Question Three. Assume that there an is employee with the following terms and conditions 1. Basic Pay K15,000 2. Housing Allowance 20% of the basic Pay 3. Overtime allowance K1,800 4. Transport Allowance 10%

Required: a. Prepare a pay slip for this employee taking into account the necessary statutory deductions. (Note: for PAYE use the 2012 or 2013 rates) (2 Marks) b. Show how the above will be recorded in the books of accounts for the company. (2.5 Marks)