Waec Model Questions Vol1 2020 Financial Accounting Question 35

A local government's Education Department had an approved annual budget of ₦2,500,000. During the year the following receipts and expenditures were recorded: **Receipts** - State allocation: ₦1,800,000 - Local taxes: ₦300,000 - Donor grants (restricted to capital projects): ₦200,000 - Miscellaneous fees (unrestricted): ₦50,000 **Expenditures** - Salaries (operating): ₦1,200,000 - Teaching materials (operating): ₦400,000 - Building renovation (capital): ₦120,000 - Community outreach (operating): ₦100,000 - Equipment purchase (capital): ₦50,000 The approved capital budget for the year was ₦300,000. Public‑sector accounting rules require that any unspent restricted grant be carried forward as a liability and any unspent capital budget be shown as a capital reserve. Determine: (a) the amount of unspent restricted grant to be shown as a liability, (b) the amount of unspent capital budget to be shown as a capital reserve, (c) the overall surplus for the department after these classifications.