2. Net Worth a. a. It is January 2 and Twin Pines Farm is putting together its annual net worth statement. They have collected the following information. Help them fit it all together using the attached blank statement. In book look at page 66 and Table 4-4. 1. The farm bank account has a balance of $4,250. 2. Their grain inventory is as follows: Total com in storage is 44,000 bushels. Current market price is $2.25. $99,000 b. They sold a 10.000 bu. futures contract for $2.45 per bushel in October. Current futures price is $2.30. gain of $1,500 They have 7.000 bu. of soybeans contracted for March delivery at $5.00 per bushel. Current soybean price is $4.50. $35,000 3. Their livestock inventory is as follows: 1,200 head of 50-pound feeder pigs. Current value is $50 each. $60,000 b. 800 head of pigs weighing about 150 pounds. Current market price for 250- pound market hogs is S.40 per pound ($100 per head), so value them at $75 each. $60,000 100 sows, valued at $150 each, and 8 boars worth $500 each. $19,000 4. They have 300 bags of purchased seed in storage for which they paid $80 per bag. $24,000 5. In November they applied $17,000 worth of fertilizer on their crop land. 6. They also prepaid the elevator $20,000 for additional fertilizer to be delivered and applied in April. 7. In December they sold 150 feeder pigs to a nephew for $8,000, to be paid when the pigs are sold in February 8. Their other machinery and equipment have a depreciated value of $217,000 from their depreciation schedule, but they estimate its market value at $240,000 9. The farm has several older buildings that added $50,000 to the purchase price of the farm 10 years ago. They have deducted $24,000 in depreciation expense from that purchase, so far. Their estimated market value is $30,000. $50,000 - 24,000 = $26,000 C. 10. They own 240 acres of farmland that they purchased ten years ago for $315,000. They estimate its current value at $480,000. They also rent 500 aces of cropland for $125 per acre. 11. They own a motorboat used for waterskiing, worth $14,500. not a farm asset 12. The current operating loan with Farm Credit is $87,300, with accumulated interest of $2.370. 13. They owe Crop Managers, Inc. $1,500 for taking soil samples in November. 14. They owe $60,000 to AgCo Credit for their combine at 8% interest. Their last payment was made December 1. Next December 1, they will have to pay $20,000, plus interest of $4.800 (560,000 x 8%x 1/12) = 5400 15. They owe $100,000 for purchase of the farm at 6% annual interest. They made a payment last March 1. Their next payment will be March 1, principal of $8.000, plus interest ($100,000 x 6%x 10/12) = $5,000 NET WORTH STATEMENT Name: Twin Pines Farm Date: January 2, 20 Cost Value Market Value Market Value FARM ASSETS Checking and Savings Accounts FARM LIABILITIES Accounts payable Farm taxes due Short-term notes and credit lines Accrued interest - short - intermediate - long-term Due in 12 mo. - intermediate Crops held for sale or feed Crops held for sale or feed Investment in growing crops Commercial feed on hand Prepaid expenses Market livestock Supplies on hand Accounts receivable Other-hedging gain :- - long-term Other Total Current Liabilities Notes and contracts, remainder Other Total Current Assets Unpaid Patronage Dividends Breeding livestock Time certificates Farm securities Other Machinery and Equipment Total Intermediate Assets Buildings/improvements Farmland Farm Securities Other Total Long-term Assets A Total Farn Assets Total Intermediate Liabilities Notes and contracts, remainder Other Total Long-term Liabilities B. Total Farn Liabilities C.Farn Net Worth. Cost Value (A-B) D. Farn Net Worth, Market Value (A-B) 2. Net Worth a. a. It is January 2 and Twin Pines Farm is putting together its annual net worth statement. They have collected the following information. Help them fit it all together using the attached blank statement. In book look at page 66 and Table 4-4. 1. The farm bank account has a balance of $4,250. 2. Their grain inventory is as follows: Total com in storage is 44,000 bushels. Current market price is $2.25. $99,000 b. They sold a 10.000 bu. futures contract for $2.45 per bushel in October. Current futures price is $2.30. gain of $1,500 They have 7.000 bu. of soybeans contracted for March delivery at $5.00 per bushel. Current soybean price is $4.50. $35,000 3. Their livestock inventory is as follows: 1,200 head of 50-pound feeder pigs. Current value is $50 each. $60,000 b. 800 head of pigs weighing about 150 pounds. Current market price for 250- pound market hogs is S.40 per pound ($100 per head), so value them at $75 each. $60,000 100 sows, valued at $150 each, and 8 boars worth $500 each. $19,000 4. They have 300 bags of purchased seed in storage for which they paid $80 per bag. $24,000 5. In November they applied $17,000 worth of fertilizer on their crop land. 6. They also prepaid the elevator $20,000 for additional fertilizer to be delivered and applied in April. 7. In December they sold 150 feeder pigs to a nephew for $8,000, to be paid when the pigs are sold in February 8. Their other machinery and equipment have a depreciated value of $217,000 from their depreciation schedule, but they estimate its market value at $240,000 9. The farm has several older buildings that added $50,000 to the purchase price of the farm 10 years ago. They have deducted $24,000 in depreciation expense from that purchase, so far. Their estimated market value is $30,000. $50,000 - 24,000 = $26,000 C. 10. They own 240 acres of farmland that they purchased ten years ago for $315,000. They estimate its current value at $480,000. They also rent 500 aces of cropland for $125 per acre. 11. They own a motorboat used for waterskiing, worth $14,500. not a farm asset 12. The current operating loan with Farm Credit is $87,300, with accumulated interest of $2.370. 13. They owe Crop Managers, Inc. $1,500 for taking soil samples in November. 14. They owe $60,000 to AgCo Credit for their combine at 8% interest. Their last payment was made December 1. Next December 1, they will have to pay $20,000, plus interest of $4.800 (560,000 x 8%x 1/12) = 5400 15. They owe $100,000 for purchase of the farm at 6% annual interest. They made a payment last March 1. Their next payment will be March 1, principal of $8.000, plus interest ($100,000 x 6%x 10/12) = $5,000 NET WORTH STATEMENT Name: Twin Pines Farm Date: January 2, 20 Cost Value Market Value Market Value FARM ASSETS Checking and Savings Accounts FARM LIABILITIES Accounts payable Farm taxes due Short-term notes and credit lines Accrued interest - short - intermediate - long-term Due in 12 mo. - intermediate Crops held for sale or feed Crops held for sale or feed Investment in growing crops Commercial feed on hand Prepaid expenses Market livestock Supplies on hand Accounts receivable Other-hedging gain :- - long-term Other Total Current Liabilities Notes and contracts, remainder Other Total Current Assets Unpaid Patronage Dividends Breeding livestock Time certificates Farm securities Other Machinery and Equipment Total Intermediate Assets Buildings/improvements Farmland Farm Securities Other Total Long-term Assets A Total Farn Assets Total Intermediate Liabilities Notes and contracts, remainder Other Total Long-term Liabilities B. Total Farn Liabilities C.Farn Net Worth. Cost Value (A-B) D. Farn Net Worth, Market Value (A-B)