Question 2 of 10. Which of the statements below, with regard to cash-basis farmers reporting items on Schedule F, is correct? The expenses of raising items held for sale are deducted in the year the items are sold and the sales price is included in income. The expenses of readying purchased livestock for resale are generally added to the cost of the livestock and subtracted from the sales proceeds in the year of sale. The cost of purchased items held for sale is subtracted from the sales proceeds in the year of sale. The expenses of raising livestock used for draft, breeding, dairy, or sporting purposes are capitalized and depreciated wher the livestock is placed in service. Mark for follow un