GAGE UNIVERSITY COLLEGE

TVET-PROGRAMS, FOR REGULAR TRAINEES

DEPARTMENT OF BUSINESS and ECONOMICS

OS: - Accounting and Finance (III) Total worth 20%

Name: ________________________________ID No. _______________Section: _______

Campus: ________________________ Learning Center: _________________________

GROUP ASSIGNMENT (ONE)

Instruction I: Dear Trainees in doing your Assignment successful you have to:
1. Visit the uploaded modules on the College website

(www.elearningportal.gagecollege.net)
UserID: - TVET Password: gage123
Or

Use Telegram Account: - T.me/gage_2020

2. Devote time specifically to read the modules
3. Build individual accountability and do your assignment thoroughly
4. You are expected to submit the assignment in Hard copy in two weeks
interval after the date you received to the Dean office
Section to be filled by the Trainer
Weight i n % S c or e d R e s u l t

Part 1
PROJECTI
Total 20%

Submission date: - 20/09/2015 E.C

ACCOUNTING FORPAYROLL SYSTEM IN ETHIOPIA

 INSTRUCTION:- This assessment contains 8 multiple choice questions, each worth points. Choose
the best answer from the given alternatives & write the choice of the correct letter on the space
provided. Make sure that your is clearly marked. Use only capital letter.
Abebe is an employee of Ethio Tele com. She earns a monthly basic salary of $3,400, monthly non
taxable allowance of $400, overtime earned $700.
Based on the above information answer question # 1 - 3
1. How much is her employee income tax:_________
A. 516.50 B. 517.50 C. 518.50 D. 519.50
2. The gross earnings of Abebe is:______________
A. 4500 B. 4600 C. 4700 D. 4800
3. The net pays of Abebe is:___________
A. 3742.5 B. 3743.5 C. 3745.5 D. 3744.5
To answer questions number 4 – 8 use the information given below.
Assume Ato Abebe Kebede employee for ABC company permanent employee earn basic salary 2,000
and taxable transport allowance is br.1,000 and overtime worked hour 10 hour working duration
public holiday Ato Abebe worked per week 40 hours
4. _______________Determine how much overtime earning Ato Abebe Kebede?
A. Br.325 C. Br.600
B. Br.311.25 D. Br.312.50
5. ______________Determine how much gross earning Ato Abebe Kebede?
A. Br.3,200 C. Br.2,300
B. Br.3,312.5 D. Br.6,000
6. ______________Determine taxable income employment income tax Ato Abebe Kebede?
A. Br.360 C. Br.3,312.5
B. Br.2,312.5 D. Br.3,200
8. ____________ determine employment income tax is paid Ato Abebe Kebede?
A. Br.204.38 C. Br.260
B. Br.360 D. Br.180
9. _____________determine how much paid pension contribution Ato Abebe Kebede?
A. Br.231.88 C. Br.70
B. Br.280 D. Br.140
WORKOUT QUESTION
Nice Company has the following information about the working of employee. The
company pays the salary for their employee according Ethiopian calendar. The necessary
information about the employee are given below
No Name of Basic Allowance Over time Duration
Employee salary hour
Representation Fuel
01 Tesfaye C. 5500 750 200Liter
02 Haile G. 3500 350 150 Liter 6 hours Holiday
Additional information
 All employee 8hr work per day and all employees are regular.
 Fuel Allowance is Fully exempt from tax and fuel price 20 birr /liter
 Representation allowance is taxable allowance
Required
1. Prepare payroll Registration sheet.
2. Prepare necessary journal entry before and after payment of salary.
 PART I: PRACTICAL PART
As of Sene 30 1994, the end of the current fiscal year, the accountant for ABAY General Trading completed
the worksheet before journalizing and posting the adjustments.
ABAY General Trading
Trial Balance
Sene 30, 1994
Account Description Un adjusted Adjusted
Cash 12,825.00 12,825.00
Supplies 8,950.00 3,635.00
Prepaid rent 19,500.00 1,500.00
Prepaid insurance 3,750.00 1,250.00
Equipment 92,150.00 92,150.00
Accumulated depreciation equipment 53,480.00 66,270.00
Automobile 56,500.00 56,500.00
Accumulated depreciation automobile 28,250.00 36,900.00
Accounts payable 8,310.00 8,730.00
Salary payable 3,400.00
Tax Payable 1,225.00
Ato Abay capital 41,245.00 41,245.00
Ato Abay drawing 18,600.00 18,600.00
Service income 261,200.00 261,200.00
Salary Expense 172,300 175,700.00
Rent Expense 18,000.00
Supplies Expense 5,315.00
Depreciation Expense Equipment 12,790.00
Depreciation Expense Automobile 8,650.00
Utilities Expense 4,700.00 5,120.00
Taxes Expense 1,500 2,725.00
Insurance Expense 2,500.00
Miscellaneous Expense 1,710.00 ____ 1,710.00 ____
Total 392,485.00 392,487.00 418,970.00 418,970.00
Part II Choose the best answer from the given alternatives
1. Which one is a non-balance sheet data?
A. Cash C. Cost of goods sold
B. Account receivables D. Supplies
2. Which one is excluding from the preparation of income statement
A. Expense C. Revenue E.Except B and D
B. Asset D. Owners’ equity
3. If the prepaid Insurance account before adjustment, on Tahses 30, indicated a balance of birr 3,000 and
unexpired cost of insurance premium at Tahses 30, total birr 1,100 the adjusting entry would be
__________.
A. Debit prepaid insurance for birr 1100 and credit insurance expense for birr 1,100
B. Debit prepaid insurance for birr 4100 and credit insurance expense for the same account
C. Debit insurance expense for birr 1900 and credit prepaid insurance for the same account
D. Debit insurance expense for birr 1100 and credit prepaid insurance for birr 1100
4. This of the following accounts would be closed to the income summary account at the end of a period_.
A. Commission income C. Prepaid insurance
B. Miscellanies expense D. A and B are correct
5. The final process in the accounting cycle is
A. Preparation of unadjusted trial balance
B. Financial Statement preparation
C. Posting closing trial balance
D. Posting transaction to ledger
 GAGE UNIVERSITY COLLEGE
TVET-PROGRAMS, FOR REGULAR TRAINEES
DEPARTMENT OF BUSINESS and ECONOMICS

OS: - Accounting and Finance (III) Total worth 20%

Name: ________________________________ID No. _______________Section:

_______
Campus: ________________________ Learning Center:
_________________________
INDIVIDUAL ASSIGNMENT (ONE)
Instruction I: Dear Trainees in doing your Assignment successful you have to:
1. Visit the uploaded modules on the College website
(www.elearningportal.gagecollege.net)
UserID: - TVET Password: gage123
Or
Use Telegram Account: - T.me/gage_2020
2. Devote time specifically to read the modules
3. Build individual accountability and do your assignment thoroughly
4. You are expected to submit the assignment in Hard copy in two weeks
interval after the date you received to the Dean office
Section to be filled by the Trainer
Weight i n % S c or e d R e s u l t

Part 1
PROJECTI
Total 20%

Submission date: - 15/09/2015 E.C

WORK SHEET ON ACCOUNTING FORPAYROLL SYSTEM IN ETHIOPIA

Choose the best answer from the given alternatives & write the choice of the correct letter
on the space provided. Make sure that your answer is clearly marked. Use only capital
letter.
1. Which one of the following is the importance of payroll accounting?
A. Employees are sensitive to payroll errors and irregularities affect their moral and
motivation
B. Payroll expenses are not subject to various government regulations.
C. The payment for payroll and related taxes has significant effect on the net income.
D. “A” and “C” E. All of the above
2. _______ refers to the length of time covered by each payroll payment.
A. The pay day C. Wage
B. The pay period D. Salary
3. A monthly sum paid to an employee for bearing a particular office responsibility
A. House allowance C. Hardship allowance
B. Position allowance D. Desert allowance
4. Which one of the following are exempted allowances based on statutory lows and practices?
A. Medical cost allowance
B. Transportation not exceeding 300birr
C. Traveling expenses paid to employees from the place of employee to return them upon
completion
D. All of the above
5. A sum of money given to an employee to compensate for an inconvenient circumstance
caused by the employer.
A. Position Allowance C. Desert Allowance
B. Hardship Allowance D. Transportation
6. Which of the following is not used gross earning determination?
A. Basic salary B. Allowance C. Overtime D. All E. None
7. For overtime work performed during night time between 10 o’clock in the evening (10PM)
and six o’clock in the morning (6AM) a worker shall be entitled to be paid at rate of
A. 1.5 B. 1.25 C. 2 D. 2.5
8. Which one of the following summarized steps are not followed in preparing a payroll
register:
A. Gathering the necessary data D. All of the above
B. Entering the names of employees E. None of the above
C. Totaling and proving the payroll
register
9. From the following one is not the possible components of a payroll register.
A. Employer number C. Earnings
B. Name of employees D. None
10. If the basic salary of an employee is birr 5000 how much will be the income tax, pension and
net pay respectively?
A. 1087.5, 250 and 3462.5 C. 1087.5, 350 and 3562.5
B. 987.5, 350 and 3562.5 D. 3562.5, 350 and 1087.5
PART II: - PRACTICAL PART
 Try to write neatly and proofread as you go.

PART ɪɪ: PRACTICAL TEST

Is a government agency pays the salary of its employees according to the Ethiopian calendar
month. The fourth coming data relates to the month of Jun 2008.
S.No Name of Basic Monthly OT Hours Duration of Basic salary
Employees Salary Allowance worked OT work per hour
01 Tola Biru 4000 100 10 25
02 Abebe Teji 2500 - 8 15
03 Kebede 3000 50 10 18
Shemsu

Additional information
- The public agency usually expects a worker to work 40 hours in a week and during June there
are four weeks.
- All employees are permanent except Abebe Teji.
- Tola agreed to contribute monthly br 300 from his salary as a monthly saving in the credit
association of the agency.
Compute
1. Calculate gross earnings?
2. Payroll deduction and net pay?
3. Prepare a payroll register /sheet/ for the agency for the month of June 2008?
4. Journalize the related journal entries?
PART III: - Demonstration
Try to write neatly and proofread as you go.
1. Define payroll
2. Describe the importance of payroll
3. Name three types of allowance and explain their nature.
4. Gross earnings and taxable employment incomes one the same? If yes, how? If no, why?
Part I: - Work out
Project.1 preparing financial reports and controlling accounts
1. The following trial balance of x company as of December 2014 don’t balance of number
of reasons
Accounts description Debit Credit
Cash 3,752.00
Account receivables 5,683.00
Supplies 1,457.00
Prepaid insurance 100.00
Equipment 14,600.00
Notes payable 13,000.00
Account payable 2,960.00
x-capital 10,042.00
 x-drawing 3,500.00
Sales 38,200.00
Wages expense 21,400.00
Rant expense 4,500.00
Advertising expense 200.00
Utility expense 900.00
Total 56,092.00 64,202.00
Reasons for trial balance in balance
A. The balance of cash was overstated by 1,000.00
B. The cash respite of 210.00 was posted as debit to cash of 120.00. Debit of 2,000.00 for a withdrawal
by owner was posted as a credit to capital account.
C. The balance of 1,200.00 advertising expense was entered as 200.00 in the trial balance.
D. A debit of 450.00 to account receivable account was not posted but posted correctly to subsidiary
ledger account
E. A return of 310.00 of defective supplies was erroneously posted as 130.00 credits to supplies.
F. The balance of notes payable was overstated by 3000.00. An insurance policy acquired at a cost of
200.00 was posted as a credit to prepaid insurance.
G. Miscellaneous expense with a balanceof 1,060.00 was omitted from trial balance
H. A credit of 710.00 in account payable was over looked during general ledger account and subsidiary
ledger reconciliation.
I. A debit of 650.00 to account receivable was posted correctly but not posted to subsidiary ledger
customer account.
Additional information’s for adjusting entries
a. Inventory of supplies as of December 31,2014 shows 277.00
b. Insurance expired for the period of 2014 is 350.00
c. Doubt full account for the period is 2% of the balance of account receivable
Doubtful account expense -----------------------122.66
Allowance doubtful account (A/R) -----------------------122.66
Required
Task1.1 Prepare adjusted trial balance as of December 31, 2014 as in interim financial report.
Task1.2 Record the necessary adjusting entries for the period and determine the balance of each
account
Task1.3 Prepare financial reports (INCOME STAMENT & BALANCE SHEET) as of December
31, 2014