Theory question 106
Public Sector AccountingThe following were extracted from the books of Edum Republic for the year ended 31/12/2021.
Receipts from oil and gas: $522,500,000
Import duties: $250,000,000
Export duties: $180,500,000
Receipts from agriculture: $60,000,000
Permit and licence fees: $92,000,000
Personal and other income taxes: $230,500,000
Miscellaneous income: $100,500,000
Additional information: The country is structured into six (6) Regions/States A, B, C, D, E, F. The population of each of the Regions/States are: A: 400,000; B: 350,000; C: 250,000; D: 100,000; E: 300,000; F: 200,000.
Revenue is shared 30% to the Federal/Central government, 10% to education trust fund and 60% to be shared by the Regions/States on the basis of population.
You are required to compute:
(a) The total revenue for the country for year 2021;
(b) Revenue for the Federal/Central Government for year 2021;
(c) Revenue for the Regions/States collectively and individually for year 2021.
Show the model answer
(a) Total revenue = 522,500,000 + 250,000,000 + 180,500,000 + 60,000,000 + 92,000,000 + 230,500,000 + 100,500,000 = $1,436,000,000.
(b) Federal/Central Government: 30% × 1,436,000,000 = $430,800,000 (education trust fund, 10% = $143,600,000, is also held at the centre; together 574,400,000).
(c) Regions/States collectively: 60% × 1,436,000,000 = $861,600,000. Total population 1,600,000.
Individually (population ÷ 1,600,000 × 861,600,000): A 400,000 → $215,400,000; B 350,000 → $188,475,000; C 250,000 → $134,625,000; D 100,000 → $53,850,000; E 300,000 → $161,550,000; F 200,000 → $107,700,000 (total $861,600,000).
Add all revenue, take the percentages, then share the 60% by population.