Answer for Exam Three

Project One
Given
A. Addis Ababa Exhibition Center
Fixed Costs = 2,000
Variable Costs = 80
B. Milleneum Hall
Fixed Costs = 6,000
Variable Costs = 60
Selling Price is 120 for both, Administrative cost is 3,500 and Band budget is 2,500
Solution
A. Addis Ababa Exhibition Center B. Tommy Hotel Hall
Total Budget = 3,500 + 2,500 = 6,000 Total Budget = 6,000 + 6,000 = 12,000
FC = 4,000 + 12,000 = 16,000 FC = 12,000 + 12,000 = 24,000
VC = 80/unit VC = 60/unit
SP = 120/unit SP = 120/unit
SP – VC – FC = 0 SP – VC – FC = 0
120Q – 80Q – 8,000 = 0 120Q – 60Q – 12,000 = 0
40Q = 8,000 60Q = 12,000
Q = 8,000/40 = 200 tickets Q = 12,000/60 = 200 tickets

If 150 customer attended

A. Addis Ababa Exhibition Center
SP*Q – VC*Q – FC
= (120*150) – (80*150) – 8,000
= 18,000 – 12,000 – 8,000 = (2,000)

B. Millennium Hall
SP*Q – VC*Q – FC
= (120*150) – (60*150) – 12,000
= 18,000 – 9,000 – 12,000 = (3,000)

If 300 customer attended

A. Addis Ababa Exhibition Center
SP*Q – VC*Q – FC
= (120*300) – (80*300) – 8,000
= 36,000 – 24,000 – 8,000 = 4,000

B. Millennium Hall
SP*Q – VC*Q – FC
= (120*300) – (60*300) – 12,000
= 36,000 –18,000 – 12,000 = 6,000

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Project Two
1. Adjusting Entries
a. Supplies Expense ------890
Supplies -----------------890
(1,270 – 380)
b. Insurance Expense -----315
Prepaid Insurance ---------315
c. Depreciation Expense ----4,950
Accumulated Depreciation ------4,950
d. Wages Expense -------440
Wages Payable -----------440
e. Accounts Receivable ------1,000
Fees earned ---------------1,000
f. Unearned Fees --------500
Fees Earned ---------------500
(1,250 – 750)
GELETA PLC
Adjusted Trial Balance
For the month of June 30, 2010
Account Title Debit Credit
Cash 3,425
Fees Receivable 8,000
Supplies 380
Prepaid Insurance 305
Office Equipment 51,650
Accumulated Deprecation 14,650
Account Payable 925
Wages Payable 440
Unearned fees 750
Geleta, Capital 29,000
Geleta, Drawing 5,200
Fees Earned 60,625
Wages Expense 22,855
Rent Expense 4,200
Utilities Expense 2,715
Depreciation Expense 4,950
Supplies Expense 890
Insurance Expense 315
Miscellanies Expense 1,505
Total 106,390 106,390

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 Huluka Company
Income Statement
For the Year Ended June 30, 2010
Revenues:
Fees Earned ---------------------------------------------------------------------------------- 60,625
Expenses:
Wages Expense --------------------------------------------- 22,855
Depreciation Expense --------------------------------------- 4,950
Rent Expense ------------------------------------------------- 4,200
Utilities Expense --------------------------------------------- 2,715
Supplies Expense ---------------------------------------------- 890
Insurance Expense --------------------------------------------- 315
Miscellaneous Expense --------------------------------------- 1,505
Total Expense ---------------------------------------------------------------------------------- 37,430
Net Income -------------------------------------------------------------------------------------- 23,195

Huluka Company
Statement of Owner’s Equity
For the Year Ended June 30, 2010
Beginning Capital --------------------------------------------------------------- 29,000
Net Income -----------------------------------23,195
Less: Drawing ------------------------------- 5,200
Increase in Owner’s Equity --------------------------------------------------- 17,995
Ending Capital ------------------------------------------------------------------ 46,995

Huluka Company
Balance Sheet
For the Year Ended June 30, 2010
Assets
Cash ------------------------------------ 3,425
Accounts Receivable ----------------- 8,000
Supplies -------------------------------- 380
Prepaid Insurance ------------------ 305
Equipment -----------51,650
Less: Acc. Depn -----14,650 37,000
Total Assets ------------------------- 49,110

Liabilities
Accounts Payable ------------------- 925
Wages Payable ---------------------- 440
Unearned Fees ----------------------- 750
Total Liabilities -----------------------------2,115
Owner’s Equity
Capital -------------------------------------- 46,995
Total Liabilities ---------------------------- 49,110

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Closing Entries
i. Fees Earned -------------------60,625
Income Summary ----------------60,625

ii. Income Summary ------------ 37,430

Wages Expense ---------------------- 22,855
Depreciation Expense --------------4,950
Rent Expense ------------------------ 4,200
Utilities Expense --------------------- 2,715
Supplies Expense --------------------- 890
Insurance Expense -------------------- 315
Miscellaneous Expense -------------- 1,505

iii. Income Summary ---------- 23,195

Capital ------------------------------ 23,195

iv. Capital --------------------- 5,200

Drawing ------------------------- 5,200

GELETA PLC
Post-Closing Trial Balance
For the month of June 30, 2010

Account Title Debit Credit

Cash 3,425
Fees Receivable 8,000
Supplies 380
Prepaid Insurance 305
Office Equipment 51,650
Accumulated Deprecation 14,650
Account Payable 925
Wages Payable 440
Unearned fees 750
Geleta, Capital 46,995
Total 63,760 63,760

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 Project Three: Payroll
S. Name BS Allowance OT GE EIT PC CA TD NP Si
N Rep Fuel g
1 Dawit K. 5,500 750 4,000 - 10,250 2,312.5 330 550 3,192.5 7,057.5
2 Abebe A. 3,500 350 3,000 262.5 7,112.5 1,354.38 210 350 1,914.38 5,198.12
3 Chalyu T. 850 - - 79.69 929.69 91.95 - - 91.95 837.74
4 Meseret L. 2,800 150 2,000 262.5 5,212.5 806.25 168 280 1,254.25 3,958.25
5 Selam B. 1,500 - 1,000 140.63 2,640.63 210.63 90 75 375.63 2,265
Total 14,150 1,250 10,000 745.32 26,145.32 4,775.71 798 1,255 6,828.71 19,316.61

Journal Entries
1. To record the salary expense for the period
Salary expense…………………… 24,049.89
Income Tax Payable……………………… 4,900.08
Pension Payable………………………….. 1,076.53
Credit Association Payable ……………… 750
Cash………………………………………. 17,323.28

2. To record the payroll tax payable (employer pension expense)

Payroll Tax Expense ……… 1,691.69
Pension Contribution payable………. 1,691.69
(15,379 * 11% = 1,691.69)

3. To record the credit association payable

Credit Association Payable ………… 750
Cash………………………………………. 750

4. To record the payment of payroll tax and withholding payments

Income tax payable ………………… 4,900.08
Pension payables………………………2,768.22
Cash……………………………………… 7,668.30

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Project Four: Bank Reconciliation

XYZ Company

Bank Reconciliation

December 31, 2016

Balance Per Bank Statement ------------------------------------ 26,465.50

Add: Deposit in Transit ----------------------------- 2,148.21

Bank Error -------------------------------------- 270 2,418.21

Subtotal ----------------------------------------------------------------- 28,883.71

Deduct: Checks Outstanding ---------------------------------------- 8,003.84

Adjusted Balance ------------------------------------------------------ 20,879.87

Bank Balance per Depositor Records ------------------------------ 17,324.40

Add: Notes plus Interest -------------------------------------------- 3,650

Subtotal ------------------------------------------------------------- 20,974.40

Deduct: Depositor Error ------------------------ 75.78

Bank Service Error -------------------- 18.75 94.53

Adjusted Balance ----------------------------------------------------- 20,879.87

Project Five

a. At a Point of Sale Method

Installment Sales ---------------------------------------------- 300,000
Cost of Merchandise Sold ------------------------------------ 180,000
Gross Profit ----------------------------------------------------- 120,000
b. Installment Method
= Gross Profit = 120,000 = 40%
Installment Sales 300,000

1st Year Collection = 140,000* 40% = 56,000

2nd Year Collection = 100,000* 40% = 40,000
3rd Year Collection = 60,000 * 40% = 24,000
Total = 300,000 120,000

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Project Six: Inventory System

Date Unit Unit Cost Total Cost

July 1: Inventory ----------------- 200 9 = 1,800

July 15: Purchase ---------------- 300 10 = 3,000

July 20: Purchase ---------------- 400 11 = 4,400

July 28: Purchase ---------------- 100 12 = 1,200

Total 1,000 10,400

Periodic FIFO

Most Recent, July 28 -------------- 100 * 12 = 1,200

Next Most Recent, July 20 --------- 200 * 11 = 2,200
Total 630 3,400

Cost of Goods Sold = CMAFS – Cost of Ending Inventory

= 10,400 – 3,400 = 7,000

Gross Profit = Net Sales – Cost of Goods Sold

= 700 * 15 = 10,500
Gross Profit = 10,500 – 7,000
= 3,000
Gross Profit ------------------------------------------------------------3,000
Less: General Expenses ( 2,500 – 900) --------------------------- 1,400
Income Before Tax -------------------------------------------------- 1,600
Less: Business Profit Tax (30%*1,600) -------------------------- 480
Net Income ------------------------------------------------------------ 1,120

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