7 FARM ACCOUNTS Sample Question 60 Mark Question


The Brown family is engaged in a mixed farming business. Included in the assets and liabilities on 01/01/2013 were the following: land and buildings €250,000, machinery €55,000, electricity due €250, milk cheque due €1,000, value of cattle €50,000, value of sheep €35,000, stock of fuel €450. The following is a summary taken from the family’s payments and lodgements book for the year ended 31/12/2013:


Lodgements


Balance (01/01/2013) Cattle Milk


Sheep Lambs Calves


Ewe Premium Wool


Beef Premium Forestry Premium € Payments 5,500 Cattle


12,000 Fertiliser 25,000


Dairy Wages


14,000 Light and Heat 7,800 Drawings 6,500 Repairs


2,600 General Farm Expenses 1,200 Veterinary Fees 2,000 Sheep


1,750 9 months Investment Interest @ 6% 6,750 Balance (31/12/2013) 85,100


10,150 85,100


The following information and instructions are to be taken into account: (i) Value of livestock on 31/12/2013 was cattle €52,000, sheep €37,000. (ii) Farm produce used by the family during the year was milk €500, lamb €350. (iii) General farm expenses, fertiliser and veterinary fees are to be apportioned 40% to sheep, and 60% to cattle and milk.


(iv) All other expenses are to be apportioned 80% to farm and 20% to household. (v) Depreciation is to be provided at the rate of 15% on machinery at cost per annum. (vi) Veterinary fees included a cheque for €200 for a family pet. (vii) On 31/12/2013 stock of fuel was €275, milk due €1,200 and creditors for fertiliser amounted to €375.


You are required to: (a) Prepare a Statement of Capital for the farm on 01/01/2013. [20 Marks] (b) Prepare Enterprise Analysis Accounts for cattle and milk, and sheep for the year ended 31/12/2013. [20 Marks]


(c) Prepare a General Profit and Loss Account for the year ended 31/12/2013. [12 Marks] (d) Prepare the Brown’s Drawings Account. [8 Marks]


7


Bank Loan and 15 months Interest @ 4% per annum on 31/06/2013


€


15,000 1,200 2,200 2,400 5,000 1,200


12,000 3,200


17,000 15,750


84


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