Scribd
Upload
34 views22 pages

Farm Records and Accounts

The document discusses the significance of farm records and accounts, emphasizing their role in farm management and decision-making. It outlines the components of farm accounting, including assets, liabilities, equity, and net farm income, as well as methods for setting up and analyzing farm records. Additionally, it covers the importance of accurate record-keeping for crop and livestock production, valuation, depreciation, and the preparation of financial statements such as balance sheets and income statements.

Uploaded by

Cyrus Bautista
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
34 views22 pages

Farm Records and Accounts

The document discusses the significance of farm records and accounts, emphasizing their role in farm management and decision-making. It outlines the components of farm accounting, including assets, liabilities, equity, and net farm income, as well as methods for setting up and analyzing farm records. Additionally, it covers the importance of accurate record-keeping for crop and livestock production, valuation, depreciation, and the preparation of financial statements such as balance sheets and income statements.

Uploaded by

Cyrus Bautista
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 22

“Farm records and accounts”

Hazel Reiz G. Sollestre


Major Concepts:

A. Importance and uses of farm records and


accounts

B. Setting up farm records

C. Farm record analysis and interpretation


Farm accounting – is the system of recording and
summarizing farm business and financial transactions
in books and analyzing, verifying and reporting the
results.

Assets – are economic resources which are allowed by


a business and are expected to benefit future
generations.

Liabilities – are debts arising from purchase of


merchandize and supplies on credit rather than to
pay cash at the time of purchase.
Forms of Liabilities:

a) Accounts payable – are liabilities resulting from the


purchase of goods or services on credit.

b) Notes payable – are formal written promises to pay


certain amounts of money, plus interest at a definite
future time.

Equity or Net worth – represents the resources invested by


the owner. It is equal to the total assets minus the
liabilities.

The equity of the owner – is a residual claim because the


claims of the creditors legally come first.
Net Farm Income – is the net earnings from the year’s
operation, which could be taken out of the business
and spent without influencing the scale of operation.

Net farm income is obtained by subtracting total


debts from total credits.

Intermediate Liabilities – are debts or obligations by a


business which will come due within one to ten years,
e.g., loans for the purchase of farm machinery.
Long-term liabilities or deferred obligations, i.e.,
mortgage debts that will not fall for several years.

Current Assets – are goods which are normally


liquidated or converted into cash within the year,
e.g., fattening cattle, hogs, fertilizers, feeds, seeds,
etc.

Fixed Assets – are virtually permanent in form or at


least which depreciate very slowly, e.g., land,
buildings, fences, and water system.
Farm inventory – is the listing of all times possessed
and the debts which the business owes.

Depreciation – is the slow using up of a long-lived


asset.

Single Entry Accounting – is the simplest form of a


farm account book which provides a page or a half-
page for each type of farm receipt or expense that
the manager wants to summarize separately.
Importance and Uses;

“Farm records” – are written statements or


collection of facts and figures, on a subject for a
definite purpose (Sta. Iglesia, et al., 1974).

 These records arise from day-to-day transactions


made by the farmer and should be accurate. They
are therefore used as the bases for the farmer’s
key decisions concerning farm operations.
Farm record system must possess the following
features;

1) It should be easy to understand


2) It should be easy to maintain
3) It should contain necessary facts and figures
4) It should be organized to suit the needs of a
particular farm.

 No tow farms are alike in the operation of the


business, and most likely, differences will occur
in the classification of receipts and expenses
and in the analysis & interpretation of farm
performances (Catelo and Flor, 1990).
Setting Up for Farm Records

 The records kept by a farm are classified as


either physical or financial:

Physical Records – are records that contain


information on farm productivity, like the records
on crop production and livestock production, and
records on machinery & equipment. They provide
data which later on become part of the financial
records under the account heading “inventory”
A. Crop Production Record

 this record is maintained mainly to monitor crop


production activities.

 It gives the name of the crop being cultivated,


the date of planting, the allocated area, the time
to harvest and the actual volume of production
at harvest time and its worth in pesos.
Suggested crop production record format:

Inclusive Date: From_______________ to________________

Area Date Volume of Value


Crop Planted Planted Harvested Production (Pesos)
(ha)

1. Rice 1.0 March 3, 2025 June 3, 2025 100 bags @


65kg/bag
2. Peanuts 1.0 April 13, 2025 July 13, 2025 20 bags
3. Beans 0.5 March 15, 2025 May 19, 2025 100 tons
B. Livestock and Poultry Production Record

 The production record for livestock largely


differs from that of crops. For examples, in a
swine enterprise here both weanlings and
fattening hogs are the main products, breeding
animals will have individual records, this will
allow the farmer to keep track of the
performance of each breeder, and of the farm as
a whole in terms of production.
Below is a simplified form of production record for swine breeders. This
may be modified or retracted depending on the information the farmer
wants to reflect in it.
Sow No. ____________________
Date of Birth: ________________

No. of Piglet
Date Bred Date No. of piglets at birth piglets at Mortality No. sold Remarks
Farrowed weaning
Valuation and Depreciation

 It plays a vital role in the preparation of the


balance sheet. This gives a more or less
objective value of the different fixed assets
included in the statement.

Four methods of valuation are available for use:

1) Original Cost or Actual Purchase Cost


 This method is used on assets with a short life
span and whose values do not change
drastically.
Four methods of valuation are available for use:

2) Normal Market Value – this method uses


estimate average selling price of the property over
a period of years.

3) Present Market Value – this method assigns


prices appropriate for the property if sold at the
time the inventory is taken. An example is land.

4) Original Cost Minus Depreciation – this method


uses some mathematical formulas in coming out
with the amount for depreciation.
The Depreciation amount (in years, quarterly or
monthly) may be computed using the straight-line
method.
Acquisition – Scrap Value
Annual Depreciation =
Life Span

To illustrate the use of this method, assume a fixed asset (e.g. plow worth 400.00 and will
last for five years after which it can be sold at a scrap value of 50.00)

Using the formula, substitute the figures as;

400.00 – 50.00
Annual Depreciation =
5 years

= 350 / 5 yrs

= P 70.00
After computing the annual depreciation (P70.00), the
value of the plow after one year and until it is used
for the duration of its life span (5 years);

Item: Plow
Year : Acquisition : Annual depreciation : Book Value
1 70.00 70.00 330.00
2 70.00 260.00
3 70.00 190.00
4 70.00 120.00
5 70.00 50.00
Financial Records

 are actually statements of the past performance


of the farm business. These statements cover a
definite period of time.

 made up of accounts of financial transactions of


a farm business.

 these will show the amount of money received


of each source and amount spent for each
purpose during the year.
Balance Sheet

 it shows how much a farm business is worht at a


given point in time.

 it reveals the monetary equivalent of assets


owned by the business, the claims of others
agianst these assets and the net worth or
owner’s equity.
The total assets should be equal to the sum of the
total liabiliites and the owner’s equity. expressed in
equation form.

Total Assets = Total Liabilities + Owner’s Equity

 Before the balance sheet could be contructed, an inventory of all


farm resources and other items should first be taken.

 these items include cash, receivables, unsold products, material


inputs, machinery and equipment, breeding stock in the case of a
livestock enterprise and seed stock in the case of crop production,
land buildings, tools and equipment, and such other particulars
which are needed in the operation of the farm. These items form the
asset side of thr balance sheet.
 The Owner’s equity or net worth of the
enterprise is the difference between the total
assets and the total liabilities.

The Income Statement

 the income statement, also called the profit and loss


statement, reveals the financial performance of the
farm.

 it determines the net income derived from the


operation during the accounting period.

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy