Theory question 108
Public Sector AccountingThe following balances have been extracted from the books of Amansie East Local Government for the year ended 31st December, 2006.
Head / Particulars / ₦
1001 Taxes: 7,000,000
1002 Rates: 4,500,000
1003 Local licences: 500,000
1004 Earnings from commercial undertakings: 200,000
1005 Rent on local government properties: 1,000,000
2001 Renovation of chairman's office: 2,000,000
2002 Construction of market stalls: 1,500,000
2003 Office of the secretary: 1,500,000
2004 Department of personnel management: 2,000,000
2005 Department of finance and supplies: 2,000,000
2006 Agriculture and community development: 1,500,000
3001 External loans: 2,000,000
3002 Grants: 2,500,000
3003 Miscellaneous receipts: 1,500,000
You are required to prepare a Statement of Revenue and Expenditure for the year ended 31st December, 2006.
Show the model answer
Amansie East Local Government: Statement of Revenue and Expenditure for the year ended 31 December 2006
Revenue (heads 1001–1005 and 3001–3003): taxes 7,000,000; rates 4,500,000; local licences 500,000; earnings from commercial undertakings 200,000; rent on properties 1,000,000; external loans 2,000,000; grants 2,500,000; miscellaneous receipts 1,500,000 = ₦19,200,000
Less expenditure (heads 2001–2006): renovation of chairman's office 2,000,000; market stalls 1,500,000; office of the secretary 1,500,000; personnel management 2,000,000; finance and supplies 2,000,000; agriculture and community development 1,500,000 = ₦10,500,000
Surplus ₦8,700,000
Group the 1000 and 3000 heads as revenue and the 2000 heads as expenditure; the difference is the surplus.