Neco Model Questions Vol1 2024 Financial Accounting Question 14

A municipal council prepares its statement of financial position for the year ended 31 December 2024. The following information is given (all amounts in Naira):\n\n* Capital assets: Buildings cost \(5,000,000\) with accumulated depreciation \(1,200,000\) (straight‑line); Land cost \(2,000,000\) (no depreciation); Equipment cost \(1,500,000\) with accumulated depreciation \(300,000\) (reducing‑balance at 20% per annum, depreciation for the current year already charged).\n* Current assets: Cash \(800,000\); Receivables \(250,000\) of which 10% is estimated uncollectible; Inventory \(400,000\).\n* Liabilities: Bonds payable \(1,500,000\) with accrued interest \(50,000\) not yet paid; Accounts payable \(200,000\); Accrued salaries \(120,000\).\n* Fund balances: Unrestricted fund \(1,200,000\); Restricted fund (for road repair) \(500,000\).\n\nThe council decides to revalue the land upward by 15% and record the revaluation surplus in the restricted fund. Determine:\n\n(a) Total assets after the revaluation,\n(b) Total liabilities,\n(c) Net fund balance after adjustments, and\n(d) The amount transferred to the restricted fund because of the land revaluation.