Question

9. For the year ended 31st December, 2010. The central Government approved Le100,000,000 to six Local Government Areas in the country. The allocation was distributed on the following basis: 60% on equal basis, 40% on population.
Local government | Population
Oruko | 2,000,000
Aha | 4,000,000
Suna | 2,000,000
Din | 2,000,000
Sika | 2,000,000
Tiri | 4,000,000
The following information relates to Suna Local Government:
(i) Revenue Generated: Renewal of Licenses Le175,000; Tenement rates Le150,000; Fines Le125,000; Park collection Le150,000.
(ii) Expenditure incurred: Stationery Le450,000; Maintenance of Vehicles Le1,750,000; Salaries of traditional Chiefs Le1,080,000; Rehabilitation of roads Le7,195,000; Rural electrification Le2,125,000; (iii) Cash balance 1/1/10 Le175,000.
You are required to prepare: (a) A statement showing the allocation made to each Local Government, and (b) Receipts and payments Account of Sunal Local Government for the year ended 31st December, 2010. [15 marks]

Accepted Answer

(a) STATEMENT OF ALLOCATION
Local Govt | Equality basis | Population basis | Total Allocation
Oruko | Le10,000,000 | Le5,000,000 | Le15,000,000
Aha | Le10,000,000 | Le10,000,000 | Le20,000,000
Suna | Le10,000,000 | Le5,000,000 | Le15,000,000
Din | Le10,000,000 | Le5,000,000 | Le15,000,000
Sika | Le10,000,000 | Le5,000,000 | Le15,000,000
Tiri | Le10,000,000 | Le10,000,000 | Le20,000,000

(b) SUNA LOCAL GOVERNMENT — RECEIPTS AND PAYMENTS ACCOUNT for the year ended 31st December, 2010
Dr: Bal b/d 175,000; Allocation: Equality 10,000,000, Population 5,000,000; Renewal of licenses 125,000... (per source figures): Renewal of licenses 175,000 (should reconcile with the revenue list); Tenement rates 150,000; Fines 125,000; Park collections 150,000; Total 15,775,000.
Cr: Stationery 450,000; Maintenance of vehicles 1,750,000; Salaries of trad. chiefs 1,080,000; Rehabilitation of roads 7,195,000; Rural electrification 2,125,000; Bal c/d 3,175,000; Total 15,775,000.

WAEC Accounting 2012 Theory — Question 9

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