Income Statement & Analysis

Using the spreadsheet Income Statement Assignment Template, develop an income statement for $2023$ using the information below and calculate return on assets $($ROA$)$ and return on equity $($ROE$).$ Upload to this dropbox.

Important notes:

a$.$ Not all information below is necessary for developing an income statement. You must sort through the information and determine the appropriate figures.

b$.$ Assume $50\%$ of automobile use for farm expense, and $50\%$ of telephone and electricity use are considered farm business use.

c$.$ Total depreciation for capital items and end$-$of$-$year balance sheet are given.

Part $1$

Inventory of Crops and Livestock on Jan. $1,2023$

Per Unit Total

Item Quantity Cost Value

Sows $($breeding$)50$ $$250\mathrm{.}00$ $$12,500$

Boars $($breeding$)5$ $$100\mathrm{.}00$ $$500$

Barrows & Gilts $600$ $$200\mathrm{.}00$ $$120,000$

Beef Cows $($breeding herd$)120$ $$1,400\mathrm{.}00$ $$168,000$

Bulls $($breeding herd$)6$ $$2,000\mathrm{.}00$ $$12,000$

Beef Heifers $($breeding herd$)15$ $$2,000\mathrm{.}00$ $$30,000$

Feeders $200$ $$1,400\mathrm{.}00$ $$280,000$

Corn $35,000$ $$6\mathrm{.}00$ $$210,000$

Soybeans $5,000$ $$13\mathrm{.}00$ $$65,000$

Hay $($alfalfa$)100$ $$150\mathrm{.}00$ $$15,000$

Silage $300$ $$60\mathrm{.}00$ $$18,000$

Farm Supplies $$15,000$

Part $2$

Land value

$320$ acres owned $($land valued at $$10,500$ per acre on Jan. $1,2023)$

$$

Part $3$

Partial Balance Sheet $($Net Worth Statement$)$ Jan. $1,2023$

Assets Liabilities

Cash on Hand $$15,000$ Current Liabilities $$275,000$

Acct. Receivable $$23,000$ Intermediate Notes $$325,000$

Value of Buildings $$255,000$ Farm Mortgage $$1,500,000$

Value of Land $$3,360,000$ Accounts Payable $$8,000$

Total Asset Value $$4,120,000$ Total Liabilities $$2,408,000$

Owner Equity $$1,712,000$

Part $4$

Cash Transactions During the Year:

INCOME

Crops Sold Quantity Price Value

Corn $120,000$ $$6$ $$720,000$

Soybeans $25,000$ $$14$ $$350,000$

Raised Market Livestock Sales

Feeders $100$ $$2,400\mathrm{.}00$ $$240,000$

Hogs $1200$ $$200\mathrm{.}00$ $$240,000$

Purchased Market Livestock Sales

Feeders $100$ $$2,400$ $$240,000$

Breeding Livestock Sales

Cull Cows $30$ $$1,000$ $$30,000$

Cull Sows $25$ $$200$ $$5,000$

Other Receipts

Non$-$Farm Income from Spouse $$75,000$

Government Payment $$5,000$

Custom Baling $$8,500$

Crop Insurance Payment $$75,000$

Other Farm Income $$6,000$

Cash Expenses

Hired Labor $$75,000$

Seeds and Plants $$225,000$

Fertilizer $$320,000$

Herbicide $$100,000$

Gas, Fuel, and Oil for farm equipment$/$vehicles $$65,000$

Machine Work Hired $($on farm$)$ $$35,000$

Machine Repairs $$45,000$

Freight, Trucking $$18,000$

Storage Fees $$4,500$

Telephone $$4,000$

Electricity $$22,500$

Farm Supplies $$37,000$

Livestock Expense $$65,000$

Other Farm Expenses $$7,000$

Improvement and Repairs $($non$-$machine$)$ $$10,000$

Insurance Premiums $($farm related$)$ $$32,000$

Property Taxes $$65,000$

Feed Purchased for Beef Cows $$45,000$

Feed Purchased for Feeders $$355,000$

Feed Purchased for Hogs $$145,000$

Rent Paid $($equipment and land$)$ $$356,000$

Automobile #$1$ expenses $$4,000$

Automobile #$2$ expenses $$6,000$

Interest Paid on Farm Debt $$155,000$

Loan Principal Payments on Farm Debt $$100,000$

Purchased Feeder Steers $(125$ @ $$1,950)$ $$243,750$

Part $4,$ continued:

Transactions of Capital Assets During $2023$:

SOLD:

JD $4960$ sold for $$67,000\mathrm{.}00($book value $=$ $$12,000\mathrm{.}00)$

Wagon sold for $$10,500\mathrm{.}00($book value $=$ $$0)$

old combine trade$-$in value $$35,000($book value $=$ $$22,000\mathrm{.}00)$

PURCHASED$/$BUILT:

$1-$ton Chev pickup May $1$ $$95,000$

Used JD Combine Oct $1$ $$195,000($$$240,000-$$$45,000)$

Part $5$:

Value of labor use $($opportunity cost of labor and management$)$

$1.$ Family Labor $6$ months @ $$3,500/$month

$2.$ Operator Labor $12\mathrm{.}0$ months @ $$55,000/$year

$3.$ Operator Expertise $($management$)12\mathrm{.}0$ months @ $$25,000/$year

Part $6$

Inventory of Crops, Feed, and Livestock on January $1,2024$

Per Unit Total

Item Quantity Value Value

Sows $($for breeding$)50$ $$150\mathrm{.}00$ $$7500$

Boar $($for breeding$)5$ $$75\mathrm{.}00$ $$375$

Market Hogs $500$ $$175$ $$87,500$

Beef Cows $($for breeding$)150$ $$1,800\mathrm{.}00$ $$270,000$

Bulls $($for breeding$)6$ $$2,500\mathrm{.}00$ $$15,000$

Beef Heifers $($breeding$)30$ $$2,500\mathrm{.}00$ $$75,000$

Feeder Steers $230$ $$2,000\mathrm{.}00$ $$460,000$

Corn $40,000$ $$4\mathrm{.}75$ $$190,000$

Soybeans $5,500$ $$13\mathrm{.}00$ $$71,500$

Hay $($alfalfa$)150$ $$200\mathrm{.}00$ $$30,000$

Silage $400$ $$55\mathrm{.}00$ $$22,000$

Farm Supplies $$10,000$

Part $7$

Partial Assets and Liabilities from Balance Sheet as of Jan. $1,2024.$

Assets Liabilities

Cash on Hand $$22,500$ Current Liabilities

Accounts Payable

$$185,000$

$$23,500$

Value of Land $$3,336,000$ Intermediate Liab.

$$400,000$

Accounts Receivable: $$17,000$

Total Asset Value

$4,420,000$

Total Liabilities $2,350,000$

Owner Equity $2,070,000$

Part $8$ Record of produce used at home.

A$.$ One beef steer valued at $$2,600$ butchered during the year.

B$.$ Two hogs were butchered as well, Valued at $$200$ each

Part $9$

Depreciation values of capital assets during $2023($you do not need to calculate depreciation, use numbers below$)$

Total Value of:

Capital Asset $2023$ Depreciation

Machinery and equipment $$45,000($Includes new purchases$)$

$50\%$ Automobile #$1$ $$1,500($$$750=50\%)$

$50\%$ Automobile #$2$ $$1,000($$