Theory question 105
Public Sector AccountingSection B – Financial Accounting Practice (answer three questions only from this section)
5. The following balances have been extracted from the books of Durodoluwa Local Government for the year ended 31st December, 2001.
General revenue balance (1/1/2001) N2,407,000
4001 Postages and stationery N123,450
4002 Maintenance of vehicles N365,845
4003 Purchase of drugs N606,435
4004 Personnel costs N4,366,155
3001 Subvention from Federal Government N7,000,000
3002 Subvention from State Government N2,500,000
4005 Grant to schools N1,500,000
3003 Rates and fines N300,100
3004 Licence renewal fees N176,400
4006 Disposal of refuse N203,440
4007 Salaries of traditional chiefs N105,000
4008 Provision of street lights N850,000
3005 Sale of grounded vehicles N74,500
You are required to prepare a statement of revenue and expenditure for the local government for the year ended 31st December, 2001.
Show the model answer
Statement of revenue and expenditure for the year ended 31st December 2001
Revenue: Federal subvention 7,000,000; State subvention 2,500,000; rates and fines 300,100; licence renewal fees 176,400; sale of grounded vehicles 74,500; total 10,051,000.
Expenditure: postages and stationery 123,450; maintenance of vehicles 365,845; drugs 606,435; personnel costs 4,366,155; grant to schools 1,500,000; refuse disposal 203,440; traditional chiefs' salaries 105,000; street lights 850,000; total 8,120,325.
Surplus for the year 1,930,675; add general revenue balance b/f 2,407,000; general revenue balance c/f 4,337,675.
3000 heads are revenue and 4000 heads are expenditure; add the surplus to the opening general revenue balance.