Below is the complete set of Financial Statements of Take-Home University (THU), a PublicUniversity of Ghana, issued on 1st May 2020.Statement of Financial Performance for the Year Ended 31 December, 2018Revenue NotesGOG grant 1,540,000,000Internally Generated Funds 2 14,427,492,000Donations and other income 9,278,258,00025,245,750,000ExpenditureCompensation for employees 3 8,385,270,000Goods and services 4 2,238,083,000Social benefit 1,720,000Interest 1,720,000Capital expenditure (CAPEX) 5 25,542,515,000Other expenses 6 79,100,00036,248,408,000Net Operating Result – Deficit (11,002,658,000)Statement of Financial Position as at 31 December 2018NotesCurrent AssetsCash and cash equivalent 294,233,000Receivable (468,050 -10,000) 458,050,000Inventory 155,254,000907,537,000Liabilities and FundPayable 7 696,325,00020% Loan 8,600,000704,925,000Accumulated fund 8 202,612,000907,537,0004Cash Flow Statement for the Year ended 31st December 2018Cash InflowsGOG grant 1,540,000,000Internally Generated Funds 14,427,492,000Donations and other income 9,278,258,00025,245,750,000Cash OutflowsCompensation of employees 6,385,270,000Goods and services 1,989,112,000Social benefit 1,720,000Interest 1,720,000Capital expenditure (CAPEX) 15,542,500,000Other expenses 79,100,00023,999,422,000Increase in Cash and Cash Equivalent 1,246,328,000Cash and Cash Equivalent as 1/1/18 -952,095,000Cash and Cash Equivalent as 31/12/18 294,233,000NOTES TO THE FINANCIAL STATEMENTSAccounting policya) Basis of accountingThe financial statements are prepared on accrual basis of accounting.b) Inventory valuationInventory is valued at lower of cost and net realisable value.c) IPSASThe financial statements are prepared in compliance with the IPSAS and allrelevant financial legislations.Internally Generated FundFees income 4,575,622,000Consultancy fees 655,600,000Admission forms 9,196,270,00014,427,492,0001. Employees CompensationAllowance 856,670,000Establish post 5,312,430,000Non establish post 1,253,600,000Books and Research allowance 150,765,000Project work allowance 48,500,000Superannuation 278,500,000End of service benefits 298,040,000Books and Research allowance arrears 186,765,0008,385,270,00052. Use of Goods and ServicesLegal cost 25,059,000Consultancy cost 800,000,000Seminar cost 500,000,000Training and Workshop Cost 104,000,000Utilities 560,053,000Increase in Provision for doubtful debt 5,060,000Opening inventory 399,165,000Closing inventory(155,254,000)2,238,083,000Capital expenditureProperty, plant and equipment 17,292,500,000Work in Progress 8,250,015,00025,542,515,000Other expensesTrial balance 71,000,000Sponsorship 8,100,00079,100,000PayablesPayables 182,840,000Consultancy cost 234,500,000Book & Research All. 186,765,000Interest payable 1,720,000Tax withholding 90,500,000696,325,0003. Accumulated FundBalance at start 11,205,270,000Net operating result (11,002,658,000)202, 612,000Required:a) Using the Qualitative Characteristics (QCs) of General-Purpose Financial Report as a Framework, evaluate the information usefulness of the set of financial statementspresented by the THU. b) Based on the relevant IPSASs, explain the significant observations you have made about the financial statements of THU and suggest improvement, if any.
Below is the complete set of Financial Statements of Take-Home University (THU), a Public
University of Ghana, issued on 1st May 2020.
Statement of Financial Performance for the Year Ended 31 December, 2018
Revenue Notes
GOG grant 1,540,000,000
Internally Generated Funds 2 14,427,492,000
Donations and other income 9,278,258,000
25,245,750,000
Expenditure
Compensation for employees 3 8,385,270,000
Goods and services 4 2,238,083,000
Social benefit 1,720,000
Interest 1,720,000
Capital expenditure (CAPEX) 5 25,542,515,000
Other expenses 6 79,100,000
36,248,408,000
Net Operating Result – Deficit (11,002,658,000)
Notes
Current Assets
Cash and cash equivalent 294,233,000
Receivable (468,050 -10,000) 458,050,000
Inventory 155,254,000
907,537,000
Liabilities and Fund
Payable 7 696,325,000
20% Loan 8,600,000
704,925,000
Accumulated fund 8 202,612,000
907,537,000
4
GOG grant 1,540,000,000
Internally Generated Funds 14,427,492,000
Donations and other income 9,278,258,000
25,245,750,000
Compensation of employees 6,385,270,000
Goods and services 1,989,112,000
Social benefit 1,720,000
Interest 1,720,000
Capital expenditure (CAPEX) 15,542,500,000
Other expenses 79,100,000
23,999,422,000
Increase in Cash and Cash Equivalent 1,246,328,000
Cash and Cash Equivalent as 1/1/18 -952,095,000
Cash and Cash Equivalent as 31/12/18 294,233,000
NOTES TO THE FINANCIAL STATEMENTS
Accounting policy
a) Basis of accounting
The financial statements are prepared on accrual basis of accounting.
b)
Inventory is valued at lower of cost and net realisable value.
c) IPSAS
The financial statements are prepared in compliance with the IPSAS and all
relevant financial legislations.
Internally Generated Fund
Fees income 4,575,622,000
Consultancy fees 655,600,000
Admission forms 9,196,270,000
14,427,492,000
1. Employees Compensation
Allowance 856,670,000
Establish post 5,312,430,000
Non establish post 1,253,600,000
Books and Research allowance 150,765,000
Project work allowance 48,500,000
Superannuation 278,500,000
End of service benefits 298,040,000
Books and Research allowance arrears 186,765,000
8,385,270,000
5
2. Use of Goods and Services
Legal cost 25,059,000
Consultancy cost 800,000,000
Seminar cost 500,000,000
Training and Workshop Cost 104,000,000
Utilities 560,053,000
Increase in Provision for doubtful debt 5,060,000
Opening inventory 399,165,000
Closing inventory
(155,254,000)
2,238,083,000
Capital expenditure
Property, plant and equipment 17,292,500,000
Work in Progress 8,250,015,000
25,542,515,000
Other expenses
Sponsorship 8,100,000
79,100,000
Payables
Payables 182,840,000
Consultancy cost 234,500,000
Book & Research All. 186,765,000
Interest payable 1,720,000
Tax withholding 90,500,000
696,325,000
3. Accumulated Fund
Balance at start 11,205,270,000
Net operating result (11,002,658,000)
202, 612,000
Required:
a) Using the Qualitative Characteristics (QCs) of General-Purpose Financial Report as a Framework, evaluate the information usefulness of the set of financial statementspresented by the THU.
b) Based on the relevant IPSASs, explain the significant observations you have made about the financial statements of THU and suggest improvement, if any.
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