Neco Model Questions Vol1 2025 Financial Accounting Question 11

The municipal council's General Fund shows the following trial‑balance items (all amounts in ₦): Cash ₦150,000; Accounts receivable ₦80,000; Supplies inventory ₦20,000; Capital equipment (cost) ₦200,000; Accumulated depreciation - equipment ₦40,000; Accrued salaries ₦15,000; Accrued interest income ₦5,000; Transfer out to Special Fund ₦30,000; Transfer in from Special Fund ₦10,000; Revenue received in advance ₦12,000. Additional information: - Capital equipment is depreciated straight‑line over 10 years with no residual value. - During the year an additional depreciation of ₦5,000 is required for equipment purchased that year (cost ₦50,000). - Salaries of ₦20,000 have been incurred; only ₦15,000 are accrued, the remaining ₦5,000 will be paid next year. - Interest income of ₦5,000 has been earned but not yet received. - The revenue received in advance relates to services to be performed next year and therefore remains a liability. Determine the adjusted fund balance (assets - liabilities) for the General Fund after all adjustments and state whether it is a surplus or a deficit.