Neco Model Questions Vol1 2017 Financial Accounting Question 42

A local government council prepared its operating budget for the Education Department for 2022. Budgeted revenue: Local taxes ₦500,000; Central government grants ₦200,000. Budgeted expenses: Salaries ₦300,000, Supplies ₦80,000, Maintenance ₦50,000, Miscellaneous ₦20,000. Actual results: Local taxes collected ₦480,000; Grants received ₦210,000. Expenses incurred: Salaries ₦310,000, Supplies ₦70,000, Maintenance ₦55,000, Miscellaneous ₦25,000. The council uses a modified accrual basis. At year‑end an unspent grant balance of ₦5,000 must be returned, and an unpaid salary liability of ₦12,000 remains outstanding. The opening cash balance on 1 January 2022 was ₦50,000. All cash receipts and payments correspond to the actual revenues and expenses, adjusted for the grant return and the unpaid salary. Compute (a) the variance for each revenue and expense line, (b) the net financial position (surplus or deficit) to be reported in the statement of financial performance, and (c) the amount of "unrestricted cash and cash equivalents" to be shown in the statement of financial position at 31 December 2022.