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Fred Farmer needs to prepare a balance sheet for his bank. He spent the day getting the following information. Fred needs your help to build
Fred Farmer needs to prepare a balance sheet for his bank. He spent the day getting the following information. Fred needs your help to build a balance sheet, and evaluate it. The information was gathered on 2/1/18 Grain sorghum in storage 4100 cwt @ $5.40 per cwt Hay on hand 75 ton @ $50.00 per ton Growing wheat 285 acres @ 24.50 per acre invested Farm mortgage payment due 4/7/18 $16,000 principle, $20,200 interest balance after 4/7/18 payment $228,000 Building and improvements $58,000 Note payable this year (feeder cattle) $46,000 Calves (sell in 60 days) 96 head @ $290 per head Feeder cattle (sell 5/1/18) 142 head @ $580 per head Operating loan (due 5/15/18) $55,000 Vehicles $16,500 Machinery & Equipment $80,500 Loan on beef cattle payment due 8/1/18 $9,000 principle, $4,200 interest balance after 8/1/18 payment $38,000 Land market value 1020 acres @ $560 per acre Beef breeding cows 106 head @ $650 per head Bulls 4 head @ $1,200 per head Checking $3,400 Account payable at IFA $1,800 Accounts receivable $2,800 Shop Equipment $2,500 Cummins diesel stock 300 shares @ $55 per share Other information Fred paid for $6,000 worth of seed to get a better price. Delivery on 3/15/18 Income and social security taxes due this year are estimated to be $8,200 Ten years ago Fred contributed $50,000 capital to get the business started. Retained earnings since the beginning of the business equals $305,000 Questions: What is Freds Owners Equity on February 1st? How much working capital does Fred have? What is his current ratio? What is the debt/asset ratio? What is the debt/equity ratio? What is the equity/asset ratio? Which part of the financial conditions from the balance sheet could be a concern and why? Fred wants to borrow $50,000 to buy a tractor, it will cost $50,000. If you were the lender would you approve the loan to Fred? Why or why not? If Fred gets the tractor loan, what affect will the transaction have to Freds owners equity if no other changes were made to the balance sheet? mm/dd/yy mm/dd/yy
Fred Farmer needs to prepare a balance sheet for his bank. He spent the day getting the following information. Fred needs your help to build a balance sheet, and evaluate it. The information was gathered on 2/1/18
Grain sorghum in storage 4100 cwt @ $5.40 per cwt
Hay on hand 75 ton @ $50.00 per ton
Growing wheat 285 acres @ 24.50 per acre invested
Farm mortgage payment due 4/7/18 $16,000 principle, $20,200 interest
balance after 4/7/18 payment $228,000
Building and improvements $58,000
Note payable this year (feeder cattle) $46,000
Calves (sell in 60 days) 96 head @ $290 per head
Feeder cattle (sell 5/1/18) 142 head @ $580 per head
Operating loan (due 5/15/18) $55,000
Vehicles $16,500
Machinery & Equipment $80,500
Loan on beef cattle payment due 8/1/18 $9,000 principle, $4,200 interest
balance after 8/1/18 payment $38,000
Land market value 1020 acres @ $560 per acre
Beef breeding cows 106 head @ $650 per head
Bulls 4 head @ $1,200 per head
Checking $3,400
Account payable at IFA $1,800
Accounts receivable $2,800
Shop Equipment $2,500
Cummins diesel stock 300 shares @ $55 per share
Other information
Fred paid for $6,000 worth of seed to get a better price. Delivery on 3/15/18
Income and social security taxes due this year are estimated to be $8,200
Ten years ago Fred contributed $50,000 capital to get the business started.
Retained earnings since the beginning of the business equals $305,000
Questions:
What is Freds Owners Equity on February 1st?
How much working capital does Fred have?
What is his current ratio?
What is the debt/asset ratio?
What is the debt/equity ratio?
What is the equity/asset ratio?
Which part of the financial conditions from the balance sheet could be a concern and why?
Fred wants to borrow $50,000 to buy a tractor, it will cost $50,000. If you were the lender would you approve the loan to Fred? Why or why not?
If Fred gets the tractor loan, what affect will the transaction have to Freds owners equity if no other changes were made to the balance sheet?
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Macroeconomics
Authors: Olivier J. Blanchard
7th Global Edition
1292160500, 978-1292160504
