Question 1 Report
(a) Define the term balance sheet.
(b) The financial data of Omega Dairy Farms Ltd as at December 31st 2012 are shown below:
Cash at bank - 200,000.00
Cash in hand - 70,000.00
Dairy cattle - 5,000.000.00
Milk - 300,000.00
Loans - 3,000,000.00
Initial capital - 4,000,000,00
Interest on loan payable - 600,000.00
Account receivable - 1,000,000.00
Taxes payable - 500,000.00
Milking machine - 1,500,000.00
Animal feed - 100,000.00
Use the data to prepare a balance sheet for Omega Dairy Farms Ltd as at December 31st 2012 (c) State two ways in which the balance sheet is important (d) Is the farm credit-worthy? Give a reason for your answer