Farm Accounts The following were the assets and liabilities of the Tierney Family who carry on a mixed farming business on 01/01/2020: Land €900,000; farm buildings €340,000; machinery at cost €118,000; cash in bank €9,500; value of cattle/cows €126,000; value of sheep €21,000; electricity due €550; wages due €1,200. Required: (a) Calculate the Tierney Family Capital on 01/01/2020. The following is a summary of the farm’s receipts and payments for the year ended 31/12/2020: Receipts € Sale of Wool 1,400 Sale of Sheep/Lambs 43,600 Sale of Cattle 68,900 Single Farm Payment 27,200 Sale of Cattle 68,900 Payments € Purchase of Sheep 6,700 Purchase of Cattle 74,400 Fertilizer 11,200 Electricity 17,300 Wages 35,900 The following additional information is available: (i) Closing Stock 31/12/2020: Value of Cattle/Cows €112,000 Value of Sheep €25,000 (ii) The Single Farm Payment is to be divided (allocated) between the two enterprises in the ratio: Cattle/Milk 80% Sheep 20% (iii) Fertilizer, Electricity, Repairs and Wages to be divided (allocated) equally between the two enterprises Land used by the farm during the year €240 Machinery used by the farm during the year €1,100 Electricity due on 31/12/2020 €670

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Farm Accounts The following were the assets and liabilities of the Tierney Family who carry on a mixed farming business on 01/01/2020: Land €900,000; farm buildings €340,000; machinery at cost €118,000; cash in bank €9,500; value of cattle/cows €126,000; value of sheep €21,000; electricity due €550; wages due €1,200 - Leaving Cert Accounting - Question 2 - 2021

Question 2

Farm Accounts The following were the assets and liabilities of the Tierney Family who carry on a mixed farming business on 01/01/2020: Land €900,000; farm buildings... show full transcript

Worked Solution & Example Answer:Farm Accounts The following were the assets and liabilities of the Tierney Family who carry on a mixed farming business on 01/01/2020: Land €900,000; farm buildings €340,000; machinery at cost €118,000; cash in bank €9,500; value of cattle/cows €126,000; value of sheep €21,000; electricity due €550; wages due €1,200 - Leaving Cert Accounting - Question 2 - 2021

Step 1

Calculate the Tierney Family Capital on 01/01/2020.

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Answer

To calculate the Tierney Family Capital on 01/01/2020, we need to determine the total assets and subtract the total liabilities.

Assets Calculation:

Land: €900,000
Farm Buildings: €340,000
Machinery: €118,000
Cash in Bank: €9,500
Value of Cattle/Cows: €126,000
Value of Sheep: €21,000

Total Assets: $ext{Total Assets} = 900,000 + 340,000 + 118,000 + 9,500 + 126,000 + 21,000 = 1,514,500$

Liabilities Calculation:

Electricity Due: €550
Wages Due: €1,200

Total Liabilities: $ext{Total Liabilities} = 550 + 1,200 = 1,750$

Capital Calculation:

Tierney Family Capital: $ext{Capital} = ext{Total Assets} - ext{Total Liabilities}$ $ext{Capital} = 1,514,500 - 1,750 = 1,512,750$

Step 2

Prepare an Enterprise Analysis Account for ‘Cattle/Milk’ for the year ended 31/12/2020.

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Answer

Enterprise Analysis Account for ‘Cattle/Milk’

Income:

Sale of Milk: €92,000
Sale of Cattle: €68,900
Single Farm Payment (80%): €21,760
Drawings: €0 (not applicable for this section)

Total Income: $ext{Total Income} = 92,000 + 68,900 + 21,760 = 181,660$

Less Cost of Sales:

Stock 1/1: €126,000
Purchases: Value to be determined based on records available.
Less Closing Stock 31/12: €200,400

Total Cost of Sales: $ext{Cost of Sales} = 126,000 + ext{Purchases} - 200,400$

Expenditure:

Fertilizer: €11,200
E.S.B (Electricity): €7,310
Repairs: €8,650
Wages: €17,350

Total Expenditure: $ext{Total Expenditure} = 11,200 + 7,310 + 8,650 + 17,350 = 44,510$

Profit Calculation:

$ext{Profit} = ext{Total Income} - ext{Total Expenditure}$ $ext{Profit} = 181,660 - 44,510 = 137,150$

Step 3

Prepare an Enterprise Analysis Account for ‘Sheep’ for the year ended 31/12/2020.

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Answer

Enterprise Analysis Account for ‘Sheep’

Income:

Sale of Lambs: €43,600
Sale of Wool: €1,400
Single Farm Payment (20%): €5,440
Drawings: €0 (not applicable for this section)

Total Income: $ext{Total Income} = 43,600 + 1,400 + 5,440 = 50,440$

Less Cost of Sales:

Stock 1/1: €21,000
Purchases: Value to be determined based on records available.
Less Closing Stock 31/12: €2,700

Total Cost of Sales: $ext{Cost of Sales} = 21,000 + ext{Purchases} - 2,700$

Expenditure:

Fertilizer: €11,200
E.S.B (Electricity): €7,310
Repairs: €8,650
Wages: €17,350

Total Expenditure: $ext{Total Expenditure} = 11,200 + 7,310 + 8,650 + 17,350 = 44,510$

Profit Calculation:

$ext{Profit} = ext{Total Income} - ext{Total Expenditure}$ $ext{Profit} = 50,440 - 44,510 = 5,930$

Calculate the Tierney Family Capital on 01/01/2020.

Assets Calculation:

Liabilities Calculation:

Capital Calculation:

Prepare an Enterprise Analysis Account for ‘Cattle/Milk’ for the year ended 31/12/2020.

Enterprise Analysis Account for ‘Cattle/Milk’

Profit Calculation:

Prepare an Enterprise Analysis Account for ‘Sheep’ for the year ended 31/12/2020.

Enterprise Analysis Account for ‘Sheep’

Profit Calculation:

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