Project work

Part 1: Crate a new company

✓ Company information
❖ Use the Following Information to Set Up a New Company
Company name . . ABC Trading PLC
✓ Address . . . . Tebase, Keble 09
✓ City . . . . . Chiro
✓ Country . . . . . Ethiopia
✓ Telephone . . . . 0111-681-256
Business type . . . . (limited liability company)
Website . . . . www.abc trading plc.com
Email address . . . . abc@gmail.com
Chart of account . . . Build Your Own company
Accounting method . . . Accruals Basis of Accounting
Posting method . . . Use Real Time
Use 12 Months of Accounting Period from January 1 to December 31 of 2023.
Required:
1. change accounting period
2. Setting of global options
3. change company information( make it ABC trading PLC)
4. back up a company
5. restore a company
6. delete a company
7. Create password security
 Part 2: maintain Chart of Accounts

Account Description Account type ABC Trading P.L.C

ID Balance sheet
As of December 31,2022
1. Asset
1000 Cash Cash 92,000
1100 Account receivable Account receivable 203,030
1101 Allowance for uncollectable Account receivable
1102 Note receivable Other current asset 15,000
1103 Vat receivable Other current asset
1104 Advance profit tax Other current asset
1200-01 Inventory of HP comp. Inventory 136,000
1200-02 Inventory of Dell comp. Inventory 47,200
1200-03 Inventory of Toshiba comp. Inventory 21,120
1200-04 Inventory of Acer comp. Inventory 114,600
1300 Office supplies Other current asset 14,000
1301 Store supplies Other current asset 13,200
1302 Prepaid insurance Other current asset 16,660
1400 Office equipment Fixed asset 84,000
1400-01 Acc. Dep-equip Acc. Dep.
Total asset 756,810

2. Liability
2100 Account payable Account payable 218,930
2200 Mortgage payable Long term liability 84,200
2300 Vat payable Other current liability 35,000
2400 Income tax payable Other current liability
2500 Pension fund payable Other current liability
2600 Credit union payable Other current liability
2700 Withholding tax payable Other current liability
3. Capital
3100 Paid up capital Equity does not closed 418,680
3200 Retained earning Equity retained earning
3300 Dividend Equity get closed
Total liability and equity 756,810
4. Income

4100 Sales Income

4100-01 Sales of HP comp. Income
4100-02 Sales of Dell comp. Income
4100-03 Sales of Toshiba comp. Income
4100-04 Sales of Acer comp. Income
4200 Interest Income
4300 Sales discount Income
4400 Other income Income
4500 Gain on disposal Income
5. Cost of Sales
5100 Cost Cost of sales
5100-01 Cost of HP comp. Cost of sales
5100-02 Cost of Dell comp. Cost of sales
5100-03 Cost of Toshiba comp. Cost of sales
5100-04 Cost of Acer comp. Cost of sales
6. Expense
6100 Advertising expense Expense
6200 Pension fund expense Expense
6300 Office supplies expense Expense
6400 Store supplies expense Expense
6500 Salary expense Expense
6600 Insurance expen Expense

se
6700 Dep. Expense equip. Expense
6800 Transportation expense Expense
6900 Over time expense Expense
6900-01 Rent expense Expense
6900-02 Loss on disposal Expense
6900-03 Bank service charge Expense
6900-04 Telephone expense Expense

Required:
1. Based on the above information (shown in the table), maintain chart of accounts for
ABC Trading PLC and insert the beginning balances as at period 12: 01/12/2022
through 31/12/22.
2. Change the account type of Telephone expense to cost.
3. Delete Telephone expense
4. Change the account ID of advertising expense to 6100
5. preview the chart of accounts
Part 3: maintain budgets

Account Description Jan 1, 2023

Sales of HP comp. 150,000.00
Sales of Dell comp. 20,000.00
Sales of Toshiba comp. 20,000.00
Sales of Acer comp. 85,000.00
Interest income 3,000.00
Sales discount -1,200.00
Other income 20,000.00
Gain on disposal 1,500.00
Cost of HP comp 70,000.00
Cost of Dell comp 15,000.00
Cost of Toshiba comp 2,000.00
Cost of Acer comp 60,000.00
Purchase discount -600.00
Advertising expense 2,000.00
Pension fund expense 3,500.00
Office supplies expense 4,000.00
Store supplies expense 4,000.00
Salary expense 12,200.00
Insurance expense 4,500.00
Dep. expense equip 1,500.00
Transportation expense 2,000.00
Over time expense 1,500.00
 Rent expense 800.00
Loss on disposal 600.00
Bank service charge 40.00

Additional information:

✓ Budget name: ABC Trading PLC 2023 budget

✓ Description: ABC Trading PLC 2023 monthly budget
Required:
1. Maintain budgets
2. Preview standard income/budget
Part 7: maintain tax

Sales tax ID Tax Tax Tax Payable GL

Sales tax name
Payable to Rate Account

VAT Value added tax ERCA 15% Vat payable

WT Withholding tax ERCA 2% Withholding tax payable

Additional information:

✓ Sales tax agency ID: ERCA ( for VAT), ERCA-01 (for WT)
✓ Sales tax agency name: Ethiopian revenue & CA (for both)

Required:

1. maintain vat and withholding tax

Part 8: maintain payroll

Pension name Pension contributed by Rate Tax Payable GL Account

Pension 6% Employee-EE (6%) 6% Pension fund payable

Pension 8% Employer-ER (8%) 8% Pension fund payable

 Required:

1. Maintain payroll set up wizards

Part 9: maintain employee

Employee Employee name Date Basic salary Transportation Over

ID hired allowance time
001 Abebe Alemu 12/10/16 4,500 1,000 200
002 Ayele Tasew 05/12/16 600 100 300
003 Zeleke Yared 17/12/16 2,700 600 500
004 Kirose Taye 26/12/16 3,200 800 250
005 Adane Birhanu 30/12/16 1,200 400 700
Total 12,200 2,900 1,950

Additional information:

✓ Transportation allowance is not subject to tax.

Required:

1. maintain employees
2. Preparing payroll reports
Part 10: credit sales transaction

1. Jan 5 sold 2 pcs of HP comp-01 at 16,800 each to LG PLC crsi 1106 plus 15% vat.
2. Jan 10 sold 4 pcs of Dell comp-01 at 1,800 each & 2 pcs of Acer comp-01 at 16,200 each
to HP PLC crsi 1107 plus 15% vat.
3. Jan 15 sold 2 pcs of HP comp-01 at 16,800 each, 3 pcs of Toshiba comp-01 at 3,200
each, 4 pcs of Dell comp-02 at 900 each & 1 pcs of Acer comp-02 at 9,000 each to KD

PLC crsi 1108 plus 15% vat.

4. Jan 25 sold 2 pcs of HP comp-02 at 8,900 each to XY PLC plus 15% vat by crsi 1109
and received cash 3,000 birr down payment ref crv 1004. Deposit ticket id 1/25.
5. Jan 31 sold on account 2 pcs of Toshiba comp-02 at 2,100 each to new customer SD

PLC by crsi 1110 plus 15% vat.

Part 11: sales order transaction
✓ Jan 5 received sales order (SO-001) from HP PLC 1 pcs of HP comp-01 at 16,800
plus 15% vat shipped by Jan 31.

Part 12: shipping sales order transaction

✓ Jan 31 shipped sales order (SO-001) from HP PLC 1 pcs of HP comp-01 at 16,800

plus 15 % vat invoice NO. crsi 1111.

Part 13: cash receipt transaction

1. Jan 22 received 18,178.26 cash from LG PLC for fully settlement of crsi -1101 ref crv

1003. LG PLC withheld withholding tax 2% which is 321.74 birr. Deposit ticket 1/22.

2. Jan 25 received 12,164.70 cash for fully settlement of crsi- 1102 and received

61,770.60 cash for fully settlement of crsi - 1108 from KD PLC ref crv 1005. KD

PLC withholding tax 2% which is 1,331.30 birr. Deposit ticket id 1/25A.

 3. Jan 26 received 45,000.00 birr from XY PLC for partial settlements of crsi- 1103 ref.
crv 1006. Deposit ticket id 1/26.
4. Jan 31 received 4,733.40 cash from SD PLC for fully settlements of crsi-1110 ref. crv
1008. Deposit ticket id 1/31.
5. Jan 31 collection of interest amount 2,500 from outstanding notes receivable from CBE

Addis Ababa Branch crv 1009. Deposit ticket id 1/31A.

6. Jan 31 95,000 cash collected from Debre Birhan University for repair & maintenance of
computer (repair & maintenance considered as other income) ref crv 1010. Deposit ticket
1/31B.

Part 14: cash sales transaction

1. Jan 15 sold by cash 2 pcs of Dell comp-01 at 1,800 each to HP PLC crv 1001 plus 15%
VAT. Deposit ticket id 1/15.
2. Jan 20 sold 2 pcs of HP comp-01 at 16.800 each & 4 pcs of Acer comp-02 at 9,000 birr
each crv 1002 on cash to ministry of health plus 15% VAT. Ministry of

health withheld 1,392 birr withholding tax. Deposit ticket id 1/20.

3. Jan 29 sold 3 pcs of Toshiba comp-01 at 3,200 each and 2 pcs of Dell comp-02 at 900
each to KD PLC on cash plus 15% vat crv 1007. KD PLC withheld withholding tax
2% which is 228 birr. Deposit ticket id 1/29.
Part 15: Sales return transaction
1. Jan 31 1 pcs of Dell comp-01 sold on account is returned by HP PLC, crsi

1107, credit no. 0910.

Part 16: credit purchase transaction

1. Jan 5 purchase of 2 pcs of HP comp-01 at 10,450 plus 15% vat which is 3,135 each
from NB PLC ref crpi 2106.
2. Jan 7 purchase of 5 pcs of Acer comp-02 6,300, 4 pcs of Toshiba comp-01 at 2, 800
each, 2 pcs of Dell comp-02 at 480 plus 15% vat which is 6,549 each from ZY PLC

ref crpi 2107.

 3. Jan 20 purchase of 3 pcs of HP comp-02 ref crpi 2108 at 6,300 from FG PLC plus
15% vat which is 2,835 with down payment of 10,000 ref ck no.13507, cpv 1207.
4. Jan 30 purchase of 2 pcs Toshiba comp-01 at 2,800 each from new supplier TV

PLC plus 15% vat which is 840 ref crpi 2109.

Part 17: Purchase order transaction
✓ Jan 16 issued purchase order (PO-001) to MK PLC to buy 1 pcs of Toshiba comp-
02 at 1,700 each plus 15 % vat which is 255. Received the computer at Jan 31.

Part 18: Received purchase order transaction

✓ Jan 31 received all the items indicated on (PO-001) at a price of 2,100 plus 15% vat
invoice no crpi 2110.

Part 19: Cash payment transaction

1. Jan 10 payment made after deducting withholding tax 1,256.43 birr for MK PLC for

settlement of crpi 2102 fully ref ck no. 13501, cpv 1201

2. Jan 15 settlement made for outstanding balance after deducting withholding tax 2%
which is 1,148.43 birr to NB PLC for settlement of crpi 2101 & crpi 2106 fully ref
ck no. 13502, cpv 1202.
3. Jan 20 payment made after deducting withholding tax 770.09 birr for HR PLC for

settlement of crpi 2104 fully ref ck no. 13505, cpv 1205.

4. Jan 20 15,000 plus 15% vat which 2,250 birr payment is made after deducting
withholding tax 2% which is 300 birr for advertisement to AT PLC ref ck no.13506,
cpv 1206.
5. Jan 25 20,000 birr payment made for mortgage loan to construction and business bank ref
ck no.13508, cpv 1208.
6. Jan 31 35,000 birr vat paid to ERCA by ck no. 13509, cpv 1209.
Part 20: Cash purchase transactions
1. Jan 15 purchase of 2 pcs of Toshiba comp-01 at 3,000 plus 15% vat which is 900 each
from cash supplier WM PLC on cash ref ck no.13503, cpv 1203.
 2. Jan 15 the following items purchased from MD PLC plus 15% vat which is 19,200.
Payments made after deducting withholding tax 2% which is 2,560 birr ref ck no. 13504,
cpv 1204.
✓ 5 pcs of HP comp-01 ......@11,000
✓ 2 pcs of Dell comp-02............@500
✓ 6 pcs Acer comp-02..........@12,000
Part 21: Purchases return transaction
✓ Jan 31 ZY PLC returns 1 pcs of Toshiba comp-01 to ABC Trading PLC before

paying for the credit, crpi 2107, credit no. 0810.

Part 22: Inventory adjustment
✓ During for the month of January 31 2023 ref Jv 01/13-2 pcs Toshiba comp-02 has
stolen by thief.
Part 23: Payroll transactions
✓ Jan 31 13,778 birr paid to employees of ABC Trading PLC ref ck no. 13510, cpv
1210.
Part 24: General journal entry
✓ The following expense incurred for the month of January 31/2023 assuming that all
assets are initially recorded as an assets ref Jv 02/13.
• Office supplies expense......................................4,200
• Store supplies expense........................................3,200
• Insurance expense...............................................1,200
Part 25: Bank Statement
Monthly bank statement
Commercial Bank of Ethiopia
As of Jan. 31, 2023

Date Ck & Depo.No Debit Credit Balance

92,000
01/10/23 Ck#13501 70,993.57 21,006.43
1/15/2023 Ck#13502 64,405.87 -43,399
1/15/2023 Ck#13503 6,900 -50,299
1/15/2023 Cash deposit 1/15 4,140 -46,159
1/15/2023 Ck#13504 144,640 -190,799
1/20/2023 Ck#13505 43,509.91 -234,309
1/20/2023 Cash deposit 1/20 78,648 -155,661.35
1/20/2023 Ck#13506 16,950 -172,611.35
1/20/2023 Ck#13507 10,000 -182,611.35
1/20/2023 Collection on N/R 15,000 -167,611.35
1/22/2023 Cash deposit 1/22 18,178.26 -149,433.09
1/25/2023 Cash deposit 1/25 3,000 -146,433.09
1/25/2023 Cash deposit 1/25A 73,935.30 -72,497.79
1/25/2023 Ck#13508 20,000 -92,497.79
1/25/2023 Bank service charge 50 -92,547.79
1/25/2023 Cost of check 30 -92,577.79
1/26/2023 Cash deposit 1/26 45,000 -47,577.79
1/29/2023 Cash deposit 1/31A 2,500 -45,077.79
1/31/2023 Ck#13509 35,000 -80,077.79
1/31/2023 Cash deposit 1/31B 95,000 14,922.21
Ending balance 14,922.21
Required:

1. preparing a bank reconciliation

2. preparing and designing financial statements
3. preparing year-end closing procedure