AG 311 Farm Management and Records L AB 4 Chap 5 INCOME STATEMENT AND ANALYSIS Assume I.M. Farmer has an accounting period running from January 1 to December 31. Use the following information obtained for the past calendar year accounting period to complete an income statement for I.M. using the attached form. Then complete the calculations on the last two pages DO NOT limit your answers to the quantitative results. ALWAYS provide the details of your computation AND the interpretation of the results. Inventory Values Crops Livestock January 1 $32,750 $17,500 December 31 $25,240 $32,200 Revenue and Expenses Depreciation Feed Purchased Property Taxes Misc. Expenses Market Livestock Sold Repairs Fertilizer Exp. Supplies Labor Hired Fuel Expense Gain on mach, sale Change in interest payable 28,900 21,200 3,400 5,800 91,660 12,100 9,400 4,800 22,600 5,800 11,100 (2,400) Crops Sold $219,600 Insurance 3,800 Interest Paid 33,400 Feeder Livestock Purch. 46,500 Seed Purchased 6,410 Vet. & Health Expense 4,800 Income from Custom Work 4,700 Gain on Sale of Breedi:[g Stock 7,600 Gov't payment income 8,890 Chemical exp. 9,780 Change in acct. payable +1,400 Other Information Average Asset Value (2007) $785,000 Family Living Expenses $ 38,000 Opportunity Cost of Operator Income Tax Paid 10,700 Labor 34,000 Owner's Equity (12/31) $402,000 Opportunity Cost of Operator Average Equity Value $375,675 Copyright 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Fuel Expense Gain on mach. sale Change in interest payable 5,800 11,100 (2,400) Gov't payment income Chemical exp. Change in acct. payable 8,890 9,780 +1,400 Other Information Average Asset Value (2007) $785,000 Family Living Expenses $ 38,000 Opportunity Cost of Operator Income Tax Paid 10,700 Labor 34,000 Owner's Equity (12/31) $402,000 Opportunity Cost of Operator Average Equity Value $375,675 Copyright 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education, Management Opportunity Cost of Capital 22,000 4.7% 7. What is the Operating Profit Margin Ratio? % 8. Compute the Asset Turnover Ratio which is Total Revenue divided by Total Assets. What does this value mean? How do you interpret it? 19. Value of Farm Production is a concept defined as Total Revenue minus livestock purchased minus feed purchased. What was I. M's Value of Farm Production for the past year? 10. What does Value of Farm Production Measure