- 14 Marks
PSAF- Nov 2019 – L2 – Q2a -Preparation and presentation of financial statements for covered entities
Prepare the Statement of Financial Performance and Statement of Financial Position for Bunsu Education College as of 31/12/2018.
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)
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