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cles to use an accrual basis the assist CORIS RA with its accor

cles to use an accrual basis the assist CORIS RA with its accor

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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C. Using the contents presented in the Units supported by information in the relevant IPSASs, give a comprehensive definition (with examples) of revenue and expenditure appropriate for a Central Government. 

CORIS RA is a government owned enterprise which is legislated to generate its own income which it uses to cover capital and recurrent expenditures. The legislations also give the government the powers to order CORIS RA to transfer all or part of the income it generates to the consolidated fund as it deems fit. Outside of these powers, its government also provide CORIS RA with monthly subventions to cover its recurrent expenditures based on CORIS RA budgetary demands and the legal allocations by the government. For the 2017 and 2018, CORIS RA used the cash basis to prepare its financial statements, although some of the accounting transactions were recorded using the accrual basis. It should be noted that the government instructed all of its agencies to use an accrual basis that is guided and recommended by IPSASS. You were asked by to government to assist CORIS RA with its accounting processes, which involved the recording, generation and preparation of accounting transactions and final accounts as stipulated by the IPSASS. Working with a team of qualified and experienced accountants, you were able to prepare the following accounting information of CORIS RA for the year ending December 2020: Details Amount Dividend Received 93,250 Loan payment 143,000 Amounts Recovered Interest Expense Court Administration Fees 194,000 200,000 240,000 Cost of Training Bar License Store Rent 275,000 300,400 300,750 Fines and Penalties General Cleaning 330,000 350,000 370,000 Sanitation Accumulated Fund (1/1/2020) Basic Taxes and Rates 370,600 370,900 Allowances Equity Investment Acquired 390,470 420,000 Royalties Accountancy and Consultancies cost Work-In-Progress 430,000 470,000 490,000 Herbalist License 530,370 580,000 600,000 Posts not on Establishment Other Expenditure Stool Land Revenue 600,000 620,000 Transport and Travelling cost Utilities 630,000 630,920 Hostel License
Transcribed Image Text:CORIS RA is a government owned enterprise which is legislated to generate its own income which it uses to cover capital and recurrent expenditures. The legislations also give the government the powers to order CORIS RA to transfer all or part of the income it generates to the consolidated fund as it deems fit. Outside of these powers, its government also provide CORIS RA with monthly subventions to cover its recurrent expenditures based on CORIS RA budgetary demands and the legal allocations by the government. For the 2017 and 2018, CORIS RA used the cash basis to prepare its financial statements, although some of the accounting transactions were recorded using the accrual basis. It should be noted that the government instructed all of its agencies to use an accrual basis that is guided and recommended by IPSASS. You were asked by to government to assist CORIS RA with its accounting processes, which involved the recording, generation and preparation of accounting transactions and final accounts as stipulated by the IPSASS. Working with a team of qualified and experienced accountants, you were able to prepare the following accounting information of CORIS RA for the year ending December 2020: Details Amount Dividend Received 93,250 Loan payment 143,000 Amounts Recovered Interest Expense Court Administration Fees 194,000 200,000 240,000 Cost of Training Bar License Store Rent 275,000 300,400 300,750 Fines and Penalties General Cleaning 330,000 350,000 370,000 Sanitation Accumulated Fund (1/1/2020) Basic Taxes and Rates 370,600 370,900 Allowances Equity Investment Acquired 390,470 420,000 Royalties Accountancy and Consultancies cost Work-In-Progress 430,000 470,000 490,000 Herbalist License 530,370 580,000 600,000 Posts not on Establishment Other Expenditure Stool Land Revenue 600,000 620,000 Transport and Travelling cost Utilities 630,000 630,920 Hostel License
Details Advances to Staff Amount 660,000 Local Park Fees 720,400 800,000 820,000 Inventory and Consumables Special Services Property Rate Social Benefit 820,900 840,300 Market Tolls Consumption of Fixed Assets Infrastructure, Plant and Equipment 870,000 960,000 980,000 990,000 990,320 Permit Fees Proceeds from Sale of Equity Established Posts 1,140,700 Development Bonds Issued 1,300,000 Business Income 2,300,600 Loans Received 2,330,000 Local Fund 2,930,000 Rent from Land and Building 6,120,800 Central Government Salaries 12,000,000 Cash and Cash Equivalent @ (1/1/2020) Parish Development Facility 12,300,240 15,000,600 NOTES 1. You are to ensure that CORIS RA adopts and maintain the accrual accounting basis when preparing its financial statements 2. As of December 31, 2020, the Established Post had outstanding salaries of $180,000,000.00 3. Closing Inventory and Consumables as at December 31, 2020 stood at $170,000,000.00
Transcribed Image Text:Details Advances to Staff Amount 660,000 Local Park Fees 720,400 800,000 820,000 Inventory and Consumables Special Services Property Rate Social Benefit 820,900 840,300 Market Tolls Consumption of Fixed Assets Infrastructure, Plant and Equipment 870,000 960,000 980,000 990,000 990,320 Permit Fees Proceeds from Sale of Equity Established Posts 1,140,700 Development Bonds Issued 1,300,000 Business Income 2,300,600 Loans Received 2,330,000 Local Fund 2,930,000 Rent from Land and Building 6,120,800 Central Government Salaries 12,000,000 Cash and Cash Equivalent @ (1/1/2020) Parish Development Facility 12,300,240 15,000,600 NOTES 1. You are to ensure that CORIS RA adopts and maintain the accrual accounting basis when preparing its financial statements 2. As of December 31, 2020, the Established Post had outstanding salaries of $180,000,000.00 3. Closing Inventory and Consumables as at December 31, 2020 stood at $170,000,000.00
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