- 20 Marks
PSA – L2 – Q11.2 – Preparation and Presentation of Financial Statements for Central Government
Question
Prepare the Central Government of Salima: Cash flows statement for the year ended 31st December 2024.
Answer
Central Government of Salima: Cash flows statement for the year ended 31st December 2024
| Cash flows from operating activities | GHC million |
|---|---|
| Corporate income tax | 38,000 |
| Custom and excise duties | 43,000 |
| Value added taxes | 45,000 |
| Multilateral grants | 16,000 |
| Income tax (PAYE) | 15,000 |
| Fee and charges for services | 10,000 |
| Dividend and other investment income | 7,000 |
| Bilateral grants | 12,000 |
| Fines, penalties and forfeitures | 9,000 |
| Established post salaries | (22,000) |
| Non-established post salaries | (20,000) |
| 13% SSF contribution for staff | (7,000) |
| Staff allowances | (8,000) |
| Administrative cost | (15,000) |
| Seminar and workshops | (12,000) |
| Training and capacity building | (6,000) |
| Foreign travelling cost | (5,000) |
| Repair and maintenance | (8,000) |
| Domestic debt interest paid | (12,000) |
| External debt interest paid | (12,000) |
| Payments for subsidies on utilities | (12,000) |
| Payment for subsidies on fuel | (12,000) |
| Lively empowerment against poverty | (12,000) |
| Support for social protection of aged widows | (12,000) |
| Statutory transfers | (12,000) |
| Other expenses | (12,000) |
| Net cash flows from operating activities | 0 |
| Cash flows from investing activities | GHC million |
|---|---|
| Recoveries of loans and advances | 8,000 |
| Payment for property, plant and equipment during year | (18,000) |
| Payments for infrastructure during year | (20,000) |
| Loans and advances granted during the year | (13,000) |
| Financial investment during the year | 0 |
| Net cash flows from investing activities | (43,000) |
| Net cash flows before financing | (43,000) |
| Cash flows from financing activities | GHC million |
|---|---|
| External borrowing during the year | 30,000 |
| Domestic borrowing during the year | 20,000 |
| Repayment of external borrowing during the year | (10,000) |
| Net cash flows from financing activities | 40,000 |
| Net increase in cash and cash equivalents | (3,000) |
| Opening cash and cash equivalents | 2,000 |
| Closing cash and cash equivalents | (5,000) |
Notes forming part of the cash flows statement:
Note 1: Reconciliation of surplus/deficit to cash flows from operating activities
| GHC million | |
|---|---|
| Surplus of revenue over expenses for the year ending 2024 | 23,200 |
| Depreciation charged for the year | 3,500 |
| Increase in inventories | (1,500) |
| Taxes recoverable | (16,200) |
| Accrued expenses | 11,000 |
| Prepaid rent | (5,000) |
| Net cash flows from operating activities | 15,000 |
Workings
W1 Taxes recoverable
| GHC million | |
|---|---|
| Corporate income taxes | 3,000 |
| Customs & excise duties | 5,000 |
| VAT | 6,000 |
| Personal Income Tax | 4,000 |
| Total taxes receivable | 18,000 |
| Less amount estimated as irrecoverable | 1,800 |
| Taxes recoverable | 16,200 |
W2 Accrued expenses
| GHC million | |
|---|---|
| Domestic debt interest | 3,000 |
| External debt interest | 4,000 |
| Accrued salaries | 4,000 |
| Total accrued expenses | 11,000 |
W3 Prepaid Rent
| GHC million | |
|---|---|
| Prepaid Rent | 5,000 |
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