Project One: Payroll

TEC IT Company
Payroll Register
April 30, 2013

S.N Name of Earnings Gross Deductions Total Net Pay Sign

Employee Basic OT Earning Income Pension Deductions
Salary Earnings s Tax Contr.
1 Tirusew 7,800 - 7,800 2,067.50 468 2,535.58 5,264.42
2 Nigatu 5,421 2,379 7,800 2,067.50 325.26 2,419.76 5,380.24
3 Geletaw 4,520 - 4,520 943.50 271.20 1,214.66 3,305.34
4 Yemariam 2,590 - 2,590 412.50 155.40 567.90 2,022.10
5 Nitsuh 1,036 - 1,036 107.90 62.16 170.06 865.94
Total 21,367 2,379 23,746 5,598.90 1,282.02 6,907.96 16,838.04

Journal Entries
1. To record the payments of salary expense for the month:
Salary Expense ……………23,746
Income Tax Payable…………………..5,598.90
Pension Contribution Payable……….1, 282.02
Cash…………………………………….16,865.08

2. To record the Payroll Tax (Employer’s Pension) Expense:

Payroll Tax Expense………….1,923.03
Pension Contribution Payable…………..1,923.03
(21,367 x 9% = 1,923.03)

3. To record the payment of payroll tax and withholding tax to the Inland Revenue
Authority:
Income Tax Payable…………….………5,598.90
Pension Contribution Payable…….……3,205.05
Cash………………………………………….8,803.95

Project Two: Accounting Cycle

Adjusting Entries

a. Fees Receivable…………….7,750
Fees Earned……………………..7,750
b. Supplies Expense……………485
Supplies………………………….…485

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 c. Insurance Expense…………2,100
Prepaid Insurance………………....2,100
d. Advertising Expense……….750
Prepaid Advertising………….……750
e. Salary Expense…………….1,140
Salary Payable……………..…1,140
f. Income Summary…………..700
Unearned Rent…………….……..700
Closing Entries
1. Fees Earned……………70,000
Rent Income……….…..9,100
Income Summary…………..79,100
2. Income Summary…….56,515
Salary Expense……………….42,840
Advertising Expense…………11,090
Insurance Expense…………..2,100
Supplies Expense…………….485
3. Income Summary….….22,585
Capital…………………………22,585
Income Summary Capital
22,585-700=21,885 A=L+C9815=1840-1840
Capital= 9815-1840=7975
21, 885+7975=29,860

Yedil Kebir Company

Adjusted Trial Balance
June 30, 2012
Account Title Dr Cr
Cash……………………………………..21,885
Fees Receivable…………………………7,750
Supplies………………………………….190
Prepaid Insurance………………………..1,625
Prepaid Advertising………………………250
Salary Payable…………………………………………………………….1,140
Unearned Rent……………………………………………………………...700
Capital………………………………………………………………………7,975
Income Summary……………………….700
Rent Income……………………………………………………………….9,100
Fees Earned………………………………………………………………70,000
Salary Expense………………………….42,840
Advertising Expense……………………..11,090
Insurance Expense………………………..2,100
Supplies Expense………………………….485
88,915 88,915

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 Yedil Kebir Company
Profit and Loss Statement
For the month ended June 30, 2012
Revenues
Fees Earned…………………………………………..70,000
Rent Income………………………………………….9,100
Total Revenues…………………………………………………………….79,100
Expenses
Salary Expense……………………………………...42,840
Advertising Expense………………………………..11,090
Insurance Expense………………………………….2,100
Supplies Expense……………………….………..…..485
Total Expenses……………………………………………………..…….56,515
Net Income………………………………………………………….…..22,585

Yedil Kebir Company

Balance Sheet
June 30, 2012
Assets Liabilities
Cash………………………..21,885 Salary Payable……………..1,140
Fees Earned…………….….7,750 Unearned Rent……………..700
Supplies……………….……190 Total Liabilities……………..1,840
Prepaid Insurance…………1,625 Shareholders’ Equity
Prepaid Insurance…………250 Capital……………………..29,860
Total Assets………………..31,700 Total Liabilities & SHE……..31,700

Project Three: Bank Reconciliation

Pointer PLC
Bank Reconciliation
April 30, 2012
Balance Per Bank Statement………………………………………………………10,367.76
Add: Deposit in transit……………………………………………………………..510.06
Subtotal……………………………………………………………………………..10,877.82
Deduct: Checks Outstanding……………………………………………………….1,479.80
Adjusted Balance………………………………………………………………..….9,398.02
Balance Per Depositor’s Records……………………………………………..…….7,091.32
Add: Notes Plus Interest…………………………………………2,625
Depositor Error……………………………………………18 2,643
Subtotal……………………………………………………………………………..9,734.32
Deduct: Bank Service Charge………………………………..24.50
NSF………………………………………………….…311.80 336.30
Adjusted Balance…………………………………………………………………….9,398.02

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Journal Entries
1. Cash in Bank……………………2,643
Notes receivables……………………..………2,500
Interest Income………………………………….125
Accounts Payable……………………………….18

2. Miscellaneous Expense……………..24.50
NSF…………………………………311.80
Cash in Bank…………………………..336.30

Project Four: Cost Accounting

1. Prepare Sales Budget for Current Quarter

Sales Budget = Selling Price x Units Sold

Units Sold (A) = 20,000 units
Units Sold (B) = 4,950 units

S.N Types of Product Selling Sold Units Sold Total Revenues

1 Product A 50 20,000 100,000
2 Product B 70 4,950 346,500
Total 120 24,950 1,346,500

2. Prepare Production Budget

Production Budget = Budget Sales + Target Ending FGI – Beginning FGI

Budgeted units Sales (A+B)……………………………………24,950, (20,000 + 4,950)

Add: Ending Finished Goods Inventory (FGI)…………………30,000 (20,000 + 10,000)

Total Required Units………………………………….………. 54,950

Less: Beginning Finished Goods Inventory (FGI)…………....30,000 (21,000 + 9,000)

Units of Finished Goods to be Produced……………………….24,950

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 3. Prepare Raw Material Purchase Budget

Purchase of DM = DM used in Prodn + End. Inventory of DM – Beg. Inventory of DM

Activity Materials Total

Sand Steel Chemical

Physical Units Budget to be used in

Production………………………….. 12,475 24,950 124,750
Add: Target Ending Inventory………. 30,000 30,000 30,000

Total Requirements…………………. 42,475 54,950 154,750

Less: Beginning Inventory…………. 30,000 30,000 30,000

Purchase to be made……………… 12,475 24,950 124,750 162,175

Project Five

1. Record the necessary journal entry for the above transactions.

I. Raw Material Purchases
Sand……………..….500
Steel…………..…….790
Chemicals…….…...4,500
Accounts Payable………………5,790

II. (A) Material issued (used) to work in process

Job#1 Work in Process………..227.50
Direct Material Inventory………..227.50
Job #2 Work in Process………780
Direct Material Inventory…….780
Job#3 Work in Process………3,900
Direct Material Inventory……3,900

(B) Accrued Payroll (for Labor Cost)

Job#1 Work in Process………..160
Accrued Payroll……………..160
Job #2 Work in Process………210
Accrued Payroll …………….210
Job#3 Work in Process………175
Accrued Payroll ……………175

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III. Factory Overhead Applied (80% of Direct Labor Cost)
Job#1 Work in Process………..128
Factory Overhead……………..128
Job #2 Work in Process………168
Factory Overhead …………….168
Job#3 Work in Process………140
Factory Overhead ………..…140
IV. Cash…………………7,800
Sales……………..7,800
2. Calculate the cost of each job
Total cost of each job = Material cost + Direct Labor cost + Factory Overhead
Job#1 = 227.5 + 160 + 128 = 515.50
Job#2 = 780 + 210 + 168 = 1,158
Job#3 = 3,900 + 175 + 140 = 4,215
Total Cost of All Jobs = 515.50 + 1,158 + 4,215 = 5,888.50
3. Calculate the total amount of gross profit
GP = Net Sales – CGS
= 7,800 – 5,888.50
= 1,911.50

Project Six
1. Record the following transactions to the journal entries.
March 15: Cash…………………………287,500
VAT Payable…………………………..37,500
Sales…………………………………...250,000
March 16: Entertainment Expense………………5,000
Cash……………………………………….5,000
March 19: Purchase……………………49,000
VAT Receivable…………….7,350
Cash………………………………..56,350
March 25: Salary Expense….……………60,000
Cash………………………………….60,000
March 26: Accounts Receivable……………92,000
VAT Payable…………………………..12,000
Sales…………………………………...80,000
March 27: Utilities Expense………………25,000
Cash……………………………………….25,000
March 16: Supplies Expense………………20,000
Cash……………………………………….20,000

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March 16: Doubtful Accounts Expense………………8,000
AFDA……………………………………….8,000

MARU Merchandising Company

Trial Balance
March 31, 2013
Account Title Dr Cr
Cash ………………………………………….121,150
Account Receivable……………………..……92,000
VAT Receivable……………………………….7,350
AFDA…………………………………………………………………………………8,000
VAT Payable…………………………………………………………………………49,500
Sales………………………..………………………………………………………..49,000
Purchase……………………………..……..49,000
Entertainment Expense…………………….5,000
Salary Expense……………………………..60,000
Utility Expense…………………………….25,000
Supplies Expense…………………..………20,000
Doubtful Accounts Expense………………..8,000
Total………………………………….…….387,500 387,500

2. Calculate the VAT Receivable of VAT Payable

Output VAT (Sales) = 330,000 x 15% = 49,500
Input VAT (Purchase) = 49,000 x 15% = 7,350

VAT Payable = Out VAT – Input VAT

= 49,500 – 7,350
= 42,150

3. Prepare Income Statement for the tax purpose

MARU Merchandising Company

Income Statement
For the month ended March 31, 2013
Sales…………………………………………………………….330,000
Less: CGS………………………………………………………49,000
Gross Profit……………………………………………………281,000
Expenses
Salary Expense……………………………..60,000
Utility Expense…………………………….25,000
Supplies Expense…………………..………20,000

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 Total Expenses………………..……………………………….105,000
Income before tax……………………………………………..176,000
Income Tax (30%)…………………………………………….52,800
Net Income…………………………………………………….123,200

Project Seven
1. Periodic FIFO
Oct 1 Inventory…………15@30………..450
Oct 10 Purchase………….10@32………..320
Oct 30 Purchase………….10@33………..330
35 1,100

Units Remained on Hand = UAFS – Units Sold

= 35 – 20 = 15 units

Recent Costs, Oct 30…………..10@33…………330

Next Recent Costs, Oct 10……..5@32…………160
15 490
Sales
5@35.........................175
12@39......................468
3@40.......................120
20 763

Cost of Goods Sold

CGS = Beginning Inventory + Net Purchases – Ending Inventory
= 450 + 650 – 490 = 610
Gross Profit
GP = Net Sales – CGS
= 763 – 610 = 153
2. Perpetual LIFO
Date Purchases CGS Inventory
Qty UC TC Qty UC TC Qty UC TC
Oct 1 15 30 450
4 5 30 150 10 30 300
10 10 32 320 10 30 300
10 32 320
17 10 32 320 8 30 240
2 30 60
22 3 30 90 5 30 150
30 10 33 330 5 30 150
10 33 330

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 Cost of Goods Sold
CGS = 150 + 320 + 60 + 90 = 620
Gross Profit
GP = Net Sales – CGS
= 763 – 620 = 143

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