Theory question 109
Public Sector Accounting9. A country "Y" comprises five states – A, B, C, D and E. The following information relate to the revenue for the fiscal year ended 31st December, 2000.
Receipts from mineral resources N7,000,000
Receipts from agriculture N669,000
Import duties N2,652,000
Excise Duties N1,275,000
Permit and licence fees N250,000
Personal and corporate income tax N3,654,000
Other income N500,000
Additional information:
(a) Revenue is shared as follows: 40% to the national government; 10% to each of the states; 5% of the total revenue to the consolidated fund; 5% of total revenue to be shared by the states on population basis.
(b) The population of each state is as follows: A 450,000; B 400,000; C 500,000; D 300,000; E 350,000
You are required to compute: (i) Total revenue for country Y during the year 2000; (ii) Revenue for the national government; (iii) Revenue for the states individually and collectively.
Show the model answer
(i) Total revenue = 7,000,000 + 669,000 + 2,652,000 + 1,275,000 + 250,000 + 3,654,000 + 500,000 = 16,000,000.
(ii) National government 40% = 6,400,000 (consolidated fund 5% = 800,000).
(iii) Each state gets 10% = 1,600,000, plus a share of 5% (800,000) by population (total 2,000,000 people, i.e. N0.40 per person): A 180,000; B 160,000; C 200,000; D 120,000; E 140,000.
States individually: A 1,780,000; B 1,760,000; C 1,800,000; D 1,720,000; E 1,740,000. Collectively 8,800,000.
Check: 6,400,000 + 800,000 + 8,800,000 = 16,000,000.
Find the total first, then apply each percentage; share the population part in proportion to each state's population.