Leadstar College of Management and Leadership

Faculty of Business Department of Managements

PROJECT WORK ON PRINCIPLE

OF ACCOUNTING II

cost Accounting

Name :- BESUFKAD AYALEW

ID.NO :-DE/DEG/MGT 21/10/0

SUBMISSION DATE: FINAL EXAM DATE November, 2018

1. Beginning inventory, purchase and sales data for Dalol merchandising company for the
month of January,2006 are given below:
2006, January 1. Inventory 14units @ Birr 8
4. Purchase 8units @ Birr 9
8. Sale 12units
14. Purchase 10 units @ Birr 7.5
20. Sale 14units
27. Purchase 4units @ Birr 9
29. Purchase 2units @Birr 8
31. Sale 7units
Required: Using perpetual LIFO method, compute:
 A. Cost of goods sold (4 point)
B. Cost of ending inventory (3 point)

2. Assume that the inventory of Jelil Company was totally destroyed by fire on July 28,
2009. The following information’s are obtained from the company’s record.
Beginning inventory (July 1)……………………Birr 65,000
Purchase…………….…………………..……………………200,000
Purchase discount…………………………………………..11,000
Sales……………………..………………………………………300,000
Sales return allowance……………………………..…….20,000
Transportation-in……………………………………….…….8,000
Based on prior period experience, the owner of the store estimates that the gross profit
percentage is consistently 30%.
Required: Calculate the cost of inventory destroyed by fire on July 28, 2009.
3. Assume that Hadis Company acquired machinery at a cost of Birr 510,000 on
September 10, 2001 that has an economic life of four years and estimated residual value of
Birr 60,000. (Assume that the accounting period ends on December 31)
Required: Using the sum of the year’s digits method:
A. Compute the depreciation expense of this plant asset for each period. (4 point)
B. Pass the necessary journal entry to record depreciation expense of each period. (4
point
4. CHILALO Retail Enterprise, a government owned business, pays its employees’ salaries
according to the Ethiopian calendar Month. The following data relate to the month of
Meskerem, 1995 E.C. (10 Point)
S. No. Employee Name Basic Salary
001 Animut Anley Birr 2500
002 Nebiyat Girma Birr 1880
003 Erecha Megersa Birr 1790
004 Bekuretsion G/Tensae Birr 1565

Additional information:
 All workers are expected to work 40 hours per week and during Meskerem there are 4
weeks. The workers have done as they have been expected.
 Nebiyat Girma has worked 10 hours of overtime during Meskerem: 3 hours during
‘Meskel’ and the other 7 hours before 10 p.m.
 Erecha Megersa has also worked 5 hours of overtime: 2 hours during weekly rest days
and 3 hours between 10 p.m. – 6 a.m.
 Animut and Nebiyat received a monthly position allowance of br. 350 and br 300
respectively which are both taxable.
 Animut Anley agreed to have a monthly deduction of br. 250 for credit association.

1|Page
  All workers are permanent except Bekuretsion G/Tesnae.
 The pension rate for the government organization consider: 7% for employees and 11 %
for employer ( government organization)

Required:
1. Compute the OT (overtime), Payroll Tax, pension, total deductions and Net pay for each
employee. (7 point)
2. Record the payment of salary as of Meskerem 30, 1995. (3 point)

5. Robel, Sosina and Teshome who share in income and loss in the ratio of 2:3:5 decided to
discontinue operations as of Ginbot 30 and liquidate their partnership. After the accounts
were closed on Ginbot 30, the following trial balance was prepared. (15 point)
Birr.
Birr
Cash 5,900
Non-cash Assets 109,900
Liabilities 26,800
Robel, Capital 14,600
Sosina, Capital 27,900
Teshome, Capital 46,500
Total 115,800 115,800
Between Sene 1 and Sene 18, the non-cash assets were sold for Br.27400 and the liabilities were
paid.
Instructions
1. Assuming that the partner with the capital deficiency pays half the amount owed to the
partnership, prepare a statement of partnership liquidation. (7 POINT)
2. Journalize the entries to record (3 POINT)
A. The sale of the assets
B. The division of loss on the sale of the assets
C. The payment of the liabilities
D. The receipts of the deficiency
E. The distribution of cash to the partners

2|Page