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Chapter 3 Current Liability Payroll
Chapter 3 Current Liability Payroll
Chapter 3
Accounts payable
Notes payable
Examples:
Unearned rent
Taxes payable
Wages payable
Current portion of long
term debt
Short-Term Notes Payable
A firm issues a 90-day, 12% note for $1,000,
dated August 1, 2006 to Murray Co. for a
$1,000 overdue account.
Discount rate
Discounted Notes Payable
Disclose
Possible
Liability
Section 2
d)Other earning:-
income received by the
employee other than the above three(basic
salary, allowance and overtime) is also added
together to determine gross earning. Bonus
is best example here.
• Therefore, the gross earnings of an
employee may include the basic salary,
allowance, overtime and any other
earning received in cash or in kind
4/27/23 PAII Ch03 25
Illustration
Solomon Tadesse an employee of Ministry of education has
basic monthly salary of Br 3,200 and position allowance of
800birr. During the month of Miyaziya, he worked an over
time of 8 hours in the weekend and 6 hours in public
holiday. Gemechis Tola, an employee of the same entity
with basic salary of 2,400 however worked 12hours
overtime of which 5 are in midnight whereas the rest up to
10:00pm.
Required
Compute the gross earning of these two employees.
Taxable Income
From To On the next Tax Rate
Zero Br. 600 Br.600 0% (Exempted)
601 1,650 1,050 10%
1,651 3,200 1,550 15%
3,201 5,250 2,050 20%
5,251 7,800 2,550 25%
7,801 10,900 3,100 30%
Above 10901 35%
Proclamation No. 286/2002 states that the following are not taxable.
• Income from employment received by causal employees who are not
regularly employed provided that they do not work for more than one month
•
for the same employer in any twelve months period.
Required
1) Find her taxable income
2) Compute employment income tax that she pay for
this month
Payroll
For the Month of Miyazia 2006
Earnings Deductions
Gross Total
Allowance Overtim Earning Income Pensio Deductions
E ID Employee Name Basic Salary s e Others s Tax n Others Net Pay Signature
Total
Prepared By:_________________ Cheked By:_____________________ Approved By:____________________