Project 1.

Develop understanding of taxation

Star and ABC are VAT registered sole proprietorship companies in Ethiopia. Star is manufacturing
company and ABC is Wholesaler Company. Star purchased raw materials From VAT registered suppliers
with 250,000 VAT inclusive and resold after processing the raw materials in to finished products to ABC
company for birr 320,000 before VAT.ABC company resold to retailer with the amount of 450,000 birr
including VAT.
During the fiscal year other administrative expenses and employment income tax for Star company paid
birr 50,000 and 12,000 and birr 40,000and 11,500 for ABC company respectively. (HINT: Any purchase
and sales transaction is carried out with sole proprietorship)
Task 1.1 Calculate direct taxes for both companies.
Task 1.2 Calculate indirect taxes for both companies.
Task 1.3 List types of stump duty tax in Ethiopia.
Project 2. Work effectively in the financial service sectors using business technology
Assume you are employee of Commercial Bank of Ethiopia the Bank assign you credit department to
administrate long term loan for20/80 house scheme and loan for mega projects. The bank also give
foreign bank guarantee for the customer to do this the nature of your department contact to different
stakeholders (local and international) and use different technologies to save the time your customers and
improve the quality of the service to archive the goals of the bank team work within the team and between
other department are essential
Consider the above information perform the following tasks.
Task 2.1 Demonstrate a safety procedures work effectively in financial sector related to the above case
Task2.2 Demonstrate how to support the team member and list the possible team members
Task 2.3 Demonstrate software applications and technology used to archive organizational goal related to
your bank.
Project 3 Develop and use a personal budget and saving plan
Ato Alemu is salaried employee of XYZ cement manufacturing company in Diredawa.Ato Alemu net
salary is 750 birr per week. In Jan,2016 the company paid two month net salary bones for each employee
for the performance of the year 2015, Ato Aleemu has fixed and Variable expenditure.

Fixed expenditures are:-

University fee 100 birr, Transport 200 birr, rent 300 birr and Magazine 40 birr
Variable expenditure is:-
Cloth 50 birr, Mobile card 25 birr, recreation 100 birr, Gas 70 birr. In order to increase his saving Ato
Alemu understand to change his behavior and skills he decide to decrease variable expenditure by 5%

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starting from Feb,2016. (Budget year of the company from January1 to December 31) Based on the above
information perform the following task:-
Task 3.1 Calculate the total saving for the month of January 2016
Task 3.2 Calculate the total saving for the month of February 2016
Task 3.3 Demonstrate required behavior and skill to successful budgeting.
Task 3.4 Demonstrate obstacles of ato Alemu to achieve financial goals
Project 4 Process customers Account, Transaction and understanding of Ethiopian financial system and
market.
Ato kidane plan to open a café after a year. The total capital needed to open the business birr 100,000. To
achieve the goal ato Kidane deposit 1,000 birr per month starting from January 2015 to December 31,
2015 to Dashen bank at Hawasa. During this period ato Kidane earn interest income of birr 2,008 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 the interest rate of 10% paid quarterly at equal installment for 3 year and
management fee 5% of the total loan amount equally distribute for 3 year. Based on the above
information perform the following tasks.
Task 4.1 Calculate the deficit capital of ato Kidane, If withdraw all deposited amount of money
Task 4.2The total interest expense and service charge at the end of second year (2015 and 2016)
Task 4.3 If the government announce budget for the year 2009 E.C birr 200 billion Ethiopia revenue and
custom authority (ERCA) plan to generate internal revenue 180 billion for the year 2009 E.C. List the
financial instrument to full fill budget deficiency.
Task 4.4 Assume you are an employee of Dashen bank as a clerk demonstrate the type of deposit account
that the bank provide for its potential customers.

Solution
Project 1
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

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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
Input VAT= 320,000*.15=48.000
Output 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
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
Task 2.1

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Following OHS guidelines relevant to work place
Completing required documentation
Keeping work place clean and tidy
Office practice manual
Displaying health and safety procures ,magazines and other material
City administration ,regional and federal state legislation
Undergoing operator training when using new equipment or process
Task 2.2
To support team member
Problem solving
Helping colleagues
Providing encouragement
Explaining / clarifying
Providing feedback to team member
Undertaking extra task if necessary
Team members
Supervisor
Coach/mentor
Other members of the organization
Peers/work colleagues/team/ enterprise
Task 2.3 Software applications
Word processing. Data base ,accounting or presentation package
Email, internet
Technology
Printer
Scanners
Photocopiers
Computer technology such as laptops and personal computers

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Task 3.1 and 3.2
Description Income and Income and
expenditure for expenditure for the
the month of month of Feb,2016
Jan,2016

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 expenditure 640 640
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

Task 3.3
organizational skills
Record keeping skills
Disciplined approach to money
Controlled spending
Task 3.4 Unexpected circumstances such as
-losing a job, falling ill and not being able to work

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Task 4.1
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 4.2 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
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
Task 4.3
commercial bills
treasury bills
promissory notes

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bills of exchange
government bills
Task 4.4
Investment accounts
Retirement accounts
Saving accounts
Accounts geared to the needs of particular groups

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