Depreciation: There are two parts to calculate Mr. Millers annual depreciation for 2023: 1 Depreciation for non-current assets purchased prior to 2020. For assets purchased before 2020, Mr. Miller utilizes the Straight Line Method (SLM) for calculating annual depreciation. He has already calculated that the depreciation expense associated with the non-current assets purchased prior to 2021 will be $19,700 This includes any necessary partial period adjustments for non-current assets. 2 Depreciation for non-current assets purchased beginning in 2021. For his newer assets (those purchased since 1/1/2021), Mr. Miller also uses the Straight Line Method (SLM). These include the truck on January 1, 2021 (so this is year 3 of its useful life) and the hay baler purchased on January 1, 2021 (so this is year 3 of its useful life) and the new corn planter purchased in August of this year (2023). Using the information given below, use the Straight Line Method to calculate the annual depreciation expense for each asset. You will need to make a partial period adjustment for the new tractor purchased on April 5, 2032 (9 months). The truck and sprayer will not need partial period adjustments. Add the 2023 depreciation expense for the truck, hay baler, and corn planter to the $19,700 Mr. Miller has already determined (for assets purchased prior to 2021) to obtain a total depreciation expense for the year. Round up your depreciation calculations to nearest dollar. Pickup Trick: Original Cost is $37,000 Salvage Value is $2,500 Useful Life is 10 years Hay Baler: Original Cost is $41,000 Salvage Value is $2,000 Useful Life is 12 years Planter: Original Cost is $35,000 Salvage Value is $3,000 Useful Life is 8 years After you have calculated the appropriate depreciation expense for the year, you will to record a journal entry reflecting that information (see page 83 in the text) and post that information to the ledger.

End of Year (EOY) Accrual Adjustments Mr. Miller will need to calculate accrual adjustments for the following accounts: 1 Accounts Receivable Adjustment. On 12/31/2023, Miller Farms Accounts Receivable are $49,200. You will find the BOY (beginning of year) Accounts Receivable value on your Miller Farms BOY Balance Sheet. 2 Taxes Payable Adjustment. On 12/31/2023, Kevin estimates that Miller Farms will owe $38,100 in income taxes next year, so that is his EOY Taxes Payable. You will find the BOY Taxes Payable value on your Miller Farms BOY Balance Sheet. 3 - Feed Inventory Raised for Sale Adjustment. On 12/31/2023, Miller Farms has $26,400 in Feed Inventory Raised for Sale on hand. You will find the BOY Feed Inventory Raised for Sale value on your Miller Farms BOY Balance Sheet. 4 - Feed Inventory Purchased for Use Adjustment. On 12/31/2023, Miller Farms has $27,300 in Feed Inventory Purchased for Use on hand. You will find the BOY Feed Inventory Purchased for Use value on your Miller Farms BOY Balance Sheet. No other accounts need adjustments. You will need to calculate the change in the appropriate accounts and then record a journal entry reflecting that information and post that information to the ledger. Once you have finished your EOY adjustments, you can prepare an adjusted trial balance and then complete your financial statements. Special notes for your end of year balance sheet: For the balance sheet, you need to properly determine the current and non-current liabilities values, particularly regarding loans. Read the following carefully; EOY ledger balances and EOY Balance Sheet values are discussed. 1 The EOY ledger balance for Notes Payable, Due Within One Year should be $32,000. 2 - The EOY ledger balance for Notes Payable, Noncurrent should be $61,000. Of that total, $29,000 is due next year and $32,000 is due after the next year. 3 The EOY ledger balance for Real Estate Notes Payable, Noncurrent should be $144,200. Of that total, $29,200 is due next year and $115,000 is due after the next year.

4 - For the current liabilities on the EOY Balance Sheet, you need to include the current portion of long-term debt (i.e., the payments that are due next year) under the current liabilities. That is because those are loan payments due within one year. As such, they need to be included with Notes Payable Due Within One Year on the Balance Sheet. The EOY Balance Sheet value for Notes Payable Due within One Year is $90,200 as follows: $32,000 from the one-year operating loan due next year, $29,000 for next years equipment loan payments, and $29,200 for next years real estate loan payments. The other current liabilities (Accounts Payable, Interest Payable, and Taxes Payable) are not affected by these loan adjustments, and you simply report the EOY ledger values for these accounts. 5 - For the Noncurrent liabilities on the Balance Sheet, you need subtract the respective current portions of the long-term debt and report the amounts due after the next year. The EOY Balance Sheet value for Notes Payable, Noncurrent is $32,000 and the EOY Balance Sheet value for Real Estate Notes Payable, Noncurrent is $115,000. When you are finished with your financial statements, post your closing entries to the journal, update your ledger one final time and you have completed the project. Final Notes: Once you have successfully completed your adjusted trial balance (the one necessary to complete the financial statements), the instructor will not be available for help. The reason being is that if the trial balance is correct, then you have all the necessary information to accurately complete the project and you do not need the instructor micro-managing your work. Also, keep in mind that compared to a real-life financial accountant you have an advantage. You have someone who already knows what the answers are supposed to be. Real-life financial accountants have no idea what the trail balance values are or what net income will be until they calculate it.