SetbyAbebeM.

Occupat
ionalCode:LSAACF4

Pr
ojectI
nfor
mat
ion

Giv
enthenecessar
ytool
s,equi
pmentandi
nfor
mat
ion,
thecandi
dat
eisexpect
edt
oper
for
mthe
Fol
lowi
ng6project
s.

Theassessorshoul
daskor
alquest
ionsonwhichsheisnotsat
isf
iedbythecandi
date'
s
per
for
manceAssessmentVenue:WellEqui
ppedAssessmentCentreorr
ealworkplace

Tot
alt
imef
oral
lpr
oject
s:4hr
s

Pr
oject1:Comput
eEt
hiopi
ant
axat
ionandFor
eignCur
rencyt
ransact
ions

Tot
alt
imef
ort
hepr
oject
:40mi
nut
es

CaseScenar
ioI

ZYPLCi sanimporterofdif
ferentmachi neriesf
rom Germany.Thecompanyhasbeenengaged
i
nbuy i
ngandselli
ngactivi
ti
es.Att heendofNov ember2014,thecompanypaidnetamountof
3,000.
00ETBt oMi ni
str
yofRev enuesf orVAT.Duringthemont hofNovemberi tear
nsbirr
1,541,
000VATinclusi
vesalesofmachi neries.I
nadditi
onZYPLCpai danempl oymenti
ncome
taxof6000ETBpermont hcollectedfrom employeesandalsopaidadmini
str
ativ
eandgeneral
expensesof15,
000ETBdur ingt hemont h.

Task1.Det
ermi
neamountofdi
rectt
axl
i
abi
l
ityoft
hecompanyf
ort
hemont
hofOct
ober2014.

Task2.Det
ermi
net
heamountofi
nputandout
putVATf
ort
hemont
hofOct
ober2014

Answer

CaseScenar
ioI

Task1.Gi
ven

sal
es.
..
..
..
..
..
..
..
..
.1,
541,
000i
ncl
usi
vev
at

v
atpay
abl
e..
..
..
..
.3,
000

Expense.
..
..
..
..
.15,
000

EI
T..
..
..
..
..
..
.6,
000

sol
uti
on
sal
es=1,
541,
000/
1.15=1,
340,
000
 SetbyAbebeM.
Rev
enue.
..
..
..
..
..
..
..
..
1,340,
000

costofgoodsol
d..
..
..
(0)

gr
osspr
ofi
t..
..
..
..
..
..
..
1,340,
000

Expense.
..
..
..
..
..
..
.15,
000

I
BT.
..
..
..
..
..
..
..
..
..
..
1,325,
000

BPT=1,
325,
000*
30/
100=397,
500

Task1.
1Di
rectt
ax=BPT+EI
T

=397,
500+600=403,
500

Task2.I
ndi
rectt
ax=out
put-i
nput

sal
es=1,
541,
000*
15/
115=201,
000

I
ndi
rectt
ax=201,
000-3000=198,
000

CaseScenar
ioI
I

GREATCompany ,anEt hi
opi
anregi
ster
edorgani
zat
ion,
pay st
hesal
aryofit
semploy
ees
accor
dingt
otheEt hiopi
ancal
endarmonthandpaysoverti
meaccordi
ngtothenewpay
ment
syst
em.Thefol
lowi nginf
ormat
ionavai
labl
efort
hemont hofHamle30,2015:

 AtoBr
ukGebr
eisanempl
oyeeoft
hecompanyst
art
ingf
rom Haml
e1,
2010E.
C.asa
sal
esman.

ThecompanyusesEthi
opianbudgety
ear(
Haml
etoSene)
.Thef
oll
owi
ngar
epar
ti
cul
arsofAt
o
BrukGebr
e'sf
ortheemploymentyear
s:

 Thecompanypai
dtoAt
oBr
ukt
hef
oll
owi
ngamount
sfort
hepastf
oury
ear
s:

o Basi
csal
arypermont
h..
..
..
..
..
..
..
br.10,
000

o Posi
ti
onal
l
owancepermont
h..
..
..
br.1000

 St
arti
ngfr
om Haml
e1,
2014t
hecompanyi
ncr
easedhi
sbasi
csal
aryandposi
ti
onal
l
owance
asfol
low:

o Basi
csal
arypermont
h..
..
..
..
..
..
..br
.12,
000

o Posi
ti
onal
l
owancepermont
h..
..
..br
.2500

 At
oBr
uki
snotent
it
ledt
oanyot
hert
axabl
ebenef
it
sdur
ingt
hesey
ear
sot
hert
hanbasi
c
 SetbyAbebeM.
sal
aryandposi
ti
onal
l
owance.Hi
nt:
Incomet
axi
scomput
edbasedonmont
hlysal
ari
es.

I
nstruct
ion:Basedont
heabov
einf
ormat
ion,
thecandi
dat
eisr
equi
redt
oanswert
hef
oll
owi
ng
questi
ons.

Task1.OnHamle30,2015E.C.,
AtoBrukhasgothi
stwomont hsbasi
csalar
yasabonusf
rom
hi
sempl oy
erf
orhisoutst
andingper
formancei
ntheprev
iousbudgetyear
.

CALCULATE:

A.Theamountofi
ncomet
axonbonusand,

B.Netamountofbonust
ober
ecei
vedbyAt
oBr
uk

Answer

Task1.CALCULATE:
A.Theamountofi
ncomet
axonbonusand,

1.
AtoBr
ukbonus=2*
12000=24,
000

2.
AtoBr
ukBonusdi
vi
dedby12mont
h=24,
000/
12=2,
000

3.
AtoBr
ukBonusAddt
oPr
evi
ousPer
iodmont
hlysal
ary=14,
500+2,
000=16,
500

4.
AtoBr
ukMont
hlyi
ncomet
axbasedonmont
hly=14,
500*
35%-
1500=3575

5.
AtoBr
ukMont
hlyi
ncomet
axmont
hly&Bonus=16,
500*
35%-
1500=4275

6.Di
ff
erenceofi
ncomet
ax=4275-
3575=700

7.
Tot
alamountofI
ncomet
axonBonus=700*
12=8400

B.Netamountofbonust
ober
ecei
vedbyAt
oBr
uk

1.
NetBonusamount=2mont
hbonusmi
nusi
ncomet
axonbonus=24,
000-8400=15600

Pr
oject2:Pr
ocessFi
nanci
alt
ransact
ionandPr
epar
eFi
nanci
alr
epor
t

Tot
alt
imef
ort
hepr
oject
:1hr

CaseScenar
ioI

LM Hotelpresentl
oanpr oposaltoAbayBankandt hebankprovi
desthreecreditschemest othe
l
oan.Thef ir
stoption i
st o borrow 230,000 mort
gagesto bepai d wit
h8y earsatequal
i
nstal
lmentatr ateof15%semi annuall
y.The2ndand3r dopti
onsar
et obor r
owBr .450000for
30mont hsatequal inst
all
ment satrateof13%andBirr300,
000forayear@ equal i
nstal
lments
@rate12.50%semi annuall
y,respect
ivel
y.ThebankagreewiththeHotelandt heloandisbursed
 SetbyAbebeM.
addi
ti
onal
ser
vicechar
gesofBi
rr27,
500(
onet
imebor
rowi
ngcostf
ort
het
hreel
oans)

I
nstruct
ion:Basedont
heabov
einf
ormat
ion,
thecandi
dat
eisr
equi
redt
oanswert
hef
oll
owi
ng
questi
ons.

Task1.Cal
cul
atet
hei
nter
estexpenseandot
herchar
gesatt
heendoff
ir
sty
ear
.

Task2.Cal
cul
atet
otal
loanr
epai
datt
heendofsecondy
ear
.

Task3.Demonst
rat
emaj
ordocument
srequi
redt
oopenbankaccountatAbayBankbyt
he
Hotel
.

Task4.Whati
stheadv
ant
ageofcr
edi
tfaci
l
ityt
othesoci
ety
?

Answer

CaseScenar
ioI
Task1.Cal
cul
atet
hei
nter
estexpenseandot
herchar
gesatt
heendoff
ir
sty
ear
.

Fi
rstopt
ion

Gi
ven=Pr
inci
pal
--
-230,
000,
Rat
e--
--
--15%semi
annual
l
yAndTi
me-
--
--
8year
s

Pay
mentt
erm=8*
2=16 andSi
ngl
epay
ment
=230,
000/
16=14375

1sti
nst
all
menti
nter
est=230,
000*15%*1/
2=17,
250

Out
standi
ngbal
ance=230,
000-
14375=215,
625

2nd i
nst
all
menti
nter
est=215,
625*15%*1/
2=16,
172

Out
standi
ngbal
ance=215,
625-
14375=201,
250

Tot
ali
nter
est
=17,
250+16172=33,
422

Secondopt
ion

Gi
ven=Pr
inci
pal
--
-450,
000,
Rat
e--
--
--13%semi
annual
l
yAndTi
me-
--
--
30mont
hs

Pay
mentt
erm=30/
6=5 andSi
ngl
epay
ment
=450,
000/
5=90,
000

1sti
nst
all
menti
nter
est=450,
000*13%*1/
2=29,
250

Out
standi
ngbal
ance=450,
000-
90,
000=360,
000

2nd i
nst
all
menti
nter
est=360,
000*13%*1/
2=23,
400

Out
standi
ngbal
ance=360,
000-
90,
000=270,
000
 SetbyAbebeM.
Tot
ali
nter
est
=29,
250+23,
400=52,
650

Thi
rdopt
ion

Gi
ven=Pr
inci
pal
--
-300,
000,
Rat
e--
--
--12.
5%semi
annual
l
yAndTi
me-
--
--
1year

Pay
mentt
erm=1*
2=2 andSi
ngl
epay
ment
=300,
000/
2=150,
000

1sti
nst
all
menti
nter
est=300,
000*12.
5%*1/
2=18,
750

Out
standi
ngbal
ance=300,
000-
150,
000=150,
000

2nd i
nst
all
menti
nter
est=150,
000*12.
5%*1/
2=9375

Out
standi
ngbal
ance=150,
000-
150,
000=0

Tot
ali
nter
est
=18750+9375=28,
125

Fi
nalAnswer

Fi
nal
ly
,int
erestexpense&ot
herchar
gesatt
heendoft
hef
ir
sty
ear

ForOpt
ion1:33,
422+27,
500=60,
922

ForOpt
ion2:52,
650+27,
500=80,
150

ForOpt
ion3:28,
125+27,
500=55,
625

Task2.Cal
cul
atet
otall
oanr
epai
datt
heendofsecondy
ear
.

Fi
rstopt
ion-
--
--
--
--
--
--
--
--
-4*
14,
375=57,
500

Secondopt
ion-
--
--
--
--
--
--
-4*
90,
000=360,
000

Thi
rdopt
ion-
--
--
--
--
--
--
--
2*150,
000=300,
000

Tot
alLoanPay
ment
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
717,
500

Task3.Demonst
rat
emaj
ordocument
srequi
redt
oopenbankaccountatAbayBankbyt
he
Hotel
.

 TI
N

 Cont
actdet
ail
s

 Nat
ureoft
hei
nst
it
uti
on[
sol
e,shar
e,cor
p.]

 Di
sput
eresol
uti
onof
fi
cer

 Nat
ure&pur
poseofabusi
ness[
ser
vice,
mer
chant
,manuf
act
urer
]
 SetbyAbebeM.
 Pr
inci
pal
placeoft
hei
nst
it
uti
on

 Cer
ti
fi
cat
e&memor
andum ofassoci
ati
on

Task4.Whati
stheadv
ant
ageofcr
edi
tfaci
l
ityt
othesoci
ety
?

 Emer
gencypr
epar
edness

 Conv
eni
ence:

 Fl
exi
bil
i
ty

 Cust
omerr
ewar
ds

CaseScenar
ioI
I

Thepart
nershipofRoman,Sara, andTigi
sti
sli
qui
dat
edonNov ember1,2003.Theincomeand
l
osssharingrati
oofthepart
ner sis:Roman40%,Sar
a35%,andTigi
st25%.Af t
erdiscont
inui
ng
theor
dinarybusinessoper
ati
onsoft hei
rpart
ner
shi
pandclosingt
heaccounts,thef ol
l
owing
summaryofat ri
albal
ancei
spr epared:

R,
SandT

Tr
ial
Bal
ance

Nov
ember1,
2002

Ti
tl
e Dr Cr
Cash 10,
000

Ot
herAsset
s 90,
000

Li
abi
l
iti
es 10,
000

R.Capi
tal 30,
000

S.Capi
ta 30,
000

T.Capi
tal 30,
000

Tot
al 100,
000 100,
000

I
nstruct
ion:Basedont
heabov
einf
ormat
ion,
thecandi
dat
eisr
equi
redt
oanswert
hef
oll
ow
questi
ons.

Task1.AssumethatRoman,Sara,
andTigi
stsel
lall
noncashassetsforBi
rr95,
000;Passthe
j
ournal
Entri
esf
orsalesofasset
s,Gai
n/Lossonreal
izat
ionofasset
s;paymentofpart
nershi
p
 SetbyAbebeM.
Li
abi
l
iti
es,
anddi
str
ibut
ionofcashamongpar
tner
sifany
.

Task2.Assumet hatRoman, Sara,

andTigi
stsel
lall
noncashassetsforBi
rr70,
000;Passthe
j
ournal
Entri
esf orsalesofasset
s,dist
ri
but
ionofgai
n/Lossonreal
izat
ionofasset
s;paymentof
part
ner
shipLiabil
it
ies,anddi
stri
but
ionofcashamongpar t
ner
sifany.

Task3.Assumet hatRoman,Sara,
andTi gi
stsell
allnoncashassetsforBir
r10,
200; Passthe
j
ournalEnt
riesforsalesofasset
s,dist
ri
buti
onofgai n/Lossonreal
izat
ionofassets:paymentof
part
nershi
pLiabil
iti
es,anddi
stri
but
ionofcashamongpar t
ner
sifany.Notethat
,ifther
eisany
defi
ci
thappenedbypar t
ner
s;useanassumpt ionthattheremaini
ngpartner
swillsharetheloss
accordi
ngtotheirincomeandloss-har
ingrati
o.

Answer

CaseScenar
ioI
I

Task1.Jour
nal
Ent
ri
es
Sol
dnoncashassetf
orETB95,
000

1.Real
i
zat
ionofnon-
cashasset

Cash-
--
--
--
--
--
--
--
--
--
--
--
--
--
--
-95000

Noncashasset
--
--
--
--
--
--
--
--
--
--
--
--
--
90000

Gai
nreal
i
zat
ion-
--
--
--
--
--
--
--
--
--
--
--
--
5000

2.Di
str
ibut
ionofgai
ntopar
tner
s

Gai
n=noncash–sol
d 95,
000–90,
000 =5000

Roman-5000x40%=2000

Sar
a-5000x35% =1750

Ti
gist-
5000x25%=1250

Gai
nonr
eal
i
zat
ion-
--
--
--
--
--
--
--
--
--
--
--
-5000

Roman-
capi
tal
---
--
--
--
--
--
--
--
--
--
2000

Sar
a-capi
tal
---
--
--
--
--
--
--
--
--
--
--
1750

Ti
gist-
api
tal
---
--
--
--
--
--
--
--
--
--
--
--
-1250
 SetbyAbebeM.
3.Pay
mentofl
i
abi
l
ity

A/
pay
.--
--
--
--
--
--
10,
000

Cash-
--
--
--
--
--
--
--
--
--
--
--
10,
000

4.Fi
nal
cashpay
ment
s

Roman-
capi
tal
---
--
--
--
--
--
--
--
--
32,
000

Sar
a-capi
tal
---
--
--
--
--
--
--
--
--
--
-31,
750

Ti
gist-
api
tal
--
--
--
--
--
--
--
--
--
--
--
31,
250

Cash-
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
95,
000

Task2.
TaskJour
nalEnt
ri
es

Sol
dnoncashassetf
orETB70,
000

1.Real
i
zat
ionofnon-
cashasset

Cash-
--
--
--
--
--
--
--
--
--
--
--
--
--
--
-70,
000

Lossonr
eal
i
zat
ion-
--
--
--
--
--
--
-20,
000

Noncashasset
--
--
--
--
--
--
--
--
--
--
--
--
--
90,
000

2. Di
str
ibut
ionofl
osst
opar
tner
s

Loss=noncash–sol
d 70,
000–90,
000=20,
000

Roman-20,
000x40%=8000

Sar
a-20,
000x35% =7000

Ti
gist-
20,
000x25%=5000

Roman-
capi
tal
---
--
--
--
--
--
-8000

Sar
a-capi
tal
---
--
--
--
--
--
--
-7,
000

Ti
gist-
api
tal
---
--
--
--
--
--
--
--
-5,
000

Lossonr
eal
i
zat
ion-
--
--
--
--
--
--
--
--
--
-20,
000

3.Pay
mentofl
i
abi
l
ity
 SetbyAbebeM.

A/
pay
.--
--
--
--
--
--
10,
000

Cash-
--
--
--
--
--
--
--
--
--
--
--
10,
000

4.Fi
nal
cashpay
ment
s

Roman-
capi
tal
---
--
--
--
--
--
--
--
--
22,
000

Sar
a-capi
tal
---
--
--
--
--
--
---
--
--
23,
000

Ti
gist-
api
tal
--
--
--
--
--
--
--
--
--
--
--
--
25,
000

Cash-
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
70,
000

Task3.
TaskJour
nalEnt
ri
es

Sol
dnoncashassetf
orETB10,
200

1.Real
i
zat
ionofnon-
cashasset

Cash-
--
--
--
--
--
--
--
--
--
--
--
--
--
--
-10,
200

Lossr
eal
i
zat
ion-
--
--
--
--
--
--
--
--
79,
800

Noncashasset
--
--
--
--
--
--
--
--
--
--
--
--
--
90,
000

2.Di
str
ibut
ionofl
osst
opar
tner
s

Loss=noncash–sol
d 10,
200–90,
000 =79,
800

 Roman-79,
800x40%=31,
920

 Sar
a-79,
800x35% =27,
930

 Ti
gist-
79,
800x25%=19,
950

Roman-
capi
tal
---
--
--
--
--
--
-31,
920

Sar
a-capi
tal
---
--
--
--
--
--
--
-27,
930

Ti
gist-
capi
tal
---
--
--
--
--
--
--
-19,
950

Lossonr
eal
i
zat
ion-
--
--
--
--
--
--
--
--
--
--
--
-79,
800

3.Pay
mentofl
i
abi
l
ity

A/
pay
.--
--
--
--
--
--
10,
000

Cash-
--
--
--
--
--
--
--
--
--
--
--
--
10,
000
 SetbyAbebeM.
4. Pay
mentofcashbySar
aandTi
gistpar
tner
s

Sar
a-capi
tal
(1920*
35%/
60%)
--
--
--
--
-1120

Ti
gist-
capi
tal
(1920*
25%/
60%)
--
--
--
--
-800

Cash-
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
1920

5.Fi
nal
cashpay
ment
s

Sar
a-Capi
tal
---
--
--
--
--
--
--
--
--
950

Ti
gist-Capi
al-
--
--
--
--
--
--
--
--
9250

Cash-
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
10,
200
 SetbyAbebeM.

Pr
oject3:Pr
ocessi
nvent
oryv
aluat
ionsy
stems
Tot
alt
imef
ort
hepr
oject
:20mi
nut
es

Pr
ojecti
nfor
mat
ion

Casescenar
ioI

FIFO and LI FO arethe two mostcommon invent

oryval
uation methods used bypubli
c
compani esitisknownthatsel
ect
ionoft
heFIFOvs.LI
FOaccountingdeci
sionhasanimpacton
i
nv entor
ycostr ecogni
ti
onofacompany ’
scostofgoodssol
d( COGS)andneti ncome(NI)on
di
f f
erentfactors

Changi
ninv
ent
ory I
nventor
yval
uat
ion Impactoncostof I
mpactonofNet
cost
s methods sol
d(COGS) I
ncome

Ri
singi
nvent
orycost
s FI
FO a) a.

Ri
singi
nvent
orycost
s LI
FO b) b.

Decr
easi
ngi
nvent
ory FI
FO c) c.
cost

Decr
easi
ngi
nvent
ory LI
FO d) d.
cost

I
nstruct
ion:basedont
heabov
einf
ormat
ion,
thecandi
dat
eisr
equi
redt
oanswert
hef
oll
owi
ng
questi
ons.

Task1.Fi
l
ltheabov
etabl
efr
om t
heal
ter
nat
ivegi
venbel
owoni
mpactCogsandNI
.

i
. LowerCOGS

i
i
. i
i
.Hi
gherCOGS

i
i
i. i
i
i.LowerNI

i
v. i
v.Hi
gherNI

v
. v
.Nochanges
 SetbyAbebeM.
Answer-CaseScenar
ioI

Task1.

Changi
ninv
ent
orycost
s I
nventor
y I
mpactoncostofsol
d(COGS) I
mpactonofNet
val
uati
on I
ncome
methods

Ri
singi
nvent
orycost
s FI
FO 1.Lowercostofgoodssol
d 1)Hi
gherneti
ncome

Ri
singi
nvent
orycost
s LI
FO 2.Hi
ghercostofgoodssol
d 2)Lowerneti
ncome

Decr
easi
ngi
nvent
orycost FI
FO 3.Hi
ghercostofgoodssol
d 3)Lowerneti
ncome

Decr
easi
ngi
nvent
orycost LI
FO 4.Lowercostofgoodssol
d 4)Hi
gherneti
ncome

CaseScenar
ioI
I
Plat
oCompanyhadonet ieininvent
oryatthebeginningoft hey ear,
anditcostBir
r250.On
Februar
y10,thecompanyboughtanothertiefori
nventory,andi tcostBi
rr400.OnMar ch10,
thecompanyboughtanothert
ieforBir
r500; onApril
3,itpur chasedanotherforBi
rr600;andon
May12, i
tboughtanot
herforBir
r750.InJune, Pl
atosoldthreet ies.

I
nstruct
ion:Basedont
heabov
einf
ormat
ion,
thecandi
dat
eisr
equi
redt
oanswert
hef
oll
owi
ng
questi
ons.

Task1:I
fthecompanyusestheLI
FOmet
hodofr
ecor
dingcostofgoodssol
dexpense,
how
muchiscostofgoodssol
d?

Task2:
Ift
hecompanyusest heaver
agecostmet
hodofr
ecor
dingcostofgoodssol
dexpense,
howmuchiscostofgoodssold?

Answer

CaseScenar
ioI
I

Task1.LI
FO-
Per
iodi
c

 Costofgoodssol
d

o 750*
1=750

o 600*
1=600

o 500*
1=500

o Tot
al3uni
t=1850
 SetbyAbebeM.
Tor
ecor
dcostofgoodssol
d

Costofgoodssol
d--
--
--
--
--
--
1850

I
nventor
y-t
ies--
--
--
---
--
--
--
---
--
1850
Task1.Av
eragecost=Totalcost/Totalunit
s=2500/
5=500
 Costofgoodssold=3*500=1500

Tor
ecor
dcostofgoodssol
d

Costofgoodssol
d--
--
--
--
--
--
1500

I
nvent
ory
-ti
es-
--
--
--
--
--
--
--
--
--
-1500

Pr
oject4.Pr
ocessCostandManagementAccount
ingI
nfor
mat
ionSy
stem

Tot
alt
imef
ort
hepr
oject
:35mi
nut
es

CaseScenar
ioI

GGManuf
act
uri
ngCompanyhast
hef
oll
owi
ngbal
ancesasoft
hey
earendedDecember31,
2023.

Di
rectMat
eri
ali
nvent
ory
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
.Bi
rr30,
000Debi
t

Wor
kinpr
ocessi
nvent
ory
…..
………………………………………………Bi
rr69,
000Debi
t

Fi
nishedGoodsi
nvent
ory
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
.Bi
rr99,
000Debi
t

Underappl
i
edFact
oryDepar
tmentOv
erhead.………….
.…….
..
Bir
r8,
000Debi
t

CostofGoodsSol
d………………………………………………………….
…..
Bir
r149,
000Debi
t

Addi
ti
onali
nfor
mat
ion:

Costofdi
rectmat
eri
alsPur
chaseddur
ing2023.
..
..
..
..
..
..
..
..
..
..
..
..
.Bi
rr82,
000

Costofdi
rectmat
eri
alsr
equi
sit
ionedi
n2023.
..
..
..
..
..
..
..
..
..
..
..
..
..
..
Bir
r74,
000

CostofGoodscompl
eteddur
ing2023………………………………………Bi
rr204,
000

Fact
oryOv
erheadappl
i
ed(
120%ofdi
rectl
abor
).
..
..
..
..
..
..
..
..
..
..
..
.Bi
rr96,
000

Requi
red:Thecandi
dat
eisexpect
edt
oper
for
mthef
oll
owi
ngt
asks:

Task1:
Comput
ebegi
nni
ngdi
rectmat
eri
alsi
nvent
ory

Task2:
Comput
ebegi
nni
ngwor
kinpr
ocessi
nvent
ory

Task3:
Comput
ebegi
nni
ngFi
nishedGoodsi
nvent
ory
 SetbyAbebeM.
Task4:
Comput
eact
ual
fact
oryov
erheadi
ncur
red.

Answer

CaseScenar
ioI

Task1:Comput
ebegi
nni
ngdi
rectmat
eri
alsi
nvent
ory
.

DMU=Begi
nni
ngr
awmat
eri
al+Mat
eri
alpur
chase-Endi
ngr
awmat
eri
al

74,
000=Begi
nni
ngr
awmat
eri
al+82,
000-30,
000

Begi
nni
ngr
awmat
eri
al=74,
000-(
82,
000-30,
000)

=74,
000-52,
000

=22,
000
Task2:Comput
ebegi
nni
ngwor
kinpr
ocessi
nvent
ory
.

Costofgoodscompl
ete=BWI
P+DMU +DL+FOH-EWI
P

204,
000=BWI
P+74,
000+80,
000+96,
000-69,
000

204,
000=BWI
P+181,
000

BWI
P=204,
000-181,
000

=23,
000

Task3:Comput
ebegi
nni
ngf
ini
shedgoodsi
nvent
ory
.

Usi
ngt
hecostofgoodssol
d(COGS)f
ormul
a:

CGS=BFG+ CGM -EFG

149,
000=BFG+204,
000-99,
000

Begi
nni
ngf
ini
shedgoods=149,
000-105,
000

Begi
nni
ngf
i shedgoods=44,
ni 000

Task4:Comput
eact
ualf
act
oryov
erheadi
ncur
red.

Theact
ual
fact
oryov
erheadi
ncur
redcanbecal
cul
atedas:

Act
ual
over
head=Appl
i
edov
erhead+Underappl
i
ed
 SetbyAbebeM.
Act
ual
over
head=96,
000+8000

Act
ual
ov head=104,
er 000

CaseScenar
ioI
I
GLADcompanyhast
hef
oll
owi
ngi
nfor
mat
iondur
ing2024.

Mont
hBudget
edsal
es

Mar
ch……………………………Bi
rr50000

Apr
il
……………………………….53,
000

May……………………………….
.51,
000

June……………………………….
.54,
500

Jul
y……………………………….
.52,
500

I
naddi
ti
on,
thegr
osspr
ofi
trat
eis40%andt
hedesi
redi
nvent
oryl
evel
is30%ofnextmont
h's

Costofsal
es.

I
nstruct
ion:Basedont
heabov
einf
ormat
ion,
thecandi
dat
eisr
equi
redt
oanswert
hef
oll
owi
ng
questi
ons.

Task1.Pr
epar
eapur
chasebudgetf
orApr
ilt
hroughJune.

Answerf
orCaseScenar
ioI
I

GLADCompany

Pur
chasebuget

Apr
ilt
hroughJune.
I
tem Apr
il May June Tot
al

Costofsal
es 31,
800 30,
600 32,
700 95,
100

Add:
Endi
ngi
nvent
ory 9180 9810 9450 28,
440

Tot
alneeded 40,
980 40,
410 42,
150 123,
540

Less:
Begi
nni
ngi
nvent
ory 9540 9180 9810 28530

Requi
redpur
chase 31,
440 31,
230 32,
240 95,
010
 SetbyAbebeM.

CaseScenar
ioI
II
Kaizenbudget
ingisabudgeti
ngprocesst hatexpli
cit
lyincorpor
atesconti
nuousimprov
ement
duringt
hebudgetperi
od.Accordi
ngly,Bi
rukCor porat
ionisusingtheKaizenapproacht
o
budgeti
ngfor2024.Thebudgetedincomest atementf orJanuary2024isasfol
lows;

Sal
es(
240,
000uni
ts)………………………………………………….
.Bi
rr720,
000

Less;
costofgoodssol
d-……………………………………………….
..
480,
000

Gr
ossmar
gin-……………………………………………………….
..
..
240,
000

Oper
ati
ngexpenses(
incl
udesBr
.64,
000off
ixedcost
s)…………………192,
000

NetI
ncome-
………………………………………………………………48,
000

UndertheKai
zenappr
oach,
costofgoodssol
dandv
ari
abl
eoper
ati
ngexpensesar
ebudget
edt
o
decl
ineby1%permonth.

I
nstruct
ion:Basedont
heabov
einf
ormat
ion,
thecandi
dat
eisr
equi
redt
oanswert
hef
oll
owi
ng
questi
ons.

Task1.Pr
epar
eaKai
zen-
basedbudget
edI
ncomest
atementf
orMar
ch2024.

Answerf
orCaseScenar
ioI
II
Bi
rukCor
por
ati
on

i
ncomest
atementbuget

Mar
ch2024.

Sal
es(
240,
000uni
ts)………………………………………………….
.Bi
rr720,
000

Less;
costofgoodssol
d-……………………………………………….
..
470,
448

Gr
ossmar
gin-……………………………………………………….
..
..
249,
552

Oper
ati
ngexpenses(
incl
udesBr
.64,
000off
ixedcost
s)…………………189,
453

NetI
ncome-
………………………………………………………………60,
100

Pr
oject5:Demonst
rat
eEt
hiopi
anFi
nanci
alsy
stem andmar
ket
s

Tot
alt
imef
ort
hepr
oject
:25mi
nut
es

Pr
ojectI
nfor
mat
ion
 SetbyAbebeM.
Fi
nanci al
Mar ketisamar ketwher ethesal eandt hepur chaseoffinanci
alproductsoccur .Such
productsincl
udest ocks,
bonds, currencies,der i
vat
ives,commodi ti
es,Crypt
ocur r
encies,etc.It
actsasapl at
f ormforsell
ersandbuy erstoconnectanddeal i
ntheirdesi
redfinanci
al assetsat
apr icedeter
mi nedbyamar ketforces.Accor dingl
y,thereareagreatmanydi ffer
entfinancial
mar ketsi
nadev el
opedeconomyanddev elopingeconomyl i
keEthiopi
a.

I
nstr
ucti
on:Basedont
heconceptoff
inanci
almar
ket
,thecandi
dat
erequest
stoper
for
mthe
f
oll
owingtasks:

Task1:Bysequenceoft
ransacti
onsforsel
li
ngandbuy i
ngsecuri
ti
es,f
inanci
almar
ket
scoul
d
beclassi
fiedint
otwoasprimarymarketandsecondarymarket
.Bri
efl
yexplai
nthe
char
acter
isti
csofpri
marymar ketandsecondar
ymar ket
.

Task2:Byter
m ofci
rcul
ati
onoff
inancialasset
str
adedi
nthemarketfi
nanci
almar
ket
scoul
d
beclassi
fi
edint
otwoasmoneymar ketandcapit
almar
ket
.Di
sti
nguishamongmoneymarket
andcapit
almarket.

Task3:Demonst
rat
einst
rument
str
adedonshor
tter
m moneymar
ket

Task4:Demonst
rat
einst
rument
str
adedoncapi
tal
mar
ket
.

Pr
ojectf
ive

Answer

Task1.

 Char
act
eri
sti
csofpr
imar
ymar
ket

o secur
it
iesoni
tar
epur
chaseddi
rect
lyf
rom ani
ssuer

o Publ
i
cIssue,

o Ri
ght
sIssue,

o Pr
ivat
ePl
acement
,and

o Pr
efer
ent
ial
All
otment

 Char
act
eri
sti
csofSecondar
ymar
ket
:

o I
tisamar
ketf
orpur
chaseandsal
eofexi
sti
ngsecur
it
ies.

o Bot
hbuy
ingandsel
l
ingofsecur
it
iescant
akepl
ace.

o I
tisl
ocat
edatspeci
fi
edpl
aces.

o Thepriceofsecur
it
iesar
edet
ermi
nedbyt
hedemandandsuppl
yoft
he
secur
it
ies.
 SetbyAbebeM.
Task2.Di
sti
ngui
shamongmoneymar
ketandcapi
talmar
ket
.

 Amoneymar keti
sashort-
termlendi
ngsy
stem t
hatal
l
owsbusi
nessest
orai
sewor
king
capi
tal
forday-
to-
dayoper
ations.

 Acapit
almarketi
sgearedtowardsl
ong-t
erminv
estment,wherecompani
esi
ssue
st
ocksandbondstor
aisecapit
alandexpandt
heirbusi
nesses.

Task3.i
nst
rument
str
adedonshor
tter
m moneymar
ket

 Tr
easur
ybi
l
ls,

 cer
ti
fi
cat
esofdeposi
t,

 commer
cial
paper
,

 f
eder
alf
unds,

 bi
l
lsofexchange,

 shor
t-
ter
m mor
tgage-
backedsecur
it
ies

 andasset
-backedsecur
it
ies.

Task4:Demonst
rat
einst
rument
str
adedoncapi
tal
mar
ket
.

 st
ocks,

 bonds,
and

 der
ivat
ives.

Pr
oject6:Oper
ateaComput
eri
zedAccount
ingI
nfor
mat
ionSy
stem

Tot
alt
imef
ort
hepr
oject
:1hr

Pr
ojectI
nfor
mat
ion

Acompany '
saccountingsy stem ist
hecor eofi t
sf i
nancialmanagement ,asitprocessesal l
transactionswi t
hintheor gani
zati
on.Acomput er i
zedaccount i
ngsystem issof t
wareapplicati
on
thataut omat esfi
nancialrecordsandreporti
ngpr ocessestomaket hem f aster,
imoreaccur ate,
andeasi ertomanage.I treducesthemanual entryofdata,eli
minat
esr edundantoper ati
ons,and
reducesaccount i
ngerrorr i
skwithbui
lt-
incontrols.Anaccountingsystem isasetofpr ocedures
and r ecor d-
keepi
ng sy stems formanagi ng t he fi
nancialand oper ati
onalact i
vi
t i
es ofan
organizat i
on.Basical
ly
, it
'samet hodfortr
ackingandmanagi ngthebusi ness'sfi
nances.Oneof
thesof twar eappli
cati
onst hatautomatefinancialrecordisPEACHTREE/ SAGE/ACCOUNTI NG
software.

I
nst
ruct
ion:Basedont
hePEACHTREESOFTWAREAPPLI
CATI
ON,
thecandi
dat
eisr
equi
redt
o
 SetbyAbebeM.
per
for
mthef
oll
owi
ngt
asks.

Task1:
Creat
eaCompanyusi
ngt
hef
oll
owi
ngi
nfor
mat
ion:

 CompanyName:
UseYourNameandFat
herName

 Busi
nessTy
pe:
Sol
ePr
opr
iet
orshi
p

 Char
tofAccount
:Bui
l
dyourownchar
tofAccount

 Account
ingMet
hod:
Accr
ual

 Post
ing:
Real
time

 Account
ingPer
iod:
12mont
haccount
ingper
iod(
thatmat
chest
hecal
endarmont
h)

 Fi
scal
yearst
art
sonJanuar
y2023

Task2:
Creat
ethef
oll
owi
ngchar
tofaccount
s:

AccountNumber Descr
ipt
ion AccountTy
pe

1000 CashatBank Cash

1100 Account
sRecei
vabl
e Account
sRecei
vabl
e

1200 Pr
epai
dRent Ot
hercur
rentAsset
s

1300 I
nvent
ory I
nvent
ory

1400 Of
fi
ceFur
nit
ure Fi
xedAsset

1400-
01 Accumulat
edDepr
eci
ati
on- Accumul
atedDepr
eci
ati
on
Furni
tur
e

2100 Account
sPay
abl
e Account
sPay
abl
e

3100 Owner
sCapi
tal Equi
tyDoesn'
tcl
ose