Level Four Code 3

Project One: Cost Accounting

The Chamber of Commerce has two exhibition centers:
A. Addis Ababa Exhibition Center
Fixed Costs = 2,000
Variable Costs = 80
B. Millennium Hall
Fixed Costs = 6,000
Variable Costs = 60

NB: Selling Price = 120 for both centers

Administration Cost = 3500
Band Budget = 2,500

Instruction:
1. Find the breakeven point at A and B
2. Find the profit when 150 and 300 customers attend respectively.
3. At what level the two operating income will be the same?

Project Two: Accounting Cycle

Huluka Company
Unadjusted Trial Balance
For the Year Ended July 31, 2010

Account Title Dr Cr
Cash ………………………………………………………..3,425
Accounts receivable………………………………………..7,000
Supplies……………………………………………………..1,270
Prepaid Insurance…………………………………………..620
Office Equipment………………………………………….51,650
Accumulated Depreciation……………………………………………………………9,700
Accounts Payable……………………………………………………………………925
Unearned Fees………………………………………………………………………1,250
Capital………………………………………………………………………………29,000
Drawing…………………………………………………5,200
Fees Earned…………………………………………………………………………59,125
Wages Expense…………………………………………22,415
Rent Expense ……………………………………………4,200
Utilities Expense………………………..………………2,715
Miscellaneous Expense………………….……………..1,505
Total 100,000 100,000

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Additional Information

a) Supplies on Hand are Birr 380.

b) Insurance premium expired is Birr 315.
c) Depreciation on equipment is Birr 4,950.
d) Wages accrued but not paid during the period is 440.
e) Accrued fees earned but not recorded is Birr 1,000.
f) Unearned Fees during the period is Birr 750.

Instruction:

1. Journalize the adjusting entries.

2. Prepare Income Statement, Statement of Owner’s equity, and Balance Sheet.
3. Journalize the Closing Entries.
4. Prepare the Post Closing Trail Balance

Project Three: Payroll

The following information is given for XYZ Company:

S.N Name of Basic Representational Fuel OT Hrs. Duration of OT

Employee Salary Allowance Allowance worked OT works Rate
1 Tola 5,500 750 200 litters - - -
2 Chala 3,500 350 150 litters 6 hrs. Weekend 2
3 Bontu 850 - - 10 hrs. 10pm to 6am 1.5
4 Kena 2,800 150 100 litters 6 hrs. Holiday 2.5
5 Hordofa 1,500 - 50 litters 6 hrs. Holiday 2.5

Additional Information
 The management of the company expects all employees to work 40 hrs. per week
and all employees have worked as they have expected.
 Bontu is a Casual Employee
 Tola and Chala monthly contribute 10% of their basic salary to credit association
as monthly saving whereas Kena contribute 5% of his basic salary.
 Upto 1,000 birr fuel Allowance is exempted form tax and the selling price of one
litter is Birr 20.
 Pension is given as 6% from employee and 9% from employer.

Instruction:
1. Prepare a Payroll Register
2. Pass the necessary journal entries.

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 Project Four: Bank Reconciliation
The following information is given:
 Balance per Bank Statement is 26,465.50
 Deposit in transit is 2,148.21
 Bank error which will be added is 270
 Checks Outstanding is 8,003.84
 Balance per depositors records is 17,324.40
 Notes plus interest of 150 is 3650.
 Depositors error which will be deducted is 75.78
 Bank service charge is 18.75
Instruction:
1. Prepare a Bank reconciliation
2. Pass the necessary journal entries.

Project Five: Revenue Recognition Method

Assume that in the first year operation, a dealer in house hold appliances had total installment
sales of birr 300,000 and the cost of the merchandise sold amounted Birr 180,000. Assume also
that collection of the installment accounts receivable were spread over three years as follows:
1st year Br 140,000
2nd year Br 100,000
3rd year Br 60,000

Instruction:
1. Find the gross profit at point of sale method
2. Find the gross profit under installment method

Project Six: Inventory System

The following information is given:
Jan 1: Beginning Inventory…………………………………………….. 200unit @9
Jan 10: Purchase ………………………………………………………... 300units@10
Jan 15: Purchase...……………………………………………………… 400units@11
Jan 29: Purchase………………………………………………………… 100units@12

The physical count on December 31 shows that 300 units of particular commodity are on hand.
Using periodic FIFO method:
1. Calculate the cost of goods sold
2. Calculating the gross profit, if selling price per unit is Birr 15.
3. Calculate the business profit tax; assume administration cost is 2,500 from this birr 900
birr is for personal investment. (Use 30% profit tax rate)

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