Neco Model Questions Vol1 2017 Financial Accounting Question 36

A state ministry received a grant of \(\text{₦}12,000,000\) at the start of FY 2023 to fund two projects. The grant agreement requires that 60% be allocated to Project A and 40% to Project B. During FY 2023 the following expenditures were incurred:\n\n- Project A: \(\text{₦}4,500,000\) cash payments for supplies and \(\text{₦}1,200,000\) of services received on account (to be paid next year).\n- Project B: \(\text{₦}2,800,000\) cash payments for equipment and \(\text{₦}500,000\) of salaries accrued (to be paid next year).\n\nThe equipment purchased for Project B is depreciated on a straight‑line basis over 5 years with no residual value. At the end of FY 2023 the ministry wants to report the unspent grant balance (grant received less total expenses recognised, including depreciation expense). What is the unspent grant balance on 31 December 2023?