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Illustration
ABC co. pays the salary of its employees according to Ethiopian calendar month to the federal
gov’t tax authority.

No Name Basic Trans. OT Hour Duration of OT

. Salary Allow worked
1 Martha 4800 900 10 Up to 10 PM
2 Alemu 1920 - 8 10pm-12am
3 Ashenafi 2400 - 6 Weekly rest days
4 Semira 2160 600 - -
5 Alemu 1440 100 10 Public holiday

N.B Workers are expected to work 40 hr./week. Beside all workers are permanent except Alemu.
Ashenafi agreed to have a monthly Br. 300 be deducted and paid to the credit association of the
factory as a monthly saving.

Based on the above information:

a. Prepare a payroll register sheet for the month of Nehase
b. Record the payment of salary as of Nehase 30.
c. Record the payroll taxes expense for the month of Nehase.
d. Record the payment of the claim of the credit association of the factory.
e. Assuming that the withholding taxes and payroll taxes of the month of Nehase have been
paid on Sep. 5, record the required journal entry.