Topic: Public Sector Financial Statements

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PSF – Nov 2023 – L2 – Q1 – Public Sector Financial Statements

Assess expected profit, completion stage, and financial statement recognition for a government contract under IPSAS.

Question

Housing-for-all Corporation is an entity established by Kazua State to engage in building construction. The corporation is partly financed with subvention from the State and also from the proceeds from its operations. It applied for a bid to construct twenty (20) classroom buildings in the riverine area of the state. After all the initial procurement processes on bid-opening were carried out, the corporation won the contract in June 2018. The contract price was N220m. The building construction contract was billed for completion in two years. The company uses stages of completion on the basis of value of work completed. The following financial data were available in respect of the contract as at December 31, 2019:

Description	Amount (N’000)
Total contract price	220,000
Total expected costs	180,000
Costs incurred to date	120,000
Value of work certified as complete	140,000
Amount billed to client (Kazua State)	130,000
Progress payment received from client	100,000

The contract was duly completed in June 2020.

Required:

a. Determine the expected profit of the contract, stage of completion in percentage, as well as the amount to be recognized in Housing-for-all Corporation’s income statement at December 31, 2019. (11 Marks)

b. Calculate the amount to be recognized as gross amount due to or from the client, Kazua State, the amount of trade receivable, and prepare extracts of financial statements in respect of the construction contracts at December 31, 2019. (13 Marks)

c. Identify what constitutes the composition of contract costs as contained in IPSAS 11. (6 Marks)

Answer

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Tags: Construction Contracts, Financial Statements, IPSAS 11, Public Sector Projects, Revenue Recognition
Level: Level 2

Topic: Public Sector Financial Statements

PSAF – Nov 2014 – L2 – Q4 – Public Sector Financial Statements

Explanation of reporting vs. authorization dates, and types of events after reporting date with treatment examples.

Question

The General National Communication Commission (GNCC) is the sub-regulatory body in the Communications industry. It is mandatory for the Board of GNCC to submit its Report/Financial statements to the Ministry of Communication before publication in accordance with IPSAS 14 (Events after the reporting date). The events occurring after the reporting date could be favourable and/or unfavourable.

You are required to:

a. Distinguish between the reporting date and authorization date of the financial statements, giving examples. (4 Marks)

b. Explain briefly the differences between Adjusting and Non-Adjusting events after the reporting date, giving TWO examples of each. (8 Marks)

c. Identify the events (occurring after the reporting date) in the following situations and explain briefly the treatment of each:

i. General National Communication Commission carries its inventories at the lower of cost and net realizable value. At 31 December 2013, the cost of inventory determined under the First In, First Out (FIFO) method as reported in its financial statement for the year ended was N5 million. Due to severe recession and negative economic trends, the inventory could not be sold in January 2014. On 10 February, GNCC entered into an agreement to sell the entire inventory for N3 million. (2 Marks)

ii. The statutory audit of GNCC for the year ended 31 December 2012 was completed on 28 February 2013. The Financial Statement was signed by the Chief Executive Officer on 8 March 2013 and approved on 10 April 2013. The following events have since occurred:

A special equipment costing N605,000 purchased on 1 September, 2012
was destroyed by fire on 31 December, 2012. GNCC had booked a
receivable of N508,000 from the insurance company in respect of this
claim. On completion of investigation by the insurance company, it was
discovered that the fire broke out due to negligence on the part of a
machine operator. Consequently, the insurance company repudiated
liability.

iii. A debtor owing N900,000 filed for bankruptcy on January 15, 2013. The financial statements had included an allowance for doubtful debts relating to this debtor for N60,000 only. (2 Marks)

Answer

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Tags: Adjusting Events, Financial Statement Authorization, IPSAS 14, Non-adjusting Events, Reporting Date
Level: Level 2

Topic: Public Sector Financial Statements

PSAF – May 2021 – L2 – Q5a – Public Sector Financial Statements

Identification of inventory costs excluded under IPSAS 12 and disclosure requirements for financial statements.

Question

IPSAS 12 on Inventories deals with the valuation and presentation of inventories in the financial statements in the context of the historical cost system, the most widely adopted basis on which financial statements are presented.

Required:

In accordance with IPSAS 12, identify FOUR costs that are excluded from the cost of inventories and FOUR requirements to be disclosed in the financial statements.

Answer

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Tags: Disclosure Requirements, Exclusions, Financial Reporting, Inventory Valuation, IPSAS 12
Level: Level 2

Topic: Government Expenditure, Public Sector Financial Statements
Series: MAY 2021

PSAF – May 2021 – L2 – Q1 – Public Sector Financial Statements

Apply IPSAS standards to adjust and analyze financial information for Okuku State University.

Question

Okuku State University is a parastatal under Okuku State, not classified as a Government Business Enterprise (GBE). The following is the statement of financial position for the University as of December 31, 2018:

Statement of Financial Position (as at Dec 31, 2018)

Item	Cost (₦’million)	Accumulated Depreciation (₦’million)	Carrying Amount (₦’million)
Land and Buildings	15,000	250	14,750
Equipment	1,000	100	900
Furniture	800	80	720
Plant & Machinery	550	50	500
Motor Vehicles	450	45	405
Total Non-Current Assets	17,800	525	17,275
Inventories	11,000	–	–
Receivables	15,000	–	–
Bank	3,000	–	–
Total Current Assets	–	–	29,000
Total Assets	–	–	46,275
Non-Current Liabilities	–	–	30,000
Current Liabilities	–	–	8,000
Total Liabilities	–	–	38,000
Net Assets	–	–	8,275
Reserves	–	–	8,275

Additional Information:

Office equipment was purchased for ₦150,000,000 from Joko Nigeria Limited, with installation and transportation costing ₦3,000,000. Half was paid during the year, with the remainder in January 2019. The University also acquired a building valued at ₦500,000,000 from a defunct State College.
The University Teaching Hospital received motor vehicles and laboratory equipment donations worth ₦20,000,000 and ₦50,000,000, respectively, from a UK-based research institute.
A motor vehicle bought on January 1, 2017, for ₦8,000,000 with a five-year life was sold for ₦4,000,000 at year-end.
Computers bought in 2017 for ₦1,000,000, with an expected five-year lifespan, were damaged in a fire and written off.
Land was bought for ₦50,000,000 for constructing a plaza valued at ₦250,000,000, with an estimated 25-year life.
One building, valued at ₦160,000,000, was damaged by fire, with a post-fire valuation of ₦130,000,000.
A motor vehicle was acquired on January 1, 2018, for ₦150,000,000.
The University’s depreciation policy includes full-year depreciation with rates: Motor Vehicle 20%, Building 4%, Furniture 10%, Equipment (including Lab and Computers) 20%, and Plant and Machinery 15%.

Required:
a. Identify FOUR characteristics of Government Business Enterprises (GBEs) as
stated in IPSAS 1 on presentation of financial statements. (2 Marks)
b. Prepare the necessary journal entries to record the above transactions for
the year ended December 31, 2018. (10 Marks)
c. Prepare the adjusted statement of financial position as at December 31,
2018. (20 Marks)
d. Identify and explain FOUR qualitative characteristics of financial reporting as
required by appendix 2 of IPSAS 1 on presentation of financial statements.
(8 Marks)

Answer

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Level: Level 2

Topic: Public Sector Financial Statements
Series: MAY 2021

PSAF – May 2023 – L2 – SA – Q1 – Public Sector Financial Statements

Prepare statements for government performance and financial position, including adjustments and depreciation calculations.

Question

a. The following information relates to the accounts of Dovet State Government for the year ended December 31, 2022:

Description	DR (N’M)	CR (N’M)
Land and buildings (cost)	387,500
Long-term investments	187,500
Equipment and furniture	67,500
Accumulated depreciation:
– Land and building		40,000
– Motor vehicles		30,000
– Equipment and furniture		21,250
Motor vehicles (cost)	145,000
Federation account allocation		287,500
VAT allocation		87,500
Grants from Federal Government		33,750
Internally generated fund		97,500
Grant from donor agency		25,000
Personnel emolument	125,000
Maintenance of premises	5,000
Consolidated Revenue Fund charges	32,500
Overhead expenses	25,000
Miscellaneous expenditure/income	37,500	61,250
Loan notes		250,000
Current assets/liabilities	38,750	36,250
Consolidated Revenue Fund (CRF)		81,250
Total	1,051,250	1,051,250

Additional Information:

Loan interest outstanding at the end of the year was N12.5 billion.
Depreciation on tangible assets is charged at the following rates on cost:
- Building is 5% (cost of land is N250 billion)
- Motor vehicles is 20%
- Equipment and furniture is 15%
A building costing N12.5 billion with accumulated depreciation of N5 billion was sold for N11.25 billion. This transaction has not been adjusted in the accounts.
Interest on receivable amounted to N10 billion.

Required:

Prepare the Statement of Financial Performance for the year ended December 31, 2022.
Prepare the Statement of Financial Position as at December 31, 2022.

b. Financial statements provide information that meets a number of qualitative characteristics in financial reporting.

Required:
Discuss FOUR characteristics of financial reporting.

Answer

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Tags: Consolidated Revenue, Depreciation, Expenditure, Government Financial Statements, Public Sector Accounting, Revenue
Level: Level 2

Topic: Public Sector Financial Statements
Series: MAY 2023

PSAF – Nov 2015 – L2 – Q4 – Public Sector Financial Statements

Prepare the financial statements of Egbin Electricity Board for 2014, including statement of financial performance and position.

Question

The following information has been extracted from the books of Egbin Electricity Board, a public sector-owned electricity generating company, for the year ended December 31, 2014:

Item	N’000
Accumulated Depreciation, January 1, 2014	45,224
Sale of Electricity	114,392
Purchase of Electricity	95,784
Meter reading, billing, and collection	1,624
Non-Current Assets Expenditure	84,102
Debtors for electricity consumption	12,006
Training and welfare	692
Stock and work-in-progress	1,234
Rents, Rates, and Insurance	2,126
Electricity Estimated unread consumption	7,222
Administration and General Expenses	1,476
Electricity Council Grant	21,556
Preparation of Electricity Council’s Expenses	362
Bank Balance and Cash	1,284
Depreciation for the year	3,634
Hire purchase and deferred payment	2,672
Interest and Financing Expenses	2,434
Creditors and accrued liabilities	13,926
Profit on contracting and sale of appliance poles	534
Reserves	23,116
Rental of Meters Application	556
Distribution cost	4,476
Customer Service	1,810

Required:

Prepare in vertical form the Statement of Financial Performance and Statement of Financial Position for Egbin Electricity Board for the year ended December 31, 2014.

Answer

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Tags: Financial Reporting, Public Sector Accounting, Statement of Financial Performance, Statement of Financial Position
Level: Level 2

Topic: Public Sector Financial Statements
Series: NOV 2015

PSAF – Nov 2016 – L2 – Q6a – Public Sector Financial Statements

This question distinguishes between Cost Benefit Analysis (CBA) and Cost Effectiveness Analysis (CEA).

Question

Distinguish carefully between Cost Benefit Analysis (CBA) and Cost Effectiveness Analysis (CEA).

Answer

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Tags: Cost Effectiveness Analysis, Cost-benefit analysis, Financial management
Level: Level 2

Topic: Public Sector Financial Statements
Series: NOV 2016

PSAF – Nov 2019 – L2 – Q1 – Public Sector Financial Statements

Prepare financial statements and journal entries for Ogogo Local Government based on trial balance and transactions provided, and identify external controls and challenges.

Question

Ogogo Local Government is one of the 26 Local Governments in Alimosho state of
Federal Republic of Wazobia. The Local Government has adopted Treasury Single
Accounting (Direct method) and prepares its accounts using IPSAS accrual basis.
There has been wide spread fraud since the retirement of the Treasurer of the
council about two years ago. However, there was no adequate information to
suggest that there was fraud or misappropriation of funds. The Chairman invited
you to his office as the new Treasurer and handed over some of the financial data
from treasury department to you as detailed below:
The trial balance for the year ended December 31, 2017 is as follows:

The following transactions took place in the Office of the Treasurer of the Local
Government for the year ended December 31, 2018.
i. Listed below are the revenue and expenditure items for the year ended December 31, 2018

(ii) Code 1 is used as prefix for revenue, 2 for recurrent expenditure and 4 for
capital expenditure
(iii) Preliminary investigations carried out revealed the following irregularities,
which occurred and were discovered within the year:
• Included in the payments for the expenses under primary health care department were various duplicated vouchers amounting to N7million;
• There were some falsifications in the bills for items bought for the provision of water under other charges. The total discrepancies amounted to N3million.
(iv) The following agreed revenue demand notices were sent to the indigenes of the Local Government during the year.

(v) Included in the payments under works and housing is the cost of motor
vehicles of N25 million while medical equipment costing N35 million was
included in primary health care department expenses.
(vi) Included in the payments under works and housing is the cost of land
including construction of access roads, certificate of occupancy etc, amounting
to N100 million. The land was acquired by the Local Government and sold to
local prospective land owners at a cost of N520,000 per plot. The land consists
of 200 standard plots for the construction of houses of their choice. Only 150
plots were fully subscribed and paid for during the year.
(vii) Included in the payments under finance department is the cost of office
stationery of N25 million while the value of office stationery based on stock
sheet as at December 31, 2018 was N6.5 million.

viii) Capital grant from the State Government was received on December 31, 2017
and utilised in 2018.
(ix) The capital expenditure paid during the year was for the acquisition of land for the new Local Government Health Centers.
(x) Some of the accounting policies for depreciation adopted by the Government include the following depreciation rates;

Note: All non-current assets were purchased at the beginning of the
year.
(xi) The following expenses were incurred but not settled as at end of the year.

You are required to prepare:
a. The journal entries to record the loss of fund (3 Marks)
b. The statements of financial performance for year ended December 31, 2018
(15 Marks)
c. The statement of financial position as at December, 31 2018 (17 Marks)
d. Identify FIVE external controls and FIVE problems of Local Government in
Nigeria (5 Marks)

Answer

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Tags: Financial Performance, Financial Position, IPSAS, Local Government Finance, Public Sector Accounting
Level: Level 2

Topic: Public Sector Financial Statements
Series: NOV 2019

PSAF – May 2019 – L2 – Q1 – Public Sector Financial Statements

Analyze financial ratios for a hotel transitioning to a public-private partnership.

Question

National Hotel, an investment unit of the Ministry of Tourism and Environment, is fifty (50) years old. It has recently been restructured from a wholly-owned government hotel to a private/government partnership. However, being the largest hotel in the country and for security reasons, the government still retains 55% of its equity.

The board of directors has decided to reposition the hotel for better performance, needing external finances amounting to N180 million, consisting of a N100 million loan over ten years and an N80 million bank overdraft. All necessary supports have been provided by the government and private equity holders.

The summarized results for the last two financial years are as follows:

Income Statement

Year ended 30 September	2013 (N’000)	2014 (N’000)
Turnover	200,000	240,000
Cost of Sales	(150,000)	(184,000)
Gross Profit	50,000	56,000
Overhead Expenses	(10,000)	(12,000)
Profit before Tax	40,000	44,000

Statement of Financial Position

You have been engaged as a consultant to assist the hotel in preparing necessary documents and reports to achieve its objectives.

Required:
a. Calculate six relevant accounting ratios covering each of the two years: 2013 and 2014 in a tabular form. (12 Marks)

b. Interpret the result of the ratios calculated in (a) above to show the financial performance and position of the entity. (12 Marks)

c. Highlight four unfavorable factors about the hotel as revealed by your interpretation. (6 Marks)

Answer

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Tags: Financial Performance, Hotel Industry, Interpretation, Public-Private Partnership, Ratio Analysis
Level: Level 2

Topic: Public Sector Financial Statements
Series: MAY 2019

PSAF – Mar/July 2020 – L2 – Q4 – Responsibilities of EFCC and Debt Burden Transfer

This question requires the preparation of financial statements for Amotekun State University of Education, Ode, for 2018.

Question

b. Amotekun State University of Education, Ode, was the second university established by the Amotekun State of Nigeria. The government, as a mark of its commitment towards the survival of this young institution, has continued to support the University Senate in all its efforts. At the last meeting of the stakeholders, held at the state hotel, Igbo, on June 30, 2019, the Bursar presented the following financial statements for discussion and approval:
Amotekun State University of Education
Statement of Financial Position as at December 31, 2018

The following notes form an integral part of these accounts.
Amotekun State University of Education
Statement of financial performance for the year ended December 31, 2018

The following notes which form an integral part of the accounts, were also provided

2.
The Oke-Mosan Microfinance Bank balance in 2018 represents the „short term
loan

The Chairman of the Governing Council, who incidentally is a chartered accountant, observed that the financial statements appeared incomplete because no statement of cash flows was prepared.
Required:
Prepare, a statement of cash flows for Amotekun State University of Education for the year ended December 31, 2018, using the direct method in accordance with IPSAS 2

Answer

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Tags: Financial Statements, Government Accounting, Public sector financial reporting
Level: Level 2

Topic: Public Sector Financial Statements
Series: MAR/JULY 2020

PSF – Nov 2023 – L2 – Q1 – Public Sector Financial Statements

Assess expected profit, completion stage, and financial statement recognition for a government contract under IPSAS.

Question

Description	Amount (N’000)
Total contract price	220,000
Total expected costs	180,000
Costs incurred to date	120,000
Value of work certified as complete	140,000
Amount billed to client (Kazua State)	130,000
Progress payment received from client	100,000

The contract was duly completed in June 2020.

Required:

c. Identify what constitutes the composition of contract costs as contained in IPSAS 11. (6 Marks)

Answer

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Tags: Construction Contracts, Financial Statements, IPSAS 11, Public Sector Projects, Revenue Recognition
Level: Level 2

Topic: Public Sector Financial Statements

PSAF – Nov 2014 – L2 – Q4 – Public Sector Financial Statements

Explanation of reporting vs. authorization dates, and types of events after reporting date with treatment examples.

Question

You are required to:

a. Distinguish between the reporting date and authorization date of the financial statements, giving examples. (4 Marks)

b. Explain briefly the differences between Adjusting and Non-Adjusting events after the reporting date, giving TWO examples of each. (8 Marks)

c. Identify the events (occurring after the reporting date) in the following situations and explain briefly the treatment of each:

iii. A debtor owing N900,000 filed for bankruptcy on January 15, 2013. The financial statements had included an allowance for doubtful debts relating to this debtor for N60,000 only. (2 Marks)

Answer

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Tags: Adjusting Events, Financial Statement Authorization, IPSAS 14, Non-adjusting Events, Reporting Date
Level: Level 2

Topic: Public Sector Financial Statements

PSAF – May 2021 – L2 – Q5a – Public Sector Financial Statements

Identification of inventory costs excluded under IPSAS 12 and disclosure requirements for financial statements.

Question

Required:

In accordance with IPSAS 12, identify FOUR costs that are excluded from the cost of inventories and FOUR requirements to be disclosed in the financial statements.

Answer

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Tags: Disclosure Requirements, Exclusions, Financial Reporting, Inventory Valuation, IPSAS 12
Level: Level 2

Topic: Government Expenditure, Public Sector Financial Statements
Series: MAY 2021

PSAF – May 2021 – L2 – Q1 – Public Sector Financial Statements

Apply IPSAS standards to adjust and analyze financial information for Okuku State University.

Question

Statement of Financial Position (as at Dec 31, 2018)

Item	Cost (₦’million)	Accumulated Depreciation (₦’million)	Carrying Amount (₦’million)
Land and Buildings	15,000	250	14,750
Equipment	1,000	100	900
Furniture	800	80	720
Plant & Machinery	550	50	500
Motor Vehicles	450	45	405
Total Non-Current Assets	17,800	525	17,275
Inventories	11,000	–	–
Receivables	15,000	–	–
Bank	3,000	–	–
Total Current Assets	–	–	29,000
Total Assets	–	–	46,275
Non-Current Liabilities	–	–	30,000
Current Liabilities	–	–	8,000
Total Liabilities	–	–	38,000
Net Assets	–	–	8,275
Reserves	–	–	8,275

Additional Information:

Office equipment was purchased for ₦150,000,000 from Joko Nigeria Limited, with installation and transportation costing ₦3,000,000. Half was paid during the year, with the remainder in January 2019. The University also acquired a building valued at ₦500,000,000 from a defunct State College.
The University Teaching Hospital received motor vehicles and laboratory equipment donations worth ₦20,000,000 and ₦50,000,000, respectively, from a UK-based research institute.
A motor vehicle bought on January 1, 2017, for ₦8,000,000 with a five-year life was sold for ₦4,000,000 at year-end.
Computers bought in 2017 for ₦1,000,000, with an expected five-year lifespan, were damaged in a fire and written off.
Land was bought for ₦50,000,000 for constructing a plaza valued at ₦250,000,000, with an estimated 25-year life.
One building, valued at ₦160,000,000, was damaged by fire, with a post-fire valuation of ₦130,000,000.
A motor vehicle was acquired on January 1, 2018, for ₦150,000,000.
The University’s depreciation policy includes full-year depreciation with rates: Motor Vehicle 20%, Building 4%, Furniture 10%, Equipment (including Lab and Computers) 20%, and Plant and Machinery 15%.

Answer

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Tags: Financial Position Adjustments, Government Business Enterprises, IPSAS Standards, Journal Entries, Qualitative Characteristics
Level: Level 2

Topic: Public Sector Financial Statements
Series: MAY 2021

PSAF – May 2023 – L2 – SA – Q1 – Public Sector Financial Statements

Prepare statements for government performance and financial position, including adjustments and depreciation calculations.

Question

a. The following information relates to the accounts of Dovet State Government for the year ended December 31, 2022:

Description	DR (N’M)	CR (N’M)
Land and buildings (cost)	387,500
Long-term investments	187,500
Equipment and furniture	67,500
Accumulated depreciation:
– Land and building		40,000
– Motor vehicles		30,000
– Equipment and furniture		21,250
Motor vehicles (cost)	145,000
Federation account allocation		287,500
VAT allocation		87,500
Grants from Federal Government		33,750
Internally generated fund		97,500
Grant from donor agency		25,000
Personnel emolument	125,000
Maintenance of premises	5,000
Consolidated Revenue Fund charges	32,500
Overhead expenses	25,000
Miscellaneous expenditure/income	37,500	61,250
Loan notes		250,000
Current assets/liabilities	38,750	36,250
Consolidated Revenue Fund (CRF)		81,250
Total	1,051,250	1,051,250

Additional Information:

Loan interest outstanding at the end of the year was N12.5 billion.
Depreciation on tangible assets is charged at the following rates on cost:
- Building is 5% (cost of land is N250 billion)
- Motor vehicles is 20%
- Equipment and furniture is 15%
A building costing N12.5 billion with accumulated depreciation of N5 billion was sold for N11.25 billion. This transaction has not been adjusted in the accounts.
Interest on receivable amounted to N10 billion.

Required:

Prepare the Statement of Financial Performance for the year ended December 31, 2022.
Prepare the Statement of Financial Position as at December 31, 2022.

b. Financial statements provide information that meets a number of qualitative characteristics in financial reporting.

Required:
Discuss FOUR characteristics of financial reporting.

Answer

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Tags: Consolidated Revenue, Depreciation, Expenditure, Government Financial Statements, Public Sector Accounting, Revenue
Level: Level 2

Topic: Public Sector Financial Statements
Series: MAY 2023

PSAF – Nov 2015 – L2 – Q4 – Public Sector Financial Statements

Prepare the financial statements of Egbin Electricity Board for 2014, including statement of financial performance and position.

Question

The following information has been extracted from the books of Egbin Electricity Board, a public sector-owned electricity generating company, for the year ended December 31, 2014:

Item	N’000
Accumulated Depreciation, January 1, 2014	45,224
Sale of Electricity	114,392
Purchase of Electricity	95,784
Meter reading, billing, and collection	1,624
Non-Current Assets Expenditure	84,102
Debtors for electricity consumption	12,006
Training and welfare	692
Stock and work-in-progress	1,234
Rents, Rates, and Insurance	2,126
Electricity Estimated unread consumption	7,222
Administration and General Expenses	1,476
Electricity Council Grant	21,556
Preparation of Electricity Council’s Expenses	362
Bank Balance and Cash	1,284
Depreciation for the year	3,634
Hire purchase and deferred payment	2,672
Interest and Financing Expenses	2,434
Creditors and accrued liabilities	13,926
Profit on contracting and sale of appliance poles	534
Reserves	23,116
Rental of Meters Application	556
Distribution cost	4,476
Customer Service	1,810

Required:

Prepare in vertical form the Statement of Financial Performance and Statement of Financial Position for Egbin Electricity Board for the year ended December 31, 2014.

Answer

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Tags: Financial Reporting, Public Sector Accounting, Statement of Financial Performance, Statement of Financial Position
Level: Level 2

Topic: Public Sector Financial Statements
Series: NOV 2015

PSAF – Nov 2016 – L2 – Q6a – Public Sector Financial Statements

This question distinguishes between Cost Benefit Analysis (CBA) and Cost Effectiveness Analysis (CEA).

Question

Distinguish carefully between Cost Benefit Analysis (CBA) and Cost Effectiveness Analysis (CEA).

Answer

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Tags: Cost Effectiveness Analysis, Cost-benefit analysis, Financial management
Level: Level 2

Topic: Public Sector Financial Statements
Series: NOV 2016

PSAF – Nov 2019 – L2 – Q1 – Public Sector Financial Statements

Prepare financial statements and journal entries for Ogogo Local Government based on trial balance and transactions provided, and identify external controls and challenges.

Question

Note: All non-current assets were purchased at the beginning of the
year.
(xi) The following expenses were incurred but not settled as at end of the year.

Answer

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Tags: Financial Performance, Financial Position, IPSAS, Local Government Finance, Public Sector Accounting
Level: Level 2

Topic: Public Sector Financial Statements
Series: NOV 2019

PSAF – May 2019 – L2 – Q1 – Public Sector Financial Statements

Analyze financial ratios for a hotel transitioning to a public-private partnership.

Question

The summarized results for the last two financial years are as follows:

Income Statement

Year ended 30 September	2013 (N’000)	2014 (N’000)
Turnover	200,000	240,000
Cost of Sales	(150,000)	(184,000)
Gross Profit	50,000	56,000
Overhead Expenses	(10,000)	(12,000)
Profit before Tax	40,000	44,000

Statement of Financial Position

You have been engaged as a consultant to assist the hotel in preparing necessary documents and reports to achieve its objectives.

Required:
a. Calculate six relevant accounting ratios covering each of the two years: 2013 and 2014 in a tabular form. (12 Marks)

b. Interpret the result of the ratios calculated in (a) above to show the financial performance and position of the entity. (12 Marks)

c. Highlight four unfavorable factors about the hotel as revealed by your interpretation. (6 Marks)

Answer

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Tags: Financial Performance, Hotel Industry, Interpretation, Public-Private Partnership, Ratio Analysis
Level: Level 2

Topic: Public Sector Financial Statements
Series: MAY 2019

PSAF – Mar/July 2020 – L2 – Q4 – Responsibilities of EFCC and Debt Burden Transfer

This question requires the preparation of financial statements for Amotekun State University of Education, Ode, for 2018.

Question

The following notes form an integral part of these accounts.
Amotekun State University of Education
Statement of financial performance for the year ended December 31, 2018

The following notes which form an integral part of the accounts, were also provided

2.
The Oke-Mosan Microfinance Bank balance in 2018 represents the „short term
loan

Answer

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Tags: Financial Statements, Government Accounting, Public sector financial reporting
Level: Level 2