YARDSTICK INTRNATIONAL COLLGE
FACULTY OF BUSINESS
DEPARTMENT OF ACCOUNTING AND FINANCE
COURSE TITLE: COMPUTERIZED ACCOUNTING Instruction: Form a
group of maximum of 10 members.
Submission date: MAY 31, 2022
1. Maintaining company
Your company is Plc Company and it has purchased and installed Peachtree accounting software
package for handling its financial affairs including payroll and fixed asset data starting from
January 1, 2021. The company accounting period is 12. The company fiscal year starts on
January 1 and ends on December 31. The following sections provide additional information
about the firm and its activities.
Company background:
Name: First letters of your group members
Business type: Partnership
Address: Ethiopia, Addis Ababa,
Chart of Accounts: the firm wants to set up its own chart of account (build your own chart of
account)
Accounting method: accrual
Posting method: “real time”
2. Maintaining chart of account
Description Account ID Balance January 31,
2021
Cash at Bank 1000 110,000
Cash on hand 1010 55,000
Notes receivable 1020 19,800
Account Receivable 1130 220,000
Allowance for uncollectable 1140 13,200
Merchandise inventory 1150 2,970,000
Prepaid Insurance 1160 22,000
Prepaid Rent 1170
Advances to employees 1190 44,000
Computers 1200 240,000
Accumulated depreciation- Computers 1210 26,500
Vehicles 1260 5,500,000
Accumulated depreciation vehicles 1270 57,500
Other Fixed asset 1300 2,000,000
Accumulated depreciation other fixed asset 1310 69,500
Account Payable 2000 37,400
Salary payable 2120
Employee income tax Payable 2150
Sales tax (VAT) payable 2180
Sales tax (TOT) payable 2185
Common stock (birr 100 par) 3000 9,885,700
Additional paid in capital(Premium) 3120 700,000
Retained earning 3140 391,000
Sales 4000
Sales Discount 4110
Sales returns and allowance 4120
Interest Income 4130
Other income 4190
Purchases 5000
Purchases Discount 5110
Purchases returns and allowances 5120
Cost of goods sold 5160
Salary Expense 6000
Supplies Expense 6120
Insurance Expense 6220
Transportation expense 6320
Service charge Expense 6420
Utility Expense 6520
Income tax Expense 6620
Miscellaneous expense 6720
Required: based on the above data, setup the chart of account for the company
4. Maintaining Vendors
4.1 Maintain vendors Default
The company buys goods and services from different vendors/suppliers both on cash and credit
basis. Majority of its vendors allow the company to buy goods and services up to birr 450,000 on
credit and earn a 2% discount if invoices are paid within 15 days from the date of purchase or
else pay within 35 days. The company wants to record information about the office manager of
each of its vendors. The company uses the purchase account No 5000 to record all purchases of
goods from vendors. Purchase discount taken are recorded in the purchase discount account No
5110 while purchases returns and allowances account No 5120. The company allowed its
Vendors to deliver goods and services in the best ways possible. The company wants to age
vendor invoice by due date. The invoice are to be categorized as follows; 0-35, 36-71, 72-127,
and over 127 days overdue in categories, I, II, III and IV respectively.
4.2 Maintain vendor information
Vendor Name Vendor Contact Address Terms Vendor Beg
ID type office/Mgr balance
11EE Ethiopian Electric Service Ato Kibe, Addis Ababa General January Birr2400
power corporation Ato Lema W 14, k52 standard 4,2021 Invo#
Tel. 1234567 098
Ethiopia
12ET Ethiopian Service W/ro Addis Ababa Mainly January Birr4000
Telecommunication W 01, k18 prepaid 6,2021 Inv# 22
nunu, Ato
corporation Tel. 666666
Abebe
Ethiopia
13aIE VJ import-Export Goods Mr. jki OklaAama 3/30,n/60 January Birr
share company MR. Kilo A2 pun Toad Cerdit limit 9,2021 1,000
Tel. 6464656 Birr 2 million Inv#36
AIE@iapab,A PO#512
Japan
14EBG GK business group Goods AtoAlemu Addis Ababa 2/10,n/45 January Birr
share company W/ro Ali W28, K02 credit limit 4,2021 13000
Birr1.5.million
Tel. 222222 Inv# 92
Ethiopia Po# 022
15FIR Federal Inland Tax Ato Addis Ababa Due on the 9th January Birr 300
Revenue Authority Benyam, W13K22 day-next 7,2021 Inv# 95
W/ro Tel. 1111111 month no
Hiwot Ethiopia
credit limit
Note: all vendors are active and all vendors beginning balance are as of February 1, 2021
Required: Based on the above data maintain vendor defaults information and vendor records.
5. Maintain Sales Tax authority
The company collects 15%Vat (description: Value Add Tax) and submit the sum collected to the
Ethiopian Revenue and Custom Authority (ID: ERCA). The sales tax code is: VAT (value Added
Tax) Taxes) and the collected amount from customers are recorded in the sales Tax (VAT)
payable account No. 2180. VAT is not payable on freight changes.
Furthermore, The Company also uses turn over tax (TOT) for those that have not been registered
for VAT. The code for this sales tax is : TOT. The company submits the collected turn over tax
(TOT) to the same tax authority (ERCA) and the collected taxes are recorded in the sales Tax
called TOT payable account No. 2185. TOT is not payable on freight changes.
Required: Based on the above data setup sales tax authority and code.
6. Maintain Inventory information
The firm buys and sells 3 inventory items which are all stock items and FIFO is considered to be
the default inventory costing method. All inventory items are subject to VAT. The company uses
the Merchandise inventory (1150), sales (4000) and cost of Goods Sold (5160) accounts to
record transactions related inventory item. The miscellaneous expense account No. 6200 is used
to record delivery costs. Inventory items are received from vendors’ through the appropriate and
best methods of delivery. At present the company uses two price levels and wholesale (W) and
retail (R) but has plan to use additional three price levels at which is inventory items are offered
for sell. The current price levels need no calculation.
Item ID Description Preferred Item Type Unit cost Sale Quantity on
Vendor price hand
21DC Computer GKIB business Acer 9900 10300 150
group
22TV Television VJ Import Sharp 5500 5700 180
export
23TR Tape Sony 2200 2600 225
recorder Share co.
All inventory items are measured in pieces and stored in warehouse , Beginning balance are as of
January 31, 2021
Required: Based on the above data maintain inventory default information and inventory
records
7. Customers’ information
7.1 Maintain Customer default
The company sells goods to its customers both on cash and credit basis. Sales and related
discounts are recorded in the sales account No. 4000 and sales discounts account No. 4110
respectively. Finance charges overdue accounts are recorded in the interest income account No.
4130. All credit customers, except those having special agreements with the company are
required to settle their obligations for goods bought on credit within 32 days from the date of
each credit sales invoice. They are entitled to 3% discount for payments within 14 days from the
date of each credit invoice. The credit limit is set at $500,000 per credit customers. All customers
failing to pay within the credit period (42days) are subject to 5% interest on balance up to
$15,000 and 8% interest on balance above $25,000. The minimum finance charge is determined
to be $10. The company does not charge interest on finance charges. Finance charges are include
and explained in customer invoices and statements and invoices “Let’s keep our relationship
smooth by timely discharging our respective duties!” At present the company accepts only cash
and checks as payment methods. The company wants to record information about the second
contact, office manager and establishment (est) date of each of its customers. Customers involves
are age by due and are to be categorized as follows: 0-45, 46-90, 91-120, and over 120 days
overdue in categories I, II, III and IV respectively. Deposit Ticket ID is assigned to collections
form customers at the time of collection besides; the company has special agreements with
customers included in the following table.
7.2 Customers Background
Cuto Name Conta 2nd Address Terms Office Beg. Date Custom
mer ct Manager balance er type
ID contac
t
3IES Snap Ato W/rt W14k15 1/15,n/6 Ato Birr January R5
PVt. Co. Nari Nini HNo123 0 Credit Bekel 20000 23, 2021
Tel 1234 limit Inv. 330
Assosa Birr
800000
12M LLL Ato At0 W01K14 General Ato Mulu Birr January R1
M Music Ali Kuku HN0369 Standard 76000 27,2021
Shop Tel. 111 Inv. #36
Mekelle PO#``
13Ap GKL W/ro Ato W14K45 1/10.n/4 Ato Birr January R4
Printers Num Laku HN0236 5 Amro 75999 20,2021
Tel, 236 Inv. #82
Jimmaa PO.#39
14BP HJP W/rt Ato W20K12 2/15,n/3 W/ro Birr January R-2
Business Lawa Tufa HN0993 0 Credit Tiru 49000 19,2021
Group Tel. 5698 limit Inv.#52
Assayta Birr Po.#99
700000
8. Transaction and related events
February 1. Sold 5 computers to snap PVT co. Invoice #0001, including 15% vat
February 4, Sold 3 tape recorder on account to LLL music shop by invoice #0002 plus 15% vat.
February 6, sold 100 television to LLL music shop on account by invoice #0004, plus 15% vat
February 7, Sold 20 computer to snap PVt co by invoice #0005 plus 15% vat.
February 10. Received on account from Snap PVT Co. for half settlement of invoice# 0001
receipt# 01 deposit ticket ID 01.
February. Received cash on account from LLL music shop for full settlement of invoice #0002,
recipt# 02 and deposit ticket ID 02
February 13. Cash sale to the cash customer for 200 computers Deposit ID 03 receipt# 03
February 16. Purchased on account from VJ import export Co for 150 Tape recorder invoice
#003
February 17. Purchased on account from GK business group 10 computer invoice # 002
February 20. Purchased on account from VJ import export Co for 140 Television invoice #005
February 22. Purchased on account from GK business group 2000 computers invoice #006
February 23. Paid cash on account from VJ import export for invoice # 36 check# 001
February 24. Paid cash on account to GK business group for invoice# 006 check#002
February 25. Paid cash on account to GK business group co for invoice#002 check#003
February 28. Rent is paid for the month of February birr 2000 check# 004
February 28. Salary is paid for the month of February birr 3000 check no 005
February 28. Supply expense during the month birr 200 reference Jv01.
Enter the following Adjusting Entries for the month ended February 28 Ref.# JV-001.
- Unexpired insurance 21,000.00
- Deprecation Expense – Computers 1% per month of the original value
- Deprecations Expense – Vehicle 1.5% per month of the original Value
-Depreciation Expense----- Other Fixed asset 1.2% per month of the original value
Project 9:
9.1: Prepare Monthly Accounting information
9.2: Prepare Monthly Closing/ period change
