Theory question 106
Public Sector Accounting6. The following balances have been extracted from the books of Uduak Local Government for the year ended 31st December, 1999:
Head – General Revenue Balance 1/1/99 N5,450,000
4001 Maintenance of vehicles N25,000
4002 Stationery N18,000
4003 Sinking of bore holes N130,000
4004 Staff salaries N1,750,000
3001 Statutory allocations N8,000,750
4005 Refuse disposal expenses N5,400
3002 Interest on fixed deposit account N13,400
4006 Rehabilitation of roads N2,500,650
4007 Fines N38,000
4008 Rates N1,500,520
3003 Renewal of licences N70,860
4009 Renovation of schools N2,150,640
4010 Salary of traditional chiefs N76,000
You are required to prepare Uduak Local Government's Revenue and Expenditure statement for the year ended 31st December, 1999.
Show the model answer
Revenue and Expenditure Statement for the year ended 31st December 1999
Revenue: statutory allocations 8,000,750; interest on fixed deposit 13,400; renewal of licences 70,860; fines 38,000; rates 1,500,520; total 9,623,530.
Expenditure: maintenance of vehicles 25,000; stationery 18,000; sinking of bore holes 130,000; staff salaries 1,750,000; refuse disposal 5,400; rehabilitation of roads 2,500,650; renovation of schools 2,150,640; salary of traditional chiefs 76,000; total 6,655,690.
Surplus for the year 2,967,840; add general revenue balance b/f 5,450,000; general revenue balance c/f 8,417,840.
Fines and rates are money the local government collects, so they are revenue even though their head numbers are in the 4000 series.