Theory question 104
Public Sector AccountingThe following balances have been extracted from the book of AGBEDE LOCAL GOVERNMENT for the year ended 31st December 1991.
General Revenue Balance – 1st January, 1991: ₦2,750,000
Head 3001 Staff salaries ₦892,750
3002 Sinking of boreholes ₦69,250
3003 Stationery ₦9,000
3004 Maintenance of Vehicles ₦12,620
2001 Statutory Allocation ₦4,000,380
3005 Salaries of Traditional Chiefs ₦36,000
2002 Interest on Fixed Deposit Account ₦5,200
3006 Refuse disposal expenses ₦1,300
3007 Renovation of Schools ₦980,000
3008 Rates ₦650,500
3009 Fines ₦19,500
3010 Rehabilitation of roads ₦1,200,580
2003 Renewal of licences ₦40,420
You are required to prepare Agbede Local Government's Revenue and Expenditure Statement for the year ended 31st December, 1991.
Show the model answer
Agbede Local Government: Revenue and Expenditure Statement for the year ended 31 December 1991
Revenue: statutory allocation 4,000,380; interest on fixed deposit 5,200; renewal of licences 40,420; rates 650,500; fines 19,500; total ₦4,716,000
Expenditure: staff salaries 892,750; boreholes 69,250; stationery 9,000; vehicle maintenance 12,620; traditional chiefs 36,000; refuse disposal 1,300; renovation of schools 980,000; rehabilitation of roads 1,200,580; total ₦3,201,500
Excess of revenue over expenditure ₦1,514,500; general revenue balance 2,750,000 + 1,514,500 = ₦4,264,500 at 31 December 1991
Rates and fines are money the local government collects, so they are revenue even though the book prints them with 3000-series heads.