Theory question 107
Public Sector AccountingThe following balances were extracted from the books of Abobaku Local Government for the year ended 31st December 2019 (D):
Construction of an office block 3,850,000
Renovation of classroom blocks 1,065,000
Court fines 90,000
Building permits 650,000
Rehabilitation of street lights 470,500
Wages and salaries 7,880,450
Medical services 1,334,650
Provision of pipe borne water 2,500,000
Interest on investments 250,000
Lorry park levies 380,000
Market tolls 560,000
Property rates 1,200,000
General administration 630,700
Motor vehicle procured 6,653,000
Extension of office building 950,000
Grants from donor agencies 2,000,000
Royalties 4,500,000
Subvention from Central/Federal Government 20,000,000
Donations to charity homes 250,000
Entertainment permits 70,000
Staff training 550,000
Entertainment expenses 200,000
Marriage registration fees 80,000
Allowances to community leaders 370,800
Birth certificate fees 160,000
Maintenance of motor vehicles 650,000
You are required to prepare for the year ended 31st December 2019: (a) Statement of Recurrent Expenditure; (b) Statement of Capital Expenditure; (c) Statement of Revenue.
Show the model answer
(a) Recurrent expenditure (D): wages and salaries 7,880,450; medical services 1,334,650; general administration 630,700; donations to charity homes 250,000; staff training 550,000; entertainment expenses 200,000; allowances to community leaders 370,800; maintenance of motor vehicles 650,000; rehabilitation of street lights 470,500 (repair of existing assets). Total 12,337,100.
(b) Capital expenditure: construction of office block 3,850,000; renovation of classroom blocks 1,065,000; provision of pipe-borne water 2,500,000; motor vehicle procured 6,653,000; extension of office building 950,000. Total 15,018,000.
(c) Revenue: court fines 90,000; building permits 650,000; interest on investments 250,000; lorry park levies 380,000; market tolls 560,000; property rates 1,200,000; grants from donor agencies 2,000,000; royalties 4,500,000; subvention 20,000,000; entertainment permits 70,000; marriage registration fees 80,000; birth certificate fees 160,000. Total 29,940,000.
Sort each line into running costs, lasting assets or income before adding.