Reference no: EM13922111

The following trial balance was extracted from the books of Mr. Charles Msafiri as at 30 April 2001.

You are given the following additional information:

(1)

(2)

(3) Depreciation is to be provided for at the rate of 20% and 10% per annum for motor vehicles and farm implements respectively on the book values. Buildings to be depreciated at 2% per annum on cost.

(4) The bank interest is 15% per annum on the loan. The interest for the current year has not been paid. The loan of Sh. 3,800,000 was used as follows:

(5) At the end of the year Sh. 19,100 was paid for medicine which had not been delivered by 30 April 2001.

Required:

(i) Trading and profit and loss account in columnar from for the year ended 30 April 2001, showing profit/loss on crop, livestock and total profit.

(ii) General profit an loss account showing the profit/loss from (i) above and net Profit after charging depreciation and bank charges. (2 marks)
Balance sheet as at 30 April 2001.

Three advantages the farmers may gain by adopting and implementing farm accounting and proper record keeping as a standard practice.