Development bank of Ethiopia

Written exam for Accountant

The year 2012
1 Deduce that the Banks/BOM make a decision of written off for Addis
Ababa Branch Agricultural loan of X company and provision held as at
June 30, 2010 for the above specific company principal Birr 2,000,000 &
Interest 500,000. However at decision date the outstanding Balance of the
company Br. 3,200,000 from this amount the principal amounting Birr
1,995,700 & the reaming balance is interest from which Birr 804,300 is
suspended interest.
N.B Total agricultural and industrial loan provision held for principal
15,000,000.00 and 16,000,000.00 interest 3,000,000.and 2,500,000
respectively.

*Record the appropriate accounting entries.

*The reaming balance of provision for the specific sector
2 Suppose that Ato Tesfay Kebede loan is Non-performing it shows undue
principal Birr amounting Birr 500,000 Overdue principal 1,200,000, other
charge Birr 1500, Balance sheet interest Birr 105,000 off Balance sheet
interest Birr 298,000 he paid an amount 1,200,000 for his loan. What kind
of transaction at the time of collection and How can you treat at the end
of the month?