ATEGORY1

TASKS 1.1 PROCESS CUSTOMER TRANSACTION

Assume that Mr. Tola needs to start a new merchandising business in the nextyear (January 1, 2016)
with a capital of birr 110,250. If he deposits his money at bank, the bank will allow him an interest rate of
5% per year.
A. Calculate the amount that Mr. Tola should depoit today (January 1, 2015)
B. Calculate the amount of interest income at the end of December 31, 2015

 GIVENSOLUTION
Amount = 110,250 A = P (1+RT) I = A-P or I=PRT
R = 5% P = A/ (1+RT) I = 110,250-105,000.
T = 1year P = 110,250/ (1+5%*1 ) I = 5,250
P = 105,000
 REQUIRED

A. Principal =___?
B. Interest =____?

TASKS 1.2 WORK EFFECTIVELY IN THE FINANCIAL SERVICES SECTOR

Chala is a new employee joining Ethiopian Electric utility as accounting clerk and he understood that
there are some information and activities he needs to know about the organization to be effective worker.

 What is the possible information & activities should Chala need to know about the
organizations to be effective worker?
 Time management
 Organizational values & objectives
 Preparing action plan for assigned job
 Workplace procedures and instructions
 Guidelines, procedures, legislations, & codes of practice

TASKS 1.3 PROCESS CUSTOMER ACCOUNTS

Ethio-telecom was using commercial bank of Ethiopia Nazreth branch for deposits and the company
needs to close the existing deposit account and open a new account at Adama branch.

A. What is the procedure required to close the existing account?

B. What are the procedures required to open a new account?

A. What are the procedures required to close the existing account?

 Reasons fortransferorclosureofanaccount
 Details of possible complaints relating to theaccount
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  Account details to enable to transfer of remainingfunds

B. What are the procedures required to open a new account

 TIN
 Contact details
 Nature of the institution [sole, share, corp.]
 Dispute resolution officer
 Nature & purpose of a business [service, merchant, manufacturer]
 Principal place of the institution
 Certificate & memorandum of association

TASKS 1.4 WORK EFFECTIVELY WITH OTHERS

Ato Yohanes is a permanent employee of Metehara sugar factory. He was recruited as junior accounting
clerk of that organization in cost department. Yohanes recognized that the newly assigned job demands
team working and he is finding the way how he can optimize his capacity by working with other staffs.

1. What are the activities Ato Yohanes needstofollow for the effectiveness of the team members?
 Respect differences
 Effective communication
 Share information to colleagues
 Provide support to team members
 Understand duties& responsibilities
 Seek assistance from workgroup members

TASKS 1.5 UNDERSTANDING OF DEBT & CUSTOMER CREDIT

In Ethiopia there are many financial institutions which are provides in credit facility for customers, like
co-operative banks. Assume that you are the employee of this institution.

 What is the importance of providing customer credit?

 To minimize the need to carry cash
 To purchase on account basis & pay later
 Convenient form of payment when traveling
 Allows for installment payment on expensive items

PROJECT 2 PERFORM TAX ACCOUNTING

Time allowed 30 minutes

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Kiya PLC is a famous merchandizing business which is engaged in purchasing and selling of various
products located at Bishoftu town. As per the Ethiopian tax regulation, The PLC is a VAT registered and
during the month of December 2015 the following information is related to the business activities of Kiya
PLC. Assume that profit tax is 30% of and the PLC will pay taxes to Inland Revenue on regular basis.

1. Purchase of products for the month of December including VAT birr 115,000
2. Sales made during the month excluding VAT 210,000
3. Employee payroll tax for the month of December birr 15,000
4. Business income before tax birr 90,000
5. Excise tax birr 6,000

TASKS 2.1Determine the indirect tax liability of the business for the given month

 GIVENSOLUTIONS

Purchase = 115,000 VAT Including 1. Output = Sales*Rate

Sales = 210,000 VAT Excluding Output = 210,000*15%
EIT = 15,000 for December Output = 31,500
Business Profit Before Tax = 90,000
Tax Rate = 30% 2. Input = Purchase*Rate
Excise tax = 6,000 Input = 115,000*15/115
Input = 15,000

3. VAT Payable = Output-Input

VAT Payable = 31,500-15,000
So, Indirect tax = Excise + VAT VAT Payable = 16,500
Indirect tax= 6,000+16,500
Indirect tax= 22,500 4. Business Profit = 90,000 [given]

5. Business Profit Tax = Business Profit*given rate

Business Profit Tax = 90,000*30%
Business Profit Tax = 27,000

TASKS 2.2 Determine the direct tax liability of the company

 Direct Tax = BPT+EIT
 Direct Tax = 27,000+15,000
 Direct Tax = 42,000

TASKS 2.3 Understanding how to present tax to inland tax authority

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 A. Determine the total amount of Kiya PLC will present to tax authority
 Total Tax Liabilities = direct tax + indirect tax
 Total Tax Liabilities = 42,000+22,500
 Total Tax Liabilities = 64,500

B. When does the indirecttax will be presented to the tax authority

 Up to 10th Month of next year 2016

Project 3 DEVELOP PERSONAL BUDGET & SAVING PLAN & BUSINESS PRACTICE

Time allowed 1hr

Description Actual Income & Expenditures

(December 31, 2015)

Income:

Salary Income (net) 6,000

Expenditures:

Clothing 500

Food 2,000

Entertainment 100

Utility 500

Personal Expense 50

School Fee 700

Cost Sharing 100

Transportation 100

Other 150

TASKS 3.1 DEVELOP & USE A PERSONAL BUDGET

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 The following data is given for actual income and expenditure of Bilisie for the month of December
2015. The difference between total income and expenditures is personal saving Using her personal saving
Bilisie has a plan to establish a business in the future.

 Assume that the salary: Income & expenditures will increase by 10% prepare budget plan &
budget variance for December 2015

Miss Bilisie
Personal budget performance report
For the Month ended December 31, 2015

Item Actual budget Budget amount Variance

Salary 6,000 6,600 (F) 600

Cloth 500 550 (U) 50

Food 2,000 2,200 (U) 200

Entertainment 100 110 (U) 10

Utility 500 550 (U) 50

Personal expense 50 55 (U) 5

School fee 700 770 (U) 70

Cost sharing 100 110 (U) 10

Transport 100 110 (U) 10

Other 150 165 (U) 15

Total Expenses 4,2004,620420

SAVING 1,800 1,980 (F) 180

%SAVING 30% 30% 30%

TASKS 3.2 DEVELOPING PERSONAL BUDGET

 Assume that expenditures will increase by 10% &nochange in salary income prepare budget
plan for January 2016.

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 Miss Bilise
Personal budget Performance Report
For the Month ended January31, 2016

Item Actual budget Budget amount Variance

Salary 6,000 6,000 ---

Cloth 500 550 (u) 50

Food 2,000 2,200 (u) 200

Entertainment 100 110 (u) 10

Utility 500 550 (u) 50

Personal expense 50 55 (u) 5

School fee 700 770 (u) 70

Cost sharing 100 110 (u) 10

Transport 100 110 (u) 10

Other 150 165 (u) 15

Total Expenses 4,2004,620420

SAVING 1,8001,380(U) 420

%SAVING 30% 23% [?]

TASKS 3.3 DEVELOPING OF SAVING PLAN

Assume that expenditure of December 2015 remains unchanged in January 2016 & Bilisie need to find
other source of income in addition to her salary to have Birr 2,000 saving amount in January 2016.

 Calculate the additional amount to her salary that Bilisie need to finance to reach a saving of
2,000

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GIVEN SOLUTION

Saving of 2015 = 1,800 Additional amount = Plan-Saving

Plan = 2,000 Additional amount = 2,000-1,800

REQUIRED Additional amount = 200

Additional amount = ___?

TASKS 3.4 UNDERSTANDING OF SAVING FOR THE SOCIETY

 What are the advantages of saving for society?
 To improve Our life
 To develop Our capital
 For emergency problems
 For family support & protection in case of job lose

CATEGOTY2
Total Time Allotted for all projects:-1:30hrs

Project 1DEVELOP UNDERSTANDING OF TAXATION (0.50)

Besualem PLC is an importer of reinforcement bars from Belgium. The company has been engaged in
buying and selling activities at the end of November 2014. The company paid net amount of birr 3,000 to
ERCA for VAT. During the month of October 2014 it earns birr 1,541,000 VAT inclusive from sales of

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reinforcement bars. In addition Besualem PLC paid an employment income tax of birr 6,000 per month
collected from employees and paid administrative & general expense of birr 15,000.

TASKS 1.1 Determine the amount of direct tax liability of the company for the month of October 2014.

Given

sales..................1,541,000 inclusive vat

vat payable.........3,000

Expense ..........15,000

EIT.............6,000

solution

sales =1,541,000/1.15 =1,340,000

Revenue .................1,340,000

cost of good sold......(0)

gross profit ..............1,340,000

Expense ..............15,000

IBT .....................1,325,000

BPT =1,325,000*30/100 =397,500

Task 1.1 Direct tax =BPT+EIT

=397,500+600 =403,500

Indirect tax =output - input

sales= 1,541,000*15/115 =201,000

Indirect tax =201,000 - 3000 =198,00

Project 2WORK EFFECTIVELY IN THE FINANCIAL SERVICES SECTOR (0.20)

DNB Bank a newly established bank as per the proclamation of Ethiopia and You are an employee of
this bank and assigned to perform banking activities to prepare daily report on saving/withdrawal amount
of more than 200,000 ETB to the national bank of Ethiopia and financial intelligence office.

TASKA 2.1 Identify at list five organizational policy/guidelines/legislation/procedures/codes of practice.

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  Financial codes
 Industry codes of practices
 Anti-discrimination legislation
 Financial transactions reports act
 Relevant environmental legislation
 Financial services reform act (FSRA)
 Electronic funds transfer (EFT) codes of conduct
 Anti-money laundry and counteract terrorism financial acts

TASKS 2.2As a team member in the bank, Identify your roles’ in supporting your team members and
your work place interaction mechanisms.

 Respect differences
 Effective communication
 Share information to colleagues
 Provide support to team members
 Understand duties& responsibilities
 Seek assistance from workgroup members

TASKS 2.3Identify the business technology applied to send your report to the National bank of Ethiopia
and financial intelligence office

 Fax
 E-mail
 Web site

Project 3 Develop and use a personal budget & saving plan (0.45)

Ato Fantahun is a permanent employee of Ethio-constraction company earning monthly netsalary of birr
9,500. He has monthly personal expenditures as per the following details and the remaining amount will
be deposited to his personal saving account.

Cloth--------------------------------------------15%
Food & Beverage-------------------------------20%
Medical------------------------------------------5%
Rent---------------------------------------------20%
Transport---------------------------------------2%
Education--------------------------------------10%

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 He plans to open barber shop with a capital of 80,520 after one year. As per his business plan his capital
is covered from his personal saving account & the remaining from Addis saving & credit association at
8.5% annual interest rate for threeyears& the principal amount will be paid semi-annually at equal
installment.

TASKS 3.1 Prepare monthly&annual budget for the year consider that there is no change in earning &
expenditures

Ato Fantahun
Personal budget report
For the month of December 31, 2010
Income:
Salary………………………………………………………………………………………….9,500
Expenditures:
Cloth……………..15% ………………………..1,425
Food………………20% ………………………..1,900
Medical…………....5% …………………………..475
Rent………………20% ……………………….1,900
Transport………….2% …………………………190
Education………..10% ………………………..950
Total Expenses ……………………………………………………………………………… 6,840

Saving 2,660

%Saving 28%

Ato Fantahun
Personal Budget report
For the year of 2010
INCOME:

Salary 114,000

Expenses:

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Cloth 17,100

Food 22,800

Medical 5,700

Rent 22,800

Transport 2,280

Education 11,400

Total Expenses 82,080

Saving 31,920

%Saving 28%

ASKS 3.2 Identify the sourceofinformation to develop business plan

 Hobbies
 Interests
 Franchises
 Personal skill & experience

TASKS 3.3 Determine

A. The amount of loan from Addis saving & credit association I1 =P1RT
 Loan = Amount-Annual Saving I 1 =48,600*8.5%*0.5
 Loan = 80,520-31,920 I1 = 2,065.50
 Loan =48,600

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 B. The amount of principal&interest repayment for the first yearP2= Loan – 1st payment
 Installment = Loan/ (round*time) P2 = 48,600 – 8,100
 Installment = 48,600/ (2*3)P2 =40,500
 Installment = 8,100

 SO, Principal for a year = Installment*2 I 2 = P2RT

 Principal for a year = 8,100*2I2 = 40,500*8.5%*0.5
 Principal for a year = 16,200I2 =1,721.25

 Interest for a year = I1 + I2

 Interest for a year = 2,065.50+1,721.25
 Interest for a year=3,786.75

C. Amount of outstanding principal balance atthe end of thesecond year

 Outstanding balance = Installment*2
 Outstanding balance = 8,100*2
 Outstanding balance =16,200

Project 4 Process customer account & transaction (0.35)

You are an accountant officer of Alem PLC among the tasks and responsibilities listed on your job
descriptions to handle issues related to financial sectors, to create business relationship with concerned
government and private companies and to process customer account and transactions of your company.

TASKS 4.1 Demonstrate the possible document required from your company to open current Bank
account in CBE
 TIN
 Contact details
 Nature of the institution
 Dispute resolution officer
 Nature & purpose of a business
 Principal place of the institution
 Certificate & memorandum of a company
TASKS 4.2 Demonstrate the advantages of saving depositaccount to your company if you maintain
saving account

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  Interest
 For emergency
 For investments
 For security purpose
 Meets financial requirement

TASKS 4.3 Demonstrate the possible challenges that affect your job with regards to banks activities.
 New procedures
 Changes of procedures
 Environmental factors

CATEGORY3
PROJECT 1

Ato Mohammed receives 2,000 birr from the supermarket he is working in as a salary. He has the
following expenditures. He his expenditures are:-
700 birr for food, 400 birr for clothing, 50 birr for car expense and 150 birr for recreation.

TASKS 1.1 Based on the above information calculate the personal saving.

Actua
Item l income & Expenditue Estimated income & Expenditue

Income 90% 2,100

Clothing 100% 700

Food 85% 400

Gas 50% 200

Recreation 70% 120

TASKS 1.2 calculate the actual income & expenditure

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TASKS 1.3 calculate the actual saving & estimated saving

TASKS 1.4 calculate percentage of actual saving against estimated saving

Task 1.1

Salary------------------------------------------------------------------------------ 2,000

Expenditures:-

Food---------------------------------------- 740
Cloth----------------------------------------400
Car expense---------------------------------50
Recreation----------------------------------150
Total expenditures---------------------------------------------------------------- 1,340
Saving--------------------------------------------------------------------------------- 660
% Saving ----------------------------------------------------------------------------- 33%

Task 1.2

 Total actual income => => 2,100*90% = 1,890

 Expenditure:-
 Cloth =>=>=> 700*100% = 700
 Food =>=>=> 400*85% = 340
 Gas =>=>=>=>200*50% = 100
 Recreation =>120*70% = 84.00
Total expenditure =>=> = 1,224

Task 1.3

Actual saving = actual income – actual expenditure

Actual saving = 1,890 – 1,224
Actual saving = 666

Estimated saving = Estimated income – Estimated expenditure

Estimated saving = 2,100 – 1,420
Estimated saving = 680

Task 1.4

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G
% of AS against ES = (Actual Saving/Estimated Saving) * 100%
% of AS against ES = (666/680)*100%
% of AS against ES = 97.94%

Project 2

XYZ is a merchandizing business enterprise engaged in buying & selling of products. The enterprise
purchased&resold items of birr 86,250 and 115,000 respectively. The enterprise has two permanent
employees.

Name of employee Basic Salary Over Time

Ato Tesfayie Abebe 1,500 300

Ato Aman Hakim 800 400

TASKS 2.1 Calculate directtax of the month

GIVEN2.1SOLUTION2.1
Purchase = 86,250
Sales = 115,000

Tesfaye’s;- Gross earning = Basic salary + Over time

Gross earning = 1,500+300
Gross earning = 1,800

Tesfaye’s:- EIT = GE*Rate – Deduction

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 Tesfaye’s:- EIT = 1,800*15% - 142.50
Tesfaye’s:- EIT = 1072.5

Aman’s:- Gross earning = Basic Salary +Over Time

Gross earning = 800+400
Gross earning = 1,200
SO

DT = BPT + EIT Aman’s:- EIT = GE*Rate – Deduction

DT = 21250+ 187.50 Aman’s:- EIT = 1,200*10% - 60.00
DT = 21,202.50Aman’s:- EIT = 60.00

So, Employment Income Tax = 1072.50 + 60.00

Employment Income Tax [EIT] = 1132.50

TASKS 2.2 Calculate indirect tax of the company

GIVEN2.2SOLUTIONS2.2
Purchase = 86,250
1. Output = sales*Rate
Sales = 115,000 Output = 115,000*15/115
EIT= 187.50 Output = 15,000

2. Input = Purchase*Rate
Input = 86,250*15/115
Input = 11,250

3. Indirect Tax Payable = Output – Input

Indirect Tax Payable = 15,000 – 11,250
Indirect Tax Payable = 3,750

4. Business Profit = Sales - [all IT + all EXPENSES]

Business Profit = 115,000 – [3,750 + 3,000]
Business Profit = 108,250

5. Business Profit Tax = Business Profit*Rate-deduction

Business Profit Tax = 108,250*30%- 11,460
Business Profit Tax = 21,015

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TASKS 2.3 Explain direct & indirect tax
 Direct taxes are the obligations of payment that cannot be shifted to a third party.
 Direct tax is a tax that the impact&incidence fall on the same person.
 Indirect tax is not born by the same person on whom it is levied & can be passed onto others.
 Indirect taxes’ impact&incidence fall on different persons.

PROJECT 3

Hyrax PLC wants to establish a business enterprise with an initial capital of birr 100,000. The investor
has birr 40,000 deposit and borrow the remaining amount from Dashen bank with an interest rate of 10%
that will be repaid after a year. You are working as a clerk in Dashen bank.

TASKS 3.1Provide information to Hyrax PLC to open a new account

TASKS 3.2Calculate the cash and interest to be collected from Hyrax PLC after a year
TASKS 3.3Explain financial intermediaries

Task 3.1
 TIN
 Contact details
 Nature of the institution
 Dispute resolution officer
 Nature & purpose of a business
 Principal place of the institution
 Certificate & memorandum of a company
TASK 3.2

 GIVEN3 SOLUTIONS

Capital = 100,000 Amount = P [1+RT] Interest = P*R*T or I=A-P

Saving = 40,000 Amount = 60,000[1+10%*1] Interest = 66,000-60,000
Rate = 10% Amount = 66,000Interest = 6,000
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Time = 1 year

 REQUIRED

I. Amount = ---?
II. Interest =----?

Task 3.3

 Banks  Corporations
 Investors  Non-banking financial institutions
 Individuals  Local & international governments
 Speculators

CATEGORY4

 GIVEN

Salary = 9,500

Cloth 15%

Food & Beverage 20%

Medical 5%

Rent 20%

Transport 2%

Education 10%

 Ato Fantahun plan to open barber shop with a capital of 80,520 after one year. As per his
business plan his capital is covered from his personal saving account & the remaining from Addis
saving & credit association at 8.5% annual interest rate for three years & the principal amount
will be paid semi-annually at equal installment.

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TASKS 1.1 Prepare monthly & annual budget for the year consider that there is no change in earning &
expenditures

Ato Fantahun
Personal budget report
For the month of …
INCOME:

Salary 9,500

EXPENDITURES:

Cloth 1,425

Food 1,900

Medical 475

Rent 1,900

Transport 190

Education 950

Total Expenses 6,840

Saving 2,660

%Saving 28%

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 Ato Fantahun
Personal Budget report
For the year of 2010
INCOME:-

Salary 114,000

EXPENSES:-

Cloth 17,100

Food 22,800

Medical 5,700

Rent 22,500

Transport 2,280

Education 11,400

Total Expenses 82,080

Saving 31,920

%Saving 28%

TASKS 1.2 Identify the sourceofinformation to develop business plan

 Hobbies
 Interests

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  Franchises
 Personal skill & experience

TASKS 1.3 Determine

A. Amount of loan from Addis saving & credit association I 1 =P1RT
 Loan = Amount-Annual Saving I 1 =48,600*8.5%*0.5
 Loan = 80,520-31,920 I1 = 2,065.50
 Loan =48,600

B. Amount of principal & interest repayment for the first year I 2 = P2RT
 Installment = Loan/ (round*time) I 2 = 40,500*8.5%*0.5
 Installment = 48,600/ (2*3) I2 =1,721.25
 Installment = 8,100

 Principal = Installment*2
 Principal = 8,100*2
 Principal = 16,200

 Interest = I1+I2
 Interest = 2,065.50+1,721.25
 Interest = 3,786.75

2. Amount of outstanding principal balance at the end of the second year

 Outstanding balance = Installment*2
 Outstanding balance = 8,100*2
 Outstanding balance = 16,200

TASKS 1.4 Relevant documentations for taxation

 Purchase invoice
 Sales invoice
 VAT invoice
 Withholding invoice
 Payroll sheets

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  Tax return statements
 Goods transits vouchers

Project 2 DEVELOP UNDERSTANDING OF TAXATION

 GIVENSOLUTION
Purchase = 300,000Before VAT 1.OUTPUT =Purchase*Rate
IT infrastructure OUTPUT = 1,081,000*15/115
Earns = 1,081,000 Including VAT OUTPUT =141,000

 EIT = 8,500 2. INPUT =Sales*Rate

INPUT = 300,000*15%’[t
INPUT =45,000

 REQUIRED 3. VAT Payable =OUTPUT – INPUT

VAT Payable = 141,000-45,000
 A. Direct tax -----8,500 VAT Payable =96,000

B. Indirect tax-----96,000 4. BP = Sales – (all ID + all expense)

But
We, do not calculate a Business Profit
B/C it is a bank; not a merchandising business

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Project 3

TASKS 3.1 Information required for clothing an account

 Reasons fortransferorclosureofaccount
 Details of possible complaints relating to theaccount
 Account details to enable transfer of remaining funds

TASKS 3.2 Information required for opening an account

 Primary account holder's፦Name, Address, Contact details etc
 Type of account
 Amount of initial deposit
 Required links to other accounts held
 Purpose for which the account will be used

TASKS 3.3 Financial markets in Ethiopia includes

 Bond markets
 Money markets
 Derivatives markets
 Option & future markets
 Foreign exchange markets

TASKS 3.4 Participants in the financial market

 Banks
 Investors
 Individuals
 Speculators
 Corporations
 Governments

TASKS 3.5The effect of the NBE’s monetary policy includes

 To change an interest rates
 Flow on changes to employment, prices, & production level
 Increase or decrease the supply of money in the Ethiopian markets
 Acting to avoid or minimize a systematic collapse of financial institutions

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TASKS 3.6 Instruments traded on the short term money market includes
 Treasurybills
 Bill of exchange
 Commercial bills
 Government bills
 Promissory notes

TASKS 3.7 Guidelines, procedures, legislations, & codes of practices

 Financial codes
 Industry codes of practices
 Anti-discrimination legislation
 Financial transactions reports act
 Relevant environmental legislation
 Financial services reform act (FSRA)
 Electronic funds transfer (EFT) codes of conduct
 Anti-money laundry and counteract terrorism financial acts

TASKS 3.8The role of the NBE’s as Ethiopian’s central bank includes

 To issue paper money & coins
 To act as an agent of the government
 To fix & control the foreign exchange rates
 To manage & administer the country’s international reserves
 To supervise loans of commercial banks & regulate interests
 To regulate the supplies, availability & costs of money & credit
 To license & supervise banks & hold commercial banks reserves & lend money to them

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 CATEGORY5

Total time for all projects: 1.30 Hours

On this project you are expected to perform the following tasks:

Based on the information provided:

The project covers the following units of competencies

EIS BAW2 01 0812 Work Effectively in the Financial Service Sector

EIS BAW2 04 0812 Process Customer Accounts
EIS BAW2 05 0812 Process Customer Transactions
EIS BAW2 06 0812 Develop Understanding of the Ethiopian Financial System & Markets
EIS BAW2 10 0812 Develop Understanding of Debt & Consumer Credit

Information:- Assume ATO BEKELE TOLOSA is a contract consultant in a newly establishing private
business enterprise earning annual net pay of Br 223,200.00 at the beginning of each yearfor four years.
ATO BEKELE’s annual living expenditure is 68% of his net pay. ATO BEKELE has a plan to open his
own business after four years. When his contract is terminated& he started to save his excess net pay at
DASHEN bank ADAMA branch at annual simple interest rate of 5.5% by opening saving account. To
open the business ATO BEKELE requires Br 500,000.00. And ATO BEKELE can borrow any deficit
amount from the bank at annual simple interest rate of 14%.

Assume you are working in this bank & you are responsible to handle customer requests

Based on the above information the candidate is expected to perform the following tasks:

Task 1.1 (01 04) Process Customer Accounts & Work Effectively in the Financial Service Sector

Whatdocuments are required from ATO BEKELE to open his saving account?

 Primary account holder's፦Name, Address, Contact details etc

 Type of account
 Amount of initial deposit
 Required links to other accounts held

Task 1.2 (05) Process Customer Transactions

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At the end of four years, howmuch would be (including the accumulated interest & total amount of
deposit made by ATO BEKELE?

GIVENREQUIREDSOLUTION

Saving = Income*Saving Rate Amount A1 = p (1+rt)

Saving = 223,200*32% A 1 = 71,424 (1+5.5%*4)
Saving = 71,424A1= 87,137.28

A 2 = P(1+rt)
A2 = 71,424(1+5.5%*3)
A 2 = 83,208.96
Total Saving = A1 + A2 + A3 + A4
Total Saving = 87137.28 + 83208.96 +79280.64+75352.32A3 = P(1+rt)
Total Saving = 324,979.20 A3 = 71,424(1+5.5%*2)
A 3= 79,280.64

A4 = P(1+rt)
A 4 = 71,424(1+5.5%*1)
A 4=75,352.32

Task 1.3 (02, 10) Develop Understanding of Debt & Consumer Credit and Markets & Work Effectively
with Others

A. To start the business as per his plan how much loan ATO BEKELE require?

GIVINREQUIREDSOLUTION
Saving = 324,979.20 Loan Loan = Capital – Total Saving
R = 14% Loan = 500,000 – 324,979.20
Loan = 175,020.80

B. Assume the loan is to be repaid after five years at one time together with interest, how much is
the total repayment amount to serve this debt?

GIVINREQUIREDSOLUTION

Loan =175,020.80 Amount A = P(1+RT)

R = 14% A = 175,020.80(1+14%*5)
T = 5 years A = 297,535.36

Task 1.4 (06) Develop Understanding of the Ethiopian Financial System & Markets

What are major roles of National Bank of Ethiopia? List at least three roles

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  To issue paper money & coins
 To act as an agent of the government
 To fix & control the foreign exchange rates
 To manage & administer the country’s international reserves
 To supervise loans of commercial banks & regulate interests
 To regulate the supplies, availability & costs of money & credit
 To license & supervise banks & hold commercial banks reserves & lend money to them

Project 2 Perform Tax Accounting

(Time allotted: 30 Minutes)

Instruction: Under this project you are expected to perform the following tasks based on the information
proved.

The project covers the following units of competency

EIS BAW2 07 0812 Develop Understanding of Ethiopian Taxation

LA-Same Trading PLC is a VAT registered merchandizing Business. During the current month the
company purchased merchandise for Br 10,000,000 vat exclusive price. During the same month the
Company sold 75% of merchandise purchased for Br 10,000,000 vat inclusive price and paid
administrative expenses during the month were Br 500,000. Business profit tax is 30%.

Using the above information the candidate is expected to perform the following tasks

Task 2.1

Determine the indirect tax liabilities of the business for the government

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GIVEN

Purchased = 10,000,000 VAT exclusive:- But, 75% of it was sold out….75% of 10,000,000 =7,500,000
Sales = 10,000,000 VAT inclusive
Administrative expense = 500,000
Profit Tax Rate = 30%
SOLN

Revenu = 8685652.17

Cost good sold =7500000

G,P= 1,195,652,17

Expense = 500000

IBT = 695,652.17

BPT = 695,652.17 × 30

=208695.65

Task 1

Net profits = IBT _ BPT =695,652.17 _ 208,695.65 = 486,956.52

TASK 2 Direct tax = 208695.65

TASK 3 IDT OUTPUT _ INPUT

1,304,347.83 _ 1500000

VAT Refundamable==195652.17

Is this uneder for answer is ronng??????

1. OUT PUT = Sales*Rate

OUT PUT = 10,000,000*15/115
OUT PUT = 1,304,347.84

2. IN PUT = Purchase*Rate
IN PUT =7,500,000*15%
IN PUT = 1,125,000

3. VAT Payable = OUT PUT – IN PUT

VAT Payable = 1,304,347.84 – 1,125,000
VAT Payable = 179,347.84

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 4. Business Profit = Sales – (VAT + Expense)
Business Profit = 10,000,000 - (179,347.83+500,000)
Business Profit = 9,320,652.17

5. Business Profit Tax = business Profit*Given Tax Rate

Business Profit Tax = 9,320,652.17*30%
Business Profit Tax = 2,796,195.65

Task 2.2

Determine the direct tax liabilities of the business for the government

Project 3 Developpersonal budget, saving plan & Business practice

Time allotted: 1hr

Instruction: Under this project you are expected to perform the following tasks based on the information
provided
The project covers the following competencies
EIS BAW2 08 0812 Develop and use a Personal Budget
EIS BAW2 09 0812 Develop and use a Saving Plan
EIS BAW2 10 0812 Develop Business Practice

ASTER earns monthly net salary of Br 15,000 & she has the following expenditures.

Clothing …………………………………………. 10%

Food ……………………………………………... 35%
Entertainment …………………………………… 30%
Transport ……………………………………….. 2%
House rent ……………………………………… 20%
Others ………………………………………….. 1%

In addition ASTER has a plan to open a beauty salon that costs Br 100,000.00

Task 3.1 (08) Develop & use a Personal Budget

A. How much would be total net income of ASTER for one year?
15,000*12 = 180,000

INCOME:-

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 Salary ……………………………………………………………………………… 15,000

EXPENSES:-
Cloth ………………10%……………….. 1,500
Food ………………35%……………….. 5,250
Entertainment …….30%……………….. 4,500
Transport ………….2%………………… 300
House rent ……….20%………………… 3,000
Others …………….1%………………….. 150
Total Expenses …..98%……………………………………………………………….. 14,700
Saving 300
300
%Saving 2%

B. How much is the total expenditure of ASTER for one year?

14,700*12 = 176,400

Task 3.2 (09, 13) Understanding of saving for the society & Develop business practice

A. Determine the amount of ASTER’s saving at the end of the year

300*12 = 3,600

B. How long it takes her to open the beauty salon if 50% of the cost is to be covered from her
saving?
GIVENREQUIREDSOLUTION
Capital = 100,000 Time IF 3,600 = 1year
A = 50,000 50, 000 = ?
(50,000*1year)/3,600 = 14years

She eager to open the beauty salon as soon as possible & she request your bank.

In order to improve her savings what do you advice to ASTER?

 She must revise her spending habits & make a basic change to her spending habits
 She might need to find other source of income by doing extra work

Which expenditure do you think she has to reduce significantly?

 Entertainment

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 CATEGORY6

1 For Qualification based … together with the tests.

2 for competency-based assessment, you are required to perform …

3 read the project package/s and written test (if applicable) properly.

4 all you questions and clarifications should be addressed to the assessor only.

5 complete the task/project described in the project package.

6 you are given fifteen (15) minutes reading time for each project and the number of hours allocated for
each project is indicated in the project information sheet.

7 after you finish this assessment you are required to submit all the project package and written tests
questions provided to you.

8 you are allowed to use your tool/instruments with the permission of the assessor, and this must be
presented to the assessor before start of the test.

9 after you finish the assessment, you are required to sign the competency assessment results summary,
and return to the stock room all the tools and materials borrowed

10 you are also required to clean up you work station after completion of you work.

Project information

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Given the necessary tools, equipment and information, you are expected to perform the following four
projects. Based on the cases given below under each project, you are expected to perform all tasks under
each respective project accordingly.

Assessment venue: well-equipped assessment center or real work place.

Total time for all projects 2:30 Hrs

Project 1: perform tax computation

Competency covered:

EIS BAW2 07 0842 Develop understanding of taxation

Time allotted: 30 minutes

MDF manufacturing PLC imported materials for Br 2,500,000 and purchased local materials for Br
1,000,000 before VAT for production of gloves in 2014. The local custom duty charge Br 200,000 paid
to tax authority. The factory sold 30,000 gloves at Br 150 each before VAT including 2% sales
commission. The company paid Br 53,000 for administrative expenses and employment income tax of Br
30,000. Imported materials are exempted from VAT & withholding taxes. Business profit tax is 30%.

Given
Imported material -----,---------------------------250,000
purchase local material --------------------------1,000,000
custom duty ----------------------- -------------------200,000
sells --------------------------------------30,000*150=4,500,000
commission------------------------2% =2/100=1.02
Administrative expense ---------------53,000
EIT ----------------------------------------30,000
Task 1.1 calculate net profit
cost of good sold-------2,500,000+1,000,000+200,000
=3,700,000
net sells. =4,500,000/1.02=4,411,764.7
Income statement
sells --------------------------------------------4,411,764.7
cost of good sold ------------------------(3,700,000)
gross profit ----------------------------------711,764.7
administrative expense ---------------(53,000)
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 income before tax -----------------------658,764.7
BPT =30% of income before tax
BPT =658,764.7*30%
=197,539.4
Net profit =IBT-BPT
=658,764.7-197,539.4
= 461,225.28

Task 1.2 calculate direct tax & indirect tax

Direct tax= EIT+BPT

= 30,000+197,539.4
=227,539.39
Indirect tax =net vat +other tax
Net vat =output -input
net vat = 4,500,000*15/100=675,000 output
=1,000,000*15/100=150,000 input
NV =675,000-150,000
=525,000
Indirect tax
=525,000+200,000
=725,000
Task 1.3 identify documents for taxation
 Purchase invoice
 Sales invoice
 VAT invoice
 Withholding invoice
 Payroll sheets
 Tax return statements
 Goods transits vouchers

Project 2
DL Hotel present loan proposal to Dashen bank & the bank provided the credit schemes to the loan. The
first option is to borrow Br 230,000 mortgages to be paid with 8years at equal installment at a rate of
15% semi-annually. The second&third options are to borrow Br 450,000 for 30 months at equal
installment at a rate of 13% and Br 300,000 for a year at equal installment at a rate of 12.5% semi-
annually respectively. The bank agreed with the hotel & the loan disbursed with additional service
charges of Br 27,500 (one time borrowing cost for the three loan

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Task 2.1 calculate the interest expense & other charges at the end of the first year

I first need to find installment amount (one round payment) for all three cases. Then each interests.

1. Case1
 Installment Amount = Loan/(round*time)
 Installment Amount = 230,000/(2*8)
 Installment Amount=14,375

I1 = P1RT I2 = P2RT
I1 = 230,000*15%0.5 I2 = (230,000 – 14,375)*15%*0.5
I1 = 17,250 I2 = 16,171.88
-------------------------------------------------------------------------------------------------------------------------------------

2. Case2

 Installment Amount = Loan/ (round*time)

 Installment = 450,000/ (2.5*2)
 Installment = 90,000

I1 = P1RTI2 = P2RT
I1 = 450,000*13%*0.5 I2 = (450,000 – 90,000)*13%*0.5
I1 =29,250I2 = 23,400
-------------------------------------------------------------------------------------------------------------------------------
3. Case3

 Installment Amount = Loan/ (round*time)

 Installment = 300,000/ (1*2)
 Installment = 150,000

I1 = P1RTI2 = P2RT
I1 = 300,000*12.5%*0.5 I2 = (300,000 – 150,000)*12.5%*0.5
I1 = 18,750I2 = 9,375
===========================================================================

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Finally, interest expense & other charges at the end of the first year

For Option 1 I1 +I2 + Service charge 17,250 +16,171.88 + 27,500 = 60,921.88

For Option 2 I1 +I2 + Service charge 29,250 + 23,400 + 27,500 = 80,150

For Option 3 I1 +I2 + Service charge 18,750 + 9,375 + 27,500 = 55,625

Task 2.2 calculate the total loan repaid at the end of second year

Since installment is known, and there are four rounds in two years; I then, multiply that number by four.

I. 14,375*4 = 57,500
II. 90,000*4 = 360,000
III. 150,000*2 = 300,000

 Because it’s time is 1 year which means ended with 2 rounds

Task 2.3 Demonstrate major documents required to open bank account at NIB bank by the hotel

 TIN
 Contact details
 Nature of the institution
 Dispute resolution officer
 Nature & purpose of a business
 Principal place of the institution
 Certificate & memorandum of a company

Task 2.4 What is the advantage of credit facility to the society?

 Interest income
 For emergency
 For investments
 For security purpose
 Meets financial requirement

Project 3 Develop and use personal budget and saving plan

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 Competencies covered:

EIS BAW2 08 0812 Develop and use a personal budget

EIS BAW2 09 0812 Develop and use a saving plan
EIS BAW2 13 0812 Develop business practice
Time allotted: 50minutes

ABEBE an employee of 3F furniture Company earns a monthly net income of Br 15,000.00. 25% of the
total income is used to cover his fixedcost and the remaining income is used to cover his variable expense
and savings. His saving is 15% of his variable expense. The actual variable expense is 85% of budgeted
variable expense but, fixed cost remains constant. If the variable expenses budget is deficitdeducted from
personal saving and if surplus added to personal saving. His salary expected to increase by 20% for the
month of February 2015.

Task 3.1 Prepare budget performance report for the month of December 2014.

I. Fixed Cost=25%Times His Basic Salary

Fixed Cost = 25%*15,000 III. PS = 15%VE
Fixed Cost = 3,750 PS = 15%*5,625
PS = 843.75
II. AVE + VE + PS + FC = Income
0.85VE + VE+ 0.15VE + 3,750=15,000 IV. AVE = 85%VE
2VE = 11,250 AVE = 85%*5,625
VE = 5,625 AVE = 4,781.25

ATO ABEBE

Personal Budget Performance Report

For Month ended December 31, 2014

Item Budget Amount Actual Amount Variance

Basic Salary 100% 15000

Fixed Cost 25%BS 3,750

Actual Variable Expense 85%VE 4,781.25

Variable Expense 5,625.00

Total Expense (14,156.25)

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Personal Saving 15%VE 843.75

%Saving 5.625%

Task 3.2 Develop personal budget for March 2015.

New Salary = 20%Old Salary + Old Salary

New Salary = 20%*15,000 + 15,000 AVE + VE + PS + FC = Income
New Salary = 3,000 + 15,000 0.85VE+VE+0.15VE+4,500 = 18,000
New Salary = 18,000 2VE = 13,500
VE = 6,750

Fixed Cost = 25%*Income

Fixed Cost = 25%*18,000 PS = 15%*VE
Fixed Cost = 4,500 PS = 15%*6,750
PS = 1,012.50

AVE = 85%VE
AVE = 85%*6,750
AVE = 5,737.50

ATO ABEBE

Personal budget performance report

For month ended March 31,2015

Item Budget amount Actual amount variance

Salary 20% + BS 18000 -

Fixed cost 25%BS 4,500

Actual variable expense 5,737.50

Variable expense 6,750

Total expense (16,987.50)

Personal saving 15%VE 1,012.50

%saving 5.625%

Task 3.3 Calculate total saving at the end March 2015 and identify the related investment opportunities.

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Total Saving = Total Income – Total Expense
Total Saving =18,000 – 16,987.50
Total Saving = 1,012.50

Task 3.4 Identify the investment related risks of personal saving.

Project 4 Develop understanding of the Ethiopian financial system to work effectively in the
financial sector

Competencies covered:

EIS BAW2 01 0812 Work effectively in the financial service sector

EIS BAW2 02 0812 Work effectively with others
EIS BAW2 03 0812 Use business technology
EIS BAW2 06 0812 Develop understanding of the Ethiopian financial system and market
EIS BAW2 11 0812 Participate in work place communication
EIS BAW2 12 0812 Work in team environment
EIS BAW2 14 0812 Apply continuous improvement processes (kaizen)
Time allotted: 30 minutes

In the ARADA city administration 25 individual’s established medium scale enterprise (MSE) that
works on trading, service rendering and small scale manufacturing. The team management, marketing of
the product and service and continues improvement in performances are the challenge of the MSE.
Assume that you are an employee of this enterprise and perform the following tasks which are related to
your jobs.

Task 4.1Identify your own role and responsibility within the team

 Task Role
 Maintenance Role
 Self-Centered Role

Task 4.2 demonstrate your role to work effectively inthe financial service sector

 Respect differences
 Effective communication
 Share information to colleagues
 Provide support to team members
 Understand duties& responsibilities
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  Seek assistance from workgroup members

Task 4.3 demonstrate your role in work place meetings and discussions

 Listen and respond sensitively

 Encourage others to contribute
 Respond appropriately to others
 Listen carefully to what others say
 Adapt what you say to suit different situations
 Respond perceptively to contributions from others
 Take part in one-to-one as well as group discussions
 Develop points & ideas, with an awareness of others' feelings, believes & opinions

Develop personal budget

Monthly salary income 15000

clothing ----------------------------------------10%

food. ----------------------------,-,----------35%

entertainment -----------------------------30%

Transportation -------____________ 2%

House rent. -----------------------------20%

Other. -------------------------------- 1%

additional information plan to open salon that costs birr =100000

Task 1.1

A. How much would be total net income of aster for one year

B. How much is the total expenditure of aster for one year

Task 1.2
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A. Determine the amount of Aster saving end of one year

B. How long it task to open the beauty salon if 50% of the cost to convert from her saving .

Item monthly income and expenditure. Annual income and expenditure

 I n c o m
e

s a l a r y i n c o m e 1 5 0 0 0 1 8 0 0 0 0

 e x p e n d i t u
r e

C l o t h i n g 1 5 0 0 1 8 0 0 0

f o o d 5 2 5 0 6 3 0 0 0

e n t e r t a i n m e n t 4 5 0 0 5 4 0 0 0

T r a n s p o r t a ti o n 3 0 0 3 6 0 0

H o u s e r e n t 3 0 0 0 3 6 0 0 0

O t h e r 1 5 0 1 8 0 0

T o t a l e x p e n s e 1 4 7 0 0 1 7 6 4 0 0

S a v i n g 3 0 0 3 6 0 0

Task 1.1

A. Amount of total Income =180000 one year

B. Amount of total expense = add total expenditure

= 176400 for one years

Task 1.2

A. Amount total saving =income _Expense

=180000_176400

=3600

B.Additional information of beauty salon

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 100000*50/1000=50000

Project five.

Ato kidane plant to open a cafe after a year. The total capital needed to open the business is birr
100,000 .to achieve the goal ato kidane deposit 1,000 birr per month starting from January ,2015 up to
December ,2015 in Dashen bank at Hawasa branch .During this period Ato kidane earn cash interest
income of birr 2008 for his deposit in dashen bank after one year .one Januaryb,2016 ato Kidane gave
loan proposal to dashen bank to fulfill the deficit amount. at 10% interest rate and management fee 5% of
the total loan amountequally distributed for 3 years and repaid quarter at equal installmentfor 3 years
based on the above information perform the following tasks

Task 5.1 Calculate the deficit capital of Ato kidane ,if he withdraws the entire deposit amount

Task 5.2 Calculate the total interest expense and service charge at the end of the first year ?

Task 5.3 Demonstrate the instrument traded in the short term money market by Ethiopian

government to fulfill the budget deficit

Task 5.4 Describe how you provide a service to your customer if you are bank clerk in Dashen bank

Given

The initial capital amount =100,000 birr

Ato kidane deposit 1,000 birr per month =12,000 per year

Interest income per year 2,008 birr so Ato Kidane has 14,008 at the end of the year which is (12,00
+2,008)

Borrow the deficit amount at 10% interest rate for 3 years

Task 5.1 the deficit amount =(100,000 -14,008) =85,992

installment payment = 85,992/12

=7,166

Task 5.2 interest and service charge at the end of the first year

st
1 term Interest expense =85,992 *0.1*1/4 =2,149.8

2nd term Interest expense = 78,826*0.1*1/4 = 1,970.65

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 3rd term interest expense =71,660*0.1/4 =1,791.5.

4rth term. interest expense =64,494*0.1/4 =1,612.35

The total interest amount the end of the 1st years is

Total interest =2,149+1,970.65+1,791.5 +1,612.35

=7,524.3 birr

service charge it management fee which is equal to 5% of the total loan=85,992*5%=4,299.6 equaly
distributed for 3 yy so ,the year

service charge =4299.6/3 =1433.2 birr

Task 5.3 financial assets traded in short term money market includes

 bills of exchange
 commercial bills
 government bills
 promissory notes

Task 5.4 service to customer should be provided in the following manner

 Customer is greeted and served with respect and professionalism

 customer is provide with infn as required in a timely, accurate and effective manner
 any queries about transactions should be answered fully
 transactions out side the my knowledge

Project six

Ato Alemu is salaried employee in XYZ manufacturing company in dire dawa net salary of 750 per
week .In January 2016 the company paid two month net salary bonus for each employeefor their
performance in the year 2015 .Ato Alemu has fixed and variable expense for the month .Fixed
expenditure are 100 birr for university fee ,200 birr for transport ,300 birrr for rent and 40 birr for
magazine and variable expense are 50 birr for cloth, 25 birr for mobile card ,100 birr for recreation and
70 birr for gas .in order to increase his saving Ato Alemu understands to change his behavior and plans to
decrease variable expense by 5% starting from February .Based on the above information perform the
following tasks

Task 6.1 calculate the total amount of saving for the month January 2016

Task 6.2 calculate the total amount of saving for the month February 2016

Task 6.3 Demonstrate the required behavior skills for successful budgeting

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 Task 6.4 Demonstrate obstacles for ato alemu to financial goals

Solution

Monthly income =750*4=3,000 birr per year

Ato Alemu has 6,000 birr bonus in January his total income is equal to 3,000+6,000=9,000 birr

EXPENSE

Fixed expense

university fee .........................100 birr

Transport ................................200 birr

Rent. .......................................300 birr

magazine ................................40 birr

Total fixed expense ...........640 birr

Variable expense

cloth expense ....................................50 birr

Mobile card ......................................25 birr

recreation ............................................100 birr

Gas expense ........................................ 70 birr

Total Variable expense .........245 birr

Total Fixed and Variable expense =640+245 =885

Task 6.1 Total amount of saving for the month January 2016

9,000-885 =8115

Task 6.2 Total amount of saving for the month February ?

income =3,000

The variable expense is decreased by 5% =245-(245*5%)

= 245-12.25 =232.75 birr

so the total amount of saving =3,000 -(640+232.75)

ACCOUNTING DEPARTMENT
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 =3,000-872.75=2127.25

Task 6.3 Demonstrate the required behaviour and skills for successful budgeting

Behaviour & skills required for successful budgeting may include:-

 controlled spending
 Discipline approach to money
 organisational Skills
 Record keeping skills

Task 6.4 Demonstrate obstacles for ato Alemu to financial goals

obstacles that might prevent financial goals being achieved may include:-

 Being unemployed
 particularly long term unemployed
 insufficient income to afford items that are beyond the individuals means
 unexpected circumstances such as
- losing a job ,falling ill ,not being able to work

Project seven .Develop understanding ot Taxation

IHLAS trading plc is a registered and licensed supplier of enjera to different universities in ethiopian
.During the year 1012 the company earns an income of birr 1,500,000 and 1,800,000 from Adama and
AAU respectively including vat. The total cost of the product is 1,980,000 before vat . In addition the
company earns birr.160,000 per year from other sources of income with zero vat rates .In the other hand
the company incurred birr 300,000 general and administrative expense for the year .During the last month
of 2012 the company withholds birr 65,000 for employment income tax and the company is expected to
pay 30% business profit tax.

Task 1.1 Calculate the net profit

Task 1.2 Calculate direct tax liabilities for the year

Task 1.3 Determine indirect tax liabilities for the year

Task 1.4 Describe direct & indirect taxes

Given

Revenue from sales =1,500,000+1,800,000 =3,300,000

cost of good sold =1,980,000

so output VAT =3,300,000*15/115 =430,434.78

ACCOUNTING DEPARTMENT
COC GUIDANCE
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Total revenue =net sales +other income

Net sales= revenue from sales - output VAT

= 3,300,000-430,434.78 =2,869,565.22

Total revenue =2,869,565.22 +160,000 =3,029,565

Revenue ................................................................ 3,029,565.22

Less cost of good sold ........................................ (1,980,000)

Gross profit ........................................................... 1,049,565.22

Less expense ........................................................ (300,000)

income before tax ................................................ 749,565.23

Business profit tax =749,565.22*30% =224,869.56

Task 7.1 Net profit = 749,565.22-224,869.56 =524,695.66

Task 7.2 Direct tax

=BPT +EIT =224,869.56+65,000 =289,869.56

Task 7.3 calculate indirect liabilities for a year

sales =1,500,000 +1,800,000 =3,300,000 including vat

3,300,000*15/115 =430,434.78

cost of goods of sold =1,980,000 before vat

=1,980,000*15/100= 297,000

Indirect tax =430,434.78 -297,000 =133,434.78

ACCOUNTING DEPARTMENT
COC GUIDANCE
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BY ȻH3RNNET GUCHI
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