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POA II Assignment 2

The document contains instructions for a group assignment with 5 questions. Students must: 1) Work in a group to answer all questions, with each member writing at least 2 pages. 2) Questions cover inventory costing methods, depreciation calculations, and preparing a payroll register and partnership liquidation statements. 3) The assignment is due in two weeks and is worth a maximum of 20% of the course grade.

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Dawit Negash
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18 views

POA II Assignment 2

The document contains instructions for a group assignment with 5 questions. Students must: 1) Work in a group to answer all questions, with each member writing at least 2 pages. 2) Questions cover inventory costing methods, depreciation calculations, and preparing a payroll register and partnership liquidation statements. 3) The assignment is due in two weeks and is worth a maximum of 20% of the course grade.

Uploaded by

Dawit Negash
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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NOTE:

 Form a group and attempt all questions.


 Each member has to write at least two pages- all members has to participate
 Legible hand writing will be rewarded
 The submission date is two weeks from the date it is posted on the Telegram
 Maximum mark 20%

Direction: Workout The Following Questions (Show all the necessary steps clearly)
Q1. The following units of a particular item were available for sale during the year:

The firm uses the perpetual inventory system, and there are 240 units of the item on hand at the
end of the year. What is the total cost of the ending inventory and cost of merchandise sold
according to (a) FIFO, (b) LIFO and (c) Weighted Average method?

Q2. Based on the following data, estimate the cost of ending merchandise inventory:

Q4. On January 1, 2010, a machine was purchased for Br 90,000. The machine has an estimated
salvage value of Br 6,000 and an estimated useful life of 5 years. The machine can operate for
100,000 hours before it needs to be replaced. The company closed its books on December 31.
Instruction: Compute the annual depreciation expense over the machine’s life (2010, 2011,
2012, 2013 and 2014) assuming a December 31 year-end under each of the following
depreciation methods.
(1) Straight-line method.
(2) Sum-of-the-years’-digits method.
(3) Double-declining-balance method

1
Q5. Ethiopia for Better, a governmental organization pays salary of its employees according to
the Ethiopian calendar month. The following data relates the month of Tkimt, 1996 E.C.
S.No. Name of Basic OT hours Duration of OT Monthly Basic
Employee Salary Worked work Allowance Salary Per
Hour
1 Tizita Dagne 640 10 Weekly rest days 100 4

2 Mamo Regassa 1280 7 Public holiday --- 8

3 Ali Temam 1920 9 10 P.m.– 5 A.m 150 12

4 Berihu Gebre 320 --- --- --- 2

5 Nigist Abebe 3520 12 Up to 10 P.m 300 22

Additional Information:
 An employee is expected to work 176 hours in a month and during Tkimt, 1996 all
employees have done as they have been expected.
 All employees are permanent employees except Ato Mamo Regassa
 The monthly allowance of Ato Ali Temam is not taxable
Tizita Dagne agreed to have a monthly Br 150 be deducted and paid to the organization’s
credit association as a monthly saving
Instructions: Based on the above Information
1. Prepare a payroll register (or Payroll sheet) for the organization for the month of Tikimt,
1996 E.C.
2. Record the payment of salary and the accrued liabilities as of Tikimt 30, 1996 E.C.
3. Record the payroll taxes expense for the month of Tikimt, 1996
4. Record the payment of the claim of the credit association of the company,and other
payroll related liabilities to the concerned authorities(withholding taxes,and payroll taxes)
that arouse from Tikimt’s payroll assuming that the payment was made on Tikmit’s 1,
1996 via Ck. no.03395

Q5. To illustrate, assume Abebe, Beka, and Omar, (ABO), who share income and loss 2:3:5, decide to
discontinue operation and liquidate Partnership as of December 31, 2020. After discontinuing business
operations of the partnership and closing the accounts, the following trial balance is prepared:

ABO Partnership
Post-Closing Trial Balance
December, 2020
Debit Balance Credit Balance
Cash $5,900
Noncash Assets 109,900
Liabilities $ 26,800
Abebe, Capital 14,600
Beka, Capital 27,900
Omar, Capital 46,500
Total $ 115,800 $ 115,800

Case 1: Assume the non-cash Asset were sold for 119,900

2
1. prepare the statement of partnership liquidation
2. Journalize the entries to record:
A. Sale of asset
B. Division of gain on sale of asset
C. Payment of liabilities
D. Distribution of cash to partners

Case 2: Assume the non-cash asset were sold for 27,400


1. Assume the partner with the capital deficiency pays the entire amount owed to the
partnership, prepare the statement of partnership liquidation

2. Journalize the entries to record:


A. Sale of asset
B. Division of loss on sale of asset
C. Payment of liabilities
D. Receipt of deficiency
E. Distribution of cash to partners

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