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Agec 0243: Farm Management And Accounts Question Paper
Agec 0243: Farm Management And Accounts
Course:Diploma In Animal Health And Production
Institution: Chuka University question papers
Exam Year:2012
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CHUKA UNIVERSITY
COLLEGE
UNIVERSITY EXAMINATIONS
FIRST YEAR EXAMINATION FOR THE AWARD OF
DIPLOMA IN ANIMAL HEALTH AND PRODUCTION
AGEC 0243: FARM MANAGEMENT AND ACCOUNTS
STREAM: DIP (ANHPD) Y1S2 TIME: 2 HOURS
DAY/DATE: THURSDAY 9/12/2010 8.30 A.M – 10.30 A.M.
INSTRUCTIONS:
Answer ALL questions in Section A and One (1) in Section B.
SECTION A
1. The desire to increase income by taking advantage of market opportunities
requires farmers to become decision makers and better at competing in a risky and
continuously changing environment.
(i) Discuss the major sources of risk in farming [5 marks]
(ii) Discuss some of the factors that need consideration when planning.
[10 marks]
2. (i) A farmer wants to analyze the decision to purchase replacements for a
cow-calf herd rather than raise them and has come to you as an expert for
advice with the following information. The farmer contemplates to sell a
heifer calf that would have been held back from the herd at KES 60,000.
The costs for developing the heifers include pasture maintenance at KES
2,000; grain fed at KES 4,000; Supplement and minerals KES 4,500; Hay
fed at 12,000; Health utilities and other costs at KES 5,500; Labour costs
at KES 5,000. Other costs, such as land ownership and depreciation on
facilities, are not expected to change. The cost of purchasing a bred heifer
is expected to be KES 120,000. It is also expected that there will be no
reduced income, since cull cow sales would be the same for either
alternative. Advice the farmer which alternative to take. [10 marks]
(ii) Discuss some of the limitations evident in partial budgeting analysis.
[10 marks]
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3. The following Trial Balance was extracted from Juja Enterprises, a farming
concern as at 31
st
December 2009.
Trial Balance as at 31
st
December 2009.
Dr.
(KES)
Cr.
(KES)
Sales 867000
Land 225000
Cash at Bank 180000
Cash in Hand 22500
Water bills 9000
Tractor 112500
Creditors 120000
Salaries and Wages 75000
Tractor Expenses 15000
Returns inwards 1500
Motor van 150000
Debtors 240000
Capital 450000
Drawings 30000
Loan from A.F.C. 225000
Carriage outwards 1500
Stock 1
st
Jan. 2006 150000
Purchases 450000
1662000 1662000
Stock at 31
st
December 2009 was 75000.
Required:
Draft Trading and Profit and Loss Account for the year to 31
st
December and
Balance Sheet as at that date. [20 marks]
SECTION B
4. There are several pieces of farm records that need to be put together in order to
see the complete record keeping picture referred to as the four basic phases or
“puzzle pieces” for record keeping: Discuss this statement conclusively.
[15 marks]
5. Accounting as it exists today may be viewed as a system of assumptions,
doctrines, tenets, and conventions, all encompassed by the phrase “generally
accepted accounting principles”. Discuss the various standards or rules for
accounting principles. [15 marks]
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