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- 14 Marks
Question
a) The following Trial Balance relates to Bunsu Education College, a public tertiary educational institution in Ghana, as at 31/12/2018.
| DR (GH¢’000) | CR (GH¢’000) | |
|---|---|---|
| Fees Income | 4,575,622 | |
| Establish Post | 5,312,430 | |
| Allowance | 856,670 | |
| Consultancy Fees | 655,600 | |
| Legal Cost | 25,059 | |
| 1,540,000 | ||
| Consultancy Cost | 565,500 | |
| Non-Establish Post | 1,253,600 | |
| Seminars cost | 500,000 | |
| Sponsorship | 8,100 | 9,066,828 |
| Receivables | 468,050 | |
| Payables | 182,840 | |
| 20% loan | 8,600 | |
| Books and Research Allowance | 150,765 | |
| Plant and Machinery | 3,000,000 | 250,000 |
| Motor Vehicle | 2,505,000 | 352,000 |
| Building | 12,300,000 | 756,000 |
| Software | 995,500 | 150,000 |
| Other Incomes | 211,430 | |
| Project Work Supervisory Allowance | 48,500 | |
| Cash and Bank | 294,233 | |
| Training and Workshop cost | 104,000 | |
| Bad debt provision (student fees) | 4,940 | |
| Work In Progress | 8,251,735 | |
| Other Expenses | 71,000 | |
| Withholding Tax | 90,500 | |
| Accumulated Fund | 11,205,270 | |
| Utilities Bills | 560,053 | |
| Proceeds from Sale of Admission Forms | 9,196,270 | |
| Superannuation | 278,500 | |
| End of Service Benefits | 298,040 | |
| Stationery Stock | 399,165 | |
| 38,245,900 | 38,245,900 |
Additional Information: i) The college has adopted the accrual basis International Public Sector Accounting Standards (IPSAS) as the basis for the preparation of its financial statements. ii) Stationery stock as at 31/12/2018 was GH¢200,500,000 but had a Net Realisable Value of GH¢155,254,000. iii) Social benefits of GH¢1,720,000 yet to be paid during the year were included in the Work In Progress value. Consultancy cost amounting to GH¢234,500,000 was incurred but not yet paid. iv) Books and Research Allowance was received from Government during the period amounting to GH¢337,530,000 for disbursement to qualified Lecturers and Administrative staff. v) Provision is to be made for interest on loans. vi) 60% of the receivables represent an amount of students’ fees outstanding as at 31/12/2017. Provision for doubtful debt is estimated to be 5% of outstanding school fees. vii) The university uses a straight-line basis of depreciation for Capital Assets. Capital Assets and their useful lives are detailed out below:
| Assets | Useful Life |
|---|---|
| Plant and Machinery | 8 years |
| Motor Vehicle | 5 years |
| Building | 50 years |
| Software | 7 years |
Required: i) Prepare a Statement of Financial Performance for Bunsu Educational College for the year ended 31/12/2018. (8 marks)
ii) Prepare a Statement of Financial Position as at 31/12/2018. (6 marks)
Answer
| 6. Other expenses | GH¢’000 |
|---|---|
| Trial balance | 71,000 |
| Sponsorship | 8,100 |
| 79,100 |
7. Non-current Asset Schedule
| Plants & Machinery | Motor Vehicle | Building | Software | Total | |
|---|---|---|---|---|---|
| Cost/valuation | GH¢’000 | GH¢’000 | GH¢’000 | GH¢’000 | GH¢’000 |
| 3,000,000 | 2,505,000 | 12,300,000 | 995,500 | 18,800,500 | |
| Less: depreciation | |||||
| Balance b/d | 250,000 | 352,000 | 756,000 | 150,000 | 1,508,000 |
| Charge for the year | 375,000 | 501,000 | 246,000 | 142,214 | 1,264,214 |
| Total Depreciation | 625,000 | 853,000 | 1,002,000 | 292,214 | 2,772,214 |
| Carrying Amount | 2,375,000 | 1,652,000 | 11,298,000 | 703,286 | 16,028,286 |
| 8. Payables | GH¢’000 |
|---|---|
| Payables per trial balance | 182,840 |
| Consultancy cost | 234,500 |
| Book & Research All. (337,530 – 150,765) | 186,765 |
| Interest payable (8,600 x 0.2) | 1,720 |
| Tax withholding | 90,500 |
| 696,325 | |
| NB: Social benefit was not included in the payable since its inclusion in work in progress was deemed to be paid for as no corresponding payable was separately created in the trial for it. |
| 9. Accumulated Fund | GH¢’000 |
|---|---|
| Trial balance | 11,205,270 |
| Net Operating Result | 13,276,282 |
| 24,481,552 |
- Tags: Educational Institution, Financial Performance, Financial Position, IPSAS, Public Sector
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