Hereford Hank operates a ranch in De Soto Parish Louisiana. He has scheduled an appointment to visit his lender next week to secure a loan to cover his operating expenses for the next year. His banker wants his most recent balance sheet so Hank has hired you to prepare one for him. His lender told him that he also needed some evidence of profitability in the operation. Accordingly, Hank has asked that you construct an accrual income statement for the past year ending January 31. He retrieved these transaction summaries for 2021/2022 from the extensive filing system he keeps in the glove box in his pickup. Wanting to get a sense of what his income tax return might look like, Hank also asks that you prepare a cash income statement for the same accounting period as he has elected to account on a cash basis for tax purposes. He has given you the following summaries: Item Feb 1 2021 Feb 1 2022 Checking and savings account $ 66,301 $ 69,080 Accounts payable for feed & fuel 18,500 28,500 Hay equipment (market value) 65,000 63,000 JD 7410 Tractor (market value) 55,000 50,000 Land (market value) 1,100,000 1,200,000 Accrued Real Estate Taxes 17,817 17,820 Alfalfa Hay 240 Ton $205/ton 200 Ton $205/ton Hank does not normally do this, but he seized an opportunity last fall and purchased $7,300 of his protein supplement needs last year, but the supplement is scheduled to be delivered this year. His mortgage payments and balances on his property are summarized in the following table. His equipment loan payments and balances are summarized in the following table. His operating loan terms were identical for both years. Date Payment Interest Paid Principal Paid Accrued Interest 2/1/2021 165,850 10,850 155,000 10,850 2/1/2022 165,850 10,850 155,000 10,850 Table 2: Land Mortgage Amortization Table for 2021 and 2022 Date Payment Interest Paid Principal Paid Accrued Interest Balance 3/1/2021 32,526 24,229 8,297 22,210 476,275 3/1/2022 32,526 23,814 8,712 21,829 467,563 1