Neco Model Questions Vol1 2023 Financial Accounting Question 50

A local government reports the following figures for the year ended 31 December:\n\n- Tax revenue (cash) \(\text{₦}500,000\)\n- Fees revenue (accrual) \(\text{₦}200,000\); \(\text{₦}30,000\) remains uncollected at year‑end.\n- Grants received (cash) \(\text{₦}150,000\); \(\text{₦}20,000\) is restricted for capital projects.\n- Operating expenses (cash) \(\text{₦}400,000\); \(\text{₦}50,000\) of this is depreciation (non‑cash).\n- Capital expenditure (cash) \(\text{₦}120,000\); \(\text{₦}40,000\) is financed by a loan.\n- Loan repayment (cash) \(\text{₦}30,000\) (principal only).\n- Interest expense (accrual) \(\text{₦}10,000\); \(\text{₦}4,000\) has been paid.\n\nCalculate the government's net cash flow for the year and state whether it is a cash surplus or deficit.