Balance Sheet 1/1/2019

Information Dean Farmer recently won the lottery and used his winnings to purchase a farm in 2018. Dean did not go to college, but rather grew up on a farm, worked as a cabinet maker for 10 years, and then won the lottery. He was able to generate a beginning balance sheet; however, he did not have experience with depreciation or market adjustments. i. Beginning Cost Basis Balance Sheet ii. In addition to the original $75,000 operating loan at the beginning of the year, Dean took out an additional operating loan of $67,000 in July as a source of new financing for the year. Both loans are due on February 15, 2020. ini. Dean also had records of his current account balances as of December 31, 2019 24,000 Interest payable 10,650 Fuel and oil expense 37,000 Interest paid 11,850 Property tax payable 16,000 Supplies on hand 18,000 Labor expense 18,000 Repair expense 36,900 Property taxes paid 15,000 Insurance expense 10,500 Accounts receivable 32,000 Feeder livestock purchases 20,000 Feed purchases 15,000 Crop sales (com and wheat) 350,750 Corn Inventory 120,000 Principal paid-Beef Loan 10,000 Prepaid expenses 20,000 Principal paid-Farm Mortgage 20,000 Livestock sales 17,500 Government program payments 2,000 Crop expenses 220,000 Other livestock expenses 12,000 Market Livestock 36,000 Accounts Payable 17,000 Inventory Wheat Inventory 50,000 Feed on Hand 70,000 Current Assets Cash Corn Grain Inventory Wheat Inventory Prepaid expenses Feed on hand Market Livestock Accounts Receivable Supplies Total current assets Cost 13,000 20,000 10,000 5,500 80,000 32,000 2,000 4,000 166,500 Current Liabilities Accounts Payable Interest Payable Principal Farm Mortgage Principal Beef Loan Operating Loan Property Taxes Payable Cost 35,000 11,850 20,000 10,000 75,000 15,000 Total current liabilities 166,850 Intermediate Liabilities Beef Loan 100,000 Intermediate Assets Machinery Beef Breeding Stock Titled Vehicles Total Intermediate Assets 300,000 55,000 26,000 381,000 Total Intermediate Liabilities 100,000 Long-term Liabilities Farm Mortgage 170,000 Long-Term Assets Land Buildings Total Long-term Assets 318,000 67,000 385,000 Total Long-term Liabilities 170,000 Total liabilities 436,850 Owner equity 495,650 Total Assets 932,500 Total liabilites & owner equity 932,500 Create the Beginning Balance Sheet (Jan 1, 2019) in a new spreadsheet. Question 2 Using the information provided in the information and charts of accounts on page land your work in question 1, generate the Ending Balance Sheet (December 31, 2019) on a cost basis. Put your ending balance sheet on a new sheet in your spreadsheet nile. You will not use all of the information in the charts of accounts. (40 points) Question 3 On a new sheet in your spreadsheet file, assess the change in the farm's liquidity, solvency, and debt structure over the year. You will need to calculate the liquidity, solvency, and debt structure measures that rely solely on the balance sheet information at the beginning of the year and at the end of the year to be able to assess the change over the year. Interpret your ratios, That is, explain in words what the numbers mean. Where possible, indicate where Dean's liquidity, solvency, and debt structure numbers fall on the farm finance scorecard. Did Dean's farm financial condition improve or get worse over the year? .. LUDI Dal Shodina Dalanesh Information Dean Farmer recently won the lottery and used his winnings to purchase a farm in 2018. Dean did not go to college, but rather grew up on a farm, worked as a cabinet maker for 10 years, and then won the lottery. He was able to generate a beginning balance sheet; however, he did not have experience with depreciation or market adjustments. i. Beginning Cost Basis Balance Sheet ii. In addition to the original $75,000 operating loan at the beginning of the year, Dean took out an additional operating loan of $67,000 in July as a source of new financing for the year. Both loans are due on February 15, 2020. ini. Dean also had records of his current account balances as of December 31, 2019 24,000 Interest payable 10,650 Fuel and oil expense 37,000 Interest paid 11,850 Property tax payable 16,000 Supplies on hand 18,000 Labor expense 18,000 Repair expense 36,900 Property taxes paid 15,000 Insurance expense 10,500 Accounts receivable 32,000 Feeder livestock purchases 20,000 Feed purchases 15,000 Crop sales (com and wheat) 350,750 Corn Inventory 120,000 Principal paid-Beef Loan 10,000 Prepaid expenses 20,000 Principal paid-Farm Mortgage 20,000 Livestock sales 17,500 Government program payments 2,000 Crop expenses 220,000 Other livestock expenses 12,000 Market Livestock 36,000 Accounts Payable 17,000 Inventory Wheat Inventory 50,000 Feed on Hand 70,000 Current Assets Cash Corn Grain Inventory Wheat Inventory Prepaid expenses Feed on hand Market Livestock Accounts Receivable Supplies Total current assets Cost 13,000 20,000 10,000 5,500 80,000 32,000 2,000 4,000 166,500 Current Liabilities Accounts Payable Interest Payable Principal Farm Mortgage Principal Beef Loan Operating Loan Property Taxes Payable Cost 35,000 11,850 20,000 10,000 75,000 15,000 Total current liabilities 166,850 Intermediate Liabilities Beef Loan 100,000 Intermediate Assets Machinery Beef Breeding Stock Titled Vehicles Total Intermediate Assets 300,000 55,000 26,000 381,000 Total Intermediate Liabilities 100,000 Long-term Liabilities Farm Mortgage 170,000 Long-Term Assets Land Buildings Total Long-term Assets 318,000 67,000 385,000 Total Long-term Liabilities 170,000 Total liabilities 436,850 Owner equity 495,650 Total Assets 932,500 Total liabilites & owner equity 932,500 Create the Beginning Balance Sheet (Jan 1, 2019) in a new spreadsheet. Question 2 Using the information provided in the information and charts of accounts on page land your work in question 1, generate the Ending Balance Sheet (December 31, 2019) on a cost basis. Put your ending balance sheet on a new sheet in your spreadsheet nile. You will not use all of the information in the charts of accounts. (40 points) Question 3 On a new sheet in your spreadsheet file, assess the change in the farm's liquidity, solvency, and debt structure over the year. You will need to calculate the liquidity, solvency, and debt structure measures that rely solely on the balance sheet information at the beginning of the year and at the end of the year to be able to assess the change over the year. Interpret your ratios, That is, explain in words what the numbers mean. Where possible, indicate where Dean's liquidity, solvency, and debt structure numbers fall on the farm finance scorecard. Did Dean's farm financial condition improve or get worse over the year? .. LUDI Dal Shodina Dalanesh