Income Statement Assignment

Ramona Rancher has an accounting period from January 1^st to December 31^st . Use the following information to complete an income statement for Ramona and evaluate the income statement.

Inventory Values

January 1^st 2010 December 31^st 2010

Crops $32,850 $27,440

Livestock $17,600 $29,500

Revenue and Expenses

Depreciation $26,700 Crop sold $169,800

Feed Purchased $19,800 Insurance $3,800

Prop. Taxes $3,400 Interest paid $36,400

Misc. Expenses $4,800 Feeder livestock Purchased $46,500

Market Livestock sold $81,660 Seed purchased $6,240

Repairs $12,100 Vet. and health expenses $4.800

Fertilizer Expenses $9,400 Custom work (income) $3,400

Supplies $4,800 Breeding livestock sale(gain) $4,600

Labor Hired $20,600 Govt. payments (income) $9,890

Fuel Expenses $5,800 Chemical expense $6,780

Gain on Machinery sale $9,100 Change in payable +$1,400

Change in interest payable ($3,400)

Other information

Average Asset Value (12/31/10) $785,000 Family living expense $38,000

Opportunity cost of Labor $24,000 Income tax paid $10,700

Opportunity cost of Management $12,000 Average Owners Equity (12/31/10) $394,000

Opportunity cost of Capital 9%

Income Statement Questions:

1. What was Net Farm Income from Operations?

2. What was Net Farm Income?

3. What is Return on Assets(ROA)%?

4. What is Return on Equity(ROE)%?

5. What is the Operating Profit Margin?

6. What is the Asset turnover ratio?

7. What is the Operating expense ratio?

8. Net Farm income from operations ratio?

9. Can you know if equity went up or down from the income statement?

10. How can you know?