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homework4-2007-key - KEY INCOME STATEMENT AND ANALYSIS I...

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1 KEY INCOME STATEMENT AND ANALYSIS I. Assume I.M. Farmer has an accounting period running from January 1 to December 31. Use the following information obtained for the calendar year 2006 accounting period to complete an income statement for I.M. using the attached form. Then complete the calculations on the last two pages. Inventory Values Jan. 1, 2006 Dec. 31, 2006 Crops $32,850 $25,440 Livestock $18,600 $31,500 Revenue and Expenses Depreciation 28,900 Crops Sold $189,600 Feed Purchased 21,200 Insurance 3,800 Property Taxes 3,400 Interest Paid 33,400 Misc. Expenses 5,800 Feeder Livestock Purch. 46,500 Market Livestock Sold 91,660 Seed Purchased 6,410 Repairs 12,100 Vet. & Health Expense 4,800 Fertilizer Exp. 9,400 Income from Custom Work 4,700 Supplies 4,800 Gain on Sale of Labor Hired 22,600 Breeding Stock 7,600 Fuel Expense 5,800 Gov't payment income 8,890 Gain on mach. sale 11,100 Chemical exp. 9,780 Change in interest payable (2,400) Change in acct. payable +1,400 Other Information Average Asset Value (2006) $785,000 Family Living Expenses $ 38,000 Opportunity Cost of Operator Income Tax Paid in 2006 10,700 Labor 24,000 Owner's Equity (12/31/06) $402,000 Opportunity Cost of Operator Average Equity Value Management 12,000 (2006) $375,675 Opportunity Cost of Capital 9%
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