Neco 2025 Financial Accounting Question 42

A local government has two funds. The General Fund was budgeted to receive \(5{,}000{,}000\) naira and to expend \(4{,}200{,}000\) naira. The Special Education Fund was budgeted to receive \(1{,}200{,}000\) naira and to expend \(1{,}500{,}000\) naira. In the actual year the General Fund received \(5{,}500{,}000\) naira and expended \(4{,}600{,}000\) naira, while the Special Education Fund received \(1{,}100{,}000\) naira and expended \(1{,}650{,}000\) naira. The General Fund may transfer at most 60% of its actual surplus to the Special Education Fund. Determine the maximum amount that can be transferred, and state the overall surplus or deficit for the municipality after this transfer.