EXERCISES CHAPTER 2

Exercise 1: AAA is a public sector entity. The accounting documents related to

transactions funded from State Budget of AAA for the year ended 31 Dec, year N are as
follows: (Currency unit: VND’ 000)
I. Opening balances:
Debit balance: Acc 211: 3,000,000
Credit balance: Acc 214: 1,300,000
Credit balance: Acc 36611: 1,700,000
II. The economic transactions that occurred in year N are as follows:
1. Received an official notice of recurrent expenditure estimate of year N at the beginning of
the year. The recurrent expenditure budget that the entity is able to spend on its own is
800,000. The recurrent expenditure budget that the entity is not allowed to spend on its own:
200,000.
2. Determined salary payable to employees: 300,000.
3. Provisions based on salary were calculated according to current legal framework.
4. Withdrew the estimate for following activities in year N:
4.1. Paying salary to employees.
4.2. Paying provisions based on salary.
4.3. Withdraw the estimate for administrative activities: 100,000.
4.4. Purchased materials used directly for the accounting department with the purchase price
150,000. All payables are paid with the withdrawal of the estimate.
4.5. Purchased and stored materials with the purchase price 50,000. All payables are paid with
the withdrawal of the estimate.
4.6. Withdrew the estimate in advance: 50,000.
5. Purchased a machine with a purchase price 200,000. All payables are paid with the
withdrawal of the estimate.
6. Issued materials for administrative purposes: 50,000.
7. Paid for professional activities with cash 50,000. Then, the entity did the necessary
procedures with the Treasury to settle estimate in advance.
8. At the end of the year:
8.1. Determined the cost of materials issued in the year.
8.2. Determined the total amount of depreciation for fixed assets of: 35,000.
8.3. Determined the saving amount: X. Withdrew the estimate to the deposit account at the
Treasury.
8.4. Determined the results of activities in year N.
8.5. Transferred account 0082 to account 0081.
9. Contributed the results of activities in year N: the fund for development of administrative
operations: 20%, the fund for supplemental income 60%, and the bonus fund: 20%.
10. In the year N+1, the previous year's operating expenses was approved for settlement:
1,000,000.
Required:
a. Prepare journal entries for the above transactions.
b. Prepare the statement of financial position and the statement of financial performance for the
year N.

Exercise 2: AAA is a State Agency entity. One of functions of AAA is collection of fees.
The accounting documents related to collecting fee activities of AAA for the year ended
31 Dec year N are as follows: (Currency unit: VND’ 000)
I. Opening balances:
Debit balance: Acc 211: 5.000.000
Credit balance: Acc 214: 3.000.000
Credit balance: Acc 36611: 2.000.000
II. The economic transactions in year N are as follows:
1. Received an official notice of recurrent expenditure estimate of N, at the beginning of the
year. The recurrent expenditure budget that the entity is not allowed to spend on its own used
for the scientific research works is 830,000.
2. Withdrew the estimate in advance: 100,000.
3. Paid for scientific research works with cash 80,000.
4. Then, the entity did the necessary procedures with the Treasury to settle estimate in
advance.
5. Purchased materials with purchase 110,000. Materials are stored. All payables are paid
with the withdrawal of the estimate.
6. Determined salary payable to employees: 200,000. Provisions based on salary were
calculated according to current legal framework.
7. Withdrew the estimate to pay salary and provisions based on salary after deducting related
provisions in transaction 6.
8. Issued materials for scientific research works 110,000.
9. Paid electricity bill of 67,000 with the withdrawal of the estimate.
10. Paid scientific research works 100,000 with the withdrawal of the estimate.
11. Purchased a machine with a purchase price 176,000. All payables are paid with the
withdrawal of the estimate.
12. At the end of the year, determined the value of materials that were issued in the year. The
total value of depreciation for fixed assets of 40,000.
13. Determined the results of activities funded from the State Budget in year N.
14. Determined the recurrent expenditure budget that the entity is not allowed to spend on its
own that has not been yet used and returned to the State Budget (if any).
Required:
a. Prepare journal entries for the above transactions.
b. Prepare the statement of financial position and the statement of financial performance for the
year N.