Neco Model Questions Vol1 2022 Financial Accounting Question 13

A municipal council prepares its statement of financial position (all amounts in \(\₦\) thousands). The data are as follows:\n\n- Non‑current assets at cost: 12,000; accumulated depreciation: 3,600.\n- Current assets: cash 2,500; receivables 1,800; inventory 900.\n- Current liabilities: accounts payable 1,200; accrued expenses 400.\n- Long‑term liabilities: loan payable 5,000.\n- Capital grant received during the year: 2,000, of which 1,200 was spent on acquiring a new building (cost 1,200) and the remaining 800 is unrestricted.\n- Depreciation for the year on existing non‑current assets (excluding the new building) is 600.\n- An unfunded pension liability of 1,500 must be disclosed but is not recognised as a liability.\n\nThe council uses the modified accrual basis, where capital grants are recognised as revenue when received, but the portion spent on capital assets is transferred to Capital Grants in Excess of Expenditure (CGEE) and shown as a reduction of capital‑grant revenue. Compute the net assets (total assets minus total liabilities) to be reported after adjusting for the capital‑grant treatment and depreciation.