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Group Title: Circular - University of Florida Institute of Food and Agricultural Sciences ; 651
Title: Introducing the balance sheet
CITATION PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00067203/00001
 Material Information
Title: Introducing the balance sheet
Series Title: Circular Florida Cooperative Extension Service
Alternate Title: Balance sheet
Physical Description: 12 p. : ill. ; 28 cm.
Language: English
Creator: Van Blokland, P. J
Publisher: Florida Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville
Publication Date: 1988?
 Subjects
Subject: Financial statements   ( lcsh )
Agriculture -- Accounting   ( lcsh )
Genre: government publication (state, provincial, terriorial, dependent)   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Bibliography: Includes bibliographical references (p. 4).
Statement of Responsibility: P.J. van Blokland.
General Note: Cover title.
Funding: Circular (Florida Cooperative Extension Service) ;
 Record Information
Bibliographic ID: UF00067203
Volume ID: VID00001
Source Institution: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: oclc - 21765729

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Full Text





HISTORIC NOTE


The publications in this collection do
not reflect current scientific knowledge
or recommendations. These texts
represent the historic publishing
record of the Institute for Food and
Agricultural Sciences and should be
used only to trace the historic work of
the Institute and its staff. Current IFAS
research may be found on the
Electronic Data Information Source
(EDIS)

site maintained by the Florida
Cooperative Extension Service.






Copyright 2005, Board of Trustees, University
of Florida





k26cz
mmmwr-


Circular 651


;Hs










Contents


Background ........................................


W hat is a Balance Sheet? ..............................


What Does a Balance Sheet Look Like? ..................


How is a Balance Sheet Constructed? ...................

Final Com m ents .....................................


R eferences ..........................................


A ppendix ...........................................


Page
1


1


1


1

4


4


5


The Author

P.J. van Blokland is Associate Professor, Food and Resource Economics Department, Institute of Food
and Agricultural Sciences, University of Florida, Gainesville, FL 32611.


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Introducing the Balance Sheet
P. J. van Blokland


Background
This publication is one in a series outlining the
four basic financial statements used in business
today. These statements are the balance sheet, the
income statement, the cash flow, and the statement
of change in financial position. A fifth publication
shows how these statements link together, and a
sixth uses the information provided by the
statements for a simple business analysis.
Here, we will outline the purpose and essential
features of the balance sheet. This should provide
the reader with information to complete a more
detailed balance sheet. Farmers, ranchers, nursery
and grove operators, extension agents, agricultural
lenders, and students should find the series of
interest.
The series is based on a widely used method-
ology developed by Frey and Klinefelter called
"Coordinated Financial Statements for Agricul-
ture"(1). The example statements in the appendix
come from Frey et al (2). The publications in
the series are listed in the reference section (3, 4,
5, 6, 7).

What is a Balance Sheet?
A balance sheet is a financial statement that
shows a picture of a business at one point in time.
It is like a snapshot which shows how things
looked when the camera button was pressed.
Things may look different later, but at a specific
point in time, that was what the business assets,
liabilities, and net worth were.
It is important to use the end of the year as the
point in time for this picture. December 31 ties in
with the calendar and tax years, so it is a logical
choice. Subsequent balance sheets should also end
on this same day. We shall see later that one major
use of balance sheets is trend analysis, and we
therefore need to use the same date for a mean-
ingful comparison.
The balance sheet shows the assets, liabilities,
and net worth of the business. Assets are what we
have, such as land, machinery, cash, grain inven-
tory, or breeding stock. Liabilities, or debts, are
what we owe. Net worth, or equity, is what we
own. For example, suppose we buy a tractor today
for $60,000. We borrow $50,000 and put $10,000 of
our own money down. The liability is $50,000 and
our equity in the tractor is $10,000. Equity is
generally calculated as a residual: assets minus


liabilities equals net worth. In the example, $60,000
minus $50,000 equals $10,000.

What Does a Balance
Sheet Look Like?
A complete balance sheet with its accompanying
schedules is shown in the appendix, but we will
first examine the simple balance sheet shown in
Table 1.
A balance sheet is usually arranged with assets
on the left-hand side and liabilities and net worth
on the right-hand side. As net worth is the dif-
ference between assets and liabilities, the total col-
umn on the left is the same as the total column on
the right. For example, total assets are $1,000 and
liabilities are $600. Therefore, net worth is $1,000
minus $600, or $400. These figures are arranged as
shown in Table 1.
Both assets and liabilities are typically subdivided
into three classifications, namely, current, inter-
mediate, and long-term. So the balance sheet in
Table 1 can be enlarged to include these classifica-
tions (Table 2).

How is a Balance Sheet
Constructed?

The Assets Column
Let's examine assets first. As we read down the
assets column from current to long-term assets, we
are losing asset liquidity, which means that, con-
ventionally, it is increasingly difficult to quickly
turn these assets into cash.
Current assets are cash and cash equivalents, such
as savings and money market accounts, and inven-
tory which will be sold in the following year. This
inventory includes stored crops, such as grains or
cotton, and feeder livestock, such as steers or
feeder pigs. Current assets are very liquid assets
which can easily be sold for cash.
Intermediate assets are less liquid. The most com-
mon items here are machinery and breeding stock.
These are assets that the farmer generally does not
plan to liquidate. They do not have a long life and
are not entirely used up in a year. It is therefore
convenient and conventional to include these items
under intermediate assets.
Long-term assets are mainly land and buildings.
These have a long life and are not often sold.
Hence, long-term assets are the least liquid assets.









Table 1: A simple balance sheet

BALANCE SHEET FOR DECEMBER 31, 198_

ASSETS ($) LIABILITIES AND NET WORTH ($)
Total Assets 1,000 Total Liabilities 600
Net Worth 400
TOTAL 1,000 TOTAL 1,000


The Liabilities Column
The same decreasing liquidity concept can be ap-
plied to the liability classifications.
Current liabilities are those debts that are due in
the coming year: for example, fertilizer or feed bills
due to the local merchant or operating loans that
must be paid during the next 365 days. But there is
something more. Current debts also include that
portion of the intermediate and long-term debts
which will be due during the next year.
For example, assume we borrowed $50,000 to
buy a tractor and will pay the principal back over
five years at $10,000 per year. This $10,000 prin-
cipal must be paid next year and is therefore a
current liability, while the remaining $40,000 is
entered as an intermediate liability. Similarly, if we
owed $200,000 on a mortgage and pay $15,000 per
year, $15,000 is a current liability, and the remain-
ing $185,000 is placed under long-term debt. In-
terest that must be paid over the next twelve
months is also a current liability.
Intermediate debts are those that are incurred on
intermediate assets and will usually be paid from
one to ten years after the balance sheet date. While
intermediate debts must be due at least one year
after the balance sheet date (otherwise some would
be a current liability), there is no rule for where an
intermediate debt should end and a long-term debt
begin. The most sensible arrangement is whatever
is convenient. Some businesses prefer seven years,
others ten years. Consistency and convenience
should dictate this decision.
Long-term liabilities are those debts which do not
fall into the other two categories. As indicated
previously, these liabilities typically represent
mortgages on land and buildings.
These are the different categories of the balance
sheet. Our balance sheet now shows us the picture
of a business on December 31 in terms of these
categories, including net worth, which is calculated
by subtracting total liabilities from total assets. The
next step concerns valuing all these categories.


The Value Columns
The final step in constructing a simple but useful
balance sheet is to know how to compute the
values for each item. Two values are recommended,
and these values will be the same for the majority
of the balance sheet items. One is called "modified
cost," the other "market value."
We need both values because we want a com-
plete picture of the business on December 31, in-
cluding all debts and assets. We also want to see
what price changes and inflation have done to the
business. (This statement becomes clearer later on,
though it may help to look at the final balance
sheet in the appendix as you read.)
Current Assets. Let's start with assets. Current
assets which will be sold in the coming year should
be valued at what we could get for them if they
were sold on or about December 31, i.e., the
balance sheet date: for example, corn at $2.50 per
bushel or 700-pound steers at 65e per pound. In
the simplest case, these values are entered in both
columns. However, it may be more useful to enter
the actual cast of production in the cost column
and use the potential sales for the market-value
column only.
Suppose we purchased 100 shares of XYZ Com-
pany in 1979 for $40 per share and on December
31, 198_, they are worth $50 per share. The
modified-cost entry should read $4,000
(i.e., $40 x 100). It does not matter when we bought
them, for we simply record their cost in this first
column. But because they are worth $50 on
December 31, 198_, the market-value entry is
$5,000.
Intermediate Assets. Machinery is the main
intermediate item to have different values in each
column. The modified-cost entry is the depreciated
value of all the machinery that we still have on
December 31, 198_. Suppose the sum of the pur-
chase prices of all our machinery is $450,000,
regardless of when purchased. The accumulated
depreciation on all this machinery since we bought










Table 2: A simple balance sheet showing asset and liability classifications

BALANCE SHEET FOR DECEMBER 31, 198

ASSETS ($) LIABILITIES AND NET WORTH ($)
Current Assets Current Liabilities
Intermediate Assets Intermediate Liabilities
Long-term Assets Long-term Liabilities
Total Liabilities
Net Worth
TOTAL LIABILITIES
TOTAL ASSETS AND NET WORTH



it is $270,000. The modified-cost entry is $450,000 We therefore end up with two values for total
minus $270,000, or $180,000. This $270,000 is not assets, with market value typically much greater
the annual depreciation but the total or accumu- than modified cost.
lated depreciation of each piece of mechanization. Liabilities. We follow the same procedure for
The annual depreciation is shown on the income liabilities. We have two values for liabilities
statement not the balance sheet. because we probably have not yet included all our
The market-value column will suggest what we creditors. We will include them all when we ask
could get for this machinery if we sold it on the question: "Who will I owe money to if I sell
December 31, 198_. (This figure can be obtained the business?" The answer, of course, is everyone
from local dealers, neighbors, or by experience.) we have already listed plus the U.S. government, in
There is often a considerable difference between the form of taxes. These taxes are called "con-
the modified cost and market value figures. This tingent" taxes, or taxes that we would incur if we
difference may well expand as the IRS Accelerated sold the business. Even though we are not going to
Cost Recovery System of depreciation is increasing- sell, we are trying to produce a complete picture of
ly adopted. the business. Using the concept of contingent taxes
Long-term Assets. The same methodology applies completes the picture and, at the same time, may
to long-term assets. Land is the simplest example. encourage estate planning to avoid some of these
Under modified cost, simply write in what was taxes.
paid for the land when it was originally purchased, For example, a farmer in the 36 percent tax
say, $300 per acre in 1950. The market-value col- bracket who paid $300 per acre for 200 acres
umn should represent what similar land is now which are now worth $1,200 per acre must pay
selling for, say, $1,200. If the land has been handed ($1,200 $300) x 200 x .36 x .4*, or $25,920 in
down for a few generations, the modified-cost entry tax, if he sells the land. If he also had $100,000 in
could show the assessed value of the land when it
passed to the present owner. The .4 is the capital gains rate.


Table 3: A simple balance sheet with two value columns

BALANCE SHEET FOR DECEMBER 31, 198_

ASSETS ($) LIABILITIES AND NET WORTH ($)
Modified Market Modified Market
Cost Value Cost Value
Liabilities 7,000 10,000
Assets 11,000 15,000 Net Worth 4,000 5,000
TOTAL 11,000 15,000 TOTAL 11,000 15,000










current assets and $30,000 in allowable deductions
for his current liabilities, his contingent taxes on
these current assets would be ($100,000 $30,000)
x .36, or $25,200, if he sells out. Contingent taxes,
therefore, are important items to include in a
balance sheet.
Net Worth. So we end up with two sets of total
liabilities and therefore with two net worths. The
difference between the assets and liabilities in the
modified-cost columns will give the net worth that
the manager alone produced, or the modified-cost
net worth. The market-value net worth also shows
this plus the effects of price changes in some of the
balance sheet items. Subtracting the modified-cost
net worth from the market-value net worth will
show the difference in net worth resulting from
these price changes.
Table 3 illustrates these differences. The $4,000
modified-cost net worth comes from managerial
skills, while the $5,000 market-value net worth
includes price changes which contributed $1,000
(i.e., $5,000 minus $4,000).
In recent years, a large proportion of these price
changes has come from land appreciation. Many
farm investment and borrowing decisions have
been based on the expectation that land apprecia-
tion would continue. It is useful, therefore, to have
these two net worth figures available when
deciding what to do in the future.

Final Comments
So now we have seen that a balance sheet is a
complete picture of the assets, liabilities, and net
worth of a business, valued under two methods on
one day in the year.
Farm managers need to know what happened to
net worth between one year and the next. How did
the liability mix change over this period? What did
assets do? The balance sheet is the single most im-
portant financial statement for business. This is the
first statement to be done, and this is where to
begin. Start now. Although a balance sheet for
December 31 is strongly recommended, don't wait
for this day to arrive. Do one now and see what
has happened to the business between this one and
when you do your second on December 31.
Appendix Comments
The example in the appendix shows what a
detailed balance sheet should look like. This
balance sheet is constructed from the nine accom-
panying schedules. The information in these
schedules comes from the previous balance sheet
on December 31, 1980, and from Bill Brown's
records during 1981. He has to complete the


schedules before completing his 1981 balance
sheet. Then he has to look at his records to fill in
the remainder. Financial statements can't be done
without a good set of records, for records are the
lifeblood of a business.




References

1. Frey, Thomas L. and Danny A. Klinefelter. "Coor-
dinated Financial Statements for Agriculture," 2nd
edition, Agri Finance. Skokie, IL. 1980.

2. Frey, Thomas L., et al. Unpublished working paper.

3. van Blokland, P.J. Introducing the Income Statement,
Extension Circular No. 645. Florida Cooperative
Extension Service, Institute of Food and Agricultural
Sciences, University of Florida, Gainesville, FL
32611.

4. van Blokland, P.J. Introducing the Cash Flow,
Extension Circular No. 656. Florida Cooperative
Extension Service, Institute of Food and Agricultural
Sciences, University of Florida, Gainesville, FL
32611.

5. van Blokland, P.J. Introducing the Statement of Change
in Financial Position, Extension Circular No. 658.
Florida Cooperative Extension Service, Institute of
Food and Agricultural Sciences, University of
Florida, Gainesville, FL 32611.

6. van Blokland, P.J. Linking the Financial Statements,
Extension Circular No. 657. Florida Cooperative
Extension Service, Institute of Food and Agricultural
Sciences, University of Florida, Gainesville, FL
32611.

7. van Blokland, P.J. Introducing Farm Business Analysis,
Extension Circular No. 655. Florida Cooperative
Extension Service, Institute of Food and Agricultural
Sciences, University of Florida, Gainesville, FL
32611.











This form is copyrighted.
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it in any manner.


APPENDIX


O Personal
" Business


BALANCE SHEET
Name ,il TirT TL rnc s
A ddlrf


-o- ___


U Consolliaated uuA rs
ASSETS LIABILITIES AND NET WORTH
Current Assets Modified Cost Market Value Current Liabilities
C:.,..r, ,cr r.inrJo or rin .rK i' 70 0 -' A,:,,r.: i ,yi ll I-
Savings accounts & time certificates .. R.S, ./0 Q d -, 0 Labor $ Feed& seed $ /L'0
Hedging account equity.............. -___ Repairs 11 Fert. &chem _
Marketable bonds & securities (Sch. 1) 325 0 /3, 0o Storage Fuel & oil _. 0
Notes & accounts receivable (good) .... /7,,0 /..,0O Other Mach hire $ 0 _oO $ 200)
Livestock & poultry to be sold: Medical & other personal.............
Kind No. Avg. Wt. $/Unit Value Notes payable within 12 months
S e /r00 o 3Y.6 t,,qoo (to whom, maturity, purpose) .........
___s r <4 > e/.oo s-oio fr,-(,ond i-^ieedly z/Ooo LI,00o
h=as_/Z_^ If_0 _,0.oo00 ---
-2 440.0/ 0-01 ________,00__


1 go I0 J ., o (O DO .___
Principal portion of longer term debts
C5-. 7/ .p .S7/ due within 12 months (Sch. 8): ,
Crops and feed: Intermediate .....................
Item Quant. Unit $/Unit Value Long term ..................... ..
c.rrs 11,00 bu. a.'o ;(,/ YO Estimated accrued interest on:
bnr' S& .1O 9., 7'o Accounts $__ Notes $
V. 0 -fo ,.. /0lO Intermediate liabilities..... $. 2
t-j 29 0 -rion I/s.O of 0 Long term liabilities ....... $.,2. /"7 /A 9
Estimated accrued tax liability:
-,-0-0 09 Property ..................
Cash investment in growing crops: Real estate ................... ... '
Crop Acres $/Ac Value Employer payroll withholding .......
//0 q1'[oo /00 Income & Soc. Sec................ g -/-s
A ./ ccrued rents & lease payments ....... / e / 00
r Other (including relatives)............
Supplies (Sch. 2) ................ /Contingent income tax liability: -:::?
Prepaid expenses ..... /......... 00 /' 0 Current assets ...... .......
Other .......... ............ Marketable securities .. ......... /'. G
TOTAL CURRENT ASSETS I$ / ,, 60 $ /,.?R (Q f TOTAL CURRENT LIABILITIES $ $ / .,b
Intermediate Assets Intermediate Liabilities (Sch. 8)
Notes & accounts receivable good) ... ~ tFrilncipal due tbeirnl 1' mirlni.,n:)<
Machinery, equipment, trucks (Sch. 9): 6:49:::::.a / .(IS, O Notes payable ........... ... ...$ $. "..7
Cost or Basis ........... $ / O :. :::: .. :: : W ::: Sales contracts ....................
Less accumulated dep $ o .....$. i :::;t Life insurance policy loans ........... -~ S-Oo 0
Breeding stock (Sch. 4) ............. Other ........... ...............
Retirement accounts (IRA, HR-10) ..... / Contingent income tax liability: :
Cash value of life insurance (Sch. 7) ... 7 Machinery ....................
Securities not readily mktable (Sch. 1) /4. '0 Breeding stock ................ :.::.:
Personal & recreational vehicles (Sch. 3) pO /0 g0 Securities not readily mktable ........ :::
Household goods & personal effects .... L0 ,. Contingent income tax liability &:
Other -- interest penalty on retirement acts n, __
TOTAL INTERMEDIATE ASSETS t 71 1. 'O 0' TOTAL INTERMEDIATE LIABILITIES i i,~, e0 s ,'y _
Fixed Assets Long Term Liabilities (Sch. 8)
Contracts & notes receivable .......... IF'rinncipal due beyond 12 monins) / 9.
Farm real estate (Sch. 5): l.::.: i! Mortgage on farm real estate....... $ /
Cost or Basis ........... $ ..:::::: :: : Land contracts ................
Less accumulated dep .... $ 5fOIo % 0n&' cW i Mortgage on non-farm real estate .....
Non-farm real estate (Sch. 6) ......... __O. : their ..........................
Other....................... Contingent capital gains tax liability: ii:: /7
Real estate ...................... .6'
TOTAL FIXED ASSETS $,A .000 $ 8S00 r TOTAL LONG TERM LIABILITIES $ / ,OOD $, _
TOTAL LIABILITIES $ 43;/ 1 $ /. _
NET WORTH $.:3 /q/< $ ,"/
TOTAL ASSETS $ 7S .) $ S/, i,/ OO TOTAL LIABILITIES AND NET WORTH $/oZt 2s $7 ;/
S........................ ,, ean Anal -a A alablF eu from Anri Finance 5520-G Touhv Ave koke. IL 60077


As of 12--31 ,19 Vt


Phone


. ..... .. ....... ... .. .. .. .. -


Developed by Thomals L Frey and Danny A. Kllnefoftef, Dept. of Agricultural Economics, Cooperative Ext. ServICV. universay 0 u







This form is copyrighted.
It is a violation of the U.S.
Copyright Law to reproduce
it in any manner.


1. Your age Physical condition

2. Ages of dependents
3. Marital status: (Do not complete if this is an application for indi-
vidual unsecured credit not primarily for agricultural purposes,
unless you reside in a community property state or property
upon which you are relying as a basis for repayment of the credit
requested is located in a community property state.)
D married 0] separated
O unmarried (single, divorced, or widowed)
4. Spouse or other person: Complete only if (check as applicable)
a spouse or other person is a;
O co-applicant, or l the applicant is relying upon the in-
come or assets of a spouse or other person for repayment of the
loan.
Name
Address
Employer
Involvement in farm operation
5. Form of business organization:
O proprietorship O partnership O corporation
6. If applicant is or includes a partnership or corporation:
Explain type and percent ownership


Have you provided the lender a current borrowing resolution?
l Yes O No

7. Have you ever or are you now involved in bankruptcy?
O Yes n No


8. Have you filed all necessary state & federal income tax returns?
O Yes n No
9. Are any taxes delinquent or under dispute? 0 Yes F No
10. Are you a defendant in any suits or legal actions or are any judg-
ments or mechanic's liens outstanding? I- Yes LI No
11. Have you prepared a will and/or estate plan? [] Yes L No

How recently?
12. List off-farm employment, if any:


13. List any contingent liabilities as endorser, co-signor or guarantor
(names and amounts):


Insurance on buildings

Insurance on machinery, equipment, and
livestock
Insurance on crops
Liability insurance coverage
Do you carry:
Life insurance (Sch. 7)
Medical and hospital insurance
Disability insurance
Workmens' compensation
If yes
number of paid employees.


No No
] No
0 No
F No


STATEMENT OF OWNER EQUITY


li i,:rh I:,Ir r.,pri.i, -I i Iu,, ,, .. ] :I I,,diiihq :,:,,- IIR/_I /1 yO a
Net income for period ......... ./ ............
Gifts and inheritances received for period. .. ....
Additions to paid-in capital (for partnership or corporation) ........ .. ...........
TOTAL AVAILABLE ................. .......... .. ......... .... ...
Less: Gifts made for estate transfer ... ..... .............. .... .
Net worth, end of period (modified cost) ....... .. /. .
EQUALS NET WITHDRAWALS (transfer to schedule 10, 12, Income Statement) .


. . . +
. .. . +






.. . .. . $
&'3/~


i ..- SUMMARY -
Period Market Value Net Worth Cost or Basis Net Worth Net Worth Change Caused by
Value Change
Ending /$/ / $ 5- / $s 3., /-
Beginning /3//0 000 o3o 000 C
Change (a) $ q_ 3 / (b) $ $'/- (a-b) $ /52
The above information and the statement on the reverse are furnished for the purpose of securing and maintaining credit and are certified to
be complete and correct. The undersigned authorize the below named lender to make all inquiries deemed necessary to verify the accuracy
of the information contained herein to determine my (or our) creditworthiness and to answer questions about his credit experience with me
(or us). I (or we) agree to notify said lender promptly of any material change herein.
Prepared for (lender): Date Signed 19
Applicant Co-applicant


T


| -


-----------







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It is a violation of the U.S.
Copyright Law to reproduce
it in any manner.


1qgl


SCHEDULE 1 -SECURITIES
No ot Snares Dale Percent Cosi or Basis Current Market Value
or Face Value Description Acquired Owned Per Unit Total Per Unit Total
MARKETABLE
/100 /erM l 114d &/Al /17a /.o0 $ /2- /$ 50 $ 5 o $5 o
lO P,0 .Pk t .1/ -79277 (o 5oe ao0o o0 O oo0








TOTAL $ .3.0 Q i{ii .. $ /f,, Q
NOT READILY MARKETABLE
_99 Fdi' al l-nd 4ank /P 77- Ion $ $6-- $ /. o $ / $-- $ .m




TOiTAL $ /
SCHEDULE 2-SUPPLIE SCHEDULE 4 BREEDING STOCK
Item Quantity Value rjumDer Oescription Age Wi $ Unit Vjlue
65, R l, #//, Vef. /7s q (Q -o s /;60 $ 419 $ ^ Q,9
_z /o I$ eo _____S'O s'00O












TOTAL $ /7 ~
SHiEDULE 3:PERSOAL & R CREATIONAL VEHICLES
Make & Model Year Value
&i7Lk /17 77 $s ;0oo









TOTAL $ (a 00 TOTAL $ ,?S
Deeloped by Thomas L. Fey and Danny A. Klinefelter. Dept of Agricullural Economics, Cooperative Ext Service. University of Illinois (Mt980 AGRI FINANCE Available from Agri Finance. 5520-G Touhy Ave., Skokie. IL 60077






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Copyright Law to reproduce
it in any manner. ( q/
SCHEDULE 5 FARM REAL ESTATE
Legal Title Held in Percent Date Cost or Accumulated Book Estimated
OWNED: Description Name of Owned Acquired Acres Basis Depreciation Value Mkt. Value
Tract 1 Land 5f'.- .C. 20 7,-M Joe c /o (l f ;2.0 $ poo $ $,. 0 $Z ,Oad
Residence -ho6on TupS. prof-if, 4. ___ ? ___ gO -- o__
Service bldgs. a'nf.,r--c -in two f ___ 600 -/ 6,00 o-
Improvements ______f 0, doo 6, 0 0,000 ,
Tract 2:























TOTAL 32o0 $37 o o$5 o0 $3 400o $ $~0,oo
Annual
RENTED: Legal Description Landlord Type of Lease Expires Acres Cash Rent
/v/ -4 -Yc. /4~ F//a3Od
h '15 o 7 TtP. Il a e V __T









TOTAL I ( $ /1g(
SSCHEDULE 6 NON-FARM REAL ESTATE
Title Held in Percent Date Cost or Accumulated Book Estimated
Description Name of Owned Acquired Basis Depreciation Value Mkt. Value


TOT$ $ $ $

TOTAL







This form is copyrighted.
It is a violation of the U.S. /
Copyright Law to reproduce
it in any manner.
SCHEDULE 7 LIFE INSURANCE
Insurance Company Beneficiry Type of Policy Fa(e Value Casn Value
6ourfr L.i4e Wiff 4-ri/ldren L/n $ s d.oO $ Z/ 00





TOTAL $ /p,,O0 0 $/3 ,500
SCHEDULE 8- INTERMEDIATE AND LONG TERM LIABILITIES
rrnt Portion of Principal
TWhom Purpose and/or Due Interest Payment Accrued C D within o bn
Security Date Rate Dates Interest Principal Due within Due beyond
Balance 12 months 12 months
INTERMEDIATE

Notes


--- TOTAL ,'7 t7i^ 1,,, $J,,g
T$ $O 1. $
Sales
Contracts
TOTAL 1 t i. $
I$ $ $
Life [7,77 .S /WZ, -. "_ p "- .-O O00
Insurance 4 -00 1_ -_-000
Policy Loans
TOTAL t. $ -o_ $ 5ooo

Other

TOTAL i, t $



Farm Real
Estate
Mortgages

TOTAL IZ-77/,x t7 -7T1 /Oo0 $1/,b0o
_____$ $ $ $____
Land
Contracts

TOTAL $
rj:,rn Farm ROli $ $ $ $
Est. Mortgages
TOTAL $ ___
$ $ $ $
Other

TOTAL I It It


r-r~P-~r ' '~ ~'''~' '-'" I~rll .~ ~1 .~.~I~~~, .-.-~. .I-I i I


.If ,I I .... I 4hind 1 I1 rl'qfr l -.' .... Irl, h. ,. a, ,, I ........






This form is copyrighted.
It is a violation of the U.S.
Copyright Law to reproduce
it in any manner. /
SCHEDULE 9-MACHINERY, EQUIPMENT AND TRUCKS
Date Percent Cost or Accumulated Book Estimated
Item Year, Make & Model Acquired Owned Basis Depreciation Value Mkt. Value
--r ^c_- H .. J (-. (C.3 (- lo $3.o $(<,>o $,ji o $.aa,Qx


'3 1 Ir z .( r1 $ o


+ + + I 4 I-


TOTAL $$$


__~-~-~:1:: itf--c






This form is copyrighted.
It is a violation of the U.S.
Copyright Law to reproduce
it in any manner.


SCHEDULE 10 CONTINGENCY WORKSHEET
WORSHET TBL FO DEERMNIG AOUN OFCUREN ASET


WORKSHEET TABLE FOR DETERMINING AMOUNT OF CURRENT ASSETS
FOR CONTINGENT TAX LIABILITY CALCULATION

CURRENT ASSETS (from Balance Sheet)

Hedging account equity minus deposits .............. ..................... ............. $

Notes and accounts receivable (good) ........................................ ..........

Livestock and poultry to be sold: Balance sheet value $ I)
Less purchase cost $ 0

N et V alue . . . . . . .. . . . .

C rops and feed .... .... .. .... ....... .... ..... .. .. .... ... .... ...... .... .. .....

Cash investm ent in grow ing crops ........................................... .........

S supplies . .. . . . ........ . . . . .. . . . .. . .

Prepaid expenses ... ....... ...... ..... ... .... ........ ........ ...... .... ....... ..

TOTALCURRENTASSETSTHATWOULDBETAXED ...................... .... (a) $

CURRENT LIABILITIES (from Balance Sheet)

A accounts payable ... ...... ..... ..... .. .... ... ..... ... ..... .... ..... ....... ..... $

Medical and other personal (onlythose deductible on Federal income tax schedule A) ...............

Estim ated accrued interest (total) ........................................... ..........

Estimated accrued tax liability:

Property ................... ........... .................. ..............

R ea l estate . . . . . .... . . . . . . . . . .

Em ployer payroll withholding ............................................. .....

Income (only state or local) ............ ..........................

Accrued rents and lease payments ............................. ......................

TOTAL CURRENT LIABILITIES THAT COULD BE DEDUCTED ........ .......... ..... ... .. (b) $

Amount to calculate contingent tax liability on: (a-b) .............................. (c) $
ORDINARY TAX RATE (d) X

CONTINGENCY TAX (e) $


1O









v50





I boo











e9 a.oc:)







lI. co o


@1984 Century Communications Inc., 5520-G Touhy Avenue, Skokie, IL 60077






This form is copyrighted.
It is a violation of the U.S.
Copyright Law to reproduce
it in any manner.


WORKSHEET FOR DETERMINING AMOUNT OF CONTINGENT TAX LIABILITIES
FOR ALL ITEMS EXCEPT CURRENT ASSETS


MARKETABLE SECURITIES
Market value
Book value
Difference
Capital gain rate
Capital gain
Ordinary tax rate
Contingency tax

BREEDING STOCK (RAISED)
Market value
Capital gain rate
Capital gain
Ordinary tax rate
Contingency tax

REAL ESTATE
Market value
Book value
Difference
Capital gain rate
Capital gain
Ordinary tax rate
Contingency tax


$

$13000
X 10 %




x$-, -o %


X 3C %
$ 3






$ xo %


X 5f0 %
$ -Ga,2w


MACHINERY
Market value
Book value
Difference
Ordinary tax rate
Contingency tax




BREEDING STOCK (PURCHASED)
Market value
Book value
Difference
Ordinary tax rate
Contingency tax

RETIREMENT ACCOUNTS
Market value
Less int. penalty
Taxable amount
Ordinary tax rate
Contingency tax
Plus int. penalty
Cont. tax & int. penalty


NOT READILY
MARKETABLE SECURITIES
(Applicable only when cost and market values differ.)
Market value $
Book value $__
Difference $


Capital gain rate
Capital gain
Ordinary tax rate
Contingency tax


X %


X %
$__


$__


$U'. too



$ 3 %










X %

$_



$o
$
X 35 %
$ 0
$






































































This publication was produced at a cost of $452.00 or $.452 per copy, to provide information about
the financial statements used in business. 11-1 M-88



COOPERATIVE EXTENSION SERVICE, UNIVERSITY OF FLORIDA, INSTITUTE OF FOOD AND AGRICULTURAL SCIENCES, K.R. Tefertiller,
director, in cooperation with the United States Department of Agriculture, publishes this information to further the purpose of the May 8 and
June 30,1914 Acts of Congress; and is authorized to provide research, educational information and other services only to individuals and institu-
tions that function without regard to race, color, sex or national origin. Single copies of Extension publications (excluding 4-H and Youth publica-
tions) are available free to Florida residents from County Extension Offices. Information on bulk rates or copies for out-of-state purchasers is I
available from C.M. Hinton, Publications Distribution Center, IFAS Building 664, University of Florida, Gainesville, Florida 32611. Before publicizing this publication,
editors should contact this address to determine availability.




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