create a cost basis balance sheet and a market basis balance sheet. Use the current and noncurrent classifications of assets and liabilities. The balance sheets should only contain business assets and liabilities.

1. The farm bank account has a balance of $4,287.

2. Their grain inventory is as follows:

   1. Total corn in storage is 38,000 bushels. Current market price is $4.34.

   2. They have 8,500 bu. of soybeans in the bin. Current soybean price is $12.31.

3. Their livestock inventory is as follows:

   1. 1,500 head of 50-pound feeder pigs. Current value is $50 each.

   2. 800 head of pigs weighing about 150 pounds. Current market price for 250-

      pound market hogs is $0.70 per pound ($175 per head), so value them at $105

      each.

   3. 100 sows, valued at $1,400 each, and 8 boars worth $1,200 each.

4. They have 300 bags of purchased seed in storage for which they paid $145 per bag.

5. In November they applied $17,000 worth of fertilizer on their crop land.

6. They also prepaid the elevator $22,000 for additional fertilizer to be delivered and

   applied in April.

7. In December they sold 150 feeder pigs to a nephew for $15,500, 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.

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 acres of cropland for $125 per

    acre.

11. They own a motorboat used for waterskiing, worth $14,500.

12. The current operating loan with Farm Credit is $92,450, with accumulated interest of

    $2,370.

13. They owe Crop Managers, Inc. $3,475 for taking soil samples in November.

14. They owe a total of $65,000 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 in principal plus interest of $4,800. As of January 2 there was $433 of interest has accrued since their last payment.

15. They owe a total of $130,000 for purchase of the farm, at 6% annual interest. They made a payment last March 1. Their next payment March 1 will be for $8,000 principal plus interest. As of January 2, $6,500 in interest has accrued since their last payment on the farm mortgage.