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Farmer John You, CA, a sole practitioner, are sitting in your office when your most important agricultural client, John Plowit, walks in: I'm sorry
Farmer John You, CA, a sole practitioner, are sitting in your office when your most important agricultural client, John Plowit, walks in: "I'm sorry to barge in like this, but I've just been to see my banker. He suggested that I ask you to explain to me some matters that affect my statements. "You will recall that I needed to renew my loans this year. The new bank manager wants some changes made to my statements before he will process my loan application. "The banker wants me to switch from a cash basis of accounting to an accrual basis. The cash basis provides me with the information I need to evaluate my performance for the year-after all, what I make in a year is the cash left in the bank once the harvest is sold. "And I only use these statements for my banker and to pay tax! I know the tax department will accept either the cash or accrual basis. "Also, the bank wants me to value all my cattle at their market value. Why do they want me to group all my cattle together when they aren't the same? Some are used for producing milk, some are sold as part of my beef operation, and some are used for breeding. Personally, I don't see the sense in valuing them at market when most of them won't be sold or replaced for a very long time. "I realize that I must provide the type of information that the bank manager wants, but I am very interested in understanding why. After all, I'm the one who has to pay for all of this! Required Respond to John.
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