CORIS RA is a government owned enterprise which is legislated to generate its own incomewhich it uses to cover capital and recurrent expenditures. The legislations also give thegovernment the powers to order CORIS RA to transfer all or part of the income it generates tothe consolidated fund as it deems fit. Outside of these powers, its government also provideCORIS RA with monthly subventions to cover its recurrent expenditures based on CORIS RAbudgetary 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 benoted that the government instructed all of its agencies to use an accrual basis that is guided andrecommended by IPSASs.You were asked by to government to assist CORIS RA with its accounting processes, whichinvolved the recording, generation and preparation of accounting transactions and final accountsas stipulated by the IPSASs.Working with a team of qualified and experienced accountants, you were able to prepare thefollowing accounting information of CORIS RA for the year ending December 2020: Dividend Received 93,250Loan payment 143,000Amounts Recovered 194,000Interest Expense 200,000Court Administration Fees 240,000Cost of Training 275,000Bar License 300,400Store Rent 300,750Fines and Penalties 330,000General Cleaning 350,000Sanitation 370,000Accumulated Fund (1/1/2020) 370,600Basic Taxes and Rates 370,900Allowances 390,470Equity Investment Acquired 420,000Royalties 430,000Accountancy and Consultancies cost 470,000 Work-In-Progress 490,000Herbalist License 530,370Salary 2 580,000Other Expenditure 600,000Stool Land Revenue 600,000Transport and Travelling cost 620,000Utilities 630,000Hostel License 630,920Advances to Staff 660,000Local Park Fees 720,400Inventory and Consumables 800,000Special Services 820,000Property Rate 820,900Social Benefit 840,300Market Tolls 870,000Consumption of Fixed Assets 960,000Infrastructure, Plant and Equipment 980,000Permit Fees 990,000Proceeds from Sale of Equity 990,320Salary 1 1,140,700Development Bonds Issued 1,300,000Business Income 2,300,600Loans Received 2,330,000Local Fund 2,930,000Rent from Land and Building 6,120,800Central Government Salaries 12,000,000Cash and Cash Equivalent @ (1/1/2020) 12,300,240Parish Development Facility 15,000,600 NOTES1 You are to ensure that CORIS RA adopts and maintain the accrual accounting basis whenpreparing its financial statements2 As of December 31, 2020, the Established Post had outstanding salaries of$180,000,000.003 Closing Inventory and Consumables as at December 31, 2020 stood at $170,000,000.00 Required: Using the direct method format recommended by IPSASsPrepare CORIS RA Statement of Cash Flow for the year ended December 31, 2020.
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:
Dividend Received 93,250
Loan payment 143,000
Amounts Recovered 194,000
Interest Expense 200,000
Court Administration Fees 240,000
Cost of Training 275,000
Bar License 300,400
Store Rent 300,750
Fines and Penalties 330,000
General Cleaning 350,000
Sanitation 370,000
Accumulated Fund (1/1/2020) 370,600
Basic Taxes and Rates 370,900
Allowances 390,470
Equity Investment Acquired 420,000
Royalties 430,000
Accountancy and Consultancies cost 470,000
Work-In-Progress 490,000
Herbalist License 530,370
Salary 2 580,000
Other Expenditure 600,000
Stool Land Revenue 600,000
Transport and Travelling cost 620,000
Utilities 630,000
Hostel License 630,920
Advances to Staff 660,000
Local Park Fees 720,400
Inventory and Consumables 800,000
Special Services 820,000
Property Rate 820,900
Social Benefit 840,300
Market Tolls 870,000
Consumption of Fixed Assets 960,000
Infrastructure, Plant and Equipment 980,000
Permit Fees 990,000
Proceeds from Sale of Equity 990,320
Salary 1 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) 12,300,240
Parish Development Facility 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
Required: Using the direct method format recommended by IPSASs
Prepare CORIS RA Statement of Cash Flow for the year ended December 31, 2020.
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