LEP 4: Green Farms used the previous financial statements to develop the Statement of Cash Flows to present to the bank. Use the previous statements to complete the cash flow information below. NOTE: The beginning cash balance comes from the Balance Sheet since there were no changes to cash during the year. Accounting Equation: Assets = Liabilities + Owner Equity STEP 1: Classify the following items as they would appear on the Balance Sheet. Then record the items you classified on the Balance Sheet on the next page. For example, Land is a Fa (Fixed Asset), a. CA - Current Asset d. CL Current Liability b. IA - Intermediate Asset c. IL - Intermediate Liability c. FA-Fixed Asset f. LL-Long-term Liability STEP 2: Green Farms also had records of their income and expenses. Prepare the income statement that they would need to present to the bank. - Green Farms has Cash Sales of Market Livestock \& Crop which totaled \$35,000 - During the summer, the barn collapsed, and they received an insurance check for $5,000 - They received a reimbursement check from USDANRCS for $8,000 - The had the following expenses: Purchased feed@\$2,000 They paid wages for hired help (a) $4,000 They purchased additional supplies@\$2,500 They purchased lubricants for the old tractor@\$200 They paid the farm water bill (a) $300 They had depreciation expense@\$00 The incurred a loss on the sale of a tractor@\$800 Their income tax in the amount of $500 TEP 3: Green Farms also had records to develop their Statement of Owner Equity. Prepare the Owner Equity statement that they would need to present to the bank. - Their beginning equity was $10,000 - They recorded their Accrual Adjusted Net Income from the Income Statement - Their off-farm income was $25,000 - They inherited 30 acres of land valued at $3,800 per acre STATEMENT OF OWNER EQUITY