The document describes the design of an arithmetic logic unit (ALU) that can perform both arithmetic and logic operations. It discusses building the ALU by combining an arithmetic unit and a logic unit using multiplexers. The arithmetic unit is constructed from a four-bit adder circuit that can be configured to perform operations like addition, subtraction, increment, decrement etc. depending on its input signals. Similarly, the logic unit uses multiplexers to perform logic operations like AND, OR, XOR on its inputs. Together these units form a fully functional ALU capable of arithmetic and logic functions specified by a selection code.