ALLLEVELTHREEQUESTI

ONS

PROJECT 1

 Atoabel eisthenewl yempl oyeewhowor ksat3ff urni

tureandhi smont hl
y
i
ncomei sbir
r10,000i nthemont hofDecember21, 2015.Hi sfi
xedexpendi tur
e
covers30%ofhi sincomeandt her emai
ningishi svariableexpenditureand
personal saving.Personal savingi s2%oft hev ari
ableexpendi t
ures.andt he
actual vari
ableexpendi t
uresi sonl y85%oft hebudget edv ari
ableexpendi t
ures.
andt hef i
xedexpendi turesr emai nconstant.Anddef i
citorsurplusisaddedor
deduct edfrom personal sav i
ng.att henewlyy earjanuar y
1,2016hisi ncome
i
ncreasedby10%. andatj anuar y1,2016hi
sv ariabl
eexpendi tureincr
easedor
growt hby10%.

Task1.
1.pr
epar
etheper
sonal
budgetf
ort
hemont
hofDecember21,
2015?

Task1.
2.pr
epar
ebudgetper
for
mancer
epor
tfort
hemont
hofDecember21,
2015?

Task1.
3.cal
cul
atet
heper
cent
agesofsav
ingf
orbot
hest
imat
edandact
ual
amount?

Task1.
4.pr
epar
etheper
sonal
budgetf
ort
hemont
hofJanuar
y1,
2016?

Task1.
5.whyi
sver
ytoat
oaber
abudget
eddur
ingDecember
?
Pr
oject2

 Assumey ouinvest
mentr equir
estotalcapit
alofbir
r120,000ofwhichyoucan
havebirr30,000inyourhandandbor r
owedt heremaini
ngamount .You
expectedtoear nmonthl
yr evenueofbirr40,000.I
nordertoful
fi
ll
y ourf
inanci
al
requi
rement s,y
ouhav etwoal t
ernat
ives:-

Alt
ernat
ives1:
-youwil
lbor
rowedthedef
ici
tofcapit
alfr
om bankatani
nter
est
rat
eof12%f ortwoyear
sandthebankchar
gedbirr2000.

Alt
ernat
ives2:
-youwi
llbor
rowedthedef
ici
tofcapi
talf
rom bankatani
nter
est
rat
eof13%f orthr
eey
earsandthebankchargedbi
rr1000.

Task2.
1.whi
chal
ter
nat
ivesar
ebest
?(Showy
ouranswerwi
thcal
cul
ati
on)

Task2.
2.cal
cul
ateest
imat
edr
ateofr
etur
nony
ouri
nvest
ment
?
Pr
oject3

 SupposeABCCompanyi sav atregi

ster
edcompany .Duringtheyearof2011the
companyearnedbir
r3,
500,000from salesvatincl
usive.Thecompany
purchasedmater
ial
sandimportedataccostofbi r
r500,000bef orevat
.Duri
ng
theyear,t
hecompanypai
dbi r
r35,000forexcisetaxandcust om dutyof15%.In
addit
ionthecompanyi
ncurredotherexpenseofbirr1,000,000.Thecompany

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 al
sochar
gedpr
ofi
ttaxof30%.

Task3.
1.cal
cul
atet
hedi
rectt
ax?

Task3.
2.cal
cul
atet
hei
ndi
rectt
ax?

Task3.
3.i
dent
if
ythedocument
soft
axat
ion?
Pr
oject1

 Supposesel
amsewanemployeeofxycompanywhoearnspermanentweekly
sal
aryofbi
rr325dur
ingt
heyearf2012.Themont
hlybudgetexpendi
tur
efor
2012areasfol
lows:
-

 Rentcost
…………………………………………bi
rr250permont
h

 Tr
anspor
tcost
……………………………….
.bi
rr100permont
h

 Communi
cat
ion…………………………….
.bi
rr50permont
h

 Mai
ntenance…………………………………bi
rr60permont
h

 Foodcost
………………………………………bi
rr140permont
h

 I
nsur
ancecost
………………………………bi
rr150permont
h

Sel
amsewpl
anst
osav
ethef
oll
owi
ngcost
sfor2013f
ort
he20/
80condomi
nium house
pl
an

 50%ofcommuni
cat
ioncost

 30%oft
ranspor
tcost

 5% ofmai
ntenancecost

 10%ofr
entcost

 15%off
oodcost

Task1.
1.pr
eparet
heannual
budgetofsel
amsew.Mont
hlyf
or2013andi
ncr
easest
he
amountofsavi
ngfort
henew20/80housepl
an.

Task1.
2.cal
cul
atesav
ingper
cent
agei
ncr
easef
ort
hey
ear
?
Pr
oject2

 Assumet hemesf i
neindust
ri
al engineeri
ngengagedi nr
entalconstr
ucti
on
machinerythecompanyi mportsdiffer
entkindsofconstr
uctionmateri
als.I
nthe
year2012,thecompanyi mportsdiffer
entkindsofconstr
ucti
onmat eri
als.I
nthe
year2012,thecompanyi mportedmachi neatacostofbirr2,
500,000ofwhich
60%machi nerycover
edbycr editfacil
i
tyfrom dashenbank.Theloanwillbe

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 repai
dwi t
hin5y earsatequalinstall
mentquarter
lyataccostof12%inter
estrat
e.
Thetotalservi
cechargeandcostr el
atedtocredi
tfacil
it
yis2000fort
hefir
st
yearand2500f orthesecondy earofl oanper
iod.Assumet hebankpoli
cyis
simpleint
erestrateonoutstandingloansandadv ances.

Task2.
1.cal
cul
atet
hepr
inci
pal
repay
mentandcostofl
oansf
ort
hef
ir
sty
ear
l
oanperiod?

Task2.
2.cal
cul
atet
hepr
inci
pal
repay
mentandcostofl
oanf
ort
hesecondy
ear
l
oanperiod?

Task2.
3.whati
stheout
standi
ngbal
anceofl
oanatt
heendof3y
earl
oanper
iod?

Task2.
4.ment
ionatl
i
stf
ivet
her
olesofcr
edi
tfaci
l
ityf
orsoci
ety
?
Pr
oject3

 AbcShar eCompanyi sregisteredandl i

censesuppli
erofinjer
at odiffer ent
universit
iesi nEthiopian.Duringt heyear2012thecompanyear nsasi ncomeof
bir
r1,500, 000and1, 800,000f r
om BUandAAUr especti
vel
yandi ncludi ngv at.
Thet otalcostoft heproducti s1,980,000beforevat
.Inadditi
ont hecompany
earns160, 000pery earfrom ot hersourceofincomewi thzerovatrat es.I nthe
otherhandt hecompanyi ncurredbirr300,
000generalandadmi nistration
expensef orthey ear.Du7r i
ngt helastmonth2012t hecompanywi thhol dbirr
65,000f orempl oy menti ncomet axt hecompanyi sexpectedtopay i
ng30%
profi
tt ax.

Task3.
1.cal
cul
atet
hedi
rectt
axf
ort
hey
ear
?

Task3.
2.cal
cul
atet
hei
ndi
rectt
axf
ort
hey
ear
?
Pr
oject1

Supposeat oalemui sanempl oyeeofxycompanyandhi ssalaryofbirr750perweek.

InJanuary2015t hecompanypai dt womont hl
ynetsalari
esasabonusf oreach
employeest otheper for
manceoft heyear2015.At oalemuhasf ixedandv ari
able
expendit
ures.Fixedexpendi tur
esar euniversi
tyfee100,tr
ansport200,andr ent300,
magazine40.Andv ar
iableexpenditur
esar eclot
h50, mobilecard25,recreati
on100,
andgas70, inor dertoincreasehissav i
ngat oalemuunderstandt ochangehisbehavior
andskil
l.Hedeci dedt odecreasev ari
ableexpenditur
eby5%st ar
tingfr
om Febr uar
y
2016.(
thebudget edyearofthecompanyi sf r
om January1t oDecember31)

Task1.
1.cal
cul
atet
otal
sav
ingf
ort
hemont
hofJanuar
y2015?

Task1.
2.cal
cul
atet
het
otal
sav
ingf
ort
hemont
hofFebr
uar
y2016?

Task1.
3.demonast
rat
erequi
redbehav
iorandski
l
ltosucessi
ngbudget
ing?

Task1.
4.demonst
rat
eobst
acl
eofat
oal
emut
oachi
evef
inanci
algoal
?

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Pr
oject2

Atokidaneplantoopenacafeafterayear.Thetotal capitalneededtoopent hebusi

ness
bi
rr100,000.Toachievethegoalatokidanedeposi t1000permont hstarti
ngfrom
January2015uptoDecember31, 2015t odashenbankathawassa.Dur i
ngt hi
speri
od
atokidaneearni
nteresti
ncomeofbi rr2008fordeposi tedcashatt hedashenbank.
Afteroneyear(January2016)at
oki danegiveal oanpr oposal f
ordefi
citcapi
tal
to
dashenbankatinterestr
ateof10%pai dquarterl
yatequal instal
lmentand
managementf ee5%oft heloanamountequal lydistri
but e.

Task2.
1.cal
cul
atet
hedef
ici
tcapi
tal
ofat
oki
dane,
ifwi
thdr
awal
all
deposi
tedamountof
money?

Task2.
2.cal
culat
ethet
otali
nter
estexpenseandser
vicechar
geatt
heendoft
he
secondyear
(2016and2017)

Task2.3.i
fthegovernmentannouncebudgetfortheyear2009e.c.bir
r200bil
li
ons,
ERCApl antogenerateint
ernalrev
enueof180bill
ionfort
hey ear2010e.c.
Demonst r
atethei
nst r
umentt r
adedont heshor
tterm marketi
nor dertof
ulf
il
lbudget
defi
ciency?

Task2.
4.demonst
rat
einf
ormat
ionpr
ovi
dedt
ocust
omerassumi
ngy
ouar
ebankcl
erki
n
dashenbank?

 dawittheownerofdawi tgeneralt
radingengagedinthesalesofsparepart
sof
bajagevehicl
ewithtwoempl oyees.Thebusinessisnotli
gil
abl
eregist
eredof
vat.Theref
oreiti
seli
gibletoregi
stertopayturnovertaxduri
ngthemont h,
the
businesshassoldthesparepar t
sforbirr35,
000.Thefoll
owingdatarel
atedto
hisemployeesearni
ngsf orthemont h.

Nameof Basi
csal
ary Overti
me Taxabl
eal
l
owance
empl
oyees ear
nings

Bet
hlehem abebe 1000 200 50

Yodi
tay
ele 500 100

Task3.
1.cal
cul
atedi
rectt
axl
i
abi
l
ityoft
hebusi
nessf
ort
hemont
h?

Task3.
2.cal
cul
ateI
ndi
rectt
axl
i
abi
l
ityoft
hebusi
nessf
ort
hemont
h?
Pr
oject1

 Dcmanuf actur
ingcompanypur chasedr awmat er
ialsforbir
r750,000aftervat
andsoldtheproducedpr oductsbybi rr1,850,
000v atincludi
ngdur i
ngthey earof
2014.Thecompanywasi ncurredt ot
al operat
ingexpenseofbi rr250,000and
subject
edtopay30%busi nesspr ofi
ttax.Thecompanywasdecl aredbonusof
bir
r21,500fortheyearof2014t oatoSamuel forthe.mont hofJanuary,
FebruaryandMar chatequal i
nstall
mentonJanuar y2015.InJanuary2015t he

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 earni
ngofat oSamuel
is7600and12000fbasi
csal
aryandov
ert
ime
respect
ivel
y.

Task1.
1.det
ermi
nedirectt
axl
i
abi
l
ityofdcmanuf
act
uri
ngcompanyf
ort
he
monthofDecember2014?

Task1.
2.det
ermi
net
otal
dir
ectt
axl
i
abi
l
ityofat
oSamuel
fort
hemont
hof
Januar
y2015?

Task1.
3.det
ermi
nei
ndi
rectt
axl
i
abi
l
ityofdcmanuf
act
uri
ngf
ort
hemont
hof
dec2014?

Pr
oject2

 Atobini
yam netbasi
csalary,houseandt r
ansportati
onal l
owanceis3000,1500,
and1000respecti
vely
.60%ofhi sbasicsalaryandt ransport
ati
onall
owanceis
forhi
svari
ableexpendit
ures.Ont heotherhandthesum of50%ofhi svari
able
expendi
tur
eand70%ofhousi ngal l
owanceishisfixedexpense.

Task2.
1.pr
epar
ehi
ssemi
annual
per
sonal
budget
?

Task2.
2.deter
minetheper
cent
ageofv
ari
abl
eExpendi
tur
eandsav
ingamount
fr
om hi
stotalear
ning?

Task2.
3.det
ermi
net
hepossi
bleway
stor
educeper
sonal
budgetandper
sonal
savi
ng?

Task2.
4.l
i
stt
hepossi
blegui
del
i
nest
hatar
eusedt
oopencust
omeraccount
?

Task2.5.det
ermineatl
i
stfiv
eequi
pment
swhi
chy
ouar
eusi
ngi
nopeni
ngand
processi
ngcustomeraccount?
Pr
oject3

 Ethi
oengi neeri
ngcorporat
ionhassi gnedr
oadconstruct
ionagreementwit
hEthiopi
an
roadaut hor
ityt
orenewt hecontractthemainroadfr
om addisabebatodir
edawawi th
contractamountofbirr250,000,
000.80%oft hecont
ractamountwi l
lbefi
nancedfr
om
theloanr el
easedbycommer ci
albankofEthiopi
anatannualint
erestr
ateof13%tobe
paidaspert hefol
lowingterm ofpayments.

 Att he1sty
heendoft ear
……………………….
.10%oft
hel
i
abi
l
ity

 Att he2ndy
heendoft ear
……………………….
20%oft
hepr
inci
pal

 Att he3rdy
heendoft ear
……………………….
30%oft
hepr
inci
pal

 Att he4thyy
heendoft ear
…………………….
.20%oft
hepr
inci
pal

 Att he5thy
heendoft ear
………………………15%oft
hepr
inci
pal

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  Att he6thy
heendoft ear
…………………….
.5%oft
hepr
inci
pal

Task3.
1.cal
cul
ateamountofl
o9anr
ecei
vedf
rom commer
cial
bankofEt
hiopi
an?

Task3.
2.cal
cul
atet
heamountofpr
inci
pal
andi
nter
estpay
mentf
ort
hesecondy
ear
?

Task3.
3.cal
cul
atet
heout
standi
ngbal heendof5thy
anceatt eari
ncl
udi
ngi
nter
estr
ate?

Task3.
4.cal
cul
atet
het
otal
int
erestexpense?
Pr
oject1

 BothstarandAbcbusi nessareasolepropriet
orshipvatregi
steredbusiness.
Astarbusi nesspur
chasedi t
emswi t
hacostofbi rr250,
000v atincl
usiveandsol
d
theitemst oABCbusi nesswi t
hbir
r320,000beforev at
.ABCr esoldtheproduct
s
withbirr150,000vatincl
usive.OntheotherhandSTARbusi nessincurredan
operati
ngexpenseandwi thholdemploy
menti ncomet axofbirr50,000and
12,000r especti
vel
y.ABCCompanybi rr10,000and11, 500respecti
v el
y.

Task1.
1.cal
cul
atet
het
otal
dir
ectt
axl
i
abi
l
ityofbot
hcompany
?

Task1.
2.cal
cul
atet
het
otal
indi
rectt
axl
i
abi
l
ityofbot
hcompany
?

Task1.
3.l
i
stt
het
wopossi
bleway
sofst
ampdut
y?

Pr
oject2

Task2.
1.demonst
rat
esaf
etypr
ocedur
est
owor
kef
fect
ivel
yint
hef
inanci
alser
vice
sect
or?

Task2.
2.demonst
rat
ewor
kpl
acet
echnol
ogy
?

Task2.
3.howt
osuppor
tat
eam member
sint
hewor
kpl
ace?
Pr
oject3

 Bel
gium plc.Paid3000onNovember2014forvatli
abi
li
ty.Thecompanysal
esi
s
bi
rr1,541,
000v atsi
ncl
usi
vethecompanyalsopaid6000asanempl oyment
i
ncomet axf ort
hemonth.Theadmini
str
ati
veexpensesofplacebir
r15,
000.

 Task3.
1.cal
cul
atedi
rectt
axl
i
abi
l
ityoft
hecompanyasofNov
ember
?

Task3.
2.cal
cul
atev
ati
nputandout
put
?

 Atofant
ahunear
nsbi
rr9500basi
csal
aryandhi
smont
hlyexpensesi
sgi
venas
fol
lows:
-

 Cl
othi
ngexpense……………………………….
12%

 Foodexpense…………………………………….
20%

 Rentexpense……………………………………30%

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  Educat
ionexpense…………………………….
5%

 Tr
anspor
tat
ionexpense………………….
.5%

Task1.
1.pr
epar
emont
hlyandannual
l
ybudgetf
orat
ofant
ahun?

 Atofantahunwanttoopenandr unnewbusinesswit
hr equi
redcapi
tal
ofbir
r80,
520
basedonhi sannualsavi
nghebor r
owedtheremaini
ngamountf r
om bankat8.
5%
i
nterestrat
esemi –annuall
yatequali
nst
all
mentwiththreeyear
s.

Task1.
2.cal
cul
atet
heamountofbor
rowed(
recei
ved)f
rom bank?

Task1.
3.det
ermi
nepr
inci
pal
andi
nter
estr
epay
mentf
orf
ir
sty
ear
?

Task1.
4.det
ermi
net
heout
standi
ngbal
anceatt
heendofsecondy
ear
?
Pr
oject2

 Alem companypurchasedoff
iceequipmentforbi
rr115,
000beforev at.The
companyhasf i
veempl oy
eestopr ovi
deservi
cestheemploymentincomet axi
sbir
r
12,000permonth.Duri
ngthey ear2012thecompanyearnedbir
r446, 500incl
usi
ve
vatbyprovi
dingserv
icesbusi
ness.Profi
ttaxisbi
rr30,
000.

Task2.
1.cal
cul
atebot
hdi
rectandi
ndi
rectt
axl
i
abi
l
ityf
ort
hey
ear2012.

I
FITI
SFEELGOODJUSTDOI
T
Compl
i
edby
:-
BINI
YAM
S.

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