Theory question 105
Public Sector Accounting5. You are the Treasurer of IFIOKOBONG Local Government Area of MFOM State. Your book-keeper makes the following return in respect of the financial year ended 31st December, 1993.
Salaries and wages: Dr N204,300
Vehicle expenses: Dr N2,480
Vehicle purchased: Dr N50,200
Stationery and Printing: Dr N15,200
Road maintenance: Dr N20,140
Hospital drugs: Dr N40,000
Subvention from State government: Cr N20,000
Subvention from Federal government: Cr N30,000
Rates and fines: Cr N15,350
Bank charges: Dr N3,780
Sundry income: Cr N52,630
Tenement rate/Building plans: Cr N250,000
Licences: Cr N125,480
Subvention to schools: Dr N62,900
Bank balance: Dr N94,660
Totals: N493,460 / N493,460
Fixed assets are to be written off
You are required to prepare the Receipts and Payments Account for IFIOKOBONG Local Government for the year ended 31st December, 1993.
Show the model answer
Receipts and Payments Account for the year ended 31st December, 1993
Receipts: subvention from State government 20,000; subvention from Federal government 30,000; rates and fines 15,350; sundry income 52,630; tenement rate/building plans 250,000; licences 125,480; total 493,460.
Payments: salaries and wages 204,300; vehicle expenses 2,480; vehicle purchased 50,200 (written off as spending, not shown as an asset); stationery and printing 15,200; road maintenance 20,140; hospital drugs 40,000; bank charges 3,780; subvention to schools 62,900; total payments 399,000.
Balance c/d (bank) 94,460 as the balancing figure; totals 493,460 = 493,460.
(The return's debit items add up to 493,660, N200 more than its stated total, so the bank balance of 94,660 cannot be reconciled; mention the difference.)
A receipts and payments account is a summary of cash: list every receipt on one side, every payment on the other, and close with the bank balance.