EXAM 1
PROJECT ONE
Brothers PLC has opened and maintained a current account in NIB international Bank S.C. The plc has
borrowed a loan amount of br. 200,000 paid in lump sum after one year at interest rate of 12% per annum.
Task 1.1. Calculate total amount of cash collected by NIB international bank from brother plc after one
year.
Task 1.2. Brother plc wants to change its business and decides to close the account. As a bank clerk what
do you perform to close the customer account?
Task 1.3. Write the intermediary role of banks.
Task 1.4. What is the advantage of credit for the firm extended by bank like for Brothers PLC.
ANSWERS
Task 1.1. Principal Amount ---------------------200,000
I = PRT = 200,000 X 12% X 1 = 24,000
Total cash collected -----------------224,000
Task 1.2. To close the account I will perform the following.
1) Gathering information required to cloth account such as:-
✔ Reasons for clothing account
✔ Checking black list
✔ Checking any wrong debt or credit entries
2) Effecting payments.
3) Make the account zero balance.
Task 1.3. Intermediary role of banks include:- Task 1.4. Advantages of credit include:-
1. To purchase items immediately
1. Money transfer 2. Allow installment payments
2. Accepting deposits 3. No need to carry cash in bulk amount
3. Providing credit facility 4. Allow circulation of money with in
4. Pay payroll for organization economy
5. Provide foreign currency exchange
service
PROJECT TWO
Unit competency covered
1. Develop understanding of Ethiopian taxation
Given:-
Dawit, the owner of Dawit general trading, engaged in sales of spare parts of Bajaj vehicle
with two employees. The business is not eligible to register for VAT; therefore, it is eligible
to register to pay turnover tax. During the month, the business has sold spare parts for Br.
35,000.00. The following data related to his employees earnings for the month.
Name of Employee Basic salary Overtime earnings Taxable allowance
Bethlehem Abebe 1,000.00 200.00 50.00
Yodit Ayele 500.00 100.00 40.00
Required:- Perform the following tasks:
Task 2.1. Calculate direct tax liability of the business for the month.
Task 2.2. Calculate indirect tax liability of the business 6th for the month.
ANSWERS
=TOT = I (indirect tax) = 65 + 4 = 69
= EIT = D (direct tax) Calculate EIT
Task 2.1. Direct tax liability Bethlehem
= employment income tax EIT = 1,250 x 10% - 60 = 65
1
Yodit
EIT = 640 x 10% - 60 = 4
Task 2.2. Indirect income tax liability
= TOT
= Sales x Rate
= 35,000 x 2%
= 700
PROJECT THREE
Unit of competency covered
1. Develop and use personal budget
2. Develop and use saving plan
3. Develop business practice
Given the following for Tamerat H/Mariam for the month of October 2014: perform the
following tasks.
Description Estimated and Actualincome and
expenditure
expenditure
Food 2000.00 2100.00
Clothing 950.00 700.00
Net salary 4400.00 4400.00
House rent 1000.00 1000.00
Net par time 1500.00 1200.00
School fee 650.00 650.00
Utility expense 50.00 50.00
Task 1.1 prepare personal budget for month of October, 2014
Task 1.2 prepare budget performance report for the month October, 2014
Task 1.3 calculate estimated and actual percentage of saving. What are the advantage of saving
as general?
Task 1.4 by his annual saving. Tamrat H/Mariam proposing to start new business. If he selects
you as business advisor, how do you advice and conduct feasibility study for the business?
ANSEWRS
Task 1.1
Ato Tamrat H/Mariam
Personal budget
For the month of October, 2014
Description Amount
● Income
Net salary 4400.00
Net par time 1500.00
Total income 5900.00
2
● Expense
Food 2000.00
Clothing 950.00
House rent 1000.00
School fee 650.00
Utility expense 50.00
Total expense 4650.00
Saving 1250.00
Task 1.2
Ato Tamrat H/Mariam
Budget performance report
October 2014
Description Budget amount Actual amount variance
● Income
Net salary 4400.00 4400.00 0
Net par time 1500.00 1200.00 -300
Total income 5900.00 5600.00
● Expense
Food 2000.00 2100.00 -100
Cloth 950.00 700.00 +250
House rent 1000.00 1000.00 0
School fee 650.00 650.00 0
Utility expense 50.00 50.00 0
Total expense 4650.00 4500.00
Saving 1250.00 1100.00
Budget deficit --------------------- ------------------ -150
-
● Budget deficit = -300 – -100 = -400 + 250 = -150
Actual saving = 1250 – 150 = 1100
Task 1.3
Estimated saving% = 1250x 100 = 21.19%
5900
Actual saving% = 1100 x 100 = 19.64
5600
3
Advantages of saving includes:-
1. Accumulate set amount of money for the purpose of
- Purchase asset
- Financing holiday
- Education fee
2. To repay existing loan.
3. To overcome financial difficulties
Task 1.4. I will advise him to do the following
1. Identifying business opportunities
2. Conducting market research
3. Identifying target customers
4. Selecting location for the business
5. Assessing rules and regulations
6. Assessing level of competitions
7. Identifying personal skills relate to the business
8. Preparing business plan.
