The following trial balance was extracted from the books of D. Fama, a farmer, on 31/12/2019. sh.
Question:
The following trial balance was extracted from the books of D. Fama, a farmer, on 31/12/2019.
sh. sh.
Land and buildings (cost sh.600,000) 520,000
Machinery (cost sh.120,000) 105,000
Stocks 1/1/2019
Livestock 96,000
Grain seeds 200
Fertilizer 1,600
Feedstuffs 3,600
Purchases
Livestock 44,000
Grain seeds 6,800
Fertiliser 7,250
Feedstuffs 16,900
Sale of cattle 235,000
Receipts from the Creamery for milk 126,300
Sale of grain 82,400
Electricity 12,920
Veterinary fees and medicines 1,900
10% Loan from Bank (1/1/2019) 90,000
Drawings of cash 8,000
Loan interest 4,500
Farm wages 56,400
Bank 106,370
Capital _______ 245,000
885,070 885,070
The following information is also available on 31/12/2019:
1. Closing Stocks
Livestock sh.74,000
Fertilizer sh.900
Feedstuffs sh.2,600
2. Value of milk used by the family sh.1,250.
3. Farm wages and fertilizers should be allocated half to ‘Cattle and Milk’ and half to ‘Grain’.
4. Provide for Loan interest due.
5. Depreciation is to be provided as follows: Buildings 3% of cost and Machinery 20% of cost.
You are required to prepare:
(a) Enterprise analysis accounts for ‘Cattle and Milk’ and ‘Grain’ for year ended 31/12/2019. (10 marks)
(b) General profit and loss account for year ended 31/12/2019. (5 marks)
(c) Statement of financial position as at 31/12/2019.
Expert Answer:
a A Cattle and Milk sh sh Opening Stocks 96000 Purchases 44000 Total Cost of Sales 140000 Less Closi... View the full answer
