Financial Management: Farming N5 Quiz

Record the transactions in the following journals: 1.1 Cash payments journal (19) 1.2 Cash receipts journal (11) 1.3 Creditors' journal (5) 1.4 Debtors' journal (5)

2.1 Give ONE word or term for each of the following descriptions. Write only the word or term next to the question number (2.1.1–2.1.5) in the ANSWER BOOK. 2.1.1 Ratios calculated for a specific farming enterprise and compared with predetermined norms 2.1.2 A ratio that reflects the relationship between the net value and total liabilities of a farming enterprise 2.1.3 The ability of a farming enterprise to repay its liabilities from the sale of its assets upon cessation 2.1.4 The difference in net worth between two balance sheets, previous and current 2.1.5 Ratios that analyse the relationship between production, marketing and administrative costs with gross production value

2.2 Name the TWO net worth criteria used for balance sheet analysis.

2.3 Give the formulae for the two criteria named in QUESTION 2.2.

2.4 DEF Co-operative provided the following financial information from its balance sheet as at 31 December 2017. BALANCE SHEET ITEMS AMOUNT Stock of production supplies R40 000 Debtors R25 000 Electricity account paid in advance R10 000 Investments R60 000 Negative bank balance R5 000 Tractor R120 000 Water pump R30 000 Land and fixed improvements R400 000 Medium-term liabilities R45 000 Mortgage bond R250 000 Calculate the following ratios showing ALL workings, formulae and units: 2.4.1 Debt ratio (4) 2.4.2 Gearing ratio (4) 2.4.3 Comment on the results in QUESTIONS 2.4.1 and 2.4.2. (2)

2.4.4 DEF is a cattle farming enterprise. Will the results of the solvency ratios on the previous page satisfy a vegetable farming enterprise?

2.4.5 Justify the answer in QUESTION 2.4.4.

2.5 Assume DEF provides the following information from the income statement for the year: INCOME STATEMENT ITEMS AMOUNT Gross production value R400 000 Day-old chicks R50 000 Vaccines R15 000 Feed R40 000 Fuel and lubricants R30 000 Sawdust R5 000 Employee remuneration R36 000 Interest on loan R7 000 Rental of land for growing maize for feed R12 000 Calculate the following ratios showing ALL workings, formulae and units: 2.5.1 Feed and vaccines per R100 GPV (4) 2.5.2 Employee remuneration per R100 GPV (3) 2.5.3 Remuneration to foreign capital per R100 NFI (4)

2.6 Which cost item above contributed more to the production, marketing and administrative costs?

2.7 Determine the percentage of contribution to the production, marketing and administrative costs of the cost item in QUESTION 2.6.