Project one 1

Task 1.2 prepare necessary journal entries

s.no Name of employee Basic salary in Desert allowance
birr
1 Ato reta 3,000 300
2 Ato abdi 2,300 230
3 w/ro tafesech 2,400 240
4 w/ro netsanet 5,800 580

Additional information

 All employee have 5%of their basic salary for credit association saving
 Pension contribution by the employee and employer is 7% and 11% respectively
 All employee are permanent and 40 hrs per week
1. Prepare payroll table which shows the basic salary gross deduction and net pay for the month
march 2015
2. Make the necessary transaction that are related to payroll
3. Pass the require entries when you pay the withholding

ABC Company
 Unadjusted trial balance

For the month ended on Dec 31.2013

Account title Debit Credit

Cash 40,00
Account receivable 16,00
Office equipment 60,000
Accumulated depreciation equipment 5,500
Office supplies 12,500
Prepaid insurance 8,500
Account payable 32,500
Deferral liability 26,000
Sales 30,000
ABC-capital 43,000
137,000 137,000
Additional information

 At the end of Dec 31.2018 the amount of insurance remaining Is birr 5,500
 During the year the office supplies used is amounted to be birr 5,000
 5 year estimated life and straight line is used there is no salvage value

Required

1. Make any adjusting entry for the month of Dec 31/2018

2. Post the entries on to T-account
3. Prepare adjusted trial balance
4. Prepare financial statement income statement owners equity and balance sheet assume
business profit tax is30%
5. Prepare closing entry
6. Prepare post closing trial balance for the year ended Dec31.2018

Project 4

Partner W, X, Y, and Z have conducted business together for a number of year they divide all profit
and loss in the ratio 5:2:2:1 on October 31 year 15 they decide to wind up the partnership by
collecting their receivable and selling the entire remaining asset of the business. A summarized
balance sheet of the partnership on this date is below

WXYZ partnership

Balance sheet

October 31 year

Account title debit credit

cash 5,000
Non cash 60,000
liability 10,000
W-capital 16,000
X-capital 18,500
Y-capital 13,000
Z-capital 7,500
 Total 65,000 65,000

The month of November the miscellaneous assets realize 48,000 in cash the resulting of loss is
allocated to the partners the liability are paid in full and the remaining of in cash is distributed to
the partner

Required

1. Prepare liquidation statement

2. Pass the necessary adjusting entries

POSSIBLE SOLUTION
ABC Company
Bank reconciliation
As of January 31, 2018
Balance per bank statement ……………………………………..14, 200.5
Add deposit in transit ……………………………6,800
Error made by bank …………………………..679.5
Less outstanding check …………………………... (6,200)
Adjustment balance …………………………………………………15,480
Balance per book statement ……………………………………….15,600
Add note collected by bank ………………………………180
Less service charge…………………………………………(300)
Adjusting balance ……………………………………………………15,480

Task 1.2 to record note collecting by bank

Cash ………………….180

N/R…………………………..180

To record bank service charge

Misc expense………….300

Cash…………………………………300

Possible solution
Task 3.1
a. Insurance expense …………………3,000
Prepaid insurance ………………….3,000
b. Supplies expense …………………..5,000
Supplies …………………………………..5,000
c. Depreciation expense ……………………12,000
 Accumulated dep……………………………….12,000
Task 3.2

Task 3.3
ABC Company
Adjusted trial balance
December 31, 2016
Account title Debit Credit
Cash 40,000
Prepaid insurance 5,500
Account receivable 16,000
Supplies 7,500
Office equipment 60,000
Accoumulated dep 17,500
Account payable 32,500
Differed liability 26,000
ABC capital 43,000
Sales 30,000
Insurance expense 3,000
Supply expense 5,000
Deprecation exp 12,000
Total 149,000 149,000
Task 3.4
ABC Company
Income statement
For the year ended dec 31,2016
Sales ……………………………………………………………………………..30,000
Insurance exp ………………………………………..3,000
Depreciation exp……………………………………5,000
Supply exp ……………………………………………12,000
Total expense ………………………………………………………………. (20,000)
Net income before tax …………………………………………………...10,000
Tax expense …………………………………………………………………….(3,000)
Net profit ………………………………………………………………………….7,000

ABC Company
Statement of owners equity
For the year ended dec 31,2016
Beginning capital …………………………………………………………………..43,000
Add: net income ……………………………………………………………………..7,000
Ending capital ………………………………………………………………………….50,000
ABC Company
Balance sheet
As of Dec 31, 2016
Asset liability
Cash……………………..40,000 account payable …………..32500
Account rec……………16,000 differed liability ……………26000
Supplies ………………….7500 tax payable ……………………3000
Insurance ………………..5500 total liability ………………….61,500
Office equip…………….60,000 capital
Less accum. Dep………(17,500) capital ……………………………50,000
Total asset ……………..111,500 total lia+cap……………………….111,500
Task 3.5 closing entries

Sales ………………………….30,000

Income summery …………….30,000

Income summery …………….30,000

Insurance expense ………………………………..3000

Supply expense ……………………………………5000

Depreciation expense …………………………..12000

Task 3.6 post closing trial balance

ABC Company
Adjusted trial balance
December 31, 2016
Account title Debit Credit
Cash 40,000
Prepaid insurance 5,500
Account receivable 16,000
Supplies 7,500
Office equipment 60,000
Accoumulated dep 17,500
Account payable 32,500
Differed liability 26,000
Tax liability 3000
ABC capital 50,000
Total 129,000 129,000
WXYZ Company

Liquidation statement

As of OCT

Task 4.1

ITEM ASSET LIABLITY CAPITAL

Cash None W-capital X-capital Y-capital z-capital
cash
Balance before sales 5000 60000 10000 16000 18500 13000 7500
Sales of non cash asset 48000 (60000) _ (6000) (2,400) (2,400) (1,200)
Balance after sales 53000 0 10,000 16,100 10,600 6,300
 Payment of liability 10000 0 10000 _ _ _ _
Balance after pyt of liability 43000 0 0 10,000 16,100 10,600 6,300
Cash distribution (43000) 0 0 (10,000) (16,100) (10,600) (6,300)
Final balance 0 0 0 0 0 0 0
Task 4.2 journal entries

Cash ………………………………….48,000

Loss realization …………………12,000

None cash ……………………….60,000

W-capital ……………………………..6,000

X-capital ………………………………2,400

Y-capital ……………………………….2,400

Z-capital ………………………………1,200

Loss……………………………………..12,000

Liability ………………………………..10,000

Cash…………………………………..10,000

W-capital ……………………………..10,000

X-capital ………………………………16,100

Y-capital ……………………………….10,600

Z-capital ………………………………6,300

Cash…………………………………………..43,000