Answer for Exam One

Project One: Payroll

TEC IT Company
Payroll Register
April 30, 2013

S.N Name of Earnings Gross Deductions Total Net Pay Sign

Employee Basic OT Earning Income Pension Deductions
Salary Earnings Tax Contr.
1 Tirusew 7,800 - 7,800 2,067.50 468 2,535.58 5,264.42
2 Nigatu 5,421 2,379 7,800 2,067.50 325.26 2,419.76 5,380.24
3 Geletaw 4,520 - 4,520 943.50 271.20 1,214.66 3,305.34
4 Yemariam 2,590 - 2,590 412.50 155.40 567.90 2,022.10
5 Nitsuh 1,036 - 1,036 107.90 62.16 170.06 865.94
Total 21,367 2,379 23,746 5,598.90 1,282.02 6,907.96 16,838.04

Journal Entries
1. To record the payments of salary expense for the month:
Salary Expense ……………23,746
Income Tax Payable…………………..5,598.90
Pension Contribution Payable……….1, 282.02
Cash…………………………………….16,865.08

2. To record the Payroll Tax (Employer’s Pension) Expense:

Payroll Tax Expense………….1,923.03
Pension Contribution Payable…………..1,923.03
(21,367 x 9% = 1,923.03)

3. To record the payment of payroll tax and withholding tax to the Inland Revenue
Authority:
Income Tax Payable…………….………5,598.90
Pension Contribution Payable…….……3,205.05
Cash………………………………………….8, 803.95

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Project Two: Accounting Cycle

Adjusting Entries
a. Fees Receivable…………….7,750
Fees Earned……………………..7,750
b. Supplies Expense……………485
Supplies………………………….…485
c. Insurance Expense…………2,100
Prepaid Insurance………………....2,100
d. Advertising Expense……….750
Prepaid Advertising………….……750
e. Salary Expense…………….1,140
Salary Payable……………..…1,140
f. Unearned Rent…………..700
Rent Income…………….……..700

Closing Entries
1. Fees Earned……………70,000
Rent Income……….…..9,100
Income Summary…………..79,100
2. Income Summary…….56,515
Salary Expense……………….42,840
Advertising Expense…………11,090
Insurance Expense…………..2,100
Supplies Expense…………….485
3. Income Summary….….22,585
Capital…………………………22,585
Income Summary Capital
22,585-700=21,885 A=L+C9815=1840-1840
Capital= 9815-1840=7975
21, 885+7975=29,860

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 Yedil Kebir Company
Adjusted Trial Balance
June 30, 2012
Account Title Dr Cr
Cash……………………………………..21,885
Fees Receivable…………………………7,750
Supplies………………………………….190
Prepaid Insurance………………………..1,625
Prepaid Advertising………………………250
Salary Payable…………………………………………………………….1,140
Unearned Rent……………………………………………………………...700
Capital………………………………………………………………………7,975
Income Summary……………………….
Rent Income……………………………………………………………….9,800
Fees Earned………………………………………………………………70,000
Salary Expense………………………….42,840
Advertising Expense……………………..11,090
Insurance Expense………………………..2,100
Supplies Expense………………………….485
88,915 88,915

Yedil Kebir Company

Profit and Loss Statement
For the month ended June 30, 2012
Revenues
Fees Earned…………………………………………..70,000
Rent Income………………………………………….9,100
Total Revenues…………………………………………………………….79,100
Expenses
Salary Expense……………………………………...42,840
Advertising Expense………………………………..11,090
Insurance Expense………………………………….2,100
Supplies Expense……………………….………..…..485
Total Expenses……………………………………………………..…….56,515
Net Income………………………………………………………….…..22,585

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 Yedil Kebir Company
Balance Sheet
June 30, 2012
Assets Liabilities
Cash………………………..21,885 Salary Payable……………..1,140
Fees Earned…………….….7,750 Unearned Rent……………..700
Supplies……………….……190 Total Liabilities……………..1,840
Prepaid Insurance…………1,625 Shareholders’ Equity
Prepaid Insurance…………250 Capital……………………..29,860
Total Assets………………..31,700 Total Liabilities & SHE……..31,700

Project Three: Bank Reconciliation

Pointer PLC
Bank Reconciliation
April 30, 2012
Balance Per Bank Statement………………………………………………………10,367.76
Add: Deposit in transit……………………………………………………………..510.06
Subtotal……………………………………………………………………………..10,877.82
Deduct: Checks Outstanding……………………………………………………….1,479.80
Adjusted Balance………………………………………………………………..….9,398.02
Balance Per Depositor’s Records……………………………………………..…….7,091.32
Add: Notes Plus Interest…………………………………………2,625
Depositor Error……………………………………………18 2,643
Subtotal……………………………………………………………………………..9,734.32
Deduct: Bank Service Charge………………………………..24.50
NSF………………………………………………….…311.80 336.30
Adjusted Balance…………………………………………………………………….9,398.02
Journal Entries
1. Cash in Bank……………………2,643
Notes receivables……………………..………2,500
Interest Income………………………………….125
Accounts Payable……………………………….18

2. Miscellaneous Expense……………..24.50
NSF…………………………………311.80
Cash in Bank…………………………..336.30

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Project Four: Cost Accounting
1. Prepare Sales Budget for Current Quarter

Sales Budget = Selling Price x Units Sold

Units Sold (A) = 20,000 units
Units Sold (B) = 4,950 units

S.N Types of Product Selling Sold Units Sold Total Revenues

1 Product A 50 20,000 100,000
2 Product B 70 4,950 346,500
Total 120 24,950 1,346,500

2. Prepare Production Budget

Production Budget = Budget Sales + Target Ending FGI – Beginning FGI

Budgeted units Sales (A+B)……………………………………24,950 (20,000 + 4,950)

Add: Ending Finished Goods Inventory (FGI)…………………30,000 (20,000 + 10,000)

Total Required Units………………………………….………. 54,950

Less: Beginning Finished Goods Inventory (FGI)…………....30,000 (21,000 + 9,000)

Units of Finished Goods to be Produced……………………….24,950

3. Prepare Raw Material Purchase Budget

Purchase of DM = DM used in Prodn + End. Inventory of DM – Beg. Inventory of DM

Activity Materials Total

Sand Steel Chemical

Physical Units Budget to be used in

Production………………………….. 12,475 24,950 124,750
Add: Target Ending Inventory………. 30,000 30,000 30,000

Total Requirements…………………. 42,475 54,950 154,750

Less: Beginning Inventory…………. 30,000 30,000 30,000

Purchase to be made……………… 12,475 24,950 124,750 162,175

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Project Five

1. Record the necessary journal entry for the above transactions.

I. Raw Material Purchases
Sand……………..….500
Steel…………..…….790
Chemicals…….…...4,500
Accounts Payable………………5,790
II. (A) Material issued (used) to work in process
Job#1 Work in Process………..227.50
Direct Material Inventory………..227.50
Job #2 Work in Process………780
Direct Material Inventory…….780
Job#3 Work in Process………3,900
Direct Material Inventory……3,900

(B) Accrued Payroll (for Labor Cost)

Job#1 Work in Process………..160
Accrued Payroll……………..160
Job #2 Work in Process………210
Accrued Payroll …………….210
Job#3 Work in Process………175
Accrued Payroll ……………175

III. Factory Overhead Applied (80% of Direct Labor Cost)

Job#1 Work in Process………..128
Factory Overhead……………..128
Job #2 Work in Process………168
Factory Overhead …………….168
Job#3 Work in Process………140
Factory Overhead ………..…140
IV. Cash…………………7,800
Sales……………..7,800
2. Calculate the cost of each job
Total cost of each job = Material cost + Direct Labor cost + Factory Overhead
Job#1 = 227.5 + 160 + 128 = 515.50
Job#2 = 780 + 210 + 168 = 1,158
Job#3 = 3,900 + 175 + 140 = 4,215
Total Cost of All Jobs = 515.50 + 1,158 + 4,215 = 5,888.50
3. Calculate the total amount of gross profit
GP = Net Sales – CGS

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 = 7,800 – 5,888.50
= 1,911.50

Project Six
1. Record the following transactions to the journal entries.
March 15: Cash…………………………287,500
VAT Payable…………………………..37,500
Sales…………………………………...250,000
March 16: Entertainment Expense………………5,000
Cash……………………………………….5,000
March 19: Purchase……………………49,000
VAT Receivable…………….7,350
Cash………………………………..56,350
March 25: Salary Expense….……………60,000
Cash………………………………….60,000
March 26: Accounts Receivable……………92,000
VAT Payable…………………………..12,000
Sales…………………………………...80,000
March 27: Utilities Expense………………25,000
Cash……………………………………….25,000
March 31: Supplies Expense………………20,000
Cash……………………………………….20,000
March 31: Doubtful Accounts Expense………………8,000
AFDA……………………………………….8,000

MARU Merchandising Company

Trial Balance
March 31, 2013
Account Title Dr Cr
Cash ………………………………………….121,150
Account Receivable……………………..……92,000
VAT Receivable……………………………….7,350
AFDA…………………………………………………………………………………8,000
VAT Payable…………………………………………………………………………49,500
Sales………………………..………………………………………………………..49,000
Purchase……………………………..……..49,000
Entertainment Expense…………………….5,000
Salary Expense……………………………..60,000
Utility Expense…………………………….25,000
Supplies Expense…………………..………20,000
Doubtful Accounts Expense………………..8,000

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Total………………………………….…….387,500 387,500

2. Calculate the VAT Receivable of VAT Payable

Output VAT (Sales) = 330,000 x 15% = 49,500
Input VAT (Purchase) = 49,000 x 15% = 7,350

VAT Payable = Out VAT – Input VAT

= 49,500 – 7,350
= 42,150
3. Prepare Income Statement for the tax purpose

MARU Merchandising Company

Income Statement
For the month ended March 31, 2013
Sales…………………………………………………………….330,000
Less: CGS………………………………………………………49,000
Gross Profit……………………………………………………281,000
Expenses
Salary Expense……………………………..60,000
Utility Expense…………………………….25,000
Supplies Expense…………………..………20,000
Total Expenses………………..……………………………….105,000
Income before tax……………………………………………..176,000
Income Tax (30%)…………………………………………….52,800
Net Income…………………………………………………….123,200

Project Seven
1. Periodic FIFO
Oct 1 Inventory…………15@30………..450
Oct 10 Purchase………….10@32………..320
Oct 30 Purchase………….10@33………..330
35 1,100

Units Remained on Hand = UAFS – Units Sold

= 35 – 20 = 15 units

Recent Costs, Oct 30…………..10@33…………330

Next Recent Costs, Oct 10……..5@32…………160
15 490
Sales
5@35.........................175

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 12@39......................468
3@40.......................120
20 763
Cost of Goods Sold
CGS = Beginning Inventory + Net Purchases – Ending Inventory
= 450 + 650 – 490 = 610
Gross Profit
GP = Net Sales – CGS
= 763 – 610 = 153
2. Perpetual LIFO
Date Purchases CGS Inventory
Qty UC TC Qty UC TC Qty UC TC
Oct 1 15 30 450
4 5 30 150 10 30 300
10 10 32 320 10 30 300
10 32 320
17 10 32 320 8 30 240
2 30 60
22 3 30 90 5 30 150
30 10 33 330 5 30 150
10 33 330

Cost of Goods Sold

CGS = 150 + 320 + 60 + 90 = 620
Gross Profit
GP = Net Sales – CGS
= 763 – 620 = 143

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 Answer for Exam Two
Project One: Payroll

S Name of Basic Allowan Over Gross EIT Pension CA Total Net Pay Sig
N Employee salary ce Time Earning Contrib Deducti
1 Roza 7,500 1500 - 11,250 2,995 525 - 3,520 7,730
1250
1000
2 Haile 2,827 848.10 220.86 3,895.96 526.97 197.89 - 724.86 3,171.10
3 Yonas 5,052 2,020.8 157.88 7,230.68 1,160.96 353.64 750 2,264.6 4,966.08

4 Niguse 1,455 - 218.25 1,673.25 217.15 - - 217.15 1,456.10

16,834 6,618.90 596.99 24,049.89 4,900.08 1,076.53 750 6,726.61 17,323.28

Prepared by ___________ Checked by ________ Approved By___________

Date…………… Date………………… Date…….……………
Sign____________ Sign _______________ Sign ………………

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

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 Cash……………………………………… 7,668.30

Project Two
HIWOT Mechanization Company
Sales budget
For the month of Oct, Nov &Dec
Oct Nov Dec
Sales on cash (80%) 4,000,000 3,200,000 2,800,000
Sales on credit (20%) 1,000,000 800,000 700,000
Total sales 5,000,000 4,000,000 3500,000

Cash (collection) Budget

Oct Nov Dec
Current sale on sash(80%) 4,000,000 3200,000 2800,000
Collection on credit (10%) _ 500,000 500,000
Remaining (10%) _ 400,000
Total collection sales 4,000,000 3,700,000 3,700,000

Determine the Receivable Balance

= 400,000 + 700,000
= 1,100,000

Project Three
1. Prepare cost of goods manufacture
A. Total manufacturing cost = Direct material cost +Direct labor cost+ Total FOHS
TMC = 243,000 + 236,000 + 288,000
= 767,000
B. Cost of manufacture = BIWP + TMC –EIWP
= 118,000 + 767,000-122,000
= 1,007,000
C. CGS = BIFG + CGM –EIFG
= 20,000 + 833,000 – 25,000
= 828,000
2. Prepare Income Statement
Sale---------------------------------------------------------------------------1,246,000
Less: CGS---------------------------------------------------------------------828,000
Gross Profit-------------------------------------------------------------------418,000
Less: Selling Expense------------------------------------265,000
Administer expense--------------------------------87,000

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Total Expenses ---------------------------------------------------------------352,000
Income Before Tax------------------------------------------------------------66,000
Business Profit Tax (30%) --------------------------------------------------19,800
Net Income---------------------------------------------------------------------46,200

Project Four: Bank Reconciliation

Tsegaye Trading
Bank Reconciliation
October 31, 2015
Balance per Bank Statement----------------------------------------------------------14,130
Add: Deposit not record by Bank----------------------------1,970
Deposit in Transit-----------------------------------------880
Bank Error -------------------------------------------------16,630
Subtotal------------------------------------------------------------------------------------33,630
Deduct: Check Outstanding------------------------------------------------------------- 450
Adjusted Balance-------------------------------------------------------------------------33,180

Balance per Depositor Record-----------------------------------------------------------47,950

Add: Collected by Bank------------------------------------------530
Depositor Error------------------------------------------------------90
Subtotal--------------------------------------------------------------------------------------47950
Deduct:
Payment to creditor---------------------------- 1240
Bank service-------------------------------------- 60
Refers return drawer----------------------------- 300
Depositor Error---------------------------------- 13,170 14,770
Adjusted Balance--------------------------------------------------------------------------33,180

Journal enters

1. Cash in bank--------------------------------------620
Collection from customer--------------------------------------------530
Account payable------------------------------------------------------90
2. Payment creditor------------------------------1240
Miscellaneous expense-------------------------60
Refers return drawer--------------------------300
A/payable---------------------------------------13,170
Cash in bank----------------------------------------------------------------------14,770

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 Project Five: Inventory System

1. Periodic FIFO

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

Next Most Recent, July 20 ---------300 * 11 = 3,300
Total 400 4,500
Cost of Goods Sold = CMAFS – Cost of Ending Inventory
= 10,400 – 4,500 = 5,900

2. Perpetual LIFO
Purchases Sales (issues) Inventory
Date Uni Unit Total Units Unit Total Units Unit Total
ts Cost Cost Cost Cost Cost Cost
Jan. 1 200 Br. 9 Br. 1,800
15 300 Br. 10 Br. 3,000 200 9 1,800
300 10 3,000
18 400 11 4,400 200 9 1,800
300 10 3,000
400 11 4,400
19 400 11 4,400 200 9 1,800
200 10 2,000 100 10 1,000
25 100 12 1,200 200 9 1,800
100 10 1,000
100 12 1,200
Cost of Ending Inventory = 4,000

Cost of Goods Sold = 4,400 + 2,000 = 6,400

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 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 B. Millennium Hall
SP*Q – VC*Q – FC SP*Q – VC*Q – FC
= (120*300) – (80*300) – 8,000 = (120*300) – (60*300) – 12,000
= 36,000 – 24,000 – 8,000 = 4,000 = 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

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Miscellanies Expense 1,505
Total 106,390 106,390

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

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Total Liabilities ---------------------------- 49,110

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
5. 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

6. 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)

7. To record the credit association payable

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

8. 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

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

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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 Answer for Exam Four

Task 1.1
Total Manufacturing Cost = DM Used + DL Cost + Indirect Manufacturing Costs
Total Manufacturing Cost = 142,000 + 80,000 + 27,000
=249,000

CGM = Beg WIP Inventory + Total Manufacturing Costs – Ending WIP Inventory
Cost of Goods Manufactured =31,000 + 249,000 - 29,000
= 251,000
CGS = Beginning FG Inventory + Cost of Goods Manufactured – Ending FG Inventory
CGS = 62,000 + 251,000 - 48,000
=313,000-48,000
=265,000

Task 1.2
BEP in unit = 240,000/40-30= 240,000/10 =24,000 units
BEP in dollars (sales) = 40*24,000= Birr 960,000

Task 1.3:
July August September October November December January
100,000 80,000 110,000 90,000 100,000 94,000 ______
_____ 40,000 55,000 45,000 50,000 47,000 ______
50,000 50,000 40,000 55,000 45,000 50,000 47,000
Total 50,000 90,000 95,000 100,000 95,000 97,000 47,000

Project Two:
July 01: Cash……………………. 40,000
Capital…………………………..40,000

July 02: No Entry

July 03: Prepaid Rent………………………3,200

Cash ……………………………..……3,200

July 05: Office Supplies………………..5,200

Accounts Payable…………………………5,200

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July 09: Accounts Payable …………….2, 600
Cash……………………………………..2,600

July 10: Cash ………………………….. 2,800

Service Revenue ……………………….. 2800

July 12: Office Equipment………………16,320

Cash ……………………………………… 16,320

July 15: Accounts Receivable…………... 9,600

Service Revenue ………………………….. 9,600

July19: Cash…………………………….. 1,400

Unearned service revenue …………………. 1400

July 22: Cash…………………………….. 5,000

Accounts Receivable ………………………… 5,000

July 26: Wage Expense ………………….. 4,800

Cash……………………………………….. 4800

July 30: Utility Expense…………………….. 680

Accounts Payable……………………………. 680

July 31: Bacha’s Drawing……………….. 2,800

Cash………………………………………. 2,800

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 Task 2: Transactions are posted to the ledger (Posting)
A/Payable
Cash
40,000 3,200
2,800 2,600
1,400 16,320
5,000 4,800
2,800
49,200 29,720
19,480

A/Receivable
9,600 5,000
4,600

Office Supplies
5,200

2,600 5,200
680

2,600 5,880
3,280

Unearned Service Revenue

1,400

Bacha’s Drawing
2,800

Bacha’s Capital
40,000

Service Revenue

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 2,800
9,600
12,400
Wages Expense
Prepaid Rent 4,800
3,200
Utilities Expense
Office Equipment 680
16,320

Bacha Website Design

Unadjusted Trial Balance
For the month of July 31, 2015

Account Title Dr Cr
Cash…………………………………19,480
A/receivable ………………….............4,600
Supplies………………………………5,200
Prepaid rent……………………..……3,200
Office equipment ……………………16,320
A/payable………………………………………………..……..3,280
Unearned service revenue………………………………………1,400
Drawing………………………….….2,800
Capital……………………………………………………………40,000
Service Revenue …….…………………………………………..12,400
Wage expense ……………….…….…4,800
Utility expense ………………………...680

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Total 57,080 57,080

Adjusting Entry
a. Rent Expense …………1,600
Prepaid Rent…………1600

b. Office supplies expense….1, 540

Office supplies ………………1,540

c. Depreciation Expense …………300

Accumulated Depreciation ……….300

d. Wage Expense ……………720

Wage payable……………….720

e. Unearned service revenue …….800

Service revenue ………………….800

f. A/Receivable …………………400
Service revenue ….………400

Bacha Website Design

Adjusted Trial Balance
For the month of July 31, 2015

Account Title Dr Cr
Cash…………………………………19,480
A/receivable ………………….............5,000
Office Supplies……………….………3,660
Prepaid Rent……………………..……1,600
Office Equipment ……………………16,320
Accumulated Depreciation ……………………………………300
Accounts Payable………………………………………..……..3,280
Wages Payable ……………………………………………….. 720
Unearned Service Revenue……………………………………600
Drawing………………………….….2,800
Capital…………………………………………………………40,000

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Service Revenue ……………………………………….…….. 13,600
Wage Expense ……………….…….…5,520
Rent Expense ………………………. 1,600
Supplies Expense ………….………. 1,540
Depreciation Expense ………………. 300
Utility expense ………………………...680
Total 58,500 58,500

Bacha Website Design

Income Statement
For the month of July 31, 2015
Revenues
Service revenue ……………………..…………..……………….13,600
Expenses
Wage Expense……………………………..5,520
Utility Expense……………………………..680
Rent expense……………………………….1,600
Supplies Expense ………………………….1,540
Depreciation Expense………………………300
Total Expense………………………………………………………. 9640
Net income……………………………………………………………3960

Bacha Website Design

Statement of Owner’s Equity
For the month of July 31, 2015
Beginning Capital…………………………………………………………….40,000
Net Income ………………………………………..3,960
Less: Drawing…………………………………..….2,800
Increases income…………………………………………….……………….. 1,160
Ending Capital …………………………………………………………………41,160

Bacha Website Design

Balance Sheet
For the month of July 31, 2015
Asset
Cash ……………………………………………..….19,480
Accounts Receivable ………………...................……5,000

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Supplies …...................................................................3,660
Prepped Rent …………………………………….…...1,600
Office Equipment ……….…………....16,320
Less: Accumulated Depreciation………300 16,020
Total Assets ………………………………………....45,760
Liabilities
Accounts Payable ……………………………3,280
Wages Payable ……………………………….720
Unearned Service Revenue …………….……1,400
Total Liabilities ………………………………….. 5,400
Owner’s Equity
Bacha’s Capital ……………………………………….40,000
Total Liabilities and Owner’s Equity …………….. 45,400

Project Three: Revenue Recognition

c. At a Point of Sale Method

Installment Sales ---------------------------------------------- 800,000
Cost of Merchandise Sold ------------------------------------ 480,000
Gross Profit ----------------------------------------------------- 320,000
d. Installment Method
= Gross Profit = 320,000 = 40%
Installment Sales 800,000

1st Year Collection = 300,000* 40% = 120,000

2nd Year Collection = 280,000* 40% = 112,000
3rd Year Collection = 220,000 * 40% = 88,000
Total = 800,000 320,000

Project Four

Date Unit Unit Cost Total Cost

July 1: Inventory ----------------- 300 10 = 3,000

July 15: Purchase ---------------- 350 11 = 3,850

July 20: Purchase ---------------- 450 12 = 5,400

July 28: Purchase ---------------- 500 13 = 6,500

Total 1,600 18,750

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 Periodic FIFO

Most Recent, July 28 -------------- 500 * 13 = 6,500

Next Most Recent, July 20 -------- 150 * 12 = 1,800
Total 630 8,300

Cost of Goods Sold = CMAFS – Cost of Ending Inventory

= 18,750 – 8,300 = 10,450

Net Sales = 950 * 20 = 19,000

Gross Profit = Net Sales – Cost of Goods Sold
= 19,000 – 10,450
= 8,550
Gross Profit -----------------------------------------------------------8,550
Less: General Expenses (3,500 – 1,000) ------------------------- 1,500
Income Before Tax -------------------------------------------------- 7,050
Less: Business Profit Tax (30%*7,050) -------------------------- 2,115
Net Income ------------------------------------------------------------ 4,935

Project Five: Payroll

SN Name of Basic Over allowa Gross Income Pc CA TD Net pay sig

employees salary time nce earning tax
1 Hawi 7800 __ 1000 8800 2137.5 546 - 2683.5 6116.5
2 Ware 4000 625 800 5425 975 280 - 1255 4170
3 Sorsa 2800 175 600 3575 508.75 196 - 704.75 2870.25
4 Gelane 1800 101.25 200 2101.25 262.75 126 50 435.75 1665.5
5 Momina 600 75 200 875 53.75 42 - 95.75 779.25

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 17,000 976.25 2800 20776.25 3937.75 1190 50 5174.75 15601.5

Prepared by ___________ Checked by ________ Approved By___________

Date…………… Date………………… Date…….……………
Sign____________ Sign _______________ Sign ………………

Journal Entries
9. To record the salary expense for the period
Salary expense……………………20,776.25
Income Tax Payable………………………………3937.75
Pension Payable…………………………….….…….1190
Credit Association Payable …………………………….50
Cash……………………………………………….…15601.5

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

Payroll Tax Expense ………………………..1870
Pension Contribution payable………………..1870

11. To record the credit association payable

Credit Association Payable …………….50
Cash…………………………………50
12. To record the payment of payroll tax and withholding payments
Income tax payable ………………………..3,937.5
Pension payables……………………………3,060
Cash……………………………………………….6,997.50

Answer for Exam Five

Project One
Given
C. Bishoftu Ababa Exhibition Center
Fixed Costs = 4,000
Variable Costs = 160
D. Tommy Hotel Hall

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 Fixed Costs = 12,000
Variable Costs = 90
Selling Price is 240 for both, Administrative cost is 7,000 and Band budget is 5,000
Solution
C. Bishoftu Ababa Exhibition Center D. Tommy Hotel Hall
Total Budget = 7,000 + 5,000 = 12,000 Total Budget = 7,000 + 5,000 = 12,000
FC = 4,000 + 12,000 = 16,000 FC = 12,000 + 12,000 = 24,000
VC = 160/unit VC = 90/unit
SP = 240/unit SP = 240/unit
SP – VC – FC = 0 SP – VC – FC = 0
240Q – 160Q – 16,000 = 0 240Q – 90Q – 24,000 = 0
80Q = 16,000 150Q = 24,000
Q = 16,000/80 = 200 tickets Q = 24,000/150 = 160 tickets
If 300 customer attended
C. Bishoftu Ababa Exhibition Center D. Tommy Hotel Hall
SP*Q – VC*Q – FC SP*Q – VC*Q – FC
= (240*300) – (160*300) – 16,000 = (240*300) – (90*300) – 24,000
= 72,000 – 48,000 – 16,000 = 8,000 = 72,000 – 27,000 – 24,000 = 21,000

Project Two
2. Adjusting Entries
g. Supplies Expense ------890
Supplies -----------------890
(1,270 – 380)
h. Insurance Expense -----315
Prepaid Insurance ---------315
i. Depreciation Expense ----4,950
Accumulated Depreciation ------4,950
j. Wages Expense -------440
Wages Payable -----------440
k. Accounts Receivable ------1,000
Fees earned ---------------1,000
l. 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

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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

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

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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
Closing Entries
v. Fees Earned -------------------60,625
Income Summary ----------------60,625
vi. 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
vii. Income Summary ---------- 23,195
Capital ------------------------------ 23,195

viii. Capital --------------------- 5,200

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

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 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

Project Three

e. At a Point of Sale Method

Installment Sales ---------------------------------------------- 600,000
Cost of Merchandise Sold ------------------------------------ 360,000
Gross Profit ----------------------------------------------------- 240,000
f. Installment Method
= Gross Profit = 120,000 = 40%
Installment Sales 300,000

1st Year Collection = 280,000* 40% = 112,000

2nd Year Collection = 200,000* 40% = 80,000
3rd Year Collection = 120,000 * 40% = 48,000
Total 600,000 240,000

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Project Four

Date Unit Unit Cost Total Cost

July 1: Inventory ----------------- 300 8 = 2,400

July 15: Purchase ---------------- 350 11 = 3,850

July 20: Purchase ---------------- 450 12 = 5,400

July 28: Purchase ---------------- 550 13 = 7,150

Total 1,650 18,800

Periodic FIFO

Most Recent, July 28 -------------- 550 * 13 = 7,150

Next Most Recent, July 20 --------- 80 * 12 = 960
Total 630 8,110

Cost of Goods Sold = CMAFS – Cost of Ending Inventory

= 18,800 – 8,110 = 10,690

Gross Profit = Net Sales – Cost of Goods Sold

= 1,020 * 20 = 20,400
Gross Profit = 20,400 – 10,690
= 9,710
Gross Profit -----------------------------------------------------------9,710
Less: General Expenses( 2,500 – 900) --------------------------- 1,400
Income Before Tax -------------------------------------------------- 8,310
Less: Business Profit Tax (30%*8,310) -------------------------- 2,493
Net Income ------------------------------------------------------------ 5,817

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 Project Five: 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
13. To record the salary expense for the period
Salary expense…………………… 26,145.32
Income Tax Payable……………………… 4,775.71
Pension Payable………………………….. 798
Credit Association Payable ……………… 1,255
Cash………………………………………. 19,316.61

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

Payroll Tax Expense ……… 1,691.69
Pension Contribution payable………. 1,691.69
(13,300* 8% = 1,064)

15. To record the credit association payable

Credit Association Payable ……… 1,255
Cash………………………………… 1,255
16. To record the payment of payroll tax and withholding payments
Income tax payable ………………… 4,775.71
Pension payables………………………2,489.69
Cash……………………………………… 7,265.40

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