Practice: Module II
Chapter Forty-Eight
Syllabus topic 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, "Unit III - Book-keeping and Accounting – Farm Accounting"; "Introduction and Types of Farm Records."; "Objectives of Farm Records."; "Reasons/Purpose of Farm Record Maintenance."; "Types of Farm Records- Specimen. (Muster roll, Overseer’s diary, Cultivation register, Cashbook, Stock book, Issue register, Receipt register, Labour requisition book, Attendance register, Deadstock, Ration book, Peon book, General register)."; "Unit IV – Preparation of Final Accounts"; "Concepts of Revenue & Capital: Income and Expenditure."; "Preparation of Trial balance."; "Preparation of Farm Trading and Profit & Loss Account."; "Preparation of Balance Sheet."
Pages 107 to 110 of 110
How this set is built
The external paper is 30 marks in one hour, any 2 out of 3 questions of 15 marks, and MU directs that wherever possible more importance be given to the practical problems. So the set below leads with a full practical, and the theory questions carry a specimen where one can be drawn.
Work each question on paper before reading the answer.
Question 1 (15 marks, practical)
The following is the trial balance of Krishna Farm, a proprietary concern of Shri R. G. Patil, as at 31 March 2027.
| Particulars | Dr Rs. | Cr Rs. |
|---|---|---|
| Capital | 8,75,000 | |
| Drawings | 66,000 | |
| Land, at cost | 5,40,000 | |
| Deadstock, at cost | 2,80,000 | |
| Accumulated depreciation on deadstock | 84,000 | |
| Livestock, at 1 April 2026 | 3,10,000 | |
| Opening stock of produce | 54,000 | |
| Opening stock of stores | 26,000 | |
| Purchases of seed, manure and pesticide | 1,08,000 | |
| Wages, field labour | 1,92,000 | |
| Salaries | 72,000 | |
| Irrigation and electricity | 41,000 | |
| Cattle feed | 52,000 | |
| Land revenue and cess | 5,400 | |
| Repairs | 14,000 | |
| Insurance | 16,000 | |
| Interest | 15,000 | |
| Transport and market expenses | 23,000 | |
| Sundry expenses | 12,600 | |
| Sale of crops | 5,80,000 | |
| Sale of milk | 1,44,000 | |
| Sale of livestock | 38,000 | |
| Sundry debtors | 43,000 | |
| Sundry creditors | 47,000 | |
| Bank loan | 1,80,000 | |
| Cash and bank | 78,000 | |
| Total | 19,48,000 | 19,48,000 |
Adjustments:
(1) Closing stock of produce Rs. 61,000 and of stores Rs. 22,000. (2) Livestock is valued at Rs. 3,42,000 on 31 March 2027. (3) Depreciation on deadstock at 10 per cent on cost. (4) Wages outstanding Rs. 12,000 and salaries outstanding Rs. 6,000. (5) Produce consumed by the proprietor's household Rs. 24,000 and produce given to labour in place of wages Rs. 9,000, neither recorded.
Prepare the Farm Trading and Profit and Loss Account for the year ended 31 March 2027 and the Balance Sheet as at that date.
Working notes
W1. Wages.
| Rs. | |
|---|---|
| As per trial balance | 1,92,000 |
| Add: outstanding | 12,000 |
| Add: produce given to labour in place of wages | 9,000 |
| Total charged to the trading account | 2,13,000 |
W2. Deadstock.
| Rs. | |
|---|---|
| At cost | 2,80,000 |
| Less: accumulated depreciation at 1 April 2026 | (84,000) |
| Less: depreciation for the year at 10 per cent on cost | (28,000) |
| Total: written down value at 31 March 2027 | 1,68,000 |
W3. Drawings.
| Rs. | |
|---|---|
| As per trial balance | 66,000 |
| Add: produce consumed by the household | 24,000 |
| Total deducted from capital | 90,000 |
The farm trading account
Krishna Farm. Farm Trading Account for the year ended 31 March 2027.
| Dr Particulars | Rs. | Cr Particulars | Rs. |
|---|---|---|---|
| To Opening stock of produce | 54,000 | By Sale of crops | 5,80,000 |
| To Opening stock of stores | 26,000 | By Sale of milk | 1,44,000 |
| To Livestock at 1 April 2026 | 3,10,000 | By Sale of livestock | 38,000 |
| To Purchases of seed, manure and pesticide | 1,08,000 | By Produce consumed by the household | 24,000 |
| To Wages, field labour (W1) | 2,13,000 | By Produce given to labour as wages | 9,000 |
| To Irrigation and electricity | 41,000 | By Closing stock of produce | 61,000 |
| To Cattle feed | 52,000 | By Closing stock of stores | 22,000 |
| To Land revenue and cess | 5,400 | By Livestock at 31 March 2027 | 3,42,000 |
| To Gross profit c/d | 4,10,600 | ||
| Total | 12,20,000 | Total | 12,20,000 |
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