 Checks and other debits ………………………………………… (8,232.21)
Balance of April 30, 2012 ………………………………………. 10,367.76
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Deposits of April
Date Amount
April 1, 2012 690.25 April 16, 2012 975.85
April 2, 2012 848.63 April 18, 2012 946.74
April 4, 2012 914.04 April 23, 2012 897.34
April 9, 2012 840.50 April 25, 2012 942.71
April 11, 2012 971.71

Check accompanying April Bank Statement

Check Number Amount
731 162.15 748 490.90
738 60.55 750 1,016.90
740 287.50 751 251.40
741 555.15 753 1,217.33
742 501.90 754 249.75
743 671.30 757 1,021.90
744 506.88 760 486.39
746 415.91

Bank Memo Accompanying April Bank Statement

Date Description
April 4, 2012 Bank Credit Memo for note collected
Principal ……………………………………………..2,500.00
Interest ……………………………………………….. 125.00
April 24, 2012 Bank Debit Memo for check returned because of insufficient funds …311.80
April 30, 2012 Bank Debit Memo for service charge ………..……………………….24.50

Pointer Plc
Bank Reconciliation
March 31, 2012
Balance per bank statement ………………………………………………………….7, 947.20
Add: Outstanding Deposit …………………………………………………………… 690.25
Total …………………………………………………………………………………. 8,637.45
Deduct: Outstanding Checks
Check #731 ………………………………….162.50
Check #736 ………………………………….345.95
Check #738 ………………………………….251.40
Check #739 ………………………….……….60.55 820.05
Adjusted Balance …………………………………………………………………….. 7,817.40
Balance Per Depositors ………………………………………………………………… 7,832.50
Deduct: Service Charge …………………………………………………………………. 15.10
Adjusted Balance …………………………………………………………………..…. 7,817.40
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Required:
1. Prepare Bank Reconciliation Statement for the month of April, 2012.
2. Record the necessary journal entries.

Project Four
Kality Steel Factory Manufactures product A and B, the Budget department of the factory has the
following information’s at the beginning of the current year.
Product A Product B
Desired Inventory for each month in units …………… 20,000.00
Estimated beginning inventory for each month ………. 21,000.00 9,000.00
Selling Price per unit ………………………………….. 50.00 70.00

Estimated Sales in unit during the current quarter:

January February March Total

Area 1: A 6,500 6,900 6,600 20,000
B 1,950 1,500 1,500 4,950

For the production of A and B Kality Steel factory uses the following raw material:
Materials Unit Cost A B
Sand 0.50 20kg per unit 15kg per unit
Steel 1.00 10kg per unit 15kg per unit
Chemicals 5.00 10 lt per unit 15 lt per unit

Required
1. Prepare Sales Budget for the current Quarter
2. Prepare Production Budget for the current Quarter
3. Prepare Raw Material Purchase Budget for the current Quarter

Project Five
During the month of January the following transactions will occur to produce three products:
1. Raw material purchases on account
Sand ……………………………………………….500.00
Steel …………………………………………...…. 790.00
Chemicals ……………………………………….4, 500.00

2. Material issued and direct factory labor cost used

Material Direct Labor
Job#1 227.50 160.00
Job#2 780.00 210.00
Job#3 3,900.00 175.00
3. Factory overhead is 80% of direct labor cost
4. Sold finished products for birr 7,800.00.
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Required
1. Record the necessary journal entry for the above transactions
2. Calculate the cost of each job
3. Calculate total amount of gross profit

Project Six
MARU Merchandising is a VAT registered company has the following transactions for the
month of march 2013.
March, 15. Received cash from sales of furniture Birr 250,000.00
16. Paid Entertainment Expense Birr 5,000.00
19. Purchase raw materials for Birr 49,000.00 on cash
25. Paid Salary Expense for the period 60,000.00
26. Sales of furniture on account Birr 80,000.00
27. Paid utility Expense for the period birr 25,000.00
31. Supplies Expense during the month of March 20,000.00
31. Doubtful account expense for the period is Birr 8,000.00
Required
i. Record the above entries in a journal entry form
ii. Calculate the amount of VAT receivable/payable from/to ERCA
iii. Prepare income statement for the month of March 2013 for tax purpose and calculate
profit tax liability (profit tax 30%)

Project Seven
DXY Company purchase Commodity L for resale during the month of October 2013, during the
month of October the following transaction is occurred in relation to Commodity L.
October 1. Inventory ……………………………15 units @30.00
4. Sales …………………………….…. 5 units @35.00
10. Purchase …………………………… 10 units @32.00
17. Sales ………………………………. 12 units @39.00
22. Sales ………………………….…... 3 units @ 40.00
30. Purchase ………………….……… 10 units @ 33.00

Required:
1. DXY company uses Periodic Inventory System and FIFO costing method calculate:
A. Cost of Goods Sold
B. Cost of Inventory on hand at the end of October
C. Determine the amount of gross profit
2. DXY Company use Perpetual Inventory System and LIFO costing method calculate:
A. Cost of goods sold during October
B. Cost of inventory on hand at the end of October
C. Determine the amount of gross profit.

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