Neco Model Questions Vol1 2023 Financial Accounting Question 34

A local government council prepares its annual financial statements under the Modified Accrual Basis. The following information is given for the year ended 31 December 2024:\ - Budgeted revenue: \(\text{₦}1,200,000\); actual cash receipts: \(\text{₦}1,050,000\); accrued revenue not yet received: \(\text{₦}80,000\).\ - Budgeted expenses: \(\text{₦}950,000\); actual cash payments: \(\text{₦}900,000\); expenses incurred but not yet paid (accrued expenses): \(\text{₦}70,000\).\ - Capital grants received in cash: \(\text{₦}200,000\); capital assets purchased costing \(\text{₦}150,000\), paid partly in cash \(\text{₦}100,000\) and the balance financed through a long‑term loan.\ - At the beginning of the year the council had cash on hand \(\text{₦}300,000\) and a loan payable of \(\text{₦}400,000\).\ (a) Prepare a simplified Statement of Financial Position as at 31 December 2024 showing Cash, Receivable (accrued revenue), Payable (accrued expenses), Loan payable and Capital assets.\ (b) Compute the cash surplus/deficit for the year and state whether it reconciles with the change in cash balance.