ABM 130 Final Exam

2018 Tax Rate, Single Individual Use the income statement and the net worth (balance sheet) statements Use the following tax rates to answer the questions. Income statement and the net worth (balance sheet) statement 2018 Tax Rate, Single Individual Net Income Statement Name: Grumpy Farn Year: 2018 Taxable income $9,525 . $9,525 fax rayable 5952.50 plus 17 15 12% of (TI - $9,525) Cash farm income Corn Sale $293,328 38,700 $82,500 $4,453.50 plus 22% of (TI- How Sales 283 .815 $9.50 plus 24% of Gross Cash farm income 577,143 memory changes* $500,000 $150,689.50 plus 370 $200 Total inventory change Net Inc of Gross farm revenue $598,993 Question 18 (3 points) Depreciation $67,800 53.000 If Sam has a taxable income of $136,000 what is her tax bill? Total operating expenses Total interest expense $420,800 $25,859.50 Total expenses $459.800 $26,929.50 Net farm income from operations (NFIO) $139.193 $32,640.00 apital Adjustments Machinery (sold tractor) Question 19 (3 points) Net Farm Income (NFI) $151.693 If Jim has $120,000 taxable income and a $5,000 tax credit. What is Jim's total tax bill? Note: the unpaid labor and management expense was $45,000 | Net Worth Statement (market value) $18,089.50 Name: Grumpy Farms Bal Sheet Date: 1/01/2018 Date: 12/31/2018 $21,889.50 Beginning Ending Average $23,089.50 Assets Current assets $403,500 $450,340 ixed assets $1.112,500 $426,920 Question 20 (3 points) $1.250.000 $1,181,250 If total farm assets are $1,000,000 and total farm liabilities are $500,000 then the Total farm assets $1,516,000 $1,700,340 $1,608, 170 farm is: Liabilities Solvent Current liabilities $195,025 $190,23 Insolvent Intermediate liabilities $392.000 $192,628 $385.050 $388,525 Liquid Total liabilities 587,025 $575,280 $581,153 Not Liquid Net Worth $928,975 $1,125,060 $1,027,018 Bal Sheet Question 21 (3 points) Question 22 (3 points) Given the following calculate net worth: Calculate and evaluate the ending current ration for 2018 Question 24 (3 points) Calculate and evaluate the ending debt to equity ratio for 2018. The current ratio is 2.0 $260,110, strong 63.2%; fair Intermediate assets are $300,000 2.37, strong 63.2%; strong Long term assets are $400,000 51.1%; fair Current Liabilities are $100,000 $260,110, fair 52.1.%; strong Total Liabilities are $400,000 2.37, fair Question 25 (3 points) Calculate and evaluate return on assets (ROA) for 2018. $500,000 Question 23 (3 points) 11.1%; fair $1,500,000 11.1%; strong Calculate and evaluate the net income ratio for 2018 8.3%; fair $350,000 8.3%; strong 25.3%; strong $900,000 Question 26 (3 points) 25.3%; weak Given the values for NFIO and NFI, what is the value for capital adjustments for 2018? 23.2%; strong O-$12,500 23.2%; weak so $12,500 ONone of the above are correct Question 27 (3 points) Question 30 (3 points) Which of the following relationships must be true? Which type of farm business entity must file and pay income taxes separately from the personal tax returns of the owners? Question 33 (3 points) D/A + E/A = 1.0 s corporation Which of the following is not correct? D/A x E/A = 1.0 D/E + E/A = 1.0 C corporation O a) To maximize profit a producer should choose to produce were marginal limited liability company revenue equals marginal cost (MR=M Question 28 (3 points) partnership O b) To maximize profit a producer should produce at the maximum output where The number of shares of stock received by each stockholder when a farm marginal physical product equals zero (MPP=0). corporation is formed is based on the _ __ contributed by each stockholder. Question 31 (3 points) c) To maximize profit a producer should choose to produce were marginal value The four stages of the life cycle of a business, in order, are: product equals marginal incremental cost (MVP=MIC). value of equity O value of total liabilities Entry: Consolidation; Growth; Exit Question 34 (3 points amount of labor Entry; Growth; Exit; Consolidation The unit for a crop enterprise budget is usually value of total assets OEntry; Growth; Consolidation; Exit a) one bushel of output Question 29 (3 points) Question 32 (3 points) A limited partnership is one in which: Changing the value of one or more key variables in a budget to test the effect on profit is called what? b) one acre some partners do not participate in management, and have limited liability Breakeven analysis c) 100 pounds of output the maximum number of acres farmed is fixed by law Sensitivity analysis the number of partners must not exceed 75 Linear programming d) one section of land only one type of enterprise is carried out Strategic planning