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Farm management questions.

Farm management questions.

Find Farm management university examination questions in acaproso.com

# Question
1

Financial reporting standard (IAS 7) on cash flow statement requires that a cash flow statement be prepared according to prescribed formats for all companies other than those exempt.

Required:

  1. Explain brifly the purpose of cash flow statement
  2. What do you understand by each of the two format in reporting cash flows from operating activities using direct or indirect method.

Long answers
2

The financial statement of Mkwaja Company limited is shown below.

Statement of comprehensive income as at December 2014

  Tshs million Tshs million Tsh million 000 Tshs million
Sales   10,000    
Cost of goods sold   6,000    
    4000    
Expenses        
Depreciation 600      
Interest 150      
Other expenses 2100      
    2850    
Profit for the year before tax   1150    
Tax   200    
Profit after tax   950    
Proposed dividend   150    
Retained profit   800    

Statement of financial position of Mkwaja Company limited as at 31 December 2012

  2012 2012 2011 2011
  Tshs million Tshs million Tshs million Tshs million
Fixed asset   6000   6000
Less accumulated depreciation   3000   2400
Net book value   3000   3600
Current asset        
Inventory 650   700  
Trade debtors 200   250  
Cash 1610 2460 150 1,100
Less current liabilities        
Trade creditors 310   300  
Taxation 200   150  
Proposed dividend 150 660 250 700
Net current assets   1800   400
Total assets   4800   4000
Financed by        
Ordinary share capital   2000   2000
Revenue reserve   2800   2000
    4800   4000

Required calculate the liquidity ration for Mkwaja company as at 31st December 2014.


Mathematical Calculation
3
  1. Discuss five major characteristics of cash flow in preparation of the farm cash budget.
  2. Briefly explain the impact of mismatch under cash operating cycle.

Long answers
4
  1. Briefly discuss the importance of working capital ratio.
  2. The following is the financial statement for Msoga Agribusiness Advisors co.ltd as at 31 December 2010 Msoga Pineapples Saccos balance sheet as at 31 Dember 2010
  2009 2010
Current assets Shs 000 Shs 000
Cash 60,000 110,000
Debtors 65,000 75,000
Stocks 175,000 195,000
Total assets 300,000 380,000
Current liabilities    
Bank overdraft 70,000 90,000
Trade creditors 140,000 250,000
Director`s loan 30,000 35,000
Others 42,000 45,000
Current tax 20,000 24,000
Total current liabilities 302,000 444,000
Net current assets (2000) (64,000)
Fixed assets    
Land and building 95,400 110,000
Plant and machinery 240,000 254,000
Total fixed assets 335,400 364,000
Total assets 333,400 360,000
     
Long term liabilities    
Mortgage loan 45,000 50,000
Loan for plant and machinery 55,000 40,000
Total long term loan 100,000 90,000
     
Owner`s equity    
Paid up capital 200,400 200,400
Retained earnings 33,000 69,600
Total owner`s equity 233,400 270,000
Totals owners equity and liabilities 33,400 360,000
     
Income statement    
Sales 2,200,000 2,610,000
Cost of goods sold 1,898,900 2,088,000
Gross profit 301,110 522,000
Operating expenses 268,110 285,600
Interest 32,990 32,100
Net income before taxes 235,120 204,300
Purchases 1,500,000 1,900,000

Required calculate the liquidity ratios (working capital and quick ratio) and stock management ratios (stock turnover, creditors days and debtors days) then give appropriate interpretations to management of Msoga Pineapple Saccos.


Mathematical Calculation
5
  1. Show why compounding is inverse of discounting
  2. Use annuity formula to present a difference between discounting and compounding.
  3. When it is appropriate to use annuity formula when calculating  NPV.
  4. Suppose Farm manager X offers you the following  financial contract. If you deposit 10000 US$ with him, he promise to pay you 2500 annually for 6 years. Using 10% interest rate will you accept this proposal? Why?.

Long answers
6

Present a well documented account on the following terminologies in farm management

  1. SWOT analysis
  2. Perennial systems

Short answers
7

A firm sells a single product in two completely different markets. The demand curves for each market are given below:

P_{1}=262-4Q_{1}

P_{2}=222-2Q_{2}

Output is produced in a single plant with a total cost function

TC=Q^{2}+2Q+3000

Where Q=Q_{1}+Q_{2} if the firm wish to maximize profit

  1. HOw much output will be sold at each market
  2. What price should each set in each market
  3. What is the firm maximum profit

Mathematical Calculation
8
  1. Why the decision on the size of farm tractors  to purchase is a very complex process?
  2. The farm manager wants to maintain a population of 44,000 plants of maize on his 1 hectare plot which is exactly square. Assuming he is using a four row planter spaced at 75cm apart.
  1. What is the most accurate within planting row distance the manager  should maintain
  2. Assume the tractor is planting at the ground speed of 5 km/hour, how long will it take to plant the said hectare (assume single turn takes 5 minutes)

Mathematical Calculation
9
  1. Explain 3 underlying assumptions associated to LP analysis
  2. Set up the LP equation for profit maximization objective function for simplex tableau approach in a situation with three(3) activities and four (4) constraints.

Short answers