CODE 5

Project 1: Bank Reconciliation statement and transaction (Level III V5)

The bank statement for Geda company for June 30, 2015, indicates a balance of birr 9,143.11.
All cash receipts are deposited each evening in a night depository, after banking hours. The
accounting records of the company indicate the following summary data for each receipt and
payments for June:
Cash balance as of June 1, 2015 -----------------------------------------------------------birr 3,943.50
Total cash receipts for June 2015 ----------------------------------------------------------birr 28,971.60
Total amount of checks issued /payment/ in June 2015 ----------------------------birr 28,388.85
Comparing the bank statement and the company’s records the following reconciling items were
identified:
A. The bank had collected for Geda company birr 1,030 on a note left for collection. The
face amount of the note was birr 1,000
B. Deposit in transit was birr 1,852.21
C. Checks outstanding totaled birr 5,265.27
D. A check written for birr 139 had been incorrectly charged by the bank as birr 157
E. A check for birr 30 was wrongly recorded as birr 240 by the company. The check was for
the payment of accounts payable.
F. Bank service charges for June amounted to birr 18.20
Instructions /Tasks/
Task1. Prepare bank reconciliation for June 2015.
Task2. Journalize the entries for June be made by Geda Company.
Project 2: Process payroll
Instructions: Under this project, the candidate is expected to prepare payroll sheet and pass
journal entries for payroll related transactions.
Adama Textile Company is one of the known textile manufacturing company in Oromia regional
state at Adama Town. The Company recently recruited new employees from accounting Level III
graduates who are competent in accounts and budget support occupation. The company
operates based on Ethiopian tax regulations. The company pays salary always at the end of the
month and normally, the employees have to work 160 hours every month.
The company provides the following additional information on the payroll of the employees
during the current month.
S.no Name of Positions Basic Pay Housing Representation Over time work
Employee allowance allowance/non-
/Taxable/ taxable/
1 Semeret Belete G/manager 7,800 1800 1500
2 Chaltu Tollosa Supervisor 5,370.00 1200 800
3 Kemal Bedri HR Manager 4,100.00 700 1000
4 Belete Teka Profe. 3400.00
5 Rahel Duguma Profe. 2,350.00 20 public holidays
6 Beshadu Chala Profe. 1,350.00 20 hours /from 12:00
morning to 4:00
night
-All employees get 20 % of their basic salary as non-taxable desert allowance.
- Pension contribution by the employee and employer is 7 % and 11 % respectively.
Required tasks
Task1: prepare this month payroll to Adama Textile of end of the month.
Task2: Journalize the required entry on the pay day to employees.
Task 3: pass the required entry when you pay the withholdings.
Project 3: Process transactions and prepare financial statement
Instruction: Under this project the candidate is expected to record financial transaction, post
transaction to ledger, prepare trial balance, perform financial calculations, journalize adjusting
entries and prepare financial statements.
Koket Company is sole proprietorship owned by Genet Lemecha and providing legal services to
its clients.

The beginnings balance sheet on January 01, 2015 has shown the following balance.
Account Amount in birr
Cash 50,000
Account Receivable 14,000
Office Equipment and Furniture 18,500
Account payable 7,000
Genet. Capital 75,500
During the month of January 2015, the business has made the following transactions
Date of Transactions occurred during the month
transaction
January 01 Paid six months office rent of birr 6,000 for the business starting from January 2015
January 03 Delivered legal service to Meseret for birr 1,500 on account
January 05 Purchased stationary materials /supplies/ for birr 1,000 on account
January 15 Genet has withdrawn birr 800 for her personal consumption.
January 20 Delivered legal service to ALSADDISS PLC for birr 15,000 on cash.
January 28 Paid salary of birr 3,500 for its employees.
January 29 Collected birr 800 from Meseret for the service rendered on account on January 03.
Additional information
1 Office supplies on hand at the end of the month worth birr 800
2 Office rent for the January was expired.

Required Tasks:
Task1. Record the above transactions
Task 2. Post the entries to T-accounts, don’t forget the beginning balance
Task 3. Prepared unadjusted trial balance January 31, 2015
Task 4. Pass the necessary adjusting entries on January 31, 2015
Task 5. Prepare adjusted trial balance on January 31, 2015
 Task 6. Prepare Interim income and balance sheet statements for the month of January 2015.
Possible answers for the projects
Project one
Task1 : Bank reconciliation statement
Balance per Bank statement……………………………………………………………..9,143.11
Add: deposit in transit……………………………………………………………………….1,852.21
Bank error………………………………………………………………………………………. ..18.00
Sub Total……………………………………………………………………………………………11,013.32
Less: Outstanding checks…………………………………………………………………… (5,265.27)
Adjusted balance……………………………………………………………………………….. 5,748.05
Balance per company’s records …………………………………..…………………..4,526.25
Add: Notes and interest collected by the Bank…………………………………..1,030.00
Error in recording check…………………………………………………………………….. 210.00
Sub Total……………………………………………………………………………………………..5,766.25
Less: Bank service charge………………………………………………………………….. … 18.20
Adjusted balance……………………………………………………………………………….5,748.05
Task2: The journal entry needed is:
Cash in bank………………………..1,240
Note receivable…………………………….1,000
Interest revenue………………………… 30
Account payable…………………………. 210
Bank service charge (miscellaneous expense)…………………18.20
Cash in bank…………………………………………………………..18.20
Project Two
Task 1: payroll sheet
s.n Employe Basic Non Taxable Over Gross Taxable Emp.i Pensio Total Net
o es name salary taxable allowanc time earning income nc.Ta n Did. payme
allowan e Earnin x nt
ce g
1 Semeret 7,800.00 1,560.00 1,800.00 12,660.00 9600.00 1,925 546.00 2,741.0 10,189.
Belete .00 0 00
2 Chaltu 5,370.00 1,874.00 1,200.00 8,444.00 6,570.00 1,077 375.90 1,453.4 6,990.6
tolosa .00 0 0
3 Kemal 4,100.00 1,820.00 700.00 6,620.00 4,800.00 657.0 287.00 944.50 5,675.5
Bedri 0 0
4 Belete 3,400.00 680.00 4,080.00 3,400.00 377.5 238.00 615.50 3,464.5
Teka 0 0
5 Rahel 2,350.00 470.00 734.38 3,554.38 3,084.38 320.1 164.50 484.66 3,069.7
Duguma 6 2
6 Beshadu 1,350.00 270.00 210.94 1,830.94 1,560.94 96.09 94.50 190.59 1,640.3
Chala 5
Total 24,370.0 8,174.00 3,700.00 945.32 37,189.32 29,015.3 4,453 1,705. 6,159.6 31,029.
0 2 .75 90 5 67

Note employer pension contribution = 2,687.70

Task 2: Payroll entries on pay day
Salary and benefit expense………………………………..37,189.32
Payroll/employer expense………………………………. 2,680.70
Employment income tax payable………………………………4,453.75
Pension contribution payable…………………………………..4,386.60
Cash/Account…………………………………………………………31,029.67

Task3: Payroll entries when liabilities are paid

Employment income tax payable …………..4,453.75
Pension contribution paid……………………..4,386.60
Cash/account………………………………………………….8,840.35
Project three
Task1: Recording Transactions.
Prepaid rent……………..6,000.00
Cash………………………………6,000.00
Account Receivable…………………….1,500.00
Legal Service-(income)……………….. 1,500.00
Supplies……………………….1,000.00
Account Payable…………………….1,000.00
Genet’s drawing………………………800.00
Cash………………………………………….800.00
Cash………………………………………15,000.00
Legal service (income)……………………….15,000.00
Salary Expense………………………3,500.00
Cash…………………………………………………3,500.00
Cash………………………………….800.00
Account receivable………………….800.00

Task2: Post the entries on T-account

Cash Account Receivable Office equipment
 and furniture
50,000.00 6,000.00 14,000.0 800.00 18,500.0
0 0
15,000.00 800.00 1,500.00
800.00 3,500.00
55,500.00 14,700.0
0

Account payable Legal service Genet’s capital

7,000.00 75,500.00
1,000.00
8,000.00
Supplies Genet’s Drawing Salary expense
1,000.00 800.00 3,500.00

Income Supplies expense Rent expense

1,500.00
15,000.00
16,500.00

Prepaid rent
6,000.00
Task3: Prepared unadjusted trial balance January 30, 2015
Genet cons
Unadjusted trial balance
As at January 30, 2015
Cash 55,500.00
Prepaid rent 6,000.00
Account receivable 14,700.00
Supplies 1,000.00
Office equipment 18,500.00
Account payable 8,000.00
Legal service-income 16,500.00
Salary expense 3,500.00
Genet’s drawing 800.00
Genet’s capital 75,500.00
Total 100,000.00 100,000.00

Task4: Pass the necessary adjusting entries for the month of January 30, 2015
Supplies expense…………….200.00
 Supplies………………………..200.00
Rent expense………………1,000.00
Prepaid rent……………………..1,000.00
Task 5: Prepare adjusted trail balance as at February 28, 2015
Genet cons
Adjusted trail balance
As at February 30, 2015
Cash 55,500.00
Prepaid rent 5,000.00
Account receivable 14,700.00
Supplies 800.00
Office Equipment 18,500.00
Account payable 8,000.00
Legal service-Income 16,500.00
Salary expense 3,500.00
Genet’s drawing 800.00
Genet’s capital 75,500.00
Supplies expense 200.00
Rent expense 1,000.00
Total 100,000.00 100,000.00

Task 6: Prepare Interim income and balance sheet statements for the month of January 2015.
Genet cons
Income statement
For the month of January 30, 2015
Legal service 16,500.00
Expense
Rent expense 1,000.00
Supplies expense 200.00
Salary expense 3,500.00 (4,700.00)
Income before tax 11,800.00

Genet cons
Balance sheet
As at January 30, 2015
Asset
Cash 55,500.00
Account Receivable 14,700.00
Supplies 800.00
Prepaid rent 5,000.00
Office equipment 18,500.00
Total Asset 94,500.00
Liabilities
Account payable 8,000.00
Genet’s capital 86,500.00
Total liabilities and capital 94,500.00