The Pineapple Industry Association (PIA) is a government owned enterprise which is legislated to generate its...

    

Transcribed Image Text:

The Pineapple Industry Association (PIA) is a government owned enterprise which is legislated to generate its own income which it uses to cover capital and recurrent expenditures. PIA is an agent of National Agriculture Association. The Young Famers association controls 25% of PIA. Outside of these powers, its government also provide Pineapple Industry with monthly subventions to cover its recurrent expenditures based on Pineapple Enterprise budgetary demands and the legal allocations by the government. Pineapple Enterprises uses ISPAP to prepare its financial statements. You were asked by to government to assist Pineapple Industry with its accounting processes, which involved the recording, generation and preparation of accounting transactions and final accounts as stipulated by the IPSASS. Collaborating with a team of qualified and experienced accountants, you were able to prepare the following accounting information of Pineapple Industry for the year ended December 2021. Details Dividends received from equity investments Service Charge on loans to beneficiaries Gross margin on sale of pineapples Interest on Loans to Members Interest on investments Miscellaneous Income 2021 Amount $000 10,000 70,400 367,308 7,400 14,700 60 255,400 2020 Amount $0001 7,500 60,500 8,400 15,000 70 Membership Fees Grants Received Grants to farmers Donations received Penalties and Fines for breach of Association rules Cost of Seminars for Farmers Royalties for use of lands Warehouse Storage General Cleaning & Sanitation Property Rates Depreciation of Fixed Assets Accounting and Consultation Cost Advances to Staff Salaries to Staff (Gross) Staff Contribution to Social Security & Other Statutory Contributions PIA's Contribution to Social Security & Other Statutory Contributions Gain on Sale of Equipment Proceed on the Sale of Equipment Plant, Property and Equipment (at cost, after disposal) Accumulated Depreciation Short-term investments Trade and Other Payables Cash and Cash Equivalent Inventory at year end Receivables Development Bond Issued Accumulated Surplus Contribution from Other Government Entities Notes relating to 2021 100,020 50,000 350,000 10,000 330 7,000 4,000 6,000 500 1,000 700 5,000 680 200,000 1,000 3500 2,000 47100 450,000 47,700 70,000 9360 2,500 85,000 6,500 150,000 75,000 60000 80,000 350,000 45,000 700 6,000 3,500 5,500 1,500 1,000 700 4,500 18406 175,000 750 2625 0 0 480,000 47,000 30,000 6700 1,500 72,000 10,500 100,000 264986 75,000 1. The Accountant for PIA records the transaction on a cash basis. For the 2020 audit adjustments were made to reflect the basis required for ISPAS. The audit was completed for 2020, therefore, those figures are final. The 2021 figures are not yet finalized. 2. Dividends received included $4,200,000 relates to amounts receivable on 31 December 2020. Dividend receivable as of 31 December 2021 is $1,100,000. 3. PIA receives an annual transfer of $30,000,000 for the National Agricultural Association for the operating of the industry. 4. Service Charge Outstanding as at 31 December 2021 was $442,000. 5. Interest receivable on Loans to Members as at 31 December 2020 received in 2021 was $2,080,000. Interest receivable at 31 December 2021 was 5,000,000. 6. All membership fees were paid in full. Ten members prepaid their membership for 6 months at $12,000 per month. 7. Only 80% of the Grants Committed were received. The Grants are normally received on a quarterly basis. 8. To secure adequate storage in 2021, payments of 1,612,000 was made in advance. 9. All the surplus, except 25% which are for several associates, are returned to the National Agriculture Association. 10. Bond issued in 2020 was issued for 200,000,000. There was a repayment of $50,000 in 2021. 11. All statutory was paid at year end Required: i. ii. Statement of Financial Performance, Statement of Financial Position and Cash flow for 2021 in line with ISAPS. Expenses should be classified by nature. No comparative data required for the Cashflow. A Junior Accountant recently joined PIA, as the Senior Accounting the budgetary process. (50 marks) Officer explain (10 marks) The Pineapple Industry Association (PIA) is a government owned enterprise which is legislated to generate its own income which it uses to cover capital and recurrent expenditures. PIA is an agent of National Agriculture Association. The Young Famers association controls 25% of PIA. Outside of these powers, its government also provide Pineapple Industry with monthly subventions to cover its recurrent expenditures based on Pineapple Enterprise budgetary demands and the legal allocations by the government. Pineapple Enterprises uses ISPAP to prepare its financial statements. You were asked by to government to assist Pineapple Industry with its accounting processes, which involved the recording, generation and preparation of accounting transactions and final accounts as stipulated by the IPSASS. Collaborating with a team of qualified and experienced accountants, you were able to prepare the following accounting information of Pineapple Industry for the year ended December 2021. Details Dividends received from equity investments Service Charge on loans to beneficiaries Gross margin on sale of pineapples Interest on Loans to Members Interest on investments Miscellaneous Income 2021 Amount $000 10,000 70,400 367,308 7,400 14,700 60 255,400 2020 Amount $0001 7,500 60,500 8,400 15,000 70 Membership Fees Grants Received Grants to farmers Donations received Penalties and Fines for breach of Association rules Cost of Seminars for Farmers Royalties for use of lands Warehouse Storage General Cleaning & Sanitation Property Rates Depreciation of Fixed Assets Accounting and Consultation Cost Advances to Staff Salaries to Staff (Gross) Staff Contribution to Social Security & Other Statutory Contributions PIA's Contribution to Social Security & Other Statutory Contributions Gain on Sale of Equipment Proceed on the Sale of Equipment Plant, Property and Equipment (at cost, after disposal) Accumulated Depreciation Short-term investments Trade and Other Payables Cash and Cash Equivalent Inventory at year end Receivables Development Bond Issued Accumulated Surplus Contribution from Other Government Entities Notes relating to 2021 100,020 50,000 350,000 10,000 330 7,000 4,000 6,000 500 1,000 700 5,000 680 200,000 1,000 3500 2,000 47100 450,000 47,700 70,000 9360 2,500 85,000 6,500 150,000 75,000 60000 80,000 350,000 45,000 700 6,000 3,500 5,500 1,500 1,000 700 4,500 18406 175,000 750 2625 0 0 480,000 47,000 30,000 6700 1,500 72,000 10,500 100,000 264986 75,000 1. The Accountant for PIA records the transaction on a cash basis. For the 2020 audit adjustments were made to reflect the basis required for ISPAS. The audit was completed for 2020, therefore, those figures are final. The 2021 figures are not yet finalized. 2. Dividends received included $4,200,000 relates to amounts receivable on 31 December 2020. Dividend receivable as of 31 December 2021 is $1,100,000. 3. PIA receives an annual transfer of $30,000,000 for the National Agricultural Association for the operating of the industry. 4. Service Charge Outstanding as at 31 December 2021 was $442,000. 5. Interest receivable on Loans to Members as at 31 December 2020 received in 2021 was $2,080,000. Interest receivable at 31 December 2021 was 5,000,000. 6. All membership fees were paid in full. Ten members prepaid their membership for 6 months at $12,000 per month. 7. Only 80% of the Grants Committed were received. The Grants are normally received on a quarterly basis. 8. To secure adequate storage in 2021, payments of 1,612,000 was made in advance. 9. All the surplus, except 25% which are for several associates, are returned to the National Agriculture Association. 10. Bond issued in 2020 was issued for 200,000,000. There was a repayment of $50,000 in 2021. 11. All statutory was paid at year end Required: i. ii. Statement of Financial Performance, Statement of Financial Position and Cash flow for 2021 in line with ISAPS. Expenses should be classified by nature. No comparative data required for the Cashflow. A Junior Accountant recently joined PIA, as the Senior Accounting the budgetary process. (50 marks) Officer explain (10 marks)

Answer rating: 100% (QA)

Question 1 Pineapple Industry Association Statement of Financial Performance For the year ended December 31 2021 000 Revenue Service Charge on loans to beneficiaries 367308 Gross margin on sale of pin... View the full answer