Theory question 106
Public Sector AccountingThe Federal Government allocation to the Ministry of Education for 1990 is ₦300 million. During the year, the following expenditure was incurred:
Construction of 1,000 classrooms ₦50,000,000
Purchase of Saloon cars for inspectorate division ₦2,000,000
Purchase of buses for schools ₦15,000,000
Sinking of boreholes for schools ₦10,500,000
Fixtures and fittings ₦3,000,000
Furniture ₦1,250,000
Renovation of classrooms ₦650,000
Laying of rugs ₦50,000
Additional Information: (a) Recurrent expenditure: (i) Maintenance of vehicles ₦870,200 (ii) Staff emoluments ₦90,000,000 (iii) Electricity ₦130,800 (iv) Cleaning materials ₦30,000 (v) Stationery ₦330,000 (vi) Medical expenses ₦250,000 (vii) Telephone, telegrams and postages ₦10,000 (viii) Leave transport grant ₦450,000 (ix) Disturbance allowance ₦110,000 (x) Transport and Travelling ₦510,000 (xi) Excursions ₦120,000 (xii) Hospitality ₦90,000 (xiii) Special grants ₦300,000 (xiv) Staff development ₦3,000,000
(b) Receipt: (i) School fees ₦5,000,000 (ii) Registration of private schools ₦400,000 (iii) Rent from properties ₦100,000 (iv) Fixed deposit interest ₦90,000 (v) Miscellaneous ₦1,000,000 (vi) Sales of unservicable assets ₦800,000
You are required to prepare the Revenue and Expenditure for the year ended 31st December 1990
Show the model answer
Ministry of Education: Revenue and Expenditure Account for the year ended 31 December 1990
Revenue: government allocation 300,000,000; own revenue: school fees 5,000,000, registration 400,000, rent 100,000, interest 90,000, miscellaneous 1,000,000 = 6,590,000; sale of assets 800,000; total ₦307,390,000
Capital expenditure: classrooms 50,000,000; saloon cars 2,000,000; buses 15,000,000; boreholes 10,500,000; fixtures 3,000,000; furniture 1,250,000; renovation 650,000; rugs 50,000; total ₦82,450,000
Recurrent expenditure: vehicles 870,200; emoluments 90,000,000; electricity 130,800; cleaning 30,000; stationery 330,000; medical 250,000; telephone 10,000; leave grant 450,000; disturbance 110,000; transport 510,000; excursions 120,000; hospitality 90,000; special grants 300,000; staff development 3,000,000; total ₦96,201,000
Total expenditure 178,651,000; excess of revenue over expenditure ₦128,739,000
In government accounts capital items are charged as expenditure in the year they are bought.