The Budget Committee of the Department of Vehicles Licensing (DVL) put together the estimated revenues, the government subventions, the appropriations and the subsequent expenditures estimates of the department for the year to be presented to the Legislature for approval. The accrual, modified accrual and cash basis of accounting are used to recognize revenues of the department depending on the type of revenue. The accrual basis is applied on inspection fee for identified existing vehicles at the beginning of the year, unless there is any justification for the non-licensing of any such vehicle by the owner. Revenue is recognized for new vehicles as and when registered. Revenue is recognized for both new and old licenses as and when issued and renewed respectively. The following is a section of the transactions of the Department for the year 2012: Parliament approved an annual inspection fee of GH₵350 per existing vehicle, GH₵2650 for any new vehicle to be registered, GH ₵190 for license renewal and GH₵550 for the issue of new license. At the beginning of the year, the modernized computerized system identified existing 83,000 vehicles for inspection. Inspection fees for 80,000 of such vehicles were collected during the year while owners of 30% of the remaining vehicles proved that these vehicles crashed in the months they were due for renewal. New vehicles that were cleared into the country amounted to 12,000 out of which 10,500 were registered. 9,000 applicants for new licenses were received and the Department processed 7,000 of these which were collected and paid for. The remaining licenses were rejected on varied grounds. Subvention to the tune of the GH₵2,050,000 was released by the government to support the Department’s activities in addition to what was released for personal emoluments and allowances. During the year, the expenditure estimates of the department presented to and approved by Parliament included personnel emoluments and allowances of GH₵1850,000 travel and transport of GH₵66,800 and general expenditures of GH₵44,400. Required: Pass the necessary journal entries, including cash, for the above transactions for entries to be made in the general ledger of the Department of Vehicles Licensing. Note: read the section on Accounting in the Public Sector.
The Budget Committee of the Department of Vehicles Licensing (DVL) put together the estimated revenues, the government subventions, the appropriations and the subsequent expenditures estimates of the department for the year to be presented to the Legislature for approval.
The accrual, modified accrual and cash basis of accounting are used to recognize revenues of the department depending on the type of revenue. The accrual basis is applied on inspection fee for identified existing vehicles at the beginning of the year, unless there is any justification for the non-licensing of any such vehicle by the owner. Revenue is recognized for new vehicles as and when registered. Revenue is recognized for both new and old licenses as and when issued and renewed respectively. The following is a section of the transactions of the Department for the year 2012: Parliament approved an annual inspection fee of GH₵350 per existing vehicle, GH₵2650 for any new vehicle to be registered, GH ₵190 for license renewal and GH₵550 for the issue of new license. At the beginning of the year, the modernized computerized system identified existing 83,000 vehicles for inspection. Inspection fees for 80,000 of such vehicles were collected during the year while owners of 30% of the remaining vehicles proved that these vehicles crashed in the months they were due for renewal. New vehicles that were cleared into the country amounted to 12,000 out of which 10,500 were registered. 9,000 applicants for new licenses were received and the Department processed 7,000 of these which were collected and paid for. The remaining licenses were rejected on varied grounds. Subvention to the tune of the GH₵2,050,000 was released by the government to support the Department’s activities in addition to what was released for personal emoluments and allowances. During the year, the expenditure estimates of the department presented to and approved by Parliament included personnel emoluments and allowances of GH₵1850,000 travel and transport of GH₵66,800 and general expenditures of GH₵44,400.
Required:
Pass the necessary
Note: read the section on Accounting in the Public Sector.
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