FARM RECORDS

INCOME STATEMENT

BALANCE SHEET REVIEW

A. ASSETS ARE THINGS OF VALUE TO THE FIRM AS ARE CLASSIFIED AS CURRENT, INTERMEDIATE, OR

LONG TERM.

B. LIABILITIES ARE DEBTS THAT WE OWE OUR

CREDITORS. THEY ARE CLASSIFIED THE SAME AS ASSETS

C. CAPITAL IS WHAT IS LEFT AFTER WE SELL THE ASSETS AND PAY THE CREDITORS

D. ASSETS & LIAB ARE STATIC @ A POINT IN TIME & DON’T REPRESENT THE FLOW OF MONEY /GOODS

3. DATE: POINT IN TIME

ASSETSa. -LIABILITIES

b. =NET WORTH, CAPTIAL, EQUITY

1. BALANCE SHEET2. FOR : BUSINESS NAME

4. LEFT SIDE 5 RIGHT SIDE

REVIEW

I WASN’T BORN YESTERDAY…..

IF I OPEN THAT DOOR, I’LL BE AN HOUR PICKINGUP ALL THE RECORDS STORED ON THE FLOOR.

JERRY PAULIN. OHIO FARMER. MAY 31, 19??

FARM RECORDS CONCEPTS

1. INTRODUCTION TO RECORDS2. ACCOUNTING EQUATION3. BALANCE SHEET

4. INCOME STATEMENT5. INVENTORY6. DEPRECIATION7. ACCOUNTING METHODS8. CASH FLOW9. RECORDS SYSTEMS10. COMPUTERIZED RECORDS11. LABOR RECORDS12. MANAGEMENT MEASURES13. INCOME TAX

LESSON OBJECTIVESAFTER COMPLETING THIS LESSON, THE STUDENT

SHOULD BE ABLE TO:

1. Define Components Of Income Statement Title

2. Classify Items As Being Operating Or Non-operating, Cash Or Non-

cash Rec Or Exp

3. Prepare An Income Statement In Proper Form (With Subheadings

And Subtotals) From A List Of Items With >65% Accuracy In A Test

Enviroment

4. Appropriately Calculate An Income Statement In The Oh

Commerical Farm Account Book With ± 5% Accuracy

INCOME STATEMENT

INCOME STATEMENT

Discussion Points

I. Review Of Acct Equation

II. Income Statement Heading

III. Inc Statement Categories

IV. Inc Statement Definitions

V. Inc Statement Examples

REVIEWACCOUNTING EQUATION

Assets = Liab + Org Investment

+ Receipts

- Expenses

A = L + C

Profit(RetainedEarnings)

3rd Line: Date: Period Of Time: From x to y

Receipts Disburshments

II. Income Statement Heading

2nd Line: For : Business Name1st Line: Statement Name : Income Statement

LEARNINGOBJECTIVE

DEFINE COMPONENTS OF THE INCOME STATEMENT HEADING1

ReceiptsA. Operating Receipts 1. Cash Receipts

.......... Tot Cash $Xx

2. Non Cash Receipts

......Tot Non-cash $Xx

Total Oper Rec $Xx

B. Non-Operating Receipts Capital Gains

Tot Cap Gain $Xx

C. Tot Receipts $Xx

DisbursementsA. Operating Expenses 1. Cash Expenses

.......... Tot Cash $Xx

2. Non Cash Expenses

......Tot Non-cash $Xx

Total Oper Exp $Xx

B. Non-Operating Disb Capital Losses

Tot Cap Gain $Xx

C. Total Expenses $Xx

LEARNINGOBJECTIVE

CLASSIFY ITEMS AS OPERATING OR NON-OPERATING, CASH/ NON-CASH REC/ EXP2

II. INCOME STATEMENT HEADING

IV. INCOME STATEMENT DEFINTIONS

ReceiptsA.Operating Receipts 1. Cash Receipts A. Rec From Things Produced B. Misc Income

2. Non Cash Receipts A. Product Consumed B. Increase In Inventory C. Decrease In Liabilities

......Tot Non-cash $Xx Total Oper Rec $Xx

B. Non-operating Rec Capital Gains Gain On Wk & Lt Asset Sale

C. Tot Receipts $Xx

DisbursementsA. Operating Expenses 1. Cash Expenses A. Purchase Supplies B. Fix & Var Costs 2. Non Cash Expenses A. Depreciation B. Inc In Liabilities C. Inventory Decrease

......Tot Non-cash $XxTotal Oper Exp $Xx

B. Non-operating Disb Capital Losses

Loss On Wk & Lt Asset Sale

C. Total Expenses $Xx

LEARNINGOBJECTIVE

CLASSIFY ITEMS AS OPERATING OR NON-OPERATING, CASH/ NON-CASH REC/ EXP2

V. INCOME STATEMENT EXAMPLES

ReceiptsA. Operating Receipts 1. Cash Receipts A. Crop Receipts B. Sale Of Mkt Lvstk C. Custom Wk Receipts

2. Non Cash Receipts A. Milk Drank B. More Hay @ Yr End C. Decreases In Liabilities

......Tot Non-cash $Xx Total Oper Rec $Xx

B. Non-Operating Rec Cap Gains On Sale Of Cow Sale Val > Bk Value

C. Tot Receipts $Xx

DisbursementsA. Operating Expenses

1. Cash Expenses A. Purchase Of Feed B. Utilities/Insurance C. Machinery Repairs

2. Non Cash Expenses A. DEPRECIATION

B. Dec In Inventories C. Inc In Liabilities

......Tot Non-cash $XxTotal Oper Exp $Xx

B. Non-Operating Disb Cap Loss On Sale Of Sow Sale Value < Book Value

C. Tot Expenses $Xx

LEARNINGOBJECTIVE 2 CLASSIFY ITEMS AS OPERATING OR NON-

OPERATING, CASH/ NON-CASH REC/ EXP

PROFITABILITY1. Net Cash Income =

Tot Cash Receipts - Tot Cash Exp

2. Net Operating Income = Tot Oper Receipts - Tot Oper Exp

3. Net Farm Income =Tot Farm Receipts - Tot Farm Exp

LEARNINGOBJECTIVE 2 CLASSIFY ITEMS AS OPERATING OR NON-

OPERATING, CASH/ NON-CASH REC/ EXP

WHAT DOESN’T GO ONINCOME STATEMENT

1. Assets

2. Liabilities

3. Borrowing Money

4. Repayment Of Money

5. Purchase Of Working & Long Term Assets

LEARNINGOBJECTIVE 2 CLASSIFY ITEMS AS OPERATING OR NON-

OPERATING, CASH/ NON-CASH REC/ EXP

Balance Sheet

Balance Sheet

Cash Flow

Cash FlowPurchase Price Nowhere – Annual Use as Deprec On Inc Statement

SELF TESTItem Statement Classification

1. Check From Govt Inc Cash Oper Receipt

2. Loan For Feed Bal Sh Current Liability3. Borrowing For Feed Bal Sh Using Money

4. Depreciation Inc Non-cash Exp

5. Sale Of Tractor Inc Cap Gain/Loss6. Sale Of Milk Inc Cash Oper Receipt7. Check Writ For Fert Inc Cash Oper Expense8. Loan Payment Bal Sh Return Money9. Inc In Inventory Inc Non Cash Receipt10. Products Consumed Inc Non Cash Receipt11. Purchase Of Tractor Bal Sh Will Be Deprec12. Dividend Payment Bal Sh Personal

LEARNINGOBJECTIVE 2 CLASSIFY ITEMS AS OPERATING OR NON-

OPERATING, CASH/ NON-CASH REC/ EXP

SUMMARY

1. Receipts & Expenses Are Transactions Related To Producing A Product.

2. Non-cash Transactions Effect The True Profit Of The Farm, But No Checks Are Written Or Received

3. Cap Gains/Losses Represent The Sale Of Working Or Fixed Assets

4. Gauges Of Farm Profitability A. Net Cash Income B. Net Operating Income C. Net Farm Income

INCOME STATEMENT

Income Statement Concept Homework

Who: YouWhere: Today On WebWhen: Next Class PeriodHow: 1. Print Assignment2. Take Items From List & Put Them In The Proper

Category On Bal Sheet Or Income Statement& Total. Not All Will Be Used.

3. Total The Categories

LEARNINGOBJECTIVE 3 PREPARE AN INCOME STATEMENT IN

PROPER FORM FROM A LIST OF ITEMS WITH >65% ACCURACY

Identifying Items

Process ResultA. Operating Activities: 1 Yr Activities

Sell Products: Cash Flow Oper Receipt Inc Stat

Buy Supplies: Cash Flow Current Asset Bal SheetOper Expense Inc Stat

B. Investing Activities: Effect More Than 1 Yr

Sell Mach: Cash Flow Non-Oper Rec Inc Stat

Buy Mach: Cash FlowDepreciationWork Asset Bal Sheet

Inc Stat

C. Financing Activities: Using Other’s MoneyBorrowing : Cash Flow Add Loan Bal Sheet

Repay Money: Cash Flow

LEARNINGOBJECTIVE 3 PREPARE AN INCOME STATEMENT IN

PROPER FORM FROM A LIST OF ITEMS

Remove Loan Bal Sheet

Income Statement Performance Quiz4 Tries: 1/2 Letter Grade

On A Blank Sheet Of Paper You Will Be Asked To Set Up A Income Statement In Proper Form With Headings, Subheadings, Sub-totals And Totals And Then Pick Out Income Statement Items From A List Of 50, Put Them In The Proper Category & Total

LEARNINGOBJECTIVE 3

PREPARE AN INCOME STATEMENT IN PROPER FORM FROM A LIST OF ITEMS

WITH >65% ACCURACY

Dr. Baur AGRICULTURAL TECHNICAL INSTITUTE Income Statement Bus Tech T102 NAME ____________________Using the appropriate items from the list below, prepare an Income Statement for a farm business in proper form (headings, subtotals, totals, etc.).Farm Checking Account 1,000 Purchased Cows 25,000 Purchase of Haybine 7,500End. Inv.> Beg. Inv. 2,500 Owe for Machinery 10,000 Land Contract 50,000Variable Costs 8,500 Lvstk Product Sales 76,000 Depreciation 6,600Sell $800 Cull Cow 500 Sell $500 Rake 1,000 9-Month Loan 1,500Land Owned 95,000 Barn Loan Payment 1,200 Borrowing for Fert . 9,800Store food in Pantry 500 Fam Living Withdraw 18,000 Receiving Inheritance 5,000Farm Checking Account 1,000 Purchased Cows 25,000 Purchase of Haybine 7,500End. Inv.> Beg. Inv. 2,500 Owe for Machinery 10,000 Land Contract 50,000Variable Costs 8,500 Lvstk Product Sales 76,000 Depreciation 6,600Sell $800 Cull Cow 500 Sell $500 Rake 1,000 9-Month Loan 1,500Land Owned 95,000 Barn Loan Payment 1,200 Borrowing for Fert. 9,800Store food in Pantry 500 Fam Living Withdraw 18,000 Receiving Inheritance 5,000Farm Checking Account 1,000 Purchased Cows 25,000 Purchase of Haybine 7,500End. Inv.> Beg. Inv. 2,500 Owe for Machinery 10,000 Land Contract 50,000Variable Costs 8,500 Lvstk Product Sales 76,000 Depreciation 6,600Sell $800 Cull Cow 500 Sell $500 Rake 1,000 9-Month Loan 1,500Land Owned 95,000 Barn Loan Payment 1,200 Borrowing for Fert. 9,800Store food in Pantry 500 Fam Living Withdraw 18,000 Receiving Inheritance 5,000

On A Blank Sheet Of Paper You Will Be Asked To Set Up An Income Statement In Proper Form With Headings, Subheadings, Sub-totals And Totals And Then Pick Out Sheet Items From A List Of 50, Put Them In The Proper Category & Total

LEARNINGOBJECTIVE 3

PREPARE AN INCOME STATEMENT IN PROPER FORM FROM A LIST OF ITEMS

WITH >65% ACCURACY

Dr. Baur AGRICULTURAL TECHNICAL INSTITUTE Balance Sheet Bus Tech T102 NAME ________Using the appropriate items from the list below, prepare an Balance Sheet for a farm business in proper form (headings, subtotals, totals, etc.).Farm Checking Account 1,000End. Inv.> Beg. Inv. 2,500Variable Costs 8,500Sell $800 Cull Cow 500Land Owned 95,000Store food in Pantry 500 Purchased Cows 25,000Purchase of Haybine 7,500Owe for Machinery 10,000Land Contract 50,000 Lvstk Product Sales 76,000 Depreciation 6,600 Sell $500 Rake 1,000 9-Month Loan 1,500 Barn Loan Payment 1,200 Borrowing for Fert 9,800 Fam Living Withdraw 18,000Receiving Inheritance 5,000

IncomeFor Your Name

As of RECEIPTS EXPENSE

Operating

NON-CURRENT WORKING

FIXED

Operating

NON-CURRENT WORKING

FIXED

FARM CKING ACCT 1000

LAND OWNED 95000

PURCHASED COWS 25000 OWE FOR MACHINERY 10000

LAND CONTRACT 50000

9 MONTH LOAN 1500

TOTAL CURRENT 1000

TOTAL WORKING 25000

TOTAL FIXED 95000

TOTAL NON-CURRENT 120000

TOTAL ASSETS 121000

Income Statement Performance Quiz4 Tries: 1/2 Letter Grade

Associated Lab Activities

Lab 9: Income Statement

LEARNINGOBJECTIVE

PREPARE AN INCOME STATEMENT IN THE OH COMMERICAL FARM ACCOUNT BOOK

WITH ± 5% ACCURACY4

Next Farm Records Concept

Inventory