Topic: Preparation and presentation of financial statements for local government

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  • 20 Marks

PSAF – Nov 2020 – L2 – Q2 – Preparation and presentation of financial statements for local government

Prepare financial statements (Statement of Financial Performance and Statement of Cash Flow) and explain basic disclosure requirements for Eminaa District Assembly.

a) The following details relate to Eminaa District Assembly for the year 2018.

Details GH¢’000
Dividend Received 93,250
Central Government Salaries 12,000,000
Basic Rates 370,900
Districts Development Facility 15,000,600
Rent from Land and Building 6,120,800
Established Posts 1,140,700
Other Expenditure 600,000
Non-Established Posts 580,000
Allowances 390,470
Court Fees 240,000
Inventory and Consumables 800,000
Sanitation Fees 370,000
General Cleaning 350,000
Common Fund 2,930,000
Social Benefit 840,300
Equity Investment Acquired 420,000
Infrastructure, Plant, and Equipment 980,000
Work-In-Progress 490,000
Loans Received 2,330,000
Interest Expense 200,000
Advances to Staff 660,000
Royalties 430,000
Consultancies cost 470,000
Training and Workshop cost 275,000
Transport and Travelling cost 620,000
Consumption of Fixed Assets 960,000
Special Services 820,000
Utilities 630,000
Market Tolls 870,000
Permit Fees 990,000
Fines and Penalties 330,000
Development Bonds Issued 1,300,000
Hostel License 630,920
Business Income 2,300,600
Chop Bar License 300,400
Proceeds from Sale of Equity 990,320
Accumulated Fund (1/1/2018) 370,600
Herbalist License 530,370
Cash and Cash Equivalent @ (1/1/2018) 12,300,240
Stool Land Revenue 600,000
Lorry Park Fees 720,400
Market Store Rent 300,750
Recoveries 194,000
Loan Repayment 143,000
Property Rate 820,900

Additional Information:

  1. Eminaa District Assembly adopts the accrual basis of accounting in the preparation of its financial statements.
  2. Established Post salaries outstanding as at 31/12/2018 were GH¢180,000,000.
  3. Inventory at 31/12/2018 was GH¢170,000,000.

Required:
Prepare for Eminaa District Assembly:

  • Statement of Financial Performance for the year ended 31/12/2018.

(7 marks)

b) Prepare a statement of cash flow for Eminaa District Assembly for the year ended 31/12/2018. (8 marks)

c) Subject to IPSAS 6: Consolidated and Separate Financial Statements, a Controlling Entity that presents Consolidated Financial Statements shall disclose certain basic information.

 

Explain FIVE (5) basic information that an institution preparing Consolidated Financial Statements needs to disclose. (5 marks)

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  • 16 Marks

PSAF – May 2017 – L2 – Q4a – Preparation and presentation of financial statements for local government

This question requires the preparation of a Statement of Financial Performance and a Statement of Financial Position for a Municipal Assembly, along with detailed workings.

The Trial Balance was extracted from the books of Bokom Municipal Assembly (BMA) as at 31st December 2015.

Debit GH¢’000 Credit GH¢’000
Property rate 450 Sundry payables 60
Basic rates 200 Short term loans 120
Special rates 50 Deposits 100
Lorry park fees 40 Accumulated Fund 43
Marriage and divorce registration 10
Building permits 110
Penalties 80
Market toll 620
Share of District Assembly Common Fund 980
District Development Facility 350
Compensation for employees 1,000
Herbalist licenses 20
Hawkers licenses 15
Other licenses 12
Royalties 50
Share of stool land revenue 150
Market Store rent 70
Other rentals 40
Interest on investment 10
Gains from business 30
Established post 1,080
Non-established post 700
Goods and services 950
Interest expense 20
Social benefits 180
Other expenditure 260
Bank and Cash 40
Advances and loans 80
Investment 100
Property, Plant, and equipment 1,200
4,610 4,610

Additional Information:

  1. Revenues are classified as follows: Rate, Land Revenue, Fees and Fines, Licenses, Rent income, investment income, and Grants.
  2. The expenditure classification should comply with the harmonized Chart of Accounts.
  3. Consumption of fixed capital for the year is computed as GH¢260,000.

Required:

a) Prepare:

i)  A Statement of Financial Performance for the year ended 31st December 2015.

ii) A Statement of Financial Position as at 31st December 2015. (Please show all workings clearly). (16 marks)

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  • 20 Marks

PSAF – Nov 2023 – L2 – Q2 – Preparation and presentation of financial statements for local government

Prepare a Cash Flow Statement for a Municipal Assembly and explain benefits of cash flow information.

a) Below are items of transactions obtained from the financial records of Ganigani Municipal Assembly for the year ended 31 December 2022.

Transaction Items GH¢’000
Share of District Assembly Common Fund received 68,000
Share of District Assembly Common Fund in arrears 120,000
District Development Facility 60,000
Clean Ghana grant (i) 40,000
Hawkers licenses 5,000
Dog licenses 2,000
Hotel and Restaurant licenses 43,000
Akpeteshie Distillers or sellers’ licenses 9,000
Non-established post salaries (Paid from Consolidated Fund) 87,000
Casual labour 77,000
Pensions contribution 8,000
Assembly members sitting allowances 7,000
Salary related allowances (ii) 20,000
Training, Seminar and Conferences (iii) 45,000
Travel and transport 12,000
Utility expenses (iv) 1,000
Consumables 200
Interest expense (v) 500
Consumption of fixed asset (Accumulated) 44,000
Consumption of fixed asset (charged for the year) 4,800
Purchase of motor vehicle (vi) 30,000
Premises (old premises revalued by experts) 167,000
Cash proceeds from auction of old furniture 300
Recoveries from loan and advances 1,200
Loans and advances granted during the year 5,000
Issue of Municipal Bonds 100,000
Redemption of Municipal Bonds 28,000
Bank loan borrowed during the year 12,000
Loan repayment 3,400
Investment income received 100
Property rates 65,000
Basic rate 21,000
Market tolls and fees 12,400
Fees and miscellaneous charges 11,400
Cash and cash equivalent at 31 December 2022 (Debit) 70,000
Accumulated Fund Balance (Debit) 123,500
Donation of Cement from Concerned Citizens 3,500

Additional Information:

i) Clean Ghana grant of GH¢40,000 has a component of 40% in kind. ii) The Assembly paid 40% of the GH¢20,000 salary related allowances. iii) 60% of the GH¢45,000 representing Training, Seminar and Conferences expenses was funded by donors. iv) 25% of the GH¢1,000 representing utility expenses was in arrears. v) 90% of the GH¢500 representing interest expense has been paid. vi) 80% of the GH¢30,000 representing Motor Vehicle has been paid.

Required:

a) Prepare a Cash Flow Statement for the year ended 31 December, 2022 for Ganigani Municipal Assembly in compliance with the International Public Sector Accounting Standards 2: Cash Flow Statement and the current Chart of Accounts of Government of Ghana. (16 marks)

b) Explain FOUR (4) benefits of Cash Flow Information to the users of the financial statements of Ganigani Municipal Assembly. (4 marks)

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  • 20 Marks

PSAF – Nov 2017 – L2 – Q4 – Preparation and Presentation of Financial Statements for Local Government

Prepare a Revenue and Expenditure Statement and a Statement of Financial Position for a Local Government Authority based on the provided financial data.

a) Below are extracts from the books of a Local Government Authority for the period ended 31 December 2015.

GH¢
Rates 27,115.16
Non-Governmental Agencies 1,000.00
Grants – District Development Facility 888,828.37
Lands and Royalties 113,563.50
Rents of Lands, Buildings 14,855.20
Licences 55,394.22
Fees 139,784.70
Fines, Penalties and Forfeits 14,231.00
Miscellaneous and Unidentified Revenue 27,345.50
Established Posts –
Non-Established Posts 41,503.62
Other Allowances 40,231.05
Casual labour 7,576.45
Materials /Office Supplies 34,628.40
Utilities 5,286.20
General Cleaning 358.50
Rentals 6,260.07
Transport 90,724.05
Repairs and Maintenance 10,568.40
Training, Seminars, Conferences 46,013.70
Consulting Services 1,500.00
Special Services 37,904.00
Other Charges / Fees 1,735.40
Grants – DACF 459,992.60
Constituency’s Share of the Common Fund 39,000.00
GOG – Grant 206,845.97
Donors 595,086.20
Other expenses 11,163.44

Below The Line Accounts

GH¢
Cash and Bank 200,740.71
Receivables 29,100.97
Equity Investment –
Infrastructure, Plants and Equipment 322,929.71
Work-in-progress 125,064.79
Accounts Payables 5,000.00
Deposits and Other Trust Monies 25,000.00
Accumulated Fund 1,002,096.58

Required: Prepare a Revenue and Expenditure Statement for the year ended 31 December 2015 and a Statement of Financial Position as at that date. (Show workings) (20 marks)

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  • 20 Marks

PSAF – Mar 2023 – L2 – Q2a – Preparation and presentation of financial statements for local government

Preparation of a Statement of Financial Performance for Nsuta-Appiah Krom Municipal Assembly for the year ended 31 December 2021.

The following Trial Balance is the financial details of Nsuta-Appiah Krom Municipal Assembly for the year ended 31 December 2021.

Additional Information:

  1. It is the policy of the Assembly to adopt Accrual Basis in preparing its Financial Statements in compliance with Public Financial Management Act, 2016 (Act 921), Public Financial Management Regulation 2019 L.I 2378 and the International Public Sector Accounting Standards (IPSAS) and Local Governance Act 2016, (Act 936).
  2. Office consumables in respect of stationery and other items bought for GH¢1,800,000 remained unused during the year. The current replacement cost of the inventories is GH¢1,550,000. Meanwhile, the net realizable value of the inventories is estimated at GH¢1,400,000. No market exists for unused office consumables and other items.
  3. Property Rates received in respect of the 2022 financial year amounted to GH¢2,050,000.
  4. Salaries outstanding during the year amounted to GH¢750,000, and other expenses amounting to GH¢1,105,000 paid in respect of the 2022 financial year.
  5. Consumption of fixed assets is charged on a straight-line basis for the year as follows:
    • Motor vehicles: 10 years
    • Furniture, Fixtures & Fittings: 5 years
    • Building and Structures: 50 years
  6. Included in the Work in Progress is an amount of GH¢2,000,000 relating to a Building that was completed, commissioned, and put to use on 5 July 2021, after an additional amount of GH¢800,000 was spent to complete the pavement aspect of the building. This expenditure has not yet been paid.
  7. Interest on Loans to staff is at the rate of 15% per annum and interest on long-term Loans is at the rate of 10% per annum.

Required:

a) Prepare a Statement of Financial Performance for Nsuta-Appiah Krom Municipal Assembly for the year ended 31 December 2021.
(9 marks)

b) Prepare a Statement of Financial Position for Nsuta-Appiah Krom Municipal Assembly as at 31 December 2021.
(9 marks)

c) State TWO (2) Accounting Policies adopted and applied in preparing the financial statements.
(2 marks)

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  • 20 Marks

PSAF – Nov 2020 – L2 – Q2 – Preparation and presentation of financial statements for local government

Prepare financial statements (Statement of Financial Performance and Statement of Cash Flow) and explain basic disclosure requirements for Eminaa District Assembly.

a) The following details relate to Eminaa District Assembly for the year 2018.

Details GH¢’000
Dividend Received 93,250
Central Government Salaries 12,000,000
Basic Rates 370,900
Districts Development Facility 15,000,600
Rent from Land and Building 6,120,800
Established Posts 1,140,700
Other Expenditure 600,000
Non-Established Posts 580,000
Allowances 390,470
Court Fees 240,000
Inventory and Consumables 800,000
Sanitation Fees 370,000
General Cleaning 350,000
Common Fund 2,930,000
Social Benefit 840,300
Equity Investment Acquired 420,000
Infrastructure, Plant, and Equipment 980,000
Work-In-Progress 490,000
Loans Received 2,330,000
Interest Expense 200,000
Advances to Staff 660,000
Royalties 430,000
Consultancies cost 470,000
Training and Workshop cost 275,000
Transport and Travelling cost 620,000
Consumption of Fixed Assets 960,000
Special Services 820,000
Utilities 630,000
Market Tolls 870,000
Permit Fees 990,000
Fines and Penalties 330,000
Development Bonds Issued 1,300,000
Hostel License 630,920
Business Income 2,300,600
Chop Bar License 300,400
Proceeds from Sale of Equity 990,320
Accumulated Fund (1/1/2018) 370,600
Herbalist License 530,370
Cash and Cash Equivalent @ (1/1/2018) 12,300,240
Stool Land Revenue 600,000
Lorry Park Fees 720,400
Market Store Rent 300,750
Recoveries 194,000
Loan Repayment 143,000
Property Rate 820,900

Additional Information:

  1. Eminaa District Assembly adopts the accrual basis of accounting in the preparation of its financial statements.
  2. Established Post salaries outstanding as at 31/12/2018 were GH¢180,000,000.
  3. Inventory at 31/12/2018 was GH¢170,000,000.

Required:
Prepare for Eminaa District Assembly:

  • Statement of Financial Performance for the year ended 31/12/2018.

(7 marks)

b) Prepare a statement of cash flow for Eminaa District Assembly for the year ended 31/12/2018. (8 marks)

c) Subject to IPSAS 6: Consolidated and Separate Financial Statements, a Controlling Entity that presents Consolidated Financial Statements shall disclose certain basic information.

 

Explain FIVE (5) basic information that an institution preparing Consolidated Financial Statements needs to disclose. (5 marks)

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  • 16 Marks

PSAF – May 2017 – L2 – Q4a – Preparation and presentation of financial statements for local government

This question requires the preparation of a Statement of Financial Performance and a Statement of Financial Position for a Municipal Assembly, along with detailed workings.

The Trial Balance was extracted from the books of Bokom Municipal Assembly (BMA) as at 31st December 2015.

Debit GH¢’000 Credit GH¢’000
Property rate 450 Sundry payables 60
Basic rates 200 Short term loans 120
Special rates 50 Deposits 100
Lorry park fees 40 Accumulated Fund 43
Marriage and divorce registration 10
Building permits 110
Penalties 80
Market toll 620
Share of District Assembly Common Fund 980
District Development Facility 350
Compensation for employees 1,000
Herbalist licenses 20
Hawkers licenses 15
Other licenses 12
Royalties 50
Share of stool land revenue 150
Market Store rent 70
Other rentals 40
Interest on investment 10
Gains from business 30
Established post 1,080
Non-established post 700
Goods and services 950
Interest expense 20
Social benefits 180
Other expenditure 260
Bank and Cash 40
Advances and loans 80
Investment 100
Property, Plant, and equipment 1,200
4,610 4,610

Additional Information:

  1. Revenues are classified as follows: Rate, Land Revenue, Fees and Fines, Licenses, Rent income, investment income, and Grants.
  2. The expenditure classification should comply with the harmonized Chart of Accounts.
  3. Consumption of fixed capital for the year is computed as GH¢260,000.

Required:

a) Prepare:

i)  A Statement of Financial Performance for the year ended 31st December 2015.

ii) A Statement of Financial Position as at 31st December 2015. (Please show all workings clearly). (16 marks)

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  • 20 Marks

PSAF – Nov 2023 – L2 – Q2 – Preparation and presentation of financial statements for local government

Prepare a Cash Flow Statement for a Municipal Assembly and explain benefits of cash flow information.

a) Below are items of transactions obtained from the financial records of Ganigani Municipal Assembly for the year ended 31 December 2022.

Transaction Items GH¢’000
Share of District Assembly Common Fund received 68,000
Share of District Assembly Common Fund in arrears 120,000
District Development Facility 60,000
Clean Ghana grant (i) 40,000
Hawkers licenses 5,000
Dog licenses 2,000
Hotel and Restaurant licenses 43,000
Akpeteshie Distillers or sellers’ licenses 9,000
Non-established post salaries (Paid from Consolidated Fund) 87,000
Casual labour 77,000
Pensions contribution 8,000
Assembly members sitting allowances 7,000
Salary related allowances (ii) 20,000
Training, Seminar and Conferences (iii) 45,000
Travel and transport 12,000
Utility expenses (iv) 1,000
Consumables 200
Interest expense (v) 500
Consumption of fixed asset (Accumulated) 44,000
Consumption of fixed asset (charged for the year) 4,800
Purchase of motor vehicle (vi) 30,000
Premises (old premises revalued by experts) 167,000
Cash proceeds from auction of old furniture 300
Recoveries from loan and advances 1,200
Loans and advances granted during the year 5,000
Issue of Municipal Bonds 100,000
Redemption of Municipal Bonds 28,000
Bank loan borrowed during the year 12,000
Loan repayment 3,400
Investment income received 100
Property rates 65,000
Basic rate 21,000
Market tolls and fees 12,400
Fees and miscellaneous charges 11,400
Cash and cash equivalent at 31 December 2022 (Debit) 70,000
Accumulated Fund Balance (Debit) 123,500
Donation of Cement from Concerned Citizens 3,500

Additional Information:

i) Clean Ghana grant of GH¢40,000 has a component of 40% in kind. ii) The Assembly paid 40% of the GH¢20,000 salary related allowances. iii) 60% of the GH¢45,000 representing Training, Seminar and Conferences expenses was funded by donors. iv) 25% of the GH¢1,000 representing utility expenses was in arrears. v) 90% of the GH¢500 representing interest expense has been paid. vi) 80% of the GH¢30,000 representing Motor Vehicle has been paid.

Required:

a) Prepare a Cash Flow Statement for the year ended 31 December, 2022 for Ganigani Municipal Assembly in compliance with the International Public Sector Accounting Standards 2: Cash Flow Statement and the current Chart of Accounts of Government of Ghana. (16 marks)

b) Explain FOUR (4) benefits of Cash Flow Information to the users of the financial statements of Ganigani Municipal Assembly. (4 marks)

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  • 20 Marks

PSAF – Nov 2017 – L2 – Q4 – Preparation and Presentation of Financial Statements for Local Government

Prepare a Revenue and Expenditure Statement and a Statement of Financial Position for a Local Government Authority based on the provided financial data.

a) Below are extracts from the books of a Local Government Authority for the period ended 31 December 2015.

GH¢
Rates 27,115.16
Non-Governmental Agencies 1,000.00
Grants – District Development Facility 888,828.37
Lands and Royalties 113,563.50
Rents of Lands, Buildings 14,855.20
Licences 55,394.22
Fees 139,784.70
Fines, Penalties and Forfeits 14,231.00
Miscellaneous and Unidentified Revenue 27,345.50
Established Posts –
Non-Established Posts 41,503.62
Other Allowances 40,231.05
Casual labour 7,576.45
Materials /Office Supplies 34,628.40
Utilities 5,286.20
General Cleaning 358.50
Rentals 6,260.07
Transport 90,724.05
Repairs and Maintenance 10,568.40
Training, Seminars, Conferences 46,013.70
Consulting Services 1,500.00
Special Services 37,904.00
Other Charges / Fees 1,735.40
Grants – DACF 459,992.60
Constituency’s Share of the Common Fund 39,000.00
GOG – Grant 206,845.97
Donors 595,086.20
Other expenses 11,163.44

Below The Line Accounts

GH¢
Cash and Bank 200,740.71
Receivables 29,100.97
Equity Investment –
Infrastructure, Plants and Equipment 322,929.71
Work-in-progress 125,064.79
Accounts Payables 5,000.00
Deposits and Other Trust Monies 25,000.00
Accumulated Fund 1,002,096.58

Required: Prepare a Revenue and Expenditure Statement for the year ended 31 December 2015 and a Statement of Financial Position as at that date. (Show workings) (20 marks)

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  • 20 Marks

PSAF – Mar 2023 – L2 – Q2a – Preparation and presentation of financial statements for local government

Preparation of a Statement of Financial Performance for Nsuta-Appiah Krom Municipal Assembly for the year ended 31 December 2021.

The following Trial Balance is the financial details of Nsuta-Appiah Krom Municipal Assembly for the year ended 31 December 2021.

Additional Information:

  1. It is the policy of the Assembly to adopt Accrual Basis in preparing its Financial Statements in compliance with Public Financial Management Act, 2016 (Act 921), Public Financial Management Regulation 2019 L.I 2378 and the International Public Sector Accounting Standards (IPSAS) and Local Governance Act 2016, (Act 936).
  2. Office consumables in respect of stationery and other items bought for GH¢1,800,000 remained unused during the year. The current replacement cost of the inventories is GH¢1,550,000. Meanwhile, the net realizable value of the inventories is estimated at GH¢1,400,000. No market exists for unused office consumables and other items.
  3. Property Rates received in respect of the 2022 financial year amounted to GH¢2,050,000.
  4. Salaries outstanding during the year amounted to GH¢750,000, and other expenses amounting to GH¢1,105,000 paid in respect of the 2022 financial year.
  5. Consumption of fixed assets is charged on a straight-line basis for the year as follows:
    • Motor vehicles: 10 years
    • Furniture, Fixtures & Fittings: 5 years
    • Building and Structures: 50 years
  6. Included in the Work in Progress is an amount of GH¢2,000,000 relating to a Building that was completed, commissioned, and put to use on 5 July 2021, after an additional amount of GH¢800,000 was spent to complete the pavement aspect of the building. This expenditure has not yet been paid.
  7. Interest on Loans to staff is at the rate of 15% per annum and interest on long-term Loans is at the rate of 10% per annum.

Required:

a) Prepare a Statement of Financial Performance for Nsuta-Appiah Krom Municipal Assembly for the year ended 31 December 2021.
(9 marks)

b) Prepare a Statement of Financial Position for Nsuta-Appiah Krom Municipal Assembly as at 31 December 2021.
(9 marks)

c) State TWO (2) Accounting Policies adopted and applied in preparing the financial statements.
(2 marks)

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