1. Use the following information to create a Balance Sheet for yearends 2020 and 2021 . Mrs. Smith only recognizes depreciation on her truck and trailer used to haul animals. She purchased the truck new for $50,000 on January 11, 2020 and the trailer was purchased for $10,000 in March of 2020. The estimated salvage value of the truck is $4,500 and a 7 year useful life; and the salvage value of the trailer is $2,000 after 10 years. When she purchased her truck and trailer, she only put $8,000 as a down payment on both. She financed the remaining portion with equal annual principle payments over 6 years. In addition to her annual principle payments, she makes annual interest payments of 10% of the balance on the loan. She had 305 breeding does valued at $340/head at yearend 2020. She increased her flock size in 2021 to 325 head. As of December 31, 2020 she had livestock held for sale (lambs and non breeding ewes) valued at $38,000. She also had wool inventories valued at $9,000. As of December 31, 2021 her livestock inventories increased to $43,000, and her wool inventories decreased to $8,500. Every spring she takes out an annual operating loan to help pay for feed, supplies, and other operating expenses. She pays the entire loan balance off on January 31st of the following year when she sells her wool and some lambs. The interest expense each year is 5% and begins accruing when she draws on the loan March 31st, but she does not make an interest payment until December 31st. She took out a loan in the amount of $26,000 in 2020, and $30,000 in 2021. Her farm consists of 100 acres, a home, and some barns and outbuildings. This was valued at $450,000 back in 2003. She had an updated appraisal done in 2021 which valued the farm at $560,000. She took out a mortgage on the farm several years ago. She makes annual principle payments of $12,000 and interest payments of 6% of the balance of the loan. She makes payments on Dec 31st each year. Her balance as of December 31, 2021 was $275,000. As of December 31, 2020, she had accounts receivable from her primary fleece buyer of $18,000, and from the wool mill of $3,200. She also had an account payable with the local farm supply store with a balance of $5,300, which she charged all her feed and supplies to. As of December 31, 2021, her lamb buyer owed her $24,000 and the wool mill owed $2,500. Her farm store account decreased to $3,200. She buys her feed only once a year to cut down on costs, so she usually has feed in her barn at the end of year. At yearend 2020 the feed left in her barn was valued at $2,500. She got a good deal on feed in 2021 so she purchased quite a bit and had approximately $4,800 left over at the end of the year. She keeps supplies on hand such as vet supplies, milk replacer, shearing supplies, etc. At yearend 2020 these were valued at $900. This increased to $850 at yearend 2021. She uses her checking account at the local bank for all his cash transactions. Her checking account balance as of December 31, 2020 was $9,300, and had decreased by $2,300 the following year. For the 2021 income statement: Cash from goat and kid sales totaled $46,500. Cash received from wool during 2021 was $4,200. Cash Feed Expenses totaled $22,000. Cash paid for vet expenses were $2,200. The goat shearer was paid $1,250 Note: The balance sheets will be as of December 31st and with the assumption that the December 31st loan payments have been made
