Project one

Project 1

1. Ex share company is registered and license supplier of enjera to d/f

universities in Ethiopia. During the year 2012 the company earns an
income of birr 1,500,000 and 1,800,000 from Adama and AAU
respectively including vat. The total cost of the product is 1,980,000
before vat in addition the company earns 160,000 per year from other
sources of income with zero vat rates .in the other hand, the company
incurred Br 300,000 general and administration expense for the year
During the last month 1012 the companies with hold BR 65,000 .for
employment income tax the Company is expected to paying 30% profit
tax.
 Calculate direct tax the year
 Determine indirect tax for the year

.Adam University ------------------------------------1,500,000

.Addis Ababa University --------------------------- 1,800.000
Total Sales (earned) --------------------------------3300,000
Less VAT (3300000x15/115) -----------------------430434.78
Sales after deduction Vat ---------------------------2869565.2
Add other income -------------------------------------160,000
Total income ----------------------------------------3029565.2
Les cost of production --------------------------1,980,000.000
Gross profit -------------------------------------1,049,562.20
Less Administrative expense --------------------------300,000
N income before fax ----------------------------------1,749,565.20
Business profit tax (749565.2x30%) ---------------224,869.56
 Direct tax liability Business profit tax +Employment income tax
224,869.56 + (65,000)
 Indirect tax liability : VAT Liability =289,869.56
 Output VAT= 430,434.78
 In put VAT =1,980,000x15/100 =297,000
VAT Payable= output –VAT=430434.78-297,000
 Indirect Tax ----------------------------=133434.78

Project 2
2.
 Project one

3. Mesfien engineering business engaged on rental of construction

Machinery. The company import d/f kinds of construction machinery in
order to rant through dashin bank. In the year 2012 mesfien
engineering plc imported to roller machinate cost of 250,000 Br, 60%
of the cost the machinery is covered by credit facility form dashin
bank. The loan will be replayed within five year at equal installment
quarterly at cost of 12% interest rate, the total service charge and cost
related with credit facility is 2000 for the first year of the loan period
and 2500 for the second year of loan period.
Assume that the bank policy is simple interest rate on outstanding loan
and advances.
 Calculate principal repayment and cost of loan or (interest & related first
year loan period)
 Calculate principal repayment and cost of loan or (interest & related
Second year of loan period)
 What is the outstanding balance of loan at the end of year three loan

Demonstrate the role of credit facility in the society (mention an list five

Answer
 Loan Balance =2,500,000x60/100=75,000
Quarterly equal payment -----------1,500,000 =75,000
5years x4
To determine 1 year Inters Expense
st

Q1 1= PRT= 1500,000 x 12%x1/4 =45,000

 1500,00- 7500=1425000
Q2 I 2 =PRT=1425000 x 12%x1/4 =42750
 1425000-75000=1350,00 Total
Q3 13 =PRT=1350,000 X 125 X ¼ = 40,500 Interest
 1350,000- 15000 =1275,000 1st year
Q4 14= PRT=1275000X12%X1/4 =38200
Total 1st year Interest Expense:-
Total Expense =service charge+ Interest expense
= 2000 +1566450
= 168,450
To Determine 2nd year Interest Expense
 1275000- 75000=1200,000
Q1 I1= PRT=1200, 000 x 12%x1/4 =36,000
 1200,000—75000= 1125000 130,500
Q2 I 2 = PRT=1125000x 12% x ¼= 33,750 Total
 Project one

 1125000-7500 =1050,000 Interest

Q3 13 =PRT=1,050,000 X 12% X ¼ = 31,500 2 year
st

 1050,00-75000=975000
Q4 14= PRT=975000 X 12% X1/4 =29,250
Total 2nd year I/Expense =service charge +total Interest
=2500+ 130500= 133000
Q1 Q2 Q3 Q5 Year end
1 Year payment 75,000 75,000
st
75,000 75,000 300,000
1 Year payment 75,000 75,000
nd
75,000 75,000 300,000
1 Year payment 75,000 75,000
rd
75,000 75,000 300,000
 Total loan Payment to end of year 3 =900,000
rd

 Outstand balance = 1500,000- 900,000= 600,000

Project 3
 Cash – 120,000
. Supplies – 150,000
.Prepaid insurance – 70,000
.Building – 300,000
.Equipment – 80,000
.Account payable 130,000
.note payable – 200,000
 Assume that united PLC has a plan to introduce anew product to make
realistic birr 750,000 is needed as a total capital as from kush bank in the
exec of its balance as of June 30,20 at the 10% interest rate that will be
repay with semi- annual at equal amount /Assume the plc will pay birr
1500 to charge that related to the Gedit the PLC has a target profit birr
150,000 info duct ion at a new product.
Task 1. Demonstrate /calculate the amount of loan that we be financed by
kush National bank
Task. 2. Perform /pan the journal entries when the loan disbursed in the
book PLC
Task 3. Demonstrate /calculate the to tale expense which is related to the
credit
Task 4. Pass journal entries for the fin a the payment of principle amount
Task 5. Calculate the rate of return from the new product.
 Asset= 120,000 +150,000+70,000+300,000+80,000 =720,000
 Liability = 130,000 + 200,000 = 330000
 capital = 720,000-330,000 = 390,000
Task 1.Amount financed = required capital – Beginning capital
= 750,000- 39, 0000 = 360,000
 Project one

Task 2.semiannual installment = 360,000 =36,000

10
1 year I = 360,000 x10%x 6/12= 18,000
st

Inst= 360,000-36,000=324,000
I=324,000*10%*6/12=
Inst=324,000-36,000=382,000
2 year I= 288,000x10%x6/12= 14400
nd

Inst = 288,000=36,000 = 252000

I= 252000x10%x6/12 = 12600
Inst = 252000=36,000 = 216000
3 year I= 216000 x10%x6/12 = 10800
rd

inst = 216000-36000 = 180000

I = 18, 0000 x10%x6/12= 9000
Inst = 18, 0000-36000=144000
4th year I= 144000x10%x6/12 = 7200
Inst = 144000-36,000 = 108,000
I = 108,000x10%x6/12 = 5400
Inst = 108,000 -36,000 =72000
5th year = 72,000x10%x6/12 =3600
Inst = 72,000-36,000 =36,000
I=36,000*10%*6/12=
Inst = 36,000-36,000= 0
Total Interest Expense= 99,000
Journal entries
Task 3.cash---------------------360,000
Note payable--------------360,000
Task 4.note payable---------------36,000
Cash--------------------------36,000

1. National bank Ethiopia increases interest 11% to 13% on borrowing and

5% to 6% on saving if xyz company bassoons br 100,000
a/ record the interest expense to be paid offer one year.
.interest= 100,000x 13 x1 = 13000 . Interest expense
100 Interest payable /13000

Project 4
 Project one

4. The person earned 425 Br for Weekly.

 Rent cost 250 Br. Per month
 Insurance 150 Br.
 Transport 100 Br.
 Maintenance 50 Br.
 Communication cost 50 Br.
 Food cost 140 Br

Slam sew plans to save for the following cost for 2013

The account held to save commercial bank of Ethiopia

 Transport 5%
 Rent cost 2%
 Communication cost 15%
 Food cost 1%
 Maintenance 2%
A. Monthly Income =525 x4= 2100
Annual cost of January =2100x 12= 25,200
B. Annual rent cost of January =2012= 250x 12= 3000
Budget for the month of Jan 2013= =250-(250x10%)=225
Annual budget for Jan 2013= 225x12= 2700
C. Annual insurance premium of Jan 2012= 150x12 =1800
The same for Jan 2012 band 2013.
D.Annual transportation expense Jan 2012= 100x12 =1200
Budget for the month of Jan 2013-100-(100x3%)= 70
Annual budget for Jan 2013=70x12 =840
E.Annual Maintenance cost of Jan 2013 =60x12 =720
Budget for the month of Jan 2013=60-(60x15%)=5

Annual budget for Jan 2013= 51x12 =612

F.Annual Communication cost of Jan 2012=50x12=600
Budget for the month of Jan 2013=50-(50x50%)=25
Annual budget for Jan 2013= 25x12=300
G.Annual of food expense of Jan 2012=540x12= 1680
Budget for the month of Jan 2013= (140—(140x15%)=119
Annual budget for Jan 2013=119x12=1428
 Project one

Item C. For M.T 2012 Annual cost of 2012 B.F.M.J2013 Annual of 2013
Basic salary 2100 25200 2100 25200
Rent cost 250 3000 225 2700
Insurance 150 1800 150 1800
premium
Transportation 100 1200 70 840
esp.
Maintance cost 60 720 51 612
Communication 50 600 25 300
cost
Food expense 750 1680 119 1428
Total expense 750 9000 640 7680
Saving 1350 16200 1460 17520

Item C. For M.T 2012 Annual cost of 2012 B.F.M.J2013 Annual of 2013

 What is the percentage of increase in saving for the year. increasing

in saving =17520- 16200 x 100 = 0.081x 100
16200
=8.15 or 8%

Project 6
January month febuary month

Given .BS = 5000

V.e = 30% of b.s BS increase 10%
R .amount=fe+ps V.e increase 10%
A.c = 80% of v.e
 Project one

Ps=15%0f fe

 ve= 5000x30%
Ve=1500
R.Amount = 5000- 1500
= 3500
3500= fe+ps
3500=f.e+1.05fe
3500/1.05 = 1.05x/1.05

FE= 3,333.33
Ato Solomon
Personal Budget
For December month
Item Budget
B.S 5000
V.e 1500
Fe 3333.33
p.s 166.67
Ato Solomon
Performance budget
December

Item Budget Actual D/t

B.S 5000 5000 0
V.e 1500 1200 300
Fe 3333.3 3333.3 0
3 3
p.s 166.67 466.67 300

B.s = 5000x10 % 500+5000 =5500

V.e = 1500x10% +1500 =1650
F.e =3333.33
P.s= 516.67
Ato Solomone
Personal Budget
for January
 Project one

B.S 5500
V.e 1650
Fe 3333
p.s 516.67

Project 7
 Assume that ato abebe monthly salary Br.5850 during the year for the month of January and
February.
 The budget allocation is for the month January and February and actual expenditure that of
January.

Description January budget Actual budget February budget

Housing operation 2025 2322 2025
Clothing 390 315 390
Contribution 240 237 240
Misc, expense 210 210 210
Utility expense 600 531 600
Saving 210 210 210
Transportation 270 171 270
Food expense 1680 1725 1680
Other expense 225 225 225

Task 1: prepare personal budget performance report for the month of January?
Task 2: prepare budget allocation for the month of February?
Task 3: what is the percent of saving for the year?

Ato abebe
Personal budget
For january month
Description January budget
salary 5,850
Housing operation 2025
Clothing 390
Contribution 240
Misc, expense 210
Utility expense 600
Saving 210
 Project one

Transportation 270
Food expense 1680
Other expense 225
Total expense 5850
Personal saving 0

Ato abebe
Personal budget
For january month
Description January budget Actual budget Difference
salary 5,850 5,850 -
Housing operation 2025 2322 (297)
Clothing 390 315 75
Contribution 240 237 3
Misc, expense 210 210 -
Utility expense 600 531 69
Saving 210 210 -
Transportation 270 171 99
Food expense 1680 1725 45
Other expese 225 225 -
Total expense 5850 5946
Personal saving 0 96

Ato abebe
Personal budget
For february month
Description January budget
salary 5,850
Housing operation
Clothing
Contribution
Misc, expense 210
Utility expense
Saving 210
Transportation
Food expense
Other expense 225
Total expense
Personal saving 0
 Project one

Project 8
1)Ato abebe is one of the employees of ABC corporation earns net income of birr 10,000. 30% of
his income covers variable cost and the remaining income are allocated (distribute ) to fixed
expenses and personal saving , personal saving is 20% of fixed expenses .for the month of
December 2014 the actual fixed expense is 80% of the budget variable expense. If variable
expense budget is deficit deducted from personal saving and variable expenses budget is
surplus added to personal saving his net income will be expected increased by 15% from
February month.
Required
Tasks 1 prepare budget performance report for the month of December 2014?
Task 2 prepare personal budget of March 2015?
Solution
.Fixed cost=30%*10,000=3,000
.Remaining=10,000-3,000=7,000
.V.E +personal saving=7,000
.VE+1.2VE=7000
.VE=7000/1.2=5,833.33
.P,S=20%VE OR 20%*5,833.33=1166.67
.Actual V.E=80%*5,833.33=4,666.67
.Budget surplus=5,833.33-4,666.67=1166.67

Ato bulti
Budget performance report
For the month ended of dec, 2014
Description Budget amount Actual budget Difference
Income
Net income 10,000 10,000 -
Total income 10,000 10,000 -
Cost and expense
Fixed cost 3,000 3,000 -
Variable expense 5,833.33 4,666.67 1,166.67
Total expense 8,833.33 7,666.67 -
Personal saving 1,166.67 2,333.34 -

Net income is increase by 15% from February month 2014

Net income=10,000+15%*10,000
 Project one

=10,000+1500=11,500
.Fixed cost=30%*11,500=3,450
.Remaning=11,500-3450=8050
.V.E +personal saving=8050
.VE+1.2VE=8050
.VE=8050/1.2=6708.33
.P,S=20%VE OR 20%*6708.33=1341.67
.Actual V.E=80%*6708.33=5,366.66
.Budget surplus=6708.33-5366.66=1,341.67

Ato bulti
Budget peroformance report
For the month ended of dec,2014
Description Budget amount
Income
Net income 11,500
Total income 11,500
Cost and expense
Fixed cost 3,450
Variable expense 6,708.33
Total expense 10,158.33
Personal saving 1,341.67

Ato bulti
Budget performance report
For the month ended of dec,2014
Description Budget amount Actual budget Difference
Income
Net income 10,000 10,000 -
Total income 10,000 10,000 -
Cost and expense
Fixed cost 3,000 3,000 -
Variable expense 5,833.33 4,666.67 1,166.67
Total expense 8,833.33 7,666.67 -
Personal saving 1,166.67 2,333.34 -
 Project one

Ato bulti
Budget performance report
For the month ended of dec,2014
Description Budget amount Actual budget Difference
Income
Net income 11,500 11,500 -
Total income 11,500 11,500 -
Cost and expense
Fixed cost 3,450 3,450 -
Variable expense 6,708.33 5,366.67 1341.67
Total expense 10,158.33 8816.67 -
Personal saving 1,341.67 2683.33 -

Ato bulti
Budget performance report
For the month ended of dec,2014
Description Budget amount Actual budget Difference
Income
Net income 11,500 11,500 -
Total income 11,500 11,500 -
Cost and expense
Fixed cost 3,450 3,450 -
Variable expense 6,708.33 5,366.67 1341.67
Total expense 10,158.33 8816.67 -
Personal saving 1,341.67 2683.33 -

Project 8
Almaz wants to develop business plan in the store supply market
with total capital of birr15,000 and she has birr 50,000 on her
bank account in order to fulfill her financial requirement she has
two options and she estimates of revenue birr 30,000 during the
year.
Alternative 1.Borrow the deficit of capital from her bank
with an interest rate 12%for two years to be paid yearly with
equal installment and service charge birr 3400.
Alternative 2.Borrow the deficit of capital from credit and
saving association with an interest rate 13% for three years to be
paid yearly with equal installment and service charge birr 2200.
Task 2.1 calculate the the amount of interest and service charge
under both option.
 Project one

Task 2.1.which option is best?

Alternative 1.borrowed amount=150,000-50,000=100,000
INS paid amount=100,000/2=50,000
Task .1st year interest=100,000*12%*1=12,000
Outstanding balance=100,000=50,000
2 year interest=50,000*12%*1=6,000
nd

Outstanding balance at the end of 2nd year=50,000-50,000=0

Total interest and service charge =12,000+6,000+3,400=21,400
Alternative 2.IST paid amount=100,000/3=33,333.33
1st year interest=100,000*13%*1=13,000
.Outstanding balance=100,000-33,333.33=66,666.67
2nd year interest=66,666.67*13%*1=8,666.67
.Outstanding balance=66,666.67-33,333.33,333.33
3RD YEAR interest=33,333.33*135*1=4,333.33
.Outstanding balance=33,333.33-33,333.33=0
.Total interest and service charge at the end of 3rd year
=13,000+8,666.67+43,333.33+2,200=28,200
Task2.Alternative 1is best option.
.Rate of return=30,000/150,000=0.2 or 20%
Exercise 1
Xyz Company purchase office equipment of birr 115,000 inclusive
vat and the company pay five employees to provide services the
employment income tax 12000 per month during the year 2012.
The company earned birr 446,500 inclusive vat by proved services
business profit tax birr 30000.
Tasks 3.1 calculate the amount of direct and indirect tax for the
year.
Exercise 2
Given basic salary for the month of January and February is 1950
And the amount of budget allocation and actual expenditure for
the month of January is as follows;
item Budget Actual Budget for
allocation expenditure February
for January for January
Food 675 774 675
Rent expense 560 575 560
Clothing 200 172 200
Transportatio 130 105 130
n
Contribution 90 67 90
and gift
Mis expenses 80 79 80
Housing 70 80 70
 Project one

operation
Utilities 70 70 70
expenses
Other 75 72 75
expenses

Tasks 4.1 prepare budget performance for January month.

Task4.2 prepare personal budget for the month of February.
Project 13
Xyz Company is vat registered company and purchase several
materials for resale during the month with two employees. The company
was purchased material by birr 92,500 and sold at birr

200,000 after vat.

s. Employee Basic Over
no name salary time
1 Tola 1,500 300
2 chala 800 200

Task 1.1 calculate direct tax liability of the business during the month
Task 1.2 calculate indirect tax liability of the business during the month
Task 1.3 lists and explain direct and indirect tax.
.Ato Tola gross salary=basic salary overtime
=1500+300=1,800
.Ato Chala gross salary=800+200=1,000
Employment income tax=(gross salary*rate)-deduction
Ato Tola EIT=(1800 *15%)-142.50=127.5
Ato chala =(1,000 * 10%)-60=40
Total employment income tax=127.5+40=167.5
 So direct tax=167.5
.output vat=200,000*15/115=26086.95
.input vat=92,500*15/100=13,875
Vat payable =out put vat-input vat
=26,086.95-13,875=12,211.95
 So indirect tax=12,211.95

Project 9
Description Actual budget Estimated
for the budget for
March 31,2105 the march
31,2015
Income 90% 2,100
clothing 100% 700
 Project one

food 85% 340

Car gas 50% 200
recreation 35% 120

Task 2.2 calculate actual budget and compare with estimated budget
Task 2.3 calculate actual and estimated saving in birr
Task 2.4 calculate percentage of actual and estimated saving
Task 2.2 income - -----------------------90%*2100=1,890
Clothing -----------------------100%*100=100
Food----------------------------85%*340=289
Cart gas ------------------------50%*200=100
Recreation-----------------------35%*120=42

Description Estimated Actual Differe

budget for the budget for nce
March the march
31,2105 31,2015
Income 2,100 1,890 210
clothing 100 100 -
food 340 289 51
Car gas 200 100 100
recreation 120 42 78
Total 760 531
expense
Personal 1,340 1,359
saving

.Actual saving in birr------------1,359

.Estimated saving in birr--------1,340
% saving=personal/income*100=1,340/2100=0.63*100=63%
%saving = personal/income*100=1,359/1,890=0.71*100=71%

Project 10
Brothers plc has opened and maintained current account on nib
international bank s.c. the plc has borrowed a loan amount of birr
200,000 paid in lump sum after one year at interest rate of 12%per
annual.
Task 1.1 CALULATE TOTAL AMOUNT OF CASH COLLECTED BY NIB FROM BROTHERS PLC
AFTER ONE YEAR.
Task 1.2. BROTHERS PLC WANTS TO CHANGE HIS BUSINESS AND WANT TO CLOSE HIS
ACCOUNT WITH YOUR BANK.WHAT DO WANT TO CLOSE ACCOUNT.
Task 1.3. Write the role of national bank.
Task 1.4. What is the advantage of credit for brother’s plc.
Task 1.1.amount=200,000
I =prt=200,000*12%*1=24,000
. Cash collected=200,000+24,000=224,000
 Project one

Project 11
The following data was give for Ato Tamirat and perfume the following
tasks.
Description Estimated income Actual income and
and expenditure for expenditure for the
the month of Feb. month of Feb. 2015
2015
Food 2000 2100
Clothing 950 700
Salary 4400 4400
House rent 1000 1000
Par time 1500 1200
School fees 650 650
Utilities 50 50
Task 4.1. Prepare personal budget report for the month of feb.2015
Task 4.2. Prepare performance budget for the month of Feb. 2015
Task 4.3. Calculate percentage of estimated and actual saving. What is
the advantage of saving?

Ato tamirat
Personal budget
For month of february
Description Estimated income
and expenditure for
the month of Feb.
2015
salary 4400
per time 1500
Total income 5,900
Clothing 950
food 2,000
House rent 1000
School fees 650
Utilities 50
Total expense 4,650
Personal saving 1,250

Ato tamirat
 Project one

Personal budget
For month of February
Description Estimated Actual income Difference
income and and
expenditure for expenditure for
the month of the month of
Feb. 2015 Feb. 2015
salary 4,400 4,400 -
pertime 1,500 1,200 300
TOTAL ICOME 5,900 5,600
Clothing 950 700 250
food 2,000 2,100 (100)
House rent 1,000 1,000 -
School fees 650 650 -
Utilities 50 50 -
total 4,650 4,500
personal saving 1,250 1,100

Project 12
Belgium plc paid birr 3000 on November 2014 for vat liability. The co sales
is birr 1,541,000 vat inclusive. The company also paid 6000 as an
employment income tax for the month. The administrative expenses of
plc. Are birr 15000.
Task 1.1. Calculate direct tax liability of the company for the month of
November.
Task1.2. calculate vat input and output
.Sales=1,541,000/1.115=1,34,000
.output vat paid on sales.
.Output vat=1,340,000*15%=201,000
Vat liability=out put vat-input vat
3,000=201,000-input vat
.Input vat=201,000-3,000=198,000
.Let p purchase cost of the goods
.15%of P=198,000
.Purchase=198,000/0.15=1,320,000
.To compute business income tax
Belgium plc
Income statement
For the mo0nth ended nov.30
Revenue
Sales -----------------------------------------------------1,340,000
Less cost of sales-----------------------------------------1,320,000
Gross profit----------------------------------------------20,000
Less administrative expense -----------------------------15,000
 Project one

Net income before tax------------------------------------5,000

Less (BPT)-------------------------------------------------1,500
Net profit --------------------------------------------------3,500
.Direct tax=EIT+BPT=1,500+6,000=7,500
.Vat payable=output vat-input vat=201,000-198,000=3,000

Project 13
Ato fantahun earns birr 9500 basic salary his monthly expenses is give as
follows.
Clothing expenses is 12%of basic salary
Food expenses is 20% of basic salary
Rent expenses is 30% of basic salary
Education expenses is 5% of basic salary
Transportation expenses is 5% of basic salary
Task 1.1. Prepare monthly budget for ato fantahun
Task 1.2. Prepare annual budget for ato fantahun.

Solution for monthly for yearly

Income __________________________9,500*12 =114,000
Clothing = 12% of income
=12%*9,500=1140*12 =13,680
Food expense =20%*9,500=1,900*12 =22,800
Rent expense = 30%*9,500=2,850*12 =34,200
Education expense =5%*9,500=475*12 =5,700
Transportation expense =5%*9,500=475*12 =5,700

Ato fantahun Ato fantahun

Personal budget Personal budget
For monthly For yearly

Item Amount
Income 9,500
Expense
Clothing 1,140
Food 1,900
Rent 2,850
Education 475
Transportation 475
cost
Total expense 6,840
Personal saving 2,660
Item
Income 114,00
Expense
Clothing 13,600
Food 22,800
Rent 34,200
 Project one

Education 5,700
Transportation 5,700
cost
Total expense 82,080
Personal saving 31,920

.Ato fantahun want to open and run new business with a required capital
of birr 80,520 based on his annual saving he borrowed the remain amount
from bank at 8.5% interest semi-annually at equal installment within three
years.
Task6.3. calculate the total amount to be borrowed by ato fantahun
Task6.4. determine principal and interest payment for first year.
Task6.5. determine outstanding balance at the end of second year.
Solution Task 1.1.borrwed amount=80520-31,9920=48,600
Ins .paid amount=48,600/6=8,100
Task 1.2.1st year I=prt=48,600*8.5%*1/2=2065.5
.Outstanding balance =48,600-8,100=40,500
I2 =prt=40,500*8.5*1/2=1,721.25

. Outstanding balance=40,500-8,100=32,400
.Total principal and interest=2,065.5+1,721.25+16,200=19,986.75
Task1.3.2nd year outstanding balance=48,600-32,400=16,200

project 14
Assume that Mr. Daniel need to start a new merchandising business in the next year December 31,
2016 with a capital of birr 340,650. If the deposits his money at bank. Rate 5%.
A. calculate the amount of that Mr. Daniel should deposit today January 2015.
B.calculate the amount of interest income at the end of December 31, 2016.
. Deposit amount=340,650/1.05=324428.571
.Interest income=340,650-324428.571=16,221.429

Project 15
Given
1. Purchase --------------------------------------------------- 250,000 including vat.
2. Sales---------------------------------------------------------450,000 before vat.
3. Employeement income tax----------------------------20,000.
4. Business income tax birr---------------------------------90,000 assume that profit tax 30%.
5. Excise tax--------------------------------------------------6,000.
A. calculate direct and indirect.
B. when does the indirect tax will be present to tax authority.
Output vat=250,000*15/115=32,608.69
Input vat=450,000*15/100=67,500
 Project one

Vat payable=out put vat-input vat

=67,500-32,608.69=34,891.31
Indirect tax=vat +excise tax=6,000 +34,891.69=40,891.31

Project 16
ABC COMPANY
DECEMBER MONTH BUDGET 2016
Description Actual and expenditure decm 2015
Income -
Salary income 9,000
Expense -
Clothing 400
Food 600
Entertainment 50
Utility 80
Personal expanse 200
School 300
Cost sharing 100
Transportation cost 50
other 150

A.incrase income and all expense by 10%. prepare January 2016 personal budget.
B.income no change, expese incrase by 10%. Prepare January 2016 personal budget.
c.Expense no change,additional income 2000 .prepare January 2016 personal budget.

Salary --------------------------------9,000+(10%*9,000)=9,900
Clothing--------------------------------400+(10%*400)=440
Food--------------------------------------600+(10%*600)=660
Entertainment---------------------------50+(10%*50)=55
Utility--------------------------------------80+(10%*80)=88
Personal saving---------------------200+(10%*200)=220
School---------------------------------300+(10%*300)=330
Cost share---------------------------100+(10%*100)=110
Transportation----------------------- 50+(10%*50)=55
Other expense---------------------- 80*(10%*80)=88
ABC COMPANY
PERSONAL BUDGET
FOR JANUARY MONTH 2016

Description Actual income

and expenditure
Income
Salary income 9,900
Expense
Clothing 440
Food 660
 Project one

Entertainment 55
Utility 88
Personal expanse 220
School 330
Cost sharing 110
Transportation cost 55
other 88
Total expense 2,046
Personal saving 7,854

ABC COMPANY
PERSONAL BUDGET
FOR JANUARY MONTH 2016
Description Actual and
expenditure decm
2015
Income -
Salary income 9000
Expense -
Clothing 440
Food 660
Entertainment 55
Utility 88
Personal expanse 220
School 330
Cost sharing 110
Transportation cost 55
other 88
Total expense 2,046
Personal saving 6954
 Project one

Project 17
ABC COMPANY
PEROANAL BUDGET
JANUARY MONTH BUDGET 2016
Description Actual and expenditure
decm 2015
Income -
Salary income 11,000
Expense -
Clothing 400
Food 600
Entertainment 50
Utility 80
Personal expanse 200
School 300
Cost sharing 100
Transportation cost 50
other 150
total saving 1,860
personal saving 9,140

Project 18
Assume that Ato bekele Tolosa is a contract consultant in a newly establishing private business
enterprise earning annual net pay of birr 223,200 at the beginning of each year for four years. Ato
bekele annual living expenditure is 68% of his net pay.ato bekele has a plan to open his own business
after four years when his contract is terminated and he started to save his excess net pay at dashen
bank adama branch at annual simple interst rate of 5.5%by opening saving account. To open the
business ato bekele requires birr 500,000. and ato bekele can borrow any deficit amount from the
bank at annual simple interest rate of 14%.Assume you are working in this bank and you are
responsible to handle customer request.

Task 1.1.the end of four years how much would be (including the accumlated interest amount of
deposit made by ato bekele?
Task 1.2.to start the business as per plan how much loan ato bekele require?
Task 1.3.assume the loan to be repaid after five years at one time together with the interest how
much is the total repayment amount to serve this debt?
Task 1.1.net pay_______________________________________223,200
. Expense -----------=68% of net pay
=68% * 223,200 = 151,776
. Remaining amount=223,200-151,776=71,424
Interest =prt
=71,424*5.5*4=15,713.28
 Project one

Total deposit =71,424 + 15,713.28=87,137.28

Task 1.2=borrowed amount=500,000-87,137.28
=412,862.72
Task 1.3.interest=prt
.412,862.72*14%*5=289,003.94
.Total repayment=412,862.72+289,003.94
=701,866.624

Project 19
LA –same trading plc is a VAT registered merchandise business during the current month the company
purchased merchandise for birr 10,000,000 VAT exclusive prices. During the same month the company
sold 75% of the purchased for birr 10,000,000 VAT inclusive price. Selling and administrative expenses
during the month income br 500,000.business profit tax is 30%.
Task 1.1.determine indirect tax and direct tax for the monthly.
.Task 1.1.purchase =10,000,000 VAT exclusive
. Sold =75% of purchase vat inclusive or 75%*10,000,000=7,500,000 vat inclusive
.Remaning purchase =10,000,000-7,500,000=2,500,000
.Out put vat=7,500,000*15/115=978,260.8
.Input vat=2,500,000*15/100=375,000
.Vat payable=outputvat – input vat
.Indirect tax =978260.8-375,000=603,260.8
LA-SAME TRADING PLC
INCOME STATMENT
FOR THE YEAR ENDED
Revenue
Sales -------------------------------------------------------7,500,000
Less vat ---------------------------------------------------978,260.8
Net sales --------------------------------------------------6,521,739.2
Less cost of sales ----------------------------------------2,500,000
Gross profit -----------------------------------------------4,021,739.2
Less adm.and selling expense -----------------------500,000
Net income before tax ----------------------------------3,521,739.2
BPT(3,521,739.2*30%)----------------------------------1,056,521.76
net income after tax -------------------------------- 2,465,217.44
Direct tax ------------=BPT
=1,056,521.76

Project 20
Information: Aster is a self employed having her own cosmetices shopping net income is nbirr 15,000
and her monthly expenditures as percentage monthly net income are as follws:
Clothing 10%
Food 35%
Entertainment 30%
 Project one

Transportaion 2%
House rent 20%
others 1%
In additional aster has a plan to open a beauty salon that cost birr 100,000.
Task 1.1.how much woud be total net income of aster for one year?
Task 1.2.how much is the total expenditure of Aster for one year?
Task 1.3.determine the amount of Aster saving at the end of the year.
Task 1.4.how long it takes her to open the beauty salon if 50% of the cost from her saving?
.Net income ____________________________________________15,000
Expense
.Clothing------------------=10%*15,000=1,500
.Food ---------------------=35%*15,000=5,250
.Entertainment --------=30%*15,000=4,500
.Transportation -------=2%*15,000= 300
.House rent ------------=20%*15,000=3,000
.Others ------------------=1%*15,000= 150
Task 1.1.Total income-------------------------=180,000
Task 1.2.Total expense---------------------=176,400

Aster
Personal saving
For the year ended
Item Amount
Net income 180,000
Expense
Clothing 18,000
Food 63,000
Entertainment 54,000
Transportaion 3,600
House rent 36,000
Others 1,800
Total expense 176,400
Personal saving 3,600

Task 1.4.50% * 3,600=1,800

Long takes her the beauty salon=100,000-1,800=98,200

Project 21
Super manufacturing company was imported raw material by birr 900,000 and additional purchase
local materials for birr 500,000 before vat for production of xy product for 2013.the company charges
 Project one

lo9cal custom duty of birr 50,000 paid to tax authority. the company was sales 4,000 product at birr
650 each before vat including 2% sales commission. Total administration expense of the company
shows birr 460,000 and with hold birr 15,000 of employment income tax. The imported goods are
exempted from vat and withholding tax business profit tax i9s 30%.
Required
1. Calculate net profit
2. Claculate direct and indirect tax
3. Identify relevant document for taxation

Solution
Sales=sales including /1.02
Sales=4,000*650/1.02
Sales=2,549,o19.61
Cost of sales=900,000+500,000+50,000=1,450,000
Required 1.

Super manufacturing company

Income statement
For the year ended of 2014
Sales------------------------------------------------------------2,549,019.61
Cost of sales--------------------------------------------------1,450,000
Gross profit --------------------------------------------------1,099,019.61
Administrative expense-----------------------------------460,000
Net income---------------------------------------------------639,019.61
Business profit-----------------------------------------------191,705.88
Net profit-----------------------------------------------------447,313.73

Withholding tax payable=2%*500,000

=10,000
Requried 2
Direct tax =business profit tax +employment icome tax
=191,705.88+15,000
=206,702.88
Indirect tax
Output vat=15%*2,600,000=390,000
Input vat=15%*500,000=75,000
Vat payable=output vat –input vat
=390,000-75,000
=315,000
Indirect tax=315,000+50,000=365,000
Required 3
.sales invoice
 Project one

.Purchase invoice
.Payroll sheet

Project 22
ABC company present loan proposal to awash international bank and the bank provides four credit
shames to the loan. The first option is to borrow 100,000 mortgage to be paid 6 years at equal
installment at the rate of 15% semi-annually.2nd,3rd and 4th option are to borrow birr 250,000 for 30
months at equal installment at the rate of 10% semi-annually, birr 150,000 for at equal installment at
the rate of 13% semi-annually and birr 200,000 for 18 months at equal installment at the rate of 8%
semi-annually respectively. the bank agreed with the company and the loan disbursed with additional
service charge of birr 21,000(one time borrowing cost for four loans).
Required
1. Calculate interest expense and other charges at the end of first year.
2. Calculate total loan repaid at the end of second year.
Solution
1st option, installment paid amount=100,000/12=8,333.33
1st installment interest=100,000*15%*1/2=7,500
Outstanding balance=100,000-8,333.33=91,666.67
2nd installment interest=91,666.67*15%*1/2=6,875
Outstanding balance=91,666.67-8,333.33=83,333.34

2ndoption, installment paid amount=250,000/5=50,000

1st installment interest=250,000*10%*1/2=12,500
Outstanding balance=250,000-50,000=200,000
2nd installment interest=200,000*10%*1/2=10,000
Outstanding balance=200,000-50,000=150,000
3rd option, installment paid amount=150,000/2=75,000
1st installment interest=150,000*13%*1/2=9,750
Outstanding balance=150,000-75,000=75,000
2nd installment interest=75,000*105*1/2=4,875
Outstanding balance=75,000-75,000=0
4th option, installment paid amount=200,000/3=66,666.67
1st installment interest=200,000*8%*1/2=8,000
Outstanding balance=200,000-66,666.67=133,333.33
2nd installment interest=133,333.33*85*1/2=5,333.33
Outstanding balance=133,333.33-66,666.67=66,666.67

Interest expense for 1st year

1st option interest=7,500+6,875= 14,375
2nd option interest=12,500+10,000=22,500
3rd option interest=9,750+4,875=14,625
4th option interest=8,000+5,333.33=13,333.33
Interest expense for 1st year--------64,833.33
Add other charges-------------------- 21,000
Total -------------------------------------85,833.33
Required 2
Total loan repaid at the end of second year
1st option repaid=8,333.33*4=33,333.32
 Project one

2nd t option repaid=50,000*4=20,000

3rd option repaid=75,000*2=150,000
4th option repaid=66,666.67*3=200,000
Total loan repaid at the end of second year---583,333.32

Project 23
Ato tola open new account by required capital of birr 300,000.ato total deposit birr 2,000 per month
starting from January 2014 up to December 2014 awash bank.ato total collect interest from awash
bank after one year birr 3,000.on January 2015 ato tola gave loan proposal to awash bank to fulfill the
deficit amount at 10% interest rate and management fee 5% of the total loan amount equally
distributed for 3 years and repaid quarterly at equal installment for 3 years.
Task 1.1.calculate deficit capital of ato tola.
Task 1.2.calculate total interest and service charge at the end of 1st year.
Answer
Task 1.1.the deficit amount= (300,000-27,000)=273,000
Installment payment=273,000/12=22,750
Task 1.2.interest and service charge at the end of 1st year.
I1=prt=273,000*10%*1/4=6,825
Outstanding balance=273,000-22,750=250,500
I2=prt=250,500*10%*1/4=6,262.5
Outstanding balance=250,500-22,750=227,750
I3=prt=227,700*10%*1/4=5,692.5
Outstanding balance=227,700-22,750=205,000
I4=prt=205,000*10%*1/4=5,125
Outstanding balance=205,000-22,750=182,250

.Total interest amount at the end of 1st year is

Total interest=6,825+6,262.5+5,692.5+5,125=
.Service charge=0.05*273,000=13,650 for 1st year.

Project 24
ABC company and XYZ company are vat registered sole proprietorship companies in ethiopia.ABC
company is manufacturing company while XYZ is a whole seller.ABC company purchase raw materials
from vat register supplier with 250,000 birr including vat and resold the finished product after
processing to xyz company for birr 320,000 before vat,XYZ company later on resold the product to
retailers for birr 450,000 vat inclusive. Expense and employment income tax paid are birr 50,000and
12,000 for ABC company and 40,000 and 11,5000 vat inclusive.
Task 1.1.calculate direct and indirect tax for both companies.
Given
ABC COMPANY XYZ COMPANY
Purchase --------------250,000(vat inclusive) 320,000(before vat0
Sell---------------------320,000(before vat) 450,000(including vat)
Employment
Income tax-----------12,000 11,500
Expense ---------------50,000 40,000
Input vat of ABC company=(250,000 *15/115)=32,608.7
Output vat of ABC company=(320,000 *15/100)=48,000
 Project one

Input vat of xyz company=(320,000 *15/100)=48,000

Output vat of xyz company=(450,000 *15/115)=58,695.65
Indirect tax for ABC company=out put vat – in put vat
=48,000 – 32,608.7=15,391.3
Indirect tax for xyz company =58,695.65-48,000=10,695.65
Task 2. Compute direct tax.
ABC company
Income statement
For the year ended
Revenue------------------------------- 320,000
Less cost of good sold--------------217,391.4
Gross profit --------------------------102,608.6
Less expense -------------------------50,000
Income before tax------------------52,608.6
BPT –(52,608.6*20%)-3630------6,891.72
So direct tax for ABC company =BPT + employment income tax
=6,891.72 + 12,000=18,891.72

Xyz company
Income statement
For the year ended
Revenue------------------------------- 391,304.35
Less cost of good sold--------------320,000
Gross profit --------------------------71,304.35
Less expense -------------------------40,000
Income before tax------------------31,304.35
BPT – (31,304.35*15%)-1,710------2,985.65
So direct tax for xyz company =BPT + employment income tax
=2,985.65 + 11,500=14,485.65

Project 25
Advantage of investment Advantage
of saving

- Job creation - to attain personal

financial goal
- Mari mare profit - to purchase items
- Personal satisfaction - to earn interest
- Independence -to investment to get
return
 Project one

- Economic growth - to berries from financial

worries
- Economic and social life growth
- Increase the valve of local reserves
Risks related Business opportunity
- Competition - Bakery
- Market - Juice
- Inflation - Hotel
- Financial risk -Cafeteria
- Available of resources - brevity salon
- Available of customers -Baneberry salo
- Supply and demand
- Time money
 Role of National bank
- Managing government debt
- Regulating payment system
- financial institution
- Setting and implementing monitory policy
How to you transmitted message to your colleagues
.e –mail
.internet
.Telephone
. face to face
.fax machine

 Transfer or close customers account

- Interview potential account holders together relevant
information
- Verity and accuracy and sufficient in accordance with
organization policies and procurers
- Complete necessary do lamentation orders to perform a tax
Role of opening and maintaining bank account?
- I will well come to customer
- I will gather the requited information (I card, passport, license,
photograph. Initial deposit
- I will check the accuracy and ampleness of the document
- I will maintain the account and
- I will issue pan book
The role of NIB of ethiopia to the society
 Project one

.borrowing money and make interest payment

.saving
.special saving account
.current account
.exchange money
.foreign currency

Guidelines,  anti-discrimination legislation

procedures, legislation  Electronic Funds Transfer (EFT) code of conduct
and codes of practice  relevant environmental legislation
may include:  Finance code
 Financial Services Reform Act (FSRA)
 Financial Transaction Reports Act
 Industry codes of practice
 legislation covering competition, prudential regulation
 Anti-Money Laundering and Counter Terrorism Financing
Acts.
Organisation policy,  best practice guidelines
guidelines, and  organisation and customer charters
procedures may  organisation codes of practice
include:  complaint and grievance procedures
 customer services statements
 induction program
 industry policy documents
 industry procedures manuals
 operating manuals
Support to team  explaining/clarifying
members may include:  helping colleagues
 problem-solving
 providing encouragement
 providing feedback to a team member
 undertaking extra tasks if necessary
Strategies/  career planning/development
opportunities for  coaching, mentoring and/or supervision
improvement may  formal/informal learning programs
include:  internal/external training provision
 performance appraisals
 personal study
Information required for  amount of initial deposit
opening accounts may  other signatories to the account
include:  primary account holder's:
 name
 address
 contact details
 purpose for which the account will be used
 Project one

 required links to other accounts held

Financial markets in  bond market
Ethiopia can include:  derivatives markets
 foreign exchange market
 money market including the short term money market
 options and futures markets
Participants in the  banks and non-banking financial institutions
financial markets may  investors:
include:  corporations
 individuals
 local and international governments
 speculators:
 corporations
 individuals
Instruments traded on  bills of exchange
the short term money  commercial bills
market include:  government bills
 promissory notes
 treasury bills
Ways that tax is  through regional and federal level taxes including:
collected include:  direct tax:
 Tax on Income from Employment / Personal Income
Tax
 Business Profit Tax
 Tax on Income from Rental of Buildings
 Tax on Interest Income on Deposits
 Dividend Income Tax
 Tax on Income from Royalties
 Tax on Income from Games of Chance
 Tax on Gain of Transfer of certain Investment
Property
 Tax on Income from Rental of Property
 Rendering of Technical Services outside Ethiopia
 Agricultural Income Tax
 Land Use Tax
 indirect tax:
 Turnover Tax
 Excise Tax
 Value Added Tax
 Customs Duty
 Stamp duty tax: instruments shall be chargeable with
stamp duty include:
 Memorandum and articles of association of any
business
 organization, cooperative or any other form of
association;
Project one

 Award; Bonds; Warehouse bond;

 Contract and agreements and memoranda;
 Security deeds;
 Collective agreement;
 Contract of employment;
 Lease, including sub-lease and transfer of similar
rights;
 Notarial acts;
 Power of attorney;