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Posted on Sep 03, 2024

QUESTION TWO Below is the complete set of Financial Statements of Take-Home University (THU), a Public University of Ghana, isrued on 1 May 2020, Statement

QUESTION TWO Below is the complete set of Financial Statements of Take-Home University (THU), a Public University of Ghana, isrued on 1 May 2020, Statement of Financial Performance for the Year Ended 31 December, 2018 Revenue Notes GOG 1.540,000,000 Internally Generated Funds 2 14,427492.000 Donations and other income 9.278.258.000 25 2.750.000 Expenditure Compensation for employees 8.385.270.000 Goods and services 2.238.083.000 Social benefit 1.720,000 Interest 1.720,000 Capital expenditure (CAPEX) 25.542.315.000 29.100.000 36.248.408.000 Net Operating Result - Deficit 1.002.5.000 Other expenses Statement of Financial Position as at 31 December 2018 Notes Current Assets Cash and cash equivalent Receivable (468.050 -10,000) Inventory 294.233.000 458.050.000 155.254.000 907.517.000 Liabilities and Fund Payable 20% Loan Accumulated fund 696,325.000 8.600.000 704.925.000 202.612.000 907.517.000 Cash Flow Statement for the Year ended 31st December 2018 Cachlafos GOG 1.500.000.000 Internally Generated Funds 14.407.492.000 Destions and other income 9.278.250 25245.252.00 Cash Outflows Compensation of employees 6,385.270.000 Goods and services 1.989.112.000 Social benefit 1.720.000 Interest 1.720,000 Capital expenditure (CAPEX) 15.542.500.000 Other expenses 79.100.000 21.099.422.000 Increase in Cash and Cash Equivalent 1.246,328,000 Cash and Cush Equivalent as 1/1/18 -952.095.000 Cash and Cash Equivalent as 31/12/18 294201.000 NOTES TO THE FINANCIAL STATEMENTS Accounting policy a) Basis of accounting The financial statements are prepared on accrual basis of accounting b) Inventory valuation Inventory is valued at lower of cost and net realisable value. The financial statements are prepared in compliance with the IPSAS and all relevant financial legislations c) IPSAS 4.575,622.000 655,600,000 9.196.270.000 14.417.492.000 Internally Generated Fund Fees income Consultancy fees Admission forms Employees Compensation Allowance Establishpost Non establish post Books and Research allowance Project work allowance Superannuation End of service benefits Books and Research allowance arrears $56,670,000 5.312.430,000 1,253,600,000 150,765,000 48,500,000 278,500,000 298,040,000 186.765.000 8.385.270.000 Use of Goods and Services Legal cost Consultancy cost Seminar cost Training and Workshop Cost Utilities Increase in Provision for doubtfuldeht Opening inventory Closing inventory 25.059.000 800,000,000 500,000,000 104,000,000 560,053,000 5.060,000 399,165,000 55.254.000 Capital expenditure Property, plant and equipment Vork in Progress 17.292.500.000 8.250.015.000 25.542.515.000 Other expenses Trial balance Sponsorship 71,000,000 8.100.000 79. Payables Payables Consultancy cost Book & Research All Interest payable Tax withholding 182.840,000 234,500,000 186,765,000 1.720,000 20.500.000 696.325.00 Accumulated Fund Balance at start Net operating result 11,205.270,000 (1.002.658.000 202612.000 Required: a) Using the Qualitative Characteristics (QCs) of General-Purpose Financial Report as a Framework, evaluate the information usefulness of the set of financial statements presented by the THU. (10 marks) b) Based on the relevant IPSAS, explain the significant observations you have made about the financial statements of THU and suggest improvement, if any. (10 marks) (Total 20 marks)