CORIS RA is a government owned enterprise which is legislated to generate its own income which it uses to cover capital and recurrent expenditures. The legislations also give the government the powers to order CORIS RA to transfer all or part of the income it generates to the consolidated fund as it deems fit. Outside of these powers, its government also provide CORIS RA with monthly subventions to cover its recurrent expenditures based on CORIS RA budgetary demands and the legal allocations by the government.

For the 2017 and 2018, CORIS RA used the cash basis to prepare its financial statements, although some of the accounting transactions were recorded using the accrual basis. It should be noted that the government instructed all of its agencies to use an accrual basis that is guided and recommended by IPSASs.

You were asked by to government to assist CORIS RA with its accounting processes, which involved the recording, generation and preparation of accounting transactions and final accounts as stipulated by the IPSASs.

Working with a team of qualified and experienced accountants, you were able to prepare the following accounting information of CORIS RA for the year ending December 2020:

Details Amount

Dividend Received 93,250

Loan payment 143,000

Amounts Recovered 194,000

Interest Expense 200,000

Court Administration Fees 240,000

Cost of Training 275,000

Bar License 300,400

Store Rent 300,750

Fines and Penalties 330,000

General Cleaning 350,000

Sanitation 370,000

Accumulated Fund (1/1/2020) 370,600

Basic Taxes and Rates 370,900

Allowances 390,470

Equity Investment Acquired 420,000

Royalties 430,000

Accountancy and Consultancies cost 470,000

Work-In-Progress 490,000

Herbalist License 530,370

Posts not on Establishment 580,000

Other Expenditure 600,000

Stool Land Revenue 600,000

Transport and Travelling cost 620,000

Utilities 630,000

Hostel License 630,920

Details Amount

Advances to Staff 660,000

Local Park Fees 720,400

Inventory and Consumables 800,000

Special Services 820,000

Property Rate 820,900

Social Benefit 840,300

Market Tolls 870,000

Consumption of Fixed Assets 960,000

Infrastructure, Plant and Equipment 980,000

Permit Fees 990,000

Proceeds from Sale of Equity 990,320

Established Posts 1,140,700

Development Bonds Issued 1,300,000

Business Income 2,300,600

Loans Received 2,330,000

Local Fund 2,930,000

Rent from Land and Building 6,120,800

Central Government Salaries 12,000,000

Cash and Cash Equivalent @ (1/1/2020) 12,300,240

Parish Development Facility 15,000,600

NOTES

1. You are to ensure that CORIS RA adopts and maintain the accrual accounting basis when preparing its financial statements

2. As of December 31, 2020, the Established Post had outstanding salaries of $180,000,000.00

3. Closing Inventory and Consumables as at December 31, 2020 stood at $170,000,000.00

Using the guidelines and formats set out in the applicable IPSASs, you are to:

A. Prepare CORIS RA Statement of Cash Flow for the year ended December 31, 2020 (8 marks)

B. Prepare CORIS RA Statement of Financial Performance for the year ended December 31, 2020 (8 marks)

C. Using the contents presented in the Units supported by information in the relevant IPSASs, give a comprehensive definition (with examples) of revenue and expenditure appropriate for a Central Government. (2 marks)

D. The IPSASs indicated some benefits of Cash Flow Information. State any two of these benefits to an entity and also the general public. (2 marks)