Course Content
Agriculture Economics iv
• Importance of farm accounts • Financial documents and their uses • Analysis of financial statements • Books of accounts and their uses.
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AGRICULTURE ECONOMICS (V)
• Market and marketing • Types of markets • Supply and demand • Marketing functions • Problems of marketing • Agricultural organizations
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AGROFORESTRY
This topic entails the following: • Definition of agro forestry • Importance of agro forestry • Forms of agro forestry • Importance of trees • Selection f trees to plant • Routine management practices on trees • Methods of tree harvesting.
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CROP PESTS AND DISEASES
This topic entails the following: • Definition of a pest and a disease • Main cause of crop diseases • Description of harmful effects of crop pests and diseases • Identification of crop pests and diseases • Control measures of crops pests and diseases
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CROP PRODUCTION I (LAND PREPARATION)
The following is the summary- Land preparation entails the following farming practices. - Land clearing or bush clearing tools, chemicals and equipment used. - Primary cultivation, tools and equipment as machines used. - Primary cultivation, tools and equipment as machines used. - Secondary cultivation, tools and equipment used. - Tertiary operations e.g. ridging, rolling and leveling. - Sub-soiling, tools used and reasons for the same. - Minimum tillage and reasons for the secure
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CROP PRODUCTION II (PLANTING)
This topic entails the following: • Correct planting materials for various crops • Selection and preparation of planting materials • Determination of optimum time of planting • Factors which determine planting depth • Planting procedure for different crops • Factors which determine seed rate, spacing and plant population. • Calculation of plant population • Economic value of land.
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AGRICULTURAL ECONOMICS II (LAND TENURE AND LAND REFORM)
• Definition of land tenure. • Description of tenure systems. • Descriptions of land reforms
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CROP PRODUCTION III NURSERY MANAGEMENT PRACTICES
This topic entails the following: • A nursery bed • A nursery bed and a seed bed • Reasons of establishing nursery bed • Suitable site for nursery bed • Nursery bed preparation • Nursery bed management practices • Transplanting seedling crops from nursery bed • Budding a seedling • Grafting a seedling • Reasons for budding, grafting and layering • Tissue culture • Damage caused by animals to a seedling and prevention
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CROP PRODUCTION IV (FIELD MANAGEMENT PRACTICES)
This topic entails the following: • Crop rotation • Reasons for crop rotations • Crop rotation programme • Terms used in crop farming • Mulching • Reasons for various field management practices • Correct stage for harvesting crops • Harvesting practices of various crops.
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AGRICULTURAL ECONOMICS III (PRODUCTION ECONOMICS)
This topic entails the following: • Parameter of national development • Factors of production • Law of diminishing returns • Farm planning and budgeting • Agricultural services • Risks and uncertainities • How to adjust to risks and uncertainities.
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CROP PRODUCTION V (VEGETABLES)
This topic entails the following: • Growing or production of a vegetable crop form nursery establishment to harvesting • Keep records of crop production. • Market vegetable crop produce • Give reasons or importance of growing vegetable crops. • The vegetable crops include the following: Tomatoes, cabbages, onions, carots, kales.
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LIVESTOCK HEALTH (INTRODUCTION TO LIVESTOCK HEALTH)
This topic entails the following: • Definition of Health and disease. • Signs of sickness in animals livestock diseases • Categories of livestock diseases • Reasons for keeping livestock in good health • Disease control practices • Appropriate methods of handling livestock.
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FACTORS WHICH INFLUENCE AGRICULTURE
In this topic, the following factors influence agriculture. -Human factors e.g. -level of education, -Health HIV/AIDS, -Economic status of the farmer e.t.c - Biotic factors e.g. pests, parasites, decomposers, pathogens, pollinators, predators e.t.c. - Climatic factors e.g. rainfall, temperature, wind and relative humidity, light - Edaplus factors e.g. type of soils, soil profile, soil structure, soil texture, soil chemical properties.
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FARM STRUCTURES
This topic entails the following: • Description of parts of a building • Identification of materials for construction • Description of various farm structures and their uses • Construction and maintenance of farm structures.
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FARM POWER AND MACHINERY
This topic entails the following: - Sources of farm power - Systems of a tractor - Tractor implements, uses and maintenance - Animal drawn implements uses and maintenance - Tractor servicing and maintenance practices
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CROP PRODUCTION VI FIELD PRACTICES FOR MAIZE, MILLET, SORGHUM, BEANS AND RICE: HARVESTING OF COTTON PYRETHRUM, SUGAR CANE COFFE AND TEA
This topic entails the following: • Description of management practices of the food crops from planting to harvesting and marketing. • Economic value of food crops and industrial crops
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FARM TOOLS AND EQUIPMENT
There are five categories of farm tools and equipment namely: - Garden tools and equipment e.g. pangas, jembe, pick axe, spade e.t.c. - Workshop tools and equipment e.g. saws, hammers, planes, chisels e.t.c - Livestock production tools and equipment e.g. milking stool, strip cup, milk churn etc. - Masonry tools and equipment e.g. wood float, spirit level, plumb bob e.t.c - Plumbing tools e.g. pipe wrench spanner, stock and die e.t.c
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FORAGE CROPS
This topic entails the following: • Definition and classification of pasture crops. • Identification of pasture corps • Description of ecological requirements of forage crops • Description of the establishment of pasture and fodder crops • Description of forage utilization and conservation.
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INTRODUCTION TO AGRICULTURE
This topic entails the following:- - Definition of agriculture - Main branches of agriculture - Farming systems - Farming methods - Role of agriculture to Kenya’s economy - Varied opportunities in agriculture.
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LIVESTOCK PRODUCTION II (NUTRITION)
This topic entails the following: • Identification and classification of livestock feeds. • Digestion and digestive systems of cattle, pigs and poultry • Definition of terms used to express field values • Preparation of balanced ration for various livestock • Functions and deficiency symptoms of various nutritional elements.
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LIVESTOCK HEALTH II (LIVESTOCK PARASITES)
This topic entails the following: • Host-parasite relationships • Effects of parasites on livestock • Life cycle of parasites • Methods of parasite control in livestock • Identify different parasites
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LIVESTOCK HEALTH III (LIVESTOCK DISEASES)
This topic entails the following: • Description of causes and vectors of the main livestock diseases. • Signs of each stated livestock disease • Stating predisposing factors where applicable • Control measures of livestock disease
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SOIL AND WATER CONSERVATION
This topic entails the following: • Definition of soil erosion • Explanation of various factors which influence erosion. • Agents of erosion • Description various methods of erosion • Description of various methods of erosion control • Description of micro-catchments and then uses.
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SOIL FERTILITY 1 (ORGANIC MANURE)
This topic entails the following: - Characteristics of a fertile soil - How soil loses soil fertility - Soil fertility maintenance - Reasons of adding organic matter to soil - Disadvantages of organic manure - Types of organic manure i.e green manure, farm yard manure and compost measure.
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LIVESTOCK PRODUCTION I COMMON LIVESTOCK BREEDS
This topic entails the following: • Reasons of keeping livestock • Parts of a cow • Characteristics of indigenous and exotic cattle breeds • Dairy cattle breeds • Beef cattle breeds • Dual purpose cattle breeds • Pig breeds • Sheep breeds • Goat breeds • Rabbit breeds • Camel breeds
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AGRICULTURE ECONOMICS (BASIC CONCEPTS AND FARM RECORDS)
This topic entails the following - Definition of scarcity, preference and classic, opportunity cot as used in agriculture production. - Uses of farm records - Types of farm records i.e production records, filed operation records, breeding records, feeding records, health, labour records and master roll.
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LIVESTOCK PRODUCTION III (SELECTION AND BREEDING)
This topic entails the following: • Description of reproduction • Description of reproduction systems • Selection f breeding stock • Description of breeding system. • Identification of livestock on heat • Description of methods used in serving livestock.
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LIVESTOCK PRODUCTION IV (LIVESTOCK MANAGMENT PRACTICES
This topic entails the following: • Description of livestock rearing practices • Carrying out livestock rearing practices • Livestock routine management practices i.e. feeding, de-beaking e.t.c.
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LIVESTOCK PRODUCTION V (POULTRY)
This topic entails the following: • Identification of parts of an egg. • Selection of eggs for incubation • Identification of suitable sources for chicks. • Descriptions of broodiness • Description of condition for incubation • Description of rearing systems • Categories of poultry feds according to age-of birds • Stating causes of stress and vices in poultry and control measures. • Marketing of eggs and poultry meat. • Selection, sorting and grading of eggs.
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SOIL FERTILITY II (IN ORGANIC FERTILIZERS)
This topic entails the following; • Essentials elements required by cops • Classification of essential elements • Role o micro-nutrients • Deficiency symptoms of macro-nutrients and micro-nutrients. • Identification and classification of fertilizers. • Soil sampling and testing methods of fertilizer application. • Effect of soil acidity/alkalinity air crops • Fertilizer rate calculations
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WATER SUPPLY, IRRIGATION AND DRAINAGE
This topic entails the following: - Hydrological cycle - Sources of water on the farm - Water collection and storage - Pumps and pumping of water - Types water pipes - Water treatment - Uses of eater of the farm. - Types of irrigation advantages and disadvantages. - Importance and methods of drainages - Water pollution causes and prevention.
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LIVESTOCK PRODUCTION III (LIVESTOCK REARING PRACTICES)
This topic entails the following: • Raising young stock • Milk and milk components • Milk secretion and milk let-down • Correct milking techniques • Marketing of milk and beef.
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WEEDS AND WEED CONTROL
This topic entails the following: • Definition of a weed • Identification of weeds • Classification o weeds • Competitive ability of weeds • Description of weed control methods • Harmful effects of weeds
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AGRICULTURE STUDIES
About Lesson

AGRICULTURAL ECONOMICS IV

           

            This topic entails the following:

  • Importance of farm accounts
  • Financial documents and their uses
  • Analysis  of financial statements
  • Books of accounts and their uses.

            The following relevant questions and their answers in this topic will greatly motivate and help the             user to comprehend and understand the required concepts and practices:

  1. Name three methods of grafting that are used in propagation of plants

2          a) The following transactions were extracted from Mr. Tembo’s financial books for the year

     ending 31st Dec 2003.study and answer the questions that follow:

            Particulars                                                       cost (ksh)

            Milk sale                                                          8 000

            Goat sale                                                             500

            Purchase of farm tools                                     1 000

            Construction of zero grazing unit                  10 000

            Depreciation of machinery                                 800

            Closing stock                                                 16 000

            Veterinary bills                                                     400

            Interest payable                                                   750

            Wages                                                              4 800

            Sales of cabbages                                                750

            Sales of tea                                                       4 700

            Opening stock                                                 12 000

            Sales of heifers                                                  9 400

            Purchase of pesticides                                          300

(a) i) Prepare a profit and loss account for Mr. Tembo’s farm for the year ending 31st Dec. 2003                             

  1. ii) Calculate the percentage profit or loss made by the farm
  2. b) i) Give five functions of farmer’s cooperative societies
  3.     ii) Outline five common risks and uncertainties in farming

 

  1. State four reasons for using certified seeds for planting
  2. List any two financial statements which may be prepared on a farm
  3. The following information was obtained from Lang’at’s farm records for the year ending

            December, 2004. Study it and answer the questions that follow:-

Goats                              4,000

Poultry                          15,000

Causal workers             12,000

Opening valuation       150,000

 His sales and receipts are as follows:

Mohair             75,000

            Rabbits                        3,600

            Eggs to hotel               15,000

            Closing valuation        200,000

            (a) Prepare the profit and loss A/C of Lang’at’s farm                                                           

            (b) State the benefit of a profit and loss A/C to Mr. Lang’at                                                

  1. (a) List any four financial documents used in the farm

            (b)  Prepare a profit and loss account for Mr. Rob’s farm for the year ending 31st Dec. 2009, given

                   the following information:-

            Sale of milk                 Kshs.10,000

            Sold two heifers          kshs.10,000

            Cabbage sold              Kshs. 20,000

            Debts payable             Ksh.4,200

            Sold tomatoes             Kshs. 3,000

            Veterinary bills           Kshs.2,500

            Bought livestock feeds Kshs.2,500

            Purchase fertilizers     Kshs.5,000

            Bought seeds               Kshs. 4,000

            Debts receivable         Kshs.20,000

            Opening valuation      Kshs.150,000

            Closing valuation        Kshs.200,000

            (c) Did the farm make a profit or a loss? Calculate the percentage profit or loss made by the Farm                                                                                                                                               

            (d) Explain the various ways in which farmers may adjust to risks and uncertainties              

  1. a) The following transactions were extracted from Mr. Tembo’s financial books for the year

    ending 31st Dec 2003.study and answer the questions that follow:

            Particulars                                                       cost (ksh)

            Milk sale                                                          8 000

            Goat sale                                                             500

            Purchase of farm tools                                     1 000

            Construction of zero grazing unit                  10 000

            Depreciation of machinery                                 800

            Closing stock                                                 16 000

            Veterinary bills                                                     400

            Interest payable                                                   750

            Wages                                                              4 800

            Sales of cabbages                                                750

            Sales of tea                                                       4 700

            Opening stock                                                 12 000

            Sales of heifers                                                  9 400

            Purchase of pesticides                                          300

  1. i) Prepare a profit and loss account for Mr. Tembo’s farm for the year ending 31st Dec 2003
  2. ii) Calculate the percentage profit or loss made by the farm
  3. b) i) Give five functions of farmer’s cooperative societies
  4.      ii) Outline five common risks and uncertainties in farming

 

  1. At the end year ended 31/12/2005 Bidii farm recorded the following:

Perennial crops           250,000

Bank loans                  30,000

Cash at hand               5,000

Bank overdrafts          15,000

Land                            350,000

Unpaid wages             3,000

Debts receivable          20,000

Stocks in store             25,000

Livestock                    200,000

Bank balances             100,000

            (a) Prepare a balance sheet as at 31/12/2005                                                                         

            (b) Did Bidii farm qualify for a loan and why?                                                                     

  1. State one condition in which each of the following documents is used.
  2. i) Invoice                                                                                                                              
  3. ii) Delivery note                                                                                                                     

            iii) Receipt                                                                                                                               

  1. Below is a transaction showing Mrs.Okello’s financial position in her business for the year 2009

-Purchase of pesticides                           3,000  00

-Milk sales                                              8,000  00

-Sales of goats                                        5,000  00

-Construction of store                           10,000  00

-Closing valuation                                 16,000  00

-Depreciation of machinery                     3,000 00

-Interest payable                                      1,750  00

-Purchase of farm tools                               800 00

-Veterinary bills                                        1,400 00

-Sales of tomatoes                                    1,750  00

-Wages                                                   10,000  00

-Sales of heifer                                       10,000  00

-Opening valuation                                 12,000  00

-Sales  of coffee                                        5,000  00

  1.  i) Prepare a profit and loss account for Mrs. Okello’s farm                                                   
  2. ii) Calculate the percentage profit or loss that Mrs. Okello made during the year 2009              

            iii) Explain six ways in which farmers adjust to risk and uncertainties in farming                      

  1. Name two examples of liabilities in a balance sheet

ANSWERS

AGRICULTURAL ECONOMICS IV

  1. three methods of grafting that are used in propagation of plants
  • Whip are tongue grafting
  • Side grafting
  • Approach grafting
  • Bark grafting

Notch grafting

  1. a) i) Prepare a profit and loss account for Mr. Tembo’s farm for the year ending

                    31st December 2003                                                                                                        (9mks)

                         PROFIT AND LOSS ACCOUNT FOR MR. TEMBO√

             FARM FOR THE YEAR ENDING 31ST DEC 2003

           

Sales and receipts

                                                     sh         cts                       

Opening stock√

Purchase of farm tools√

Zero grazing unit construction√

Machinery depreciation√

Interest payable √

Pesticide  purchase√

Veterinary  bills √

wages √

TOTAL

net profits √

      

12000   00

1000    00

10000   00

800    00

750    00

300    00

400    00

4800    00

30050   00

   9300  00

Milk sale√

Sale  of goats√

Cabbage sale√

Sale of heifers√

Sale of tea√

Closing valuation√

8000          00

500        00

750        00

9400          00

4700          00

     16000    00

39350         00

         

39 350   00

39 350√    00

  1. ii) Calculate the percentage profit or loss made by the farm (1mk)

     %profit=profit x 100

                   Total income

             =9300 x 100

               39350           = 23.6%

  1. b) five functions of farmer’s cooperative societies
  • function of farmers cooperative societies
  • marketing farmers produce
  • negotiating fair  prices for  produce and input
  • keeping records  of the  cooperative activities and  in forming the members accordingly
  • paying dividends to members
  • giving loans in kind  to members
  • educating members on matters relevant  to cooperative(5×1=5mks)
  1. ii) Outline five common risks and uncertainties in farming
  • risks and uncertainties
  • pest and diseases outbreak
  • price fluctuation
  • sickness and  injury
  • natural  catastrophes e.g. floods, earth quakes ,storm ,strong  wind
  • new technologies  of  production
  • ownership  uncertainty
  • physical yield  on  what is expected
  1. four reasons for using certified seeds for planting
  • High yielding
  • Quality produce
  • High germination percentage
  • Grow faster
  1. two financial statements which may be prepared on a farm.

            – Balance sheet.

            – Cash analysis.

            – Profit and Loss Account.

  1. (a) Profit and loss A/C for Langat’s farm for the year ending 31st December, 2004

Purchases & Expenses               

Shs.

Cts

Sales & receipts

Shs.

Cts

Opening  valuation

Goats

Poultry

Casual worker

Subtotal

Net profit

150000

4000

15000

12000

181000

112600

00

00

00

00

00

00

Mohair

Rabbits

Eggs to hotel

Closing valuation

75000

3600

15000

200000

00

00

00

00

Total

293,600

293,600

Awarding:-

–  Title (½mk)

– (Purchases & expenses and sales & receipts) ½mk

– Entries each ½ x 10 (5mks)

                         

            (b) State the benefit of a profit and loss A/C to Mr. Lang’at                                    

  • Helps the farmer to detect whether he has loss or profit
  • Helps in tax assessment to avoid over taxation

–   Acts as evidence when a farmer requires a loan

  1. a) – Invoice                                                                                                                            
  • Receipt
  • Delivery note
  • Purchase order
  • Statement of account (4×1=4 mks)

  1. b) ROBS,

PROFIT AND LOSS ACCOUNT

AS AT 31ST DEC, 2009

Purchases and expenses√ ½ mk

Sales and receipt√ ½ mk

Opening stock                150,000

Vetenary bills                       2500

Livestock feeds                     2500

Fertilizer                              5000

Seeds                                   4000

Debts payable                       4200

 TOTAL    √ ½ mk                168000   Profit   √ 1 mk                       94,800

                                                                                            

                                                 263000

Sale of milk                                             10,000

Sale of cabbages                                       20,000

Sale of two heifers                                     10,000

Sale of tomatoes                                            3000

Debts available                                            20,000

Closing valuation                                        200,000

                                  √ ½ mk                     263,000

                            √ 1 mk                            263,000

( ½ mk each entry 6 mks)

 Total 10 mks

.

  1. c) It made profit

                 Profit ksh. 94,800√ 1 mk

               % profit= profit   x 100

                              Opening Valuation

             94,800×100

               150,000

                      = 63.2%√ 1 mk

  1. d) -Diversification- Setting up several and different enterprises on the farm. If one fails the

                                   farmer cannot  incur total loss.

  • Contracting- farmers can enter into contract with consumers. It guarantees a constant fixed market for goods/services
  • Insurance- Taking an insurance cover to compensate them incase of loss
  • Input rationing- Farmers can control the quantities of inputs used in various enterprises to reduce losses
  • Flexibility in production methods- Ability to change from one enterprise to another in response to demand changes
  • Adopting modern methods of production e.g. disease control, irrigation, mechanization e.t.c.

  1. a) i) profit and loss account for Mr. Tembo’s farm for the year ending 31st Dec. 2003                                                                                                

PROFIT AND LOSS ACCOUNT FOR MR. TEMBO√

FARM FOR THE YEAR ENDING 31ST DEC 2003

Purchases and expenses

Sales and receipts

                                                     sh         cts                       

Opening stock√

Purchase of farm tools√

Zero grazing unit construction√

Machinery depreciation√

Interest payable √

Pesticide  purchase√

Veterinary  bills √

wages √

TOTAL      net profits √

      

12000   00

1001    00

10000   00

801    00

751    00

301    00

401    00

4801    00

30050   00

   9300  00

Milk sale√

Sale  of goats√

Cabbage sale√

Sale of heifers√

Sale of tea√

Closing valuation√

8001          00

501        00

751        00

9401          00

4701          00

     16000    00

39350         00

         

39 350   00

39 350√    00

  1. ii) Calculate the percentage profit or loss made by the farm (1mk)

%profit=profit x 100

               Total income

             =9300 x 100

               39350

             = 23.6%

  1. b) five functions of farmer’s cooperative societies
      • Function of farmers cooperative societies
      • marketing farmers produce
      • negotiating fair  prices for  produce and input
      • keeping records  of the  cooperative activities and  in forming the members accordingly
      • paying dividends to members
      • giving loans in kind  to members
      • educating members on matters relevant  to cooperative(5×1=5mks)
  1. ii) five common risks and uncertainties in farming
    • Risks and uncertainties
    • pest and diseases outbreak
    • price fluctuation
    • sickness and injury
    • natural catastrophes e.g. Floods, earth quakes ,storm ,strong  wind
    • new technologies of  production
    • ownership uncertainty
    • physical yield on  what is expected

  1. a) Prepare a balance sheet s at 31.12.2005

                                                BIDII FARM BALANCE SHEET AS AT 31.12.2005

LIABILITIES                           SHS                 CTS

Current liabilities

Overdraft                      15000                 00

Unpaid wage                3000                  00

Long term liabilities

Bank l                           30000                 00

Net worth                 897000                   00

                                945000                    00

ASSETS                           SHS                 CTS

Current assets

Debt receivable                 20000                 0

Stocks                               25000                 00

Bank balance                 100000                 00

Fixed assets

Perennial crops               250000                00

Land                              350000                 00

Livestock                        200000                00

                                      945000                  00

  1. b) Yes it qualified for a loan because it was solvent i.e. has more assets than liabilities
  2. one condition in which each of the following documents is used.                           
  3. i) Invoice –when  goods //services are sold /bought  on credit                                                                                                                                                   
  4.  ii) Delivery note-when goods are  physically  delivered  to the buyer                                                                                                                                         

            iii) Receipt-when goods/services are bought or rendered on cash                                                                                                                                                    

  1. i) Prepare a profit and loss account for Mrs. Okello’s farm                                                   

profit  and loss A/C  for Mrs.Okello’s farm  for the  year ending 31/12/2009

Purchase  and  expenses

Sales and receipts

Opening valuation                      12000    00

Pesticides                                     3000     00

Construction  of  store                 10000    00

Depreciation  of  machines            3000   00

Interest payable                                1750   00

Purchase  of  tools                              800    00

Veterinary  bills   1                           400

Wages  10,000

Net profit         3800

Milk sales         8000

Sales  of  goats  5000

Sales of tomatoes 1750

Sales  of  heifer     10 000

Sales of coffee 5000

Closing valuation  16000

                                          

                                    45750

                         45750

Award  of  marks        Title -1mk

                                    Purchases and expenses  side -1mk

                                    Sales and receipt sales-1mk

                                    Net profit – 1mk

                                                Both totals-1mk  (5×1=5mks)

Each of the correct  entries in purchase and expenses  and sales and receipt sides (14x ½ =7mks)

  1. ii) Calculate the percentage profit or loss that Mrs. Okello made during the year 2009

              3800 x100√1

              45750

               = 8.3%√1

             iii) six ways in which farmers adjust to risk and uncertainties in farming                                  

  • diversification-production of services  products at the same time to  avoid risks  due  to  weather, fluctuation in price  and disease
  • contracting-make  contracts  with dealers  to  supply or  buy  certain commodities at fixed prices  thus  transfer the risk  of  drop in demand and  supply
  • insurance-purchase security by  payment of  small  sum of  money for compensation in case of  failure
  • input rationing-use  of inputs  sparingly to avoid wastage
  • flexibility in production-combination and  substitution of  inputs  and  techniques of  products for  each  other use the cheapest
  • use of  government price stabilization policies
  • adapting modern methods of farming-use  of  researched  varieties, breeds better  adapted to local conditions

selecting more certain   enterprises-engage in enterprises  with  more surerity  of success i.e. artificial insemination as opposed to natural insernimation (any 6×1=6mks)

  1. – Bank overdraft

            -Bank loans

            -Debts payable

            -Tax payable

            -rent

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