Question

Review Problems 1 Given the following financial information, calculate the missing values $1,000 95,000 Cash Crop revenue Grain inventory Total operating expenses Prepaid expenses Notes payable Accrued interest Interest expense Supplies Owner equity 200 10,000 Machinery and equipment Farm real estate Total current assets $75,000 Total current liabilities 150,000 Accounts payable 17,500 Cash investment in growing 14,000 crops 2.000 Net farm income from 800 operations 27,000 Current portion of noncurrent 1.500 debt Deferred portion of noncurrent debt 10,000 500 138,500 2. Use the following information to calculate value of farm production, total farm operating expenses, interest expense, net farm income from operations ands owner equity. Use the value of farm production format Crop sales of new crop Crop sales of old crop Change in crop inventory from 1/10 to 12/10 Change in accounts payable from 1/10 to 12/10 Change in accounts receivable from 1/10 to 12/10 Government payments received in 2010 Cash received for sale of tractor Market livestock purchases Feed purchases Cash paid for operating expenses Capital gain on sale of tractor Change in prepaid expenses from 1/10 to 12/10 Cash paid for interest expense $90,000 35,000 -15,000 -7,500 20,400 12,500 30,000 3,000 25,000 75,000 4,300 2,000 10,000 7

Answer 1

Calculation of accrued interest

Total current liabilities	14000
Notes payable	(10000)
Accounts payable	(2000)
Current portion of longterm debt	(1500)
Accrued interest	500

Calculation of grain inventory

Total current assets	17500
Cash	(1000)
Prepaid expenses	(200)
Supplies	(500)
Cash invest in growing crop	(800)
Grain inventory	15000

Deffered portion of long term debt

Total current liabilities	14000	Total current assets	17500
Owners equity	138500	Machinery and equipment	75000
Net farm income	27000	Farm real estate	150000
	179500		242500

=242500-179500=63000

Crop revenue	95000
Interest expense	(10000)
Net farm income	(27000)
Total operating expense	58000