Case study: Janet Rowe Le Rowe graduated from high school five years ago with a background in agronomy had worked for a lawn care service until a year ago, when she decided to start her www business selling soil testing kits to homeowners. Janet had saved $20,000 during the She decided to invest the $20,000 in a proprietorship to sell the soil testing Lies in her local community. Janet spent $2,000 for gas and other supplies. Janet calculated she needed at least $3,000 make ends meet before she received the first check. Janet also spent $20,000 to pur- chese kits that will be placed in inventory. Janet's sister agreed to keep the books. Janet's a refund had been sold for $100.00. She had been making $50,000 per year when working at her previous job, and she calculated that she should make at least that much to justify the time spent in the business. Her sister spent about one day per week doing he office work, and Janet felt that she should be reimbursed at a rate of $50 per day for a balance sheet as of the first day of business for Janet. The balance sheet is to be prepared after she purchased the assets needed to start the business and bor towed the money from her father and the bank. The date for the balance sheet is 12/31/2014. How much did she have to borrow from the bank? het efforts. Her sister worked 50 weeks and went on vacation for two weeks. Make the following assumptions: an income statement for Janet's first year of business, 1/1/2015 12/31/2015, Why or why not? five years. aber let her use the family garage for an office and agreed not to charge rent the first unet purchased the following capital items to start the business. First, she purchased a enice truck that cost $45,000, which she estimates will last for another five years . Second, she purchased her own storage tank for gasoline to be used for the truck, and that cost another $1,000. Third, she purchased a computer and some other office equip- ment for a total of $4,000. Janet's father was willing to lend her $15,000. The principal is to be repaid in 18 months. The interest rate is 4 percent per year. At the end of 12 months Janet will repay her father the interest for 12 months, but no principal. At the end of 18 months Janet will pay her father interest for 6 months, plus all principal owed on the loan. Janet borrowed the balance of what she needed from First National Bank. The loan was to be repaid in fve equal, annual principal payments, with interest at an annual rate of 5 percent. At the end of the first year Janet's expenses were as follows: gas, oil, repairs and tires $10.000 and telephone $600. During her first year she purchased 1,000 kits at $50.00/kit at were in addition to the $20,000 spent on kits to start the business. The freight on the kins was $5,000. At the end of the first year of the business she had $20,000 in ventory Her gross revenue from the business was $100,000. Kits sold that had been returned Questions 1 Prepare 2 Prepare 226 Financial management for agribusiness . loan from him. She makes both payments on not have to pay any state and federal income . Depreciate all fixed assets over five years and assume a salvage value of $0. Janet makes her payment to the bank. She also pays her father interest only Assume Janet does not pay Social Security tax on her sister's salary and that 3. Prepare a balance sheet as of the end of the first year for Janet's business. Uste information provided on Janet Rowe's beginning balance sheet and income ment to complete an ending balance sheet for Janet Rowe. The ending balance sheet date is as of 12/31/2015. Note: You will need to calculate Janet's cash balance ment on the loan. How did she make the payment? Discuss Janet's situation Barnard, Freddie L., Paul N. Ellinger, and Christine Wilson. 2010. "Measurement Bus Assessing Farm Profitability through Cash Tax Returns." Journal of the American Stacy Farm Financial Standards Council. 2010. Financial Guidelines for Agricultul Puer Farm Financial Standards Council. 2010. Management Accounting Guidelines for April 12/30/2015 12/31/2015, because it is not $3,000. Make the following assumptions: The ending inventory is the same amount as her beginning inventory, $20,00 The ending inventory for Janet's supplies is the same amount as her beginning inventory, $2,000. Janet lives with her parents, which reduces her need for living expenses. She decided to withdraw $30,200 for family living expenses, because she is living at home with her parents. Janet was running a little low on cash at the end of 2015, so she charged $6,0 on the company credit card. 4. Prepare a statement of cash flows and a statement of owner's equity for Janet's fis year of business. 5. Janet's principal payment on her long-term debt and her withdrawal for family lite expenses exceeded her net income after taxes, but she did make the principal por assesses her ability to make her payments in 2016. . Additional references and readings e li N b P Managers and Rural Appraisers (2010), 207-217. Financial Standards Council. www.ffsc.org Farm Financial Standards Council, www.fisc.org 94 Pr. th Te