Subject: PERFORMANCE MANAGEMENT

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PM – Nov 2024 – L2 – Q7b – Divisional Performance Measurement

Evaluating division performance using ROI and residual income methods with adjusted cost of capital.

Question

Ngerige and Sons Limited has four operating divisions spread across four cities in Nigeria: Lagos, Kano, Gombe, and Enugu. These divisions are treated as investment centres for performance reporting purposes. The following information is available:

Particulars	Lagos	Kano	Gombe	Enugu
Divisional Investment (N)	10,000,000	4,000,000	3,000,000	7,000,000
Divisional Sales (N)	53,000,000	23,000,000	24,600,000	29,400,000
Divisional Variable Costs (N)	50,000,000	22,000,000	23,400,000	27,400,000
Specific Fixed Costs (N)	1,500,000	750,000	600,000	800,000

The company’s annual general fixed cost is N1,300,000, apportioned to divisions based on sales. The cost of capital for Ngerige and Sons Limited is 7.5%. Ignore taxation.

Required:

i. Evaluate the performance of the divisions using the following methods:

ROI method. (3 Marks)
Residual Income Method. (3 Marks)

ii. Re-evaluate the residual income situation for the company given an adjusted cost of capital of 10%. (3 Marks)

Answer

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Tags: Cost of Capital, Division Performance, Investment Centres, Profitability Ratios, Residual Income, ROI
Level: Level 2

Topic: Divisional Performance Measurement

PM – Nov 2024 – L2 – Q7a – Divisional Performance Measurement

Definitions of Responsibility Accounting, Investment Centre, Return on Investment (ROI), and Residual Income.

Question

Define the following concepts:

i. Responsibility accounting
ii. An investment centre
iii. Return on Investment (ROI)
iv. Residual income

Answer

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Tags: Investment Centre, Performance Measurement, Residual Income, Responsibility Accounting, ROI
Level: Level 2

Topic: Divisional Performance Measurement

PM – Nov 2024 – L2 – Q6 – Divisional Performance Measurement

Comparative analysis of Owerri and Isiekenesi event centers based on financial performance metrics

Question

Omegboje and company is a medium-scale outfit that specializes in the rental business in Owerri and Isiekenesi towns. The company operates a large event center in each city, supplying chairs, tables, and canopies for both outdoor and some indoor events.

Each event center manager has some independence in operations and earns a performance bonus of 10% of sales if they achieve more than the standard return on capital employed (ROCE) of 50%.

The following financial data is available for the two centers for the years ending December 31, 2020, and 2019:

Additional Information:

Revenue is derived from rentals and ancillary services.
Both centers have a cost of capital of 15%.
Ignore taxation and inflation.

Required:

a. Discuss the relative performance of the two centers based on: i. Return on Capital Employed (ROCE) ii. Residual Income iii. Profit Margin iv. Current Ratio v. Quick Ratio vi. Gearing Ratio vii. Interest Cover
(7 Marks)

b. Compute the performance bonus for the centers (if any), showing your workings.
(4 Marks)

c. Briefly outline the role of a Management Accountant in project management.
(4 Marks)

Answer

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Tags: Current Ratio, Gearing Ratio, Interest Cover, Liquidity Ratios, Profit margin, Quick Ratio, Residual Income, ROCE
Level: Level 2

Topic: Divisional Performance Measurement

PM – Nov 2024 – L2 – Q1 – Decision-Making Techniques

Optimization of Oshimiri Nigeria Limited's production plan to maximize profits under resource constraints using linear programming.

Question

Oshimiri Nigeria Limited, a company based in Aba, produces two grades of industrial vanish. The selling price and associated unit variable costs for vanish Grade A and Grade B are shown below:

Particulars	Grade A	Grade B
Selling Price	N2,100	N1,500
Material X (N240/kg)	N480	N240
Skilled Labour (N144/hr)	N720	N288
Unskilled Labour (N60/hr)	N120	N180
Variable Overhead (N84/machine hr)	N168	N336

The fixed overhead costs are N2,600,000 per month. The company plans to maximize profits.

The availability of resources for the following month is as follows:

Material X: 25,000 Kg
Skilled Labour: 48,000 hours
Unskilled Labour: 39,000 hours
Machine hours: 50,000 hours

Required:

a. Identify the objective function and the constraints of the model to be used in determining the optimum production plan for the following month. (5 Marks)

b. Determine the optimum production plan for the month and the associated profit. (5 Marks)

c. Explain the concept and significance of dual prices and slack variables in the context of the model used by the company in this scenario. (4 Marks)

d. Calculate the dual prices for constraints identified in this scenario. (10 Marks)

e. Suggest ways in which the management can overcome the capacity constraints identified above during the month and the cost implications. (6 Marks)

Answer

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Tags: Capacity Constraints, Constraints, Dual Prices, Linear Programming, Objective Function, Production Plan, Slack Variables
Level: Level 2

Topic: Decision-making techniques

PM – May 2015 – L2 – SB – Q7 – Environmental and Social Performance Management

Discuss the concept of globalisation, its impact on management information systems, and arguments against its influence on management performance

Question

The use of internet has made the entire universe a global village. Managers can comfortably sit in their offices connected to the internet and the world wide web to obtain all necessary information for their business needs.

Required: a. Discuss the concept of globalisation and how management information systems have enhanced effective management performance. (10 Marks)
b. What arguments will you advance against globalisation as it relates to management performance? (5 Marks)

Answer

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Tags: Globalisation, Internet Usage, Management Performance, MIS
Level: Level 2

Topic: Environmental and Social Performance Management
Series: MAY 2015

PM – May 2015 – L2 – SB – Q6 – Costing Systems and Techniques-

Determine the most profitable product mix for Markus Limited, and prepare a profitability statement for the optimal product mix.

Question

Markus Limited manufactures three products and operates a marginal costing system.

The following information has been extracted from the company’s records:

Products	X	Y	Z
Units budgeted to be produced and sold	3,600	6,000	3,400
Selling Price (₦)	120	110	100
Requirement per Unit:
Direct Material (kg)	5	3	4
Direct Labour (Hours)	4	3	2
Direct Labour Hour rate (₦)	4	4	4
Direct Material Cost per Kg (₦)	8	8	8
Variable Overheads (₦)	14	26	16
Fixed Overheads (₦)	20	20	20
Maximum possible sales (units)	8,000	10,000	3,000

All the three products are produced from the same direct material using the same types of machine and labour. Direct labour, which is the key factor, is limited to 37,200 hours.

Required: a. Determine the most profitable product mix. (6 Marks)
b. Prepare a statement of profitability for the product mix. (9 Marks)

Answer

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Tags: Contribution analysis, Marginal Costing, Product Mix, Profitability
Level: Level 2

Topic: Costing Systems and Techniques
Series: MAY 2015

PM – May 2015 – L2 – SB – Q5 – Balanced Scorecard

Evaluate the use of the Balanced Scorecard and analyze investment decisions for Carossi Limited using ROI and RI.

Question

CAROSSI Limited makes quality wooden products such as tables, chairs, benches, and doors. Historically, the company has used mainly financial performance measures to assess the performance of the company as a whole. The company’s Chief Executive Officer has just been informed of the ‘Balanced Scorecard Approach’ and is eager to learn more.

CAROSSI Limited has two Divisions X and Y, each with its own cost and revenue streams. Each Division is managed by a divisional manager who has the power to make all investment decisions within the Division. The cost of capital for both Divisions is 15 percent. Historically, investment decisions have been made by calculating the Return on Investment (ROI) of any opportunities, and presently, the return on investment of each Division is 18 percent.

A recently appointed manager for Division X strongly feels that using Residual Income (RI) to make investment decisions would result in better ‘goal congruence’ throughout the organisation.

Investment Details for Each Division:

	Division X	Division Y
Capital required for investment (₦m)	88.2	46.0
Revenue generated from investment (₦m)	46.4	28.1
Net profit margin (%)	30	35

The company is seeking to maximise shareholders’ wealth.

Required: a. Describe the Balanced Scorecard Approach to performance measurement. (8 Marks)
b. Determine both the return on investment and residual income of the new investment for each of the two divisions. Comment on these results and take into consideration the manager’s views about residual income. (7 Marks)

Answer

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Tags: Balanced Scorecard, Goal Congruence, Investment Appraisal, Residual Income, ROI
Level: Level 2

Topic: Balanced Scorecard
Series: MAY 2015

PM – May 2015 – L2 – SB – Q4 – Costing Systems and Techniques

Analyze the pricing policy and budget position for Badegy Limited, considering competitor price changes and cost inflation.

Question

BADEGY Limited is a medium-sized company. The company is in the process of deciding its pricing policy for the next period.

The following information is available from its records:

Previous Period:

Revenue: ₦13,000,000
Units Sold: 100,000 at ₦130
Costs: ₦10,000,000
Profit: ₦3,000,000

Current Period:

Revenue: ₦13,780,000
Units Sold: 106,000 at ₦130
Costs: ₦10,774,000
Profit: ₦3,006,000

It was discovered that between the previous and current periods, there was a 4% general cost inflation, and it is forecast that costs will rise further by 6% in the next period. As a matter of policy, the company did not increase the selling price in the current period, although competitors raised their prices by 4% to allow for the increased costs.

A survey by a team of management consultants found that the demand for the product is elastic with an estimated price elasticity of demand of 1.5. This means that volume falls by 1.5 times the rate of real price increase. Various options are to be considered by the Board.

Required: a. Show the budgeted position of the company if it maintains the ₦130 selling price for the next period when it is expected that competitors will increase their prices by 6%. (15 Marks)
b. What would the budgeted position be if the company also raises its price by 6%? (5 Marks)

Answer

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Tags: Budget Position, Competitor Pricing, Cost Analysis, Demand Elasticity, Pricing Policy
Level: Level 2

Topic: Costing Systems and Techniques
Series: MAY 2015

FM – May 2015 – L2 – SB – Q3 – Cost-Volume-Profit (CVP) Analysis

Evaluate Pakex's investment proposal using Residual Income and ROCE, including alternative proposal analysis for decision-making.

Question

Pakex is a division of an automobile group that has five years remaining on a leased premises in which it sells self-assembled motorcycles. The management is proposing an investment of ₦48 million on immediate improvements to the interior of the premises in order to stimulate sales by creating a more effective selling environment. The following information is available:

(i) The expected increase in revenue following the improvements is ₦40 million per annum. The average contribution to sales ratio is expected to be 40%.

(ii) The cost of capital is 16% and the division has a target Return on Capital Employed of 20% based on the net book value of the investment at the beginning of the year.

(iii) At the end of the five-year period, the premises improvements will have a NIL residual value.

(iv) The management staff turnover at Pakex division is high. The division’s investment decisions and management performance measurement are currently based on the figures for the first year of the proposal.

In addition to the above information, there is an alternative proposal that suggests a forecast of the increase in revenue per annum from the premises improvements as follows:

Year	1	2	3	4	5
Increase in Revenue	56	40	40	24	16

All other factors are expected to remain the same.

Required: a. Prepare a summary of the statement of the management’s investment proposal for years 1 to 5 showing Residual Income and Return on Capital Employed for each year using the straight-line depreciation method. (10 Marks)
b. Comment on the use of the figures from the Statement in (a) above as a decision-making and management performance measure. (4 Marks)
c. Calculate the Residual Income and Return on Capital Employed for year 1 using the alternative proposal. (6 Marks)

Answer

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Tags: Investment Appraisal, Management Performance, Residual Income, ROCE, Straight Line Depreciation
Level: Level 2

Topic: Cost-Volume-Profit (CVP) Analysis
Series: MAY 2015

FM – May 2015 – L2 – SB – Q2 – Introduction to Performance Management

Prepare profitability and cash flow statements, and compute liquidity and gearing ratios for Ozoigbondu Nigeria Limited.

Question

Ozoigbondu Nigeria Limited is a company that is into buying and selling of plastic containers. The company is financed by a capital of ₦15 million inclusive of reserves in a mix of 30% and 70% of debt and equity respectively.

The Company has been in trading business for the past six years and has consistently adhered to its corporate policy on sales, purchases, and inventory management.

The company’s policy on sales is to ensure that sales are collected as follows: (i) Cash sales is 40% of the monthly sales. (ii) The balance of the month’s sales is to be collected in the month following sales.

The policy on purchases is in agreement with the supplier’s policy which is to pay for all supplies in the month following. The company’s stock policy is to reserve 30% of the month’s purchases as closing inventory.

The following information is available for the five years 2010 to 2014:

	2010	2011	2012	2013	2014
Monthly Sales	3,400,000	3,600,000	4,200,000	4,800,000	7,200,000
Monthly Purchases	2,000,000	2,400,000	2,800,000	3,200,000	4,800,000
Monthly Salaries	350,000	350,000	430,000	430,000	480,000
Monthly Rent	100,000	100,000	100,000	100,000	100,000
Monthly Cash Expenses	200,000	220,000	240,000	280,000	360,000

Additional Information: (i) The company purchased a motor vehicle in July 2013 which was paid for in September 2013. The cost of the motor vehicle was ₦5,000,000.
(ii) Annual depreciation for the motor vehicle is 20%.
(iii) The Cash Balance as at 31st December 2011 was ₦4,000,000.
(iv) The company’s salaries, rent, and expenses were paid in the month they were due.

Required: a. Prepare a Profitability Statement for 2012, 2013, and 2014. (10 Marks)
b. Prepare a Cash Flow Statement for 2012, 2013, and 2014. (7 Marks)
c. Determine and comment on the liquidity ratio (current ratio) for 2014. (2 Marks)
d. Compute the gearing ratio. (1 Mark)

Answer

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Tags: Cash Flow, Financial Ratios, Financial Statement Analysis, Gearing, Liquidity, Profit Analysis
Level: Level 2

Topic: Introduction to Performance Management
Series: MAY 2015

PM – Nov 2015 – L2 – Q4 – Strategic Management Accounting

Examine strategic and performance issues MOOJ Ltd. must consider before adopting internet trading.

Question

The existing business of MOOJ Ltd. is very profitable, with forecasts for the next year
showing that this trend of profitability will continue.
MOOJ Limited manufactures all of its own clothes, and then sells these direct to the
public through 105 branches located around Nigeria. The branches are not run as profit
centres; prices are set centrally for the clothes and the costs of each branch are
monitored at the Head Office. Surprisingly, there is no minimum or maximum turnover
requirement for each branch. In the company‟s view, this enables staff to focus on
customer service without the concern of meeting a profit figure. The strategy obviously
works well, given the company‟s results.
The existing Information Technology (IT) infrastructure is based around each shop
maintaining its own inventory records. There is no Wide Area Network (WAN) and Head
Office has few integrated systems.
The Directors recognise that the current IT infrastructure of MOOJ Limited is inadequate
for Internet trading.
The Board of MOOJ Limited is currently discussing whether or not to start selling clothes
on the Internet.

Required:
Identify and discuss the strategic and performance management issues that the Board of
MOOJ Limited will have to address prior to a decision being taken regarding trading on
the Internet.

Answer

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Tags: Corporate Image, E-commerce, Internet Security, IT infrastructure, Strategic Planning
Level: Level 2

Topic: Strategic Management Accounting
Series: NOV 2015

PM – Nov 2015 – L2 – Q3 – Costing Systems and Techniques

Prepare profit or loss statement for each product W, X, Y, and Z, and evaluate impact of discontinuing additional processing.

Question

Casko Limited manufactures four products from a single chemical process and a single
raw material. The production director is considering proposals to discontinue certain
production process and has provided the following information:
(i) The cost of raw materials for the year just ended was N1,320,000.
(ii) The initial processing costs amounted to N2,564,600.
(iii) All the four products W, X, Y and Z are produced simultaneously at a single split-off point.
(iv) Product Y is sold immediately without further processing.
(v) The other three products are subjected to further processing before being sold.
(vi) It is the company‟s policy to apportion the cost prior to split-off point on a suitable
sales value basis.
(vii) The output, sales and the additional processing costs for the past year were as
follows:

Product	Output (units)	Sales (N)	Additional Processing Costs (N)
W	400,000	3,840,000	800,000
X	89,230	1,160,000	640,000
Y	5,000	160,000	–
Z	9,000	1,200,000	40,000

The proposal being considered by the management is to sell the products to other
processors immediately after the split-off point without any of the present additional
processing. The additional processing costs of products W,X and Z would either no
longer be incurred or be charged to an alternative profitable use. The prices per unit to
be obtained from the other processors would be: W: N6.40, X: N8, Y: N32, and Z: N100.

You are required to prepare a statement of:
a. i. The profit or loss on each of the four products. (10 Marks)
ii. The change in the profit or loss given in your solution to
(i) above, if the proposals being considered were adopted. (8 Marks)
b. Identify TWO long-run pricing decision approaches that are relevant
to a price setting firm. (2 Marks)

Answer

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Tags: Cost-benefit analysis, Joint Cost Allocation, Long-Run Pricing, Profit and Loss
Level: Level 2

Topic: Costing Systems and Techniques
Series: NOV 2015

PM – Nov 2015 – L2 – Q2 – Standard Costing and Variance Analysis

Calculate material price and usage planning and operational variances for wheat used in baking cake and bread, and discuss the benefits of these variances.

Question

Pestel Limited produces cake and bread which it supplies to a major supermarket in
Abuja. It holds no inventories because it adopts the Just-In-Time (JIT) system.
The standard cost of the wheat used in baking the products is N200 per kg. Each piece
of cake uses 0.5kg of wheat while each loaf of bread uses 2kg of wheat.
The production levels for cake and bread for the month of October were as follows:

The actual cost of wheat in October was N232 per kg. 496,000kg of wheat was used to
bake the bread and 190,000kg was used to bake the cake.
The global prices of wheat increased by 18% in the month of October.

At the beginning of the month, the supermarket group made an expected request for an
immediate shape change to the cake resulting in 5% more wheat than previously
required. This change also brought about production delays which caused a reduction in
production by 20,000 units of cake in that month. The production director is given the
task of purchasing relevant input materials and any production request which occur,
although he does not take responsibility for setting standard costs.
Required:

(a) Compute the following variances for the month of October for each product and in total:

(i) Material price planning variances, (4 Marks)

(ii) Material price operational variances. (4 Marks)

(iii) Material usage planning variances, (4 Marks)

(iv) Material usage operational variances (4 Marks)

(b) Discuss the benefits of planning and operational variances to a management accountant. (4 Marks)

Answer

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Tags: Material Price Variances, Material Usage Variances, Operational Variances, Planning Variances, Variance Analysis
Level: Level 2

Topic: Standard Costing and Variance Analysis
Series: NOV 2015

PSAF – May 2024 – L2 – SB – Q7 – Public Sector Reforms

Categories of public finance and rationale for public sector involvement in the economy.

Question

Public finance is concerned with the income and expenditure of public authorities and with the adjustment of one to the other. Also, it opines that the subject matter of public finance looks into the financial problems and policies of the government at different levels and studies the inter-governmental financial relations.

Required:
a. Identify and explain FIVE categories of public finance. (7½ Marks)

b. Discuss FIVE rationale for public sector in the economy. (7½ Marks)

Answer

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Tags: Fiscal Responsibility, Government Policy, Public Finance
Level: Level 2

Topic: Public Sector Reforms
Series: MAY 2024

PM – Nov 2015 – L2 – Q1 – Decision-Making Techniques

Comparison of two machine purchase options - ZIGMA 5000 and DELPHA 7000 using profitability statement, cash flows, payback period and NPV.

Question

The Board of Directors of Danda Company Limited is proposing the purchase of either of two machines that have been proved adequate for the production of an engineering product “Gee”. The two machines are: ZIGMA 5,000 and DELPHA 7,000. Production in the first year would be affected by installation challenges and inadequate understanding of the operating instructions of the machines.

Information available from the production profile of the two machines are as shown below:

ZIGMA 5000:

Cost of machine is N16,500,000 while the life span is 6 years.

DELPHA 7000:

Cost of plant is N18,300,000 while the life span is 6 years.

Other information relevant to the company’s operations and administration are:

(i) Selling price per unit is N300.

(ii) Variable cost per unit is N150.

(iii) Annual fixed overhead exclusive of depreciation is N1,200,000.

(iv) Company depreciation policy is straight line basis.

(v) The budgeted production capacity is 100,000 units.

(vi) No opening or closing inventory is envisaged.

(vii) All sales are for cash.

(viii) All costs are for cash.

Required:

a. Prepare the SIX year profitability statement for the two machines. (6 Marks)

b. Prepare the SIX year cash flow statement for the two machines. (6 Marks)

c. What is the payback period for the two machines? (7 Marks)

d. Determine the Net Present Value (NPV) of the two machines if the acceptable discount rate for the company is 15%. (7 Marks)

e. Which of the two machines should the company acquire? (4 Marks)

Answer

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Tags: Capital Budgeting, Cash Flow Analysis, Investment Appraisal, NPV, Payback Period
Level: Level 2

Topic: Decision-making techniques
Series: NOV 2015

PSAF – May 2024 – L2 – SB – Q6 – Government Expenditure

Evaluation of investment projects using Profitability Index.

Question

a. Oyigbo Local Government is set to improve its internally generated revenue by venturing into the construction of an animal feedmill, which will cost N15 million. The mill, when constructed, is projected to generate a net cash inflow of N3.8 million annually and the useful life is 6 years. The cost of borrowing from a commercial bank for this purpose is 12%.

Required:
Advise the Chairman of Oyigbo Local Government whether or not to undertake the project using the Profitability Index (PI) technique of investment appraisal.

The cumulative discount factor formula to use is:

where $r =$ discount rate, $n =$ number of years. (10 Marks)

b. Identify THREE advantages and TWO disadvantages of the profitability index as a technique for project appraisal. (5 Marks)

Answer

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Tags: Investment Appraisal, Profitability Index, Public Sector Finance
Level: Level 2

Topic: Government Expenditure
Series: MAY 2024

PSAF – May 2024 – L2 – SB – Q5 – Government Revenue

Principles and factors affecting revenue allocation in Nigeria.

Question

In Nigeria, public revenue belongs to its citizenry and is allocated to them through the National Revenue Mobilisation, Allocation and Fiscal Commission.

a. State and explain FIVE principles that guide revenue allocation in Nigeria. (7½ Marks)

b. Explain FIVE factors that led to the controversies surrounding revenue sharing in Nigeria. (7½ Marks)

Answer

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Tags: Fiscal Commission, Public Finance, Revenue Allocation
Level: Level 2

Topic: Government Revenue
Series: MAY 2024

PSAF – May 2024 – L2 – SB – Q4 – Government Accounting Concepts and Principles

Characteristics, structures, and steps for budgeting with National Chart of Accounts.

Question

National Chart of Accounts (NCOA) shows the complete list of budget and accounting items for General Purpose Financial Reporting (GPFS) and budgeting.

a. State FOUR characteristics of the National Chart of Accounts. (4 Marks)

b. Discuss the SIX structures of the National Chart of Accounts for budgeting. (12 Marks)

c. Identify and briefly explain FOUR steps for budgeting with the National Chart of Accounts. (4 Marks)

Answer

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Tags: Budgeting, National Chart of Accounts, Public Sector Finance
Level: Level 2

Topic: Government Accounting Concepts and Principles
Series: MAY 2024

PSAF – May 2024 – L2 – SB – Q3 – Financial Reporting and Accountability in the Public Sector

Preparation of a bank reconciliation statement and discussion of challenges in e-payment.

Question

a. Differentiate between unapplied mandate and uncredited cheques. (5 Marks)

b. The Account Officer of University of Igbokuenu, Abia, supplied the following information for Asejere Bank for the month ended March 31, 2020. On the same date, the balance as per the bank statement was a credit balance of N26,229,000, while the cash book showed a debit balance of N12,063,000.

The investigation carried out by the accounts officer revealed the following:

There was a bank charge amounting to N15,000 for administrative fees, which had been deducted by the bank but no entry was made in the cash book.
A commission on turnover (COT) of N30,000 for the month of February had not been recorded in the cash book.
Interest of 2% was paid on an endowment fund of N127,500,000, which was maintained in a fixed deposit account in Kazua Bank. This was paid directly to Asejere Bank PLC, but has not been recorded in the cash book, while an investment income amounting to N60,000 was also received directly by the bank but has no entry in the cash book.
A cheque of N24,000 was received from B-Engineering services as a registration fee on March 31, 2020, and was duly entered into the cash book and taken to the bank on the same day but had not been credited as of the time the bank statement was collected.
Cheques amounting to N3,300,000, previously credited by the bank were dishonored.
A sum of N10,200,000 which was paid directly to the bank was received from the Abuja Alumni of the University in the form of aid, which the accountant has not recorded in the cash book, while an additional N4,500,000 aid was received from USAID but not recorded in the cash book.
Mandate numbers, which were issued by the University to the bank for payments to beneficiaries in March 2020, were yet to be applied with details as follows:

Mandate No.	Beneficiary	Amount (N)
0671420	SolarTech	90,000
0002418	GreenLaud	120,000
0021462	S-Publishers	15,000

Required:
i. Prepare a bank reconciliation statement for the period ended March 31, 2020. (10 Marks)

ii. Identify and explain FIVE challenges of bank reconciliation under the e-payment system. (5 Marks)

Answer

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Tags: Bank Reconciliation, Financial Reporting, Public Sector Accounting
Level: Level 2

Topic: Financial Reporting and Accountability in the Public Sector
Series: MAY 2024

PSAF – May 2024 – L2 – SB – Q2 – International Public Sector Accounting Standards (IPSAS)

Disclosures and interpretation of financial statements for public sector investments.

Question

a. IPSAS 36 – Investments in Associates and Joint Ventures is a replacement of IPSAS 7 on Accounting for Investments in Associates.

You are required to:

Identify and briefly explain FOUR disclosures that should be made in the accounts on investments in associates. (8 Marks)

b. Interpretation of public sector financial statements is necessary in order to take decisive action in the public sector activities.

You are required to:

Identify and briefly explain THREE ways through which comparison of figures in respect of two or more years can be derived. (12 Marks)

Answer

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Tags: Financial Reporting, Investments, IPSAS
Level: Level 2

Topic: International public sector accounting standards
Series: MAY 2024

Subject: PERFORMANCE MANAGEMENT

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PM – Nov 2024 – L2 – Q7b – Divisional Performance Measurement

Evaluating division performance using ROI and residual income methods with adjusted cost of capital.

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PM – Nov 2024 – L2 – Q7a – Divisional Performance Measurement

Definitions of Responsibility Accounting, Investment Centre, Return on Investment (ROI), and Residual Income.

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PM – Nov 2024 – L2 – Q6 – Divisional Performance Measurement

Comparative analysis of Owerri and Isiekenesi event centers based on financial performance metrics

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PM – Nov 2024 – L2 – Q1 – Decision-Making Techniques

Optimization of Oshimiri Nigeria Limited's production plan to maximize profits under resource constraints using linear programming.

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PM – May 2015 – L2 – SB – Q7 – Environmental and Social Performance Management

Discuss the concept of globalisation, its impact on management information systems, and arguments against its influence on management performance

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PM – May 2015 – L2 – SB – Q6 – Costing Systems and Techniques-

Determine the most profitable product mix for Markus Limited, and prepare a profitability statement for the optimal product mix.

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PM – May 2015 – L2 – SB – Q5 – Balanced Scorecard

Evaluate the use of the Balanced Scorecard and analyze investment decisions for Carossi Limited using ROI and RI.

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PM – May 2015 – L2 – SB – Q4 – Costing Systems and Techniques

Analyze the pricing policy and budget position for Badegy Limited, considering competitor price changes and cost inflation.

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FM – May 2015 – L2 – SB – Q3 – Cost-Volume-Profit (CVP) Analysis

Evaluate Pakex's investment proposal using Residual Income and ROCE, including alternative proposal analysis for decision-making.

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FM – May 2015 – L2 – SB – Q2 – Introduction to Performance Management

Prepare profitability and cash flow statements, and compute liquidity and gearing ratios for Ozoigbondu Nigeria Limited.

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PM – Nov 2015 – L2 – Q4 – Strategic Management Accounting

Examine strategic and performance issues MOOJ Ltd. must consider before adopting internet trading.

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PM – Nov 2015 – L2 – Q3 – Costing Systems and Techniques

Prepare profit or loss statement for each product W, X, Y, and Z, and evaluate impact of discontinuing additional processing.

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PM – Nov 2015 – L2 – Q2 – Standard Costing and Variance Analysis

Calculate material price and usage planning and operational variances for wheat used in baking cake and bread, and discuss the benefits of these variances.

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PSAF – May 2024 – L2 – SB – Q7 – Public Sector Reforms

Categories of public finance and rationale for public sector involvement in the economy.

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PM – Nov 2015 – L2 – Q1 – Decision-Making Techniques

Comparison of two machine purchase options - ZIGMA 5000 and DELPHA 7000 using profitability statement, cash flows, payback period and NPV.

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PSAF – May 2024 – L2 – SB – Q6 – Government Expenditure

Evaluation of investment projects using Profitability Index.

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PSAF – May 2024 – L2 – SB – Q5 – Government Revenue

Principles and factors affecting revenue allocation in Nigeria.

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PSAF – May 2024 – L2 – SB – Q4 – Government Accounting Concepts and Principles

Characteristics, structures, and steps for budgeting with National Chart of Accounts.

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PSAF – May 2024 – L2 – SB – Q3 – Financial Reporting and Accountability in the Public Sector

Preparation of a bank reconciliation statement and discussion of challenges in e-payment.

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PSAF – May 2024 – L2 – SB – Q2 – International Public Sector Accounting Standards (IPSAS)

Disclosures and interpretation of financial statements for public sector investments.

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