DIPLOMA IN PLANTING MANAGEMENT

AT110

AGR323
ESTATE BUDGETING AND ACCOUNTING

PREPRARED BY :
NO NAME STUDENT ID
1 MUHAMMAD AMIR FARHAN BIN MOHD TAUFIK 2021892518

PREPARED FOR
FACILTIY PLANTING INDUSTRY MANAGEMENT
SEMESTER 5
CLASS M3AT1105J
SUBJECT AGR 323
LECTURER MISS WAN NUR AISYAH BINTI ABDUL RAOF
PROBLEM SHEET QUESTIONS (20%)
QUESTION 1
Prepare an income statement for Amira based on following information and then calculate Amira’s
retained earnings.

REVENUE
Crop Sales RM 40,000
Livestock Product Sales RM 60,000
Government Subsidy RM 4,550
Gain in Sale of Capital Asset RM 3,500
Ending Account Receivable + RM 8,500
Beginning Account Receivable - RM 5,300
Change in Crop Inventories RM 5,200

TOTAL REVENUE RM 116,450

EXPENSES
Interest Expense RM 18,240
Depreciation RM 3,850
Ending Accrued Expenses + RM 4,760
Family Living Expenses RM 28,430
Crop Expenses RM 8,630
Fuel and Lubrication RM 2,700
Livestock Expenses RM 10,500
Repair and Maintenance RM 3,480
Beginning Unused Fertilizer + RM 5,870
Income Tax RM 4,420
Beginning Accrued Expenses - RM 7,220
Ending Unused Fertilizer - RM 2,530

TOTAL EXPENSES RM 81,130

NET INCOME RM 35,320

RETAINED EARNINGS:
RM 35,320 – RM28,430 – RM 4,420
= RM 2,470
QUESTION 2
i. ENTERPRISE BUDGET FOR SWEET FARM SDB BHD

ITEM UNIT QUANTITY PRICE (RM) AMOUNT (RM)

REVENUE
- MD2 Pineapple Kg 5,200 5.50 28,600
VARIABLE COST
- Seedlings 10,000 1.00 10,000
- Fertilizer:
Nitrogen Kg 90 1.25 112.5
Phosphorus Kg 70 0.75 52.5
Potash Kg 70 0.95 66.5
Pesticides Acre 350
- Machinery Acre 550
- Hauling 300
- Insurance Crop 250
- Labor 600

- Interest on Variable 1228.15 -13,509.65

TOTAL VARIABLE COST
15,090.35

FIXED COSTS
- Machinery Interest Acre 7,800
- Machinery
Depreciation Acre (989)
- Machinery Taxes and
Insurances Acre (997.2)
- Land Charges Acre (996.5)
- Overhead Acre (975)
TOTAL FIXED COSTS 3,842
TOTAL COST 17,351.65
NET INCOME 11,248.05

ii. COST of PRODUCTION

RM 17,351.65/5,200
= RM 3.34/kg
iii. BREAK-EVEN YIELD
RM 17,351.65/RM 5.50
= RM 3,154.85
QUESTION 3

WHOLE FARM BUDGET FOR SPINACH, CABBAGE AND BOK CHOY

SPINACH CABBAGE BOK CHOY
RM RM RM
GROSS INCOME
- Yield 8,400 22,500 7,812.50
Total Gross Income 8,400 22,500 7,812.50

VARIABLE COST
- Seed 670 400 250
- Pasture 1.200 870 500
- Fertilizer 1,750 1,100 900
- Labor 1,050 1,440 840
- Interest 420 1,575 390.63
- Variable Cost 1,300 1,600 980
(-)TOTAL VARIABLE COST 6,390 6,985 3,860.63
TOTAL GROSS MARGIN 2,010 15,515 3,951.87

FIXED COST
- Fixed Cost 2,750 1,135 1,000
- Land Charges 950 950 950
- Tax 800 800 800
- Depreciation 2,115 3,150 1,750
TOTAL FIXED COST 6,615 6,035 4,500
NET FARM INCOME -4,605 9,480 -548.13

BREAK-EVEN YIELD
- Spinach: 13,005
5.00
= 2601 kg
- Cabbage: 13,020
5.50

= 2,367.27 kg

- Bok Choy: 8,360.63

3.30

= 2,533.52 kg
BREAK-EVEN PRICE
- Spinach: 13,005
3,200

= RM 4.06/kg
- Cabbage: 13,020
4,800

= RM 2.71/kg

- Bok Choy: 8,360.63

3,500

= RM 2.39/kg
QUESTION 4

a) Prepare the partial budget for En. Emirul

PARTIAL BUDGET
ADDITIONAL COST: RM ADDITIONAL REVENUE: RM
- Depreciation Machine 500 - Sales:
- Land Charge 3,000 RM 20 X 8750 Kg 175,000

VARIABLE COST:
- Labor 40,000
- Vaccine 10,900
- Veterinary and Health 9,650
- Feed and Hay 40,740
- Miscellaneous Expenses 7,820
- Interest on Variable Cost
(5%) 5,455.50
REDUCED REVENUE: RM REDUCED COST: RM
- Sales: - Fixed Cost
RM 20 X 6130 Kg 122,600 Depreciation Machine nil
Land Charge 1,500

- Variable Cost
Labor 20,000
Vaccine 7,000
Veterinary and Health 4,430
Feed and Hey 20,870
Miscellaneous Expenses 3,500
Interest on Variable Cost 2,790
(5%)

TOTAL ADDITIONAL COST 240,665.50 TOTAL ADDITIONAL REVENUE 235,090

AND REDUCED REVENUE WITH REDUCED COST
NET CHANGE PROFIT - 5,575.50
 b) Based on the analysis, En. Emirul may consider not proceeding with the proposed change, as
it could result in a negative impact on the overall profitability.

QUESTION 5

Initial Cost: RM 40,000

YEAR 1: RM 12,000
YEAR 2: RM 13,000
YEAR 3: RM 15,000
YEAR 4: RM 20,000

a) PAYBACK PERIOD
RM 12,000 + RM 13,000 + RM 15,000
= 3 Years
The payback period will be in the third year.

SIMPLE RATE of RETURN

(RM 60,000 – RM 40,000) / 4 years X 100%
RM 40,000
= 12.5%

NET PRESENT VALUE

[RM 12,000 / (1+0.13)1 ] + [RM 13,000 / (1+0.13)2] + [RM15,000 / (1+0.13)3]
+ [RM 20,000 / (1+0.13)4] – RM 40,000
= RM 3,462.5
b)
YEAR NFC(RM) PVIF(13%) PV(RM)
1 12,000 0.8850 10,620
2 13,000 0.7831 10,180.30
3 15,000 0.6931 10,396.50
4 20,000 + 8,000 0.6133 17,172.40
TOTAL 48,369.20

TOTAL NEW NPV

RM 48,369.20 – RM 40,000
= RM 8369.20