Graded Assessment 2: Problem Set #1 General Purpose Financial Statements

The following Trial Balance relates to Banco Community College, a public tertiary educational institution in Guyana, as at December 31, 2019.

DETAILS	DR	CR
	$000	$000
Fees Income		4,575,622
Permanent Post	5,312,430
Allowance	856,670
Independent consultancy fees		655,600
Legal Cost	25,059
CARICOM Grant		1,540,000
Consultancy Cost	565,500
Non-Permanent Post	1,253,600
Seminars cost	500,000
Sponsorship (granted/received)	8,100	9,066,828
Receivables	468,050
Payables		182,840
20% loan		8,600
Books and Research Allowance	150,765
Plant and Machinery	3,000,000	250,000
Motor Vehicle	2,505,000	352,000
Building	12,300,000	756,000
Software	995,500	150,000
Other Incomes		211,430
Project Work Supervisory Allowance	48,500
Cash and Bank	294,233
Training and Workshop cost	104,000
Bad debt provision (student fees)		4,940
Work in Progress	8,251,735
Other Expenses	71,000
Withholding Tax		90,500
Accumulated Fund		11,205,270
Utilities Bills	560,053
Proceeds from Sale of Admission Forms		9,196,270
Superannuation	278,500
End of Service Benefits	298,040
Stationery Stock	399,165
	38,245,900	38,245,900

Additional Information:

I. The college has adopted the accrual basis International Public Sector Accounting Standards (IPSAS) as the basis for preparation of its financial statements.

II. Stationery stock as at 31/12/2019 was $200,500,000 but have a Net Realizable Value of $155,254,000.

III. Social benefits of $1,720,000 yet to be paid during the year was included in the Work In Progress value. Consultancy cost amounting $234,500,000 was incurred but not yet paid.

IV. Books and Research Allowance was received from Government during the period amounting to $337,530,000 for disbursement to qualified Lectures and Administrative staff.

V. Provision is to be made for interest on loans.

VI. 60% of the receivables represent an amount of students fees outstanding as at 31/12/2018. Provision for doubtful debt is estimated to be 5% of outstanding school fees.

VII. The university uses straight line basis of depreciation for Capital Assets. Capital Assets and their useful lives are detailed out below:

Assets Useful Life

Plant and Machinery 8 years

Motor Vehicle. 5 years

Building 50 years

Software 7 years

Required:

1. Prepare a Statement of Financial Performance for Banco Community College for the year ended 31/12/2019. (8 marks).

2. With reference to IPSAS 1: Presentation of Financial Statements, state four (4) objectives of general purpose financial statements. (2 marks).