Agriculture Paper 3, Nov/Dec 2015

Question 4

      

    The information below was obtained from the record books of Vamboi Farms Limited for the year ended December 31, 2014.

    Study it carefully and answer the questions that follow.

                Item                    Amount (Le)

    Cost of inputs                           500
    Publicity                               120
    Produce in store                          120
    Transport expenes                        620
    Sales of produce                         840
    Wages                                150
    Value of crops on the field                  450
    Miscellaneous expenses                     40
    Rent                                    50

    1. Prepare a Profit and Loss account for Vamboi Farms Limited for the year ended December 31, 2014.   [11 marks]

     

    1. Suggest four ways of improving the performance of Vamboi Farms Limited.       [4 marks]

Observation

This question was poorly attempted by the candidates. In 4(a-b), most of the candidates could neither prepare a Profit and Loss account for Vamboi Farms Limited nor suggest ways of improving the performance of the farm.

The expected answers include:

4. (a)   Profit and loss account for Vamboi Farms Limited for year ended December 31, 2014                                                                                           

 

 


Debit/DR

Credit/CR

Expenses                           Amount
(Le)

 



Rent                                      50.00
Cost of inputs                500.00
Miscellaneous expenses             40.00
Publicity                    120.00
Transport expenses             620.00
Wages                                 150.00

Income                  Amount
(Le)

 



Sale of produce      840.00
Produce in store     120.00
Value of crops      
On the field       450.00

 

 

 



Total income      1,410.00
 

Net loss                   70.00

Grand Total                 1,480.00

Grand Total        1,480.00

 

      

      

      



(b) Ways of improving the performance of Vamboi Farms Limited 

-  Use of cheaper alternative means of transport

- Acquisition of credit facility to expand production
- Use of cheaper methods of publicit- Acquisition of cheaper (good/quality) inputs/Acquisition of improved variety of
seeds

- Adoption of improved farming techniques/mechanization
- Cutting down on miscellaneous expenses 

- Acquisition of better processing and storage facilities