Professional Documents
Culture Documents
Maintaining Company
1. Introduction
“Your Name” Electronic Retail Trading is planning to purchase and install an Accounting
Software Packages for handling its financial affairs and related data. It will start using the
software to handle its financial affairs including payroll and fixed asset data starting July 07
2023. The company’s fiscal year starts on Hamle 1 and ends on Sene 30. The following
sections provide additional information about the firm and its activities.
2. Company Background
Name: Your Name Trading
Business type: PLC
Line of business: Retail: Buying and reselling electronic materials
Address: Ethiopia, Addis Ababa City Government
Bole Kifle Ketema, Woreda 07, house No. 2540l
Tel. +251-22-987000, Fax +251-22-987000
Chart of accounts: The firm wants to setup its own chart of accounts.
Accounting method: The firm buys and sells goods and services virtually on credit
basis and want to use the accounting method which best handles
its financial affairs and provide accurate, fair and timely financial
information.
Posting method: The firm wants to use the batch posting method.
Accounting periods: Accounting periods that do not match the calendar months.
Required: Based on the above data, create and setup the plc.
Page 1 of 11
User ID and passwords
You are assigned as an administrator of the Peachtree Accounting Software the company
maintains for recording and reporting its financial affairs. You should use your full name as
both your user ID and Password.
Below is list of employees whose jobs are directly related with PCASP, and their related ID
and passwords.
User Passwor
No. Name General Duties Duties Control level
ID d
Your full control over all PCASP
Your own program areas
1 You administrator maintain user ID and password
name passwor
d
123456 full control over all payroll tasks
2 Buna BN payroll clerk prepare monthly payroll
b
full control over all purchase
perform all tasks related to purchase tasks
3 Cuna CN 123456c purchase clerk
gather inventory status and sales data read inventory reports only
read sales reports only
full control over all inventory
123456 perform all tasks related to inventory tasks
4 Duna DN inventory clerk
d collect purchase and sales data read purchase reports only
read sales reports only
full control over all sales tasks
perform all sales related tasks
5 Euna EN 123456e sales clerk read inventory reports only
collect purchase and inventory data
read purchase reports only
maintain chart of accounts full control over all general
6 Funa FN 123456f GL clerk
maintain prior period adjustments ledger tasks
maintain company information
7 Guna GN 123456c system clerk full control over all system tasks
backup and restore company
Note: All users are “Active”. And all users, except You, the administrator, should not have
access to the “maintain user” window.
Required: Based on the above data, set up user records.
2. Additional requirements
i. Change the existing company name to a name consisting of your name “IFRS Electronic
Retail Trading".
ii. Replace Cuna's user ID by the first words making up the new name of the company.
iii. Change the posting method to “real-time”.
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Chart of Accounts
Budget Balance
Particulars Account ID
July-June 2023 June 30, 2023
Cash at Bank 11000 200,000 110,000
Cash on Hand 11100 50,000 55,000
Notes Receivable 12100 20,000 19,800
Account Receivable 12200 30,0000 220,000
Allowance for Uncollectible 12200-01 20,000 13,200
Merchandise Inventory 13000 3,000,000 2,970,000
Prepaid Insurance 14000 40,000 22,000
Advances to Employee 15000 50,000 44,000
Computers 16000 800,000 440,000
Accumulated Depreciation-computers 16000-01 30,000 16,500
Vehicles 16100 600,000 550,000
Accumulated Depreciation-vehicles 16100-01 500,000 27,500
Other Fixed Assets 16500 1,000,000 990,000
Accumulated Depreciation-other fixed assets 16500-01 50,000 49,500
Accounts Payable 21000 40,000 37,400
Salary Payable 21100 - --
Employee PFC Payable 21200 - --
Employer PFC Payable 21300 - --
Employer Employee Tuition Fee Payable 21400 - --
Employee Income Tax Payable 21500 - --
Employee Bank Loan Payable 21600 - --
Employee Union Due 21700 - --
Sales Tax (VAT) Payable 22000 - 6,600
Common Stock ($100 par) 31000 - 4,400,000
Additional Paid-in Capital 31100 - 550,000
Retained Earnings 33000 - 750,200
Treasury Stock 33500 - 430,100
Sales 41000 - --
Sales Discounts 41000-01 - --
Sales Returns and Allowances 41000-02 - --
Interest Income 44000 - --
Other Income 45000 - --
Purchases 51000 - --
Purchases Discounts 51000-01 - --
Purchases Returns & Allowances 51000-02 - --
Cost of Goods Sold 53000 - --
Salary Expense 61000 - --
Payroll Expense 61200 - --
Supplies Expense 62000 - --
Insurance Expense 62100 - --
Utility Expenses 62300 - --
Income Tax Expense 63000 - --
Miscellaneous Expenses 69000 - --
Note that you may add new accounts when the need for doing so arises.
Required: Based on the above data, setup the chart of accounts, enter the general ledger
beginning balances and allocate the given budget. All accounts have their normal
balances.
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Vendor Information
The company buys goods and services from different vendors/suppliers both on cash and credit basis.
Majority of its vendors allow the company to buy goods and services worth up to $1,450,000 on credit
and earn a 2% discount if invoices are paid within 15 days from the date of purchase or else pay within
35 days. The company wants to record information about the office manager of each of its vendors. The
company uses the inventory Account No. 13000 to record all purchases of goods from vendors, while it
records purchases of utility services in the Utility Expenses Account. Purchase discounts taken are
recorded in the Purchase Discounts Account while Purchases Returns and Allowances are recorded in
Purchases Returns & Allowances Account. The company allowed its vendors to deliver goods and
services in the best ways possible. The company wants to age vendor invoices by due date. The
invoices are to be categorized as follows; 0-35, 36-71, 72-127, and over 127 days overdue in categories
I, II, III and IV, respectively. Besides, the company has special agreements with the following vendors.
Vendor Vendo Contact/ Address /Vendor Beg.
Name Terms
ID r type Office Mgr since/ Balance
11EE Ethiopian Service Ato KIBE Addis Ababa Standard Jan 4, $2400
Electric Power Ato LEMA W14 K52 1995 Bill #01
Corporation Tel. 1234567 Invo#098
EtAiopia
12ET Ethiopian Service W/ro nunu Addis Ababa Mainly prepaid Mar 6, $4,000
Telecommunication Ato abebe W01 K18 1999 Inv. # 22
Corporation Tel. 6666666 Bill # 91
EtAiopia
13AIE VJ Goods Mr. jkl Oklahama 3/30, n/60 Jun 9, $15,000
Import-Export M/SSuzi A2 Pun Road $2 million 2001 Inv. # 36
Share Company Tel. 6565656 PO # 512
AIE@japan.A
Japan
14EBG GK Goods Ato alemu Addis Ababa 2/10, n/45 Jan 4, $13,000
Business Group W/ro Ali W28 K02 $1.5 million 2000 Inv. # 92
Share Company Tel. 222222 PO # 012
EtAiopia
15FIRA Federal Inland Tax Ato benyam Addis Ababa Due on the 9th ---$3000
Revenue W/ro hiwot W13 K22 day - next month Jun 7, Invo#95
Authority Tel. 1111111 No credit limit 1999
EtAiopia
Note: All vendors are active and all vendor-beginning balances are as of July1, 2023.
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Required: Based on the above data, maintain vendor defaults information and vendor records
Inventory Information
The firm buys and sells 3 inventory items, which are all stock items, and FIFO is considered to be the
default inventory costing method. All inventory items are subject to VAT. The company uses the
Merchandise Inventory (13000), Sales (41000) and Cost of Goods Sold (53000) accounts to record
transactions related to inventory items. The Miscellaneous Expenses Account No. 69000 is used to
record delivery costs. Inventory items are received from vendors through the appropriate and best
method of delivery. The company wants to record additional information related to alternative vendors
and substitutes (subst.) of all its inventory items. At present the company uses two price levels named
Wholesale (W) and Retail (R) but has the plan to use additional three price levels at which its inventory
items are offered for sell. The current price levels need no calculation.
Given below is additional information related to the inventory items the company sells.
Vendor Beg. Bal.
Price
Item Subst. Min. stock
Item ID
Computer GKL Business Office Acer ? $990,000 39,600 Last cost 100
21DC
VJ
Machine +30,000 2,000
Import-Export
Last cost
Share Co.
+40,000
Tape recorder House Sony ? $990,000 4,950 Last cost + 500 300
23TR
All inventory items are measured in pieces and stored in Warehouse-10. Beginning balances
are as of June 30, 2023.
Required: Based on the above data, maintain inventory default information and inventory
records.
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Customers information
The company sells goods to its customers both on cash and credit basis. Sales and related discounts are
recorded in the Sales Account No. 41000 and Sales Discounts Account No. 41000-01, respectively.
Finance charges on overdue accounts are recorded in the Interest Income Account. All credit customers,
except those having special agreements with the company, are required to settle their obligations for
goods bought on credit within 32 days from the date of each credit sales invoice. They are entitled to
3% discount for payments within 14 days from the date of each credit invoice. The credit limit is set at
$500,000 per credit customer. All customers failing to pay within the credit period (32 days) are subject
to 5% interest on balances up to $15,000 and 8% interest on balances above that. The minimum finance
charge is determined to be $100. The company does not charge interest on finance charges. Finance
charges are included and explained in customer invoices and statements as Finance charges. The
following warning message is declared in customer statements and invoices; “Let’s keep our
relationship smooth by timely discharging our respective duties!” At present, the company accepts only
cash and checks as payment methods. The company wants to record information about the second
contact, office manager and establishment (est.) date of each of its customers. Customer invoices are
age by due date and are to be categorized as follows; 0-45, 46-90, 91-120, and over 120 days overdue
in categories I, II, III and IV, respectively. Deposit Ticket ID is assigned to collections from customer at
the time of collection. Besides, the company has special agreements with the customers included in the
following table. Wholesale prices are offered to these customers. Goods are delivered to customers via
means preferred by each customer. All customers reside in Ethiopia.
Cust. Contact Addresses Off. Beg. Cust. since
Cust. ID Name Terms
Type 1st 2nd Bill to Ship to Mgr Balance & Est. date
31ES Snap R5 Ato Nari W/rt Nini W14 K52 W14 K52 1/15, n/60 Ato Bekre $20,000 Jun 4, 1999
Pvt Co ANo. 123 ANo. 124 $800,000 Invo#30 Jan 2, 1995
Tel. 1234 Tel. 1235
Assosa Assosa
32MM LLL R1 Ato Ali Ato Kulu W01 K18 W01 K19 Standard Ato Mulu $76,000 Jul 6, 1999
Music Shop ANo. 369 ANo. 2A4 Inv. # 36 Feb 7, 1994
Tel. 1111 Tel. 2222 PO # 11
Mekelle Axum
33AP GKL R4 W/ro Num Ato Laku W14 K12 W14 K12 1/10, n/45 Ato Amro $75,000 Dec 9, 2001
Printers ANo. 666 ANo. 999 $900,000 Inv. # 82 Mar 4, 2000
Tel. 6543 Tel. 6555 PO # 39
Jimma Agaro
34BT HJP R2 W/rt Lawa Ato Tufa W20 K02 W21 K13 2/15, n/30 W/ro Tiru $49,000 Jan 4, 2000
Business ANo. 321 ANo. 322 $700,000 Inv. # 52 Feb 9, 1990
Group Tel. 1122 Tel. 1213 PO # 99
Assayta Semera
Note: All customers are active and all beginning balances are as of June 30, 2023.
Required: Based on the above data, maintain customers default information and customer
records.
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Employee information
Below is information related to employees of the company.
Pay levels/Compensation-all employees receive the following monthly compensation except -
NIBA who is paid on hourly basis for his regular and overtime compensation.
Basic salary
Taxable allowance
Nontaxable allowance
Overtime
Bonus (new year bonus amounting to 10% of basic salary, NIBA bonus is Birr 8000)
Deductions-the following are monthly deduction from each employees gross salary
Income tax according to Schedule-A of the Ethiopian Income Tax Proclamation.
Permanent Employee Provident fund (7% of basic salary)
Permanent Employee Labour Union Due (2% of basic salary)
Bank loan
Employer contributions
Permanent Employees Provident fund (14% of basic salary)
GL accounts - select the appropriate GL accounts to record payroll related transactions.
Employee custom fields - the company wants to keep information related to each employee’s
position and employment status in the company, birthday, educational qualification and marital
status.
Table below provides additional data related to employees of the company.
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Additional Information
1. All employees were hired on December 30, 2014.
2. NIBA’s average hourly compensation rates for regular and overtime work are Birr 10 and Birr
15, respectively. Besides, the company pays Birr 4,000 monthly tuition fee for NIBA
3. The company's employee provident fund plan is maintained with Commercial Nominees Plc.
4. All permanent employees of the company, except Girma -the GM, make monthly contribution
to the Ethiopian Labor Union of employees of private companies.
5. The company regularly remits employee withholding, including income tax, provident fund
contribution, union due and bank loan, to the appropriate institutions within 15 days of the
month next to the salary month.
6. All employees dwell in an apartment the company leased for the same purpose. The apartment
is located at Addis Ababa, Bole Kifle Ketema, Kebele 12, Bole Road. The residents use
common telephone line -12121212- with extension numbers starting from 111 for Girma to 116
for NIBA.
Required: Based on the above information complete all the necessary payroll procedures and
generate payroll register for the month ended July 30, 2023. (Note that compensation
information given on Table-2 above is for the month of JULY 2023.)
Note that you should create all the necessary company payroll tax tables using your own Tax ID and Name.
Fixed Assets
The following table provides data related to fixed assets of the company.
Serial Savage Economic Date Depreciation
ID Description Cost
No. Value Life (years) Acquired In-service Method
001 1CC Computers 400,000 20,000 5 06/22/21 06/30/21 DBMMS
002 1VV Vehicles 500,000 80,000 10 03/14/21 03/28/21 DBMMS
003 1BB Buildings 100,000 15,000 20 01/07/22 01/07/22 SLMM
004 1FF Furniture and Fixtures 40,000 5,000 10 01/07/22 01/07/22 SLMM
005 1LL Land 150,000 - - 01/07/22 01/07/22 -
006 1MM Other Fixed Assets 900,000 120,000 10 01/15/21 02/15/21 SLFM
Note:
All fixed assets are to be used for only business purposes.
Life-to-date depreciation is equal to the depreciation balance given as of June 30, 2023
in the chart of accounts of the company.
No investment tax credit is offered on fixed assets.
The depreciation method given in the above table is applicable starting from July 1,
2023.
You should create additional fixed asset accounts when necessary.
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Other fixed assets refer to fixed assets, which cannot be categorized as computers,
vehicles, buildings, land or furniture and fixtures.
Required: Based on the above data and using Peachtree Fixed Assets Program (PFAP)
maintain fixed assets records for the company. (If the PFAP is not applicable
you may use Excel spreadsheet)
Note that you should select the appropriate GL accounts for recording fixed asset related
transactions and specify your own location and department for the fixed assets.
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July 28 The Company sold the new product to GKL Printer @R. Price Level, invoice #0009, including
15%vat.
July 29. The company sold to CGH co 40 Tape recorder, 20 computer and 10 Television @W.price
level , including Vat, invoice #0008.
July 30 .An agreement to B/n the new customer CGH and the company for all product of the company
Each 20 Television to be shipped @W. price level Including15% Vat.
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4. Record the following Purchase and related transaction for the month of July
July 1 Apply purchase order From GK Business group for 5000 Computer @W.Price level, purchase
order #001.
July 2 Apply purchase order FromVJImport Export for 1000 Television @W. price level, purchase
order #002
July 3 apply purchase order FromVJImport Export co 2000 Computer/price level, purchase order #003
July 10, Convert purchase order #002 in to purchase invoice #001
July 11 Convert purchase order# 001 in to purchase invoice#002
July 12 Convert purchase order #003 in to purchase invoice #003
July 15 purchase on account from VJ Import Export for 40 Tape recorder @W.Price level, invoice #004
July 20 purchase on account From VJ Import Export for 140 Television @W. Price level, invoice #005.
July 22 Purchase on account From GK Business group 2000 Computer @w.Price level, Invoice #006
5. Record the following cash payments Transaction For the month of July
July 23 Paid cash on account From VJ Import Export for invoice ##003, check # 001
July 24. Paid cash on account to GK Business group for invoice #006. Check #002
July 25 paid cash on account to GK Business group co for invoice # 002, check #003
July 28 Rent is paid for the month of July. $ 2000, check #0004
July 29 Salary is paid for the month of July $30,000., Check#0005
6. Record the following Debit Memos and Credit Memos for the month of July
July 7 Returned 50 televisions from sale of July 6 to LLL music shop because of some defect on it
.Credit memo#001.
July 23 Returned 500 computers to Gk business group because it has some defect when we purchase on
July 22 Debit memo # 002
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