Page 322 - Agriculture_Form_Three

Agriculture for Secondary Schools

Example
On 31 December 2020, Juhudi Farm had the following situation: There were a
st
flock of 500 broiler chicken each valued at TZS 3,000, 35 goats each valued at TZS
30,000, and 300 layers chicken each valued at TZS 10,000. In the store, there were
5 bags of broiler finisher feed each worth TZS 61,500, 7 bags of layers grower mash

each worth TZS 49,500, 16 packets of sweet pepper seed each worth TZS 50,000,
2 bags phosphatic fertiliser each worth TZS 65,000. The farm also had a wooden
livestock house that was three years old and its original value was TZS 4,500,000
with an expectation that it would last for 12 years and then be written off at the
value of TZS 600,000. In addition, there was TZS 150,000 in the cash box on the
farm and the Juhudi’s farm bank statement on 31/12/2020 read the balance of TZS
2,100,552.55. Write down an inventory and valuation for Juhudi farm as on 31
st
December 2021.
Solution
Step 1: Identifying the main groups of assets

In this case, the main groups were building, livestock, livestock feeds, seeds, and
fertilisers. After doing this, it is necessary to calculate the value of each item.

Step 2: Determining the value of each item

(a) Determining the value of long durable assets (if any)
In this case, annual depreciation of the livestock building by straight line method is
to be calculated as follows:
Original cost of the asset Salvage value
−
Annual depreciation =
Useful life in years

Where,

Original cost of the asset = TZS 4,500,000
Salvage value = TZS 600,000
Expected life of asset = 12 years
Therefore,

TZS 4,500,000 TZS 600,000
−
Annual depreciation =
12 years

TZS 3,900,000
=
12 years

= TZS 325,000 per annum

Student’
Student’s Book Form Twos Book Form Three
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