Problem 5-1.

5
Please complete this accrual adjusted income statement using the adjusted trial balance from Problem 4-9.

Accrual Adjusted Income Statement

December 31, 20XX
Cash Crop Sales $ 12,600.00
Change in Crop Inventory $ 10,000.00
Cash Sales of Market Livestock and Poultry $ 50,900.00 1000
Gain (Losses) from Sale of Culled Breeding Livestock $ (250.00) 1212
Total Gross Revenue $ 73,250.00 1223
Feeder Livestock $ 1,500.00 1231
Change in Purchased Feeder Livestock Inventory $ (9,050.00) 1300
Purchase of Feed $ 1,000.00 1500
Change in Purchased Feed Inventory $ (570.00) 1600
Wage Expense $ 1,200.00 1650
Payroll Tax Expense $ 129.20 1700
Truck and Machinery Hire $ 150.00 1800
Herbicides, Pesticides $ 500.00 1910
Livestock Supplies, Tools, and Equipment $ 75.00 1980
Insurance $ 1,200.00 2000
Real Estate and Personal Property Taxes $ 1,300.00 2100
Depreciation Expense $ 31,000.00 2300
Change in Accounts Payable $ 600.00 2310
Change in Prepaid Insurance $ (1,000.00) 2400
Interest Expense $ 1,200.00 2500
Total Farm Operating Expenses $ 29,234.20 2600
Net Farm Income from Operations $ 44,015.80 3100
Gain (Losses) from Sale of Farm Capital Assets $ 800.00 3110
Gain/Losses Due to Change in General Base $ 2,100.00 3120
Income Before Taxes $ 45,315.80 3130
Income Tax Expense $ 2,160.00 4000
Change in Taxes Payable $ 3,600.00 4010
Accrual Adjusted Net Income $ 39,555.80 4100
4500
5000
Problem 5-3.5 5010
Second: Create the ACCRUAL ADJUSTED STATEMENT OF OWNER'S EQUITY 5020
5030
Accrual Adjusted Statement of Owners Equity 6100
December 31, 20XX 6110
Owners' Equity Beginning $ 104,540.00 6310
Accrual Adjusted Net Income $ 39,555.80 6520
Owner Withdrawal $ (150.00) 6630
Non-Farm Income $ 100.00 6700
Other Capital Contributions/Gifts/Inheritances $ 350,000.00 6710
Addition to Retained Capital $ 389,505.80 6780
Owners' Equity, End of the year $ 494,045.80 6810
 6820
8100
8200
8300
9100
9110

Totals

Problem 5-4.5
Third: Create the ACCRUAL ADJUSTED BALANCE SHEET

Accrual Adjusted Balance Sheet

December 31, 20XX
Assets:
Cash $ 203.80
Feeder Livestock Inventory Purchase for Resale $ 9,050.00
Feed Inventory Purchase for Use $ 570.00
Crop Inventory Raised for Sale $ 10,000.00
Prepaid Expenses $ 1,000.00
Total Current Assets $ 20,823.80
Breeding Livestock $ 75,600.00
Machinery and Equipment $ 65,000.00
Office Furniture and Equipment $ 1,000.00
Perennial Crops and Natural Resources $ 45,000.00
Land, Buildings, and Improvements $ 470,000.00
Lease Assets $ 100,000.00
Accumulated Depreciation $ (31,000.00)
Total Non-Current Assets $ 725,600.00
Total Assets $ 746,423.80
Liabilities:
Accounts Payable $ 600.00
Taxes Payable $ 2,160.00
Notes Payable --Due within One Year $ -
Total Current Liabilities $ 2,760.00
Notes Payable --Non Current $ 50,000.00
Real Estate Notes Payable--Non Current $ 120,000.00
Non-Current Deferred Taxes $ 3,600.00
Obligations on Leased Assets $ 76,018.00
Total Non-Current Liabilities $ 249,618.00
Total Liabilities $ 252,378.00

Owner Equity $ 494,045.80

Total Liabilities and Owners Equity $ 746,423.80

Fourth complete the closing entries?

Remember you will always have two closing journal entries, one closes the income statement accounts and the other the state
Post the transaction to the Retained Capital account below.

First closing entry

31-Dec
Cash Crop Sales $12,600.00
Change in Crop Inventory $10,000.00
Cash Sales of Market Livestock and Poultry $50,900.00
Change in Purchased Feeder Livestock Inventory $9,050.00
Change in Purchased Feed Inventory $570.00
Change in Prepaid Insurance $1,000.00
Gain/Losses Due to Change in General Base $2,100.00
Gain (Losses) from Sale of Culled $ 250.00
Feeder Livestock $ 1,500.00
Purchase of Feed $ 1,000.00
Wage Expense $ 1,200.00
Payroll Tax Expense $ 129.20
Truck and Machinery Hire $ 150.00
Herbicides, Pesticides $ 500.00
Livestock Supplies, Tools, and E $ 75.00
Insurance $ 1,200.00
Real Estate and Personal Propert $ 1,300.00
Depreciation Expense $ 31,000.00
Change in Accounts Payable $ 600.00
Interest Expense $ 1,200.00
Gain (Losses) from Sale of Farm C $ 800.00
Income Tax Expense $ 2,160.00
Change in Taxes Payable $ 3,600.00
Retained Capital $ 39,555.80
Second closing entry
31-Dec
Non-Farm Income $ 100.00
Other Capital Contributions/Gifts/Inheritances $ 350,000.00
Retained Capital $ 349,950.00
Owner Withdrawal $ 150.00

ACCOUNT: Retained Capital

This is the Ledger account for retained capital, Date Item Post Ref
where you will post your closing entries. Beginning Balance Beginning Bala 3100
31-Dec Closing revenue, expense, gains/losses, and tax acco
31-Dec Closing equity accounts.
Problem 4-9.

Adjusted Trial Balance

Steve and Chris Farmer
December 31, 20XX
Accounts Debit Credit
Cash $204
Feeder Livestock Inventory Purchase for Resale $9,050
Feed Inventory Purchase for Use $570
Crop Inventory Raised for Sale $10,000
Prepaid Expenses $1,000
Breeding Livestock $75,600
Machinery and Equipment $65,000
Office Furniture and Equipment $1,000
Perennial Crops and Natural Resources $45,000
Land, Buildings, and Improvements $470,000
Lease Assets $100,000
Accumulated Depreciation $31,000
Accounts Payable $600
Taxes Payable $2,160
Notes Payable --Non Current $50,000
Notes Payable --Due within One Year $0
Real Estate Notes Payable--Non Current $120,000
Non-Current Deferred Taxes $3,600
Obligations on Leased Assets $76,018
Retained Capital $104,540
Owner Withdrawal $150
Non-Farm Income $100
Other Capital Contributions/Gifts/Inheritances $350,000
Cash Crop Sales $12,600
Change in Crop Inventory $10,000
Cash Sales of Market Livestock and Poultry $50,900
Gain (Losses) from Sale of Culled Breeding Livestock $250
Feeder Livestock $1,500
Change in Purchased Feeder Livestock Inventory $9,050
Purchase of Feed $1,000
Change in Purchased Feed Inventory $570
Wage Expense $1,200
Payroll Tax Expense $129
Truck and Machinery Hire $150
Herbicides, Pesticides $500
Livestock Supplies, Tools, and Equipment $75
Insurance $1,200
Real Estate and Personal Property Taxes $1,300
Depreciation Expense $31,000
Change in Accounts Payable $600
Change in Prepaid Insurance $1,000
Interest Expense $1,200
Gain (Losses) from Sale of Farm Capital Assets $800
Gain/Losses Due to Change in General Base $2,100
Income Tax Expense $2,160
Change in Taxes Payable $3,600

$824,238 $824,238
counts and the other the statement of owner equity accounts.

Should match accrual Adjusted Net Income

ACCT NO. 3100

Debit Credit Balance
- $ 104,540.00
pense, gains/losses, and tax accounts. 39,556 $ 144,095.80
$ 349,950.00 $ 494,045.80 Must match Ending Equ
al Adjusted Net Income

Must match Ending Equity in Statement of Owners Equity.

 Problem 5-7 Use information found in the textbook to complete
the market based financial statements
Go to the back of Chapter 5 use the information found in Problem
5-7 to to replace the historic cost values with market values.
Accrual Adjusted Income Statement
December 31, 20XX
Cash Crop Sales 120000
Change in Crop Inventories 105500
Change in Raised Crop Inventories 4500
Total Gross Revenue $ 230,000.00
Changes in purchased feed inentory $ (2,350.00) $ 2,850.00 Change in Purchased Feed Inventory
Change in accounts payable $ 2,350.00
Wage Expense 12000
Payroll Tax Expense 1668
Herbicides, Pesticides 5000
Insurance 5200
Chang in Prepaid Insurance -3033.33
Real Estate and Personal Property Taxes 7200
Depreciation Expense 31000
Toatl Farm Operating Expenses $ 59,034.67
Net Farm Income from Operation $ 170,965.33
Loss on Sale of Capital Assets -1600
Income Before Taxes $ 169,365.33
Income Tax Expense 3,600
Change in taxes payable 4,000
Net Income $ 161,765.33

Problem 5-3
Accrual Adjusted Statement of Owners Equity
December 31, 20XX
Owners' Equity Beginning 80,868.00
Net Cash Income $ 161,765.33
Owners Withdrawals -
Non Farm Income -
Other Capital Contributions/Gifts/Inheritances 480,000.00
Additions to Retained Capital $ 641,765.33
Retained Capital $ 722,633.33
Change in market value over cost $ (66,000.00) Excess of Market Value over cost
Change in Non-current portion of defferred taxes $ 5,290.00 Change in Non-Current deferred taxes.
Owners' Equity, End of the year
Problem 5-4
Accrual Adjusted Balance Sheet
December 31, 20XX
Assets:
Cash 17600
Feed inventory raised for sale 4500
Crop inventory raised for sale 105500
Purchased feed inventory 2350 $ 2,850.00 Purchased Feed Inventory
Prepaid Insurance 3033.33
Total Current Assets $ 132,983.33
Machinery and Equipment 235000 $ 240,000.00 Machinery and Equipment
Office Furniture and Equipment 2000 $ 2,000.00 Office furniture and equipment
Perennial Crops and Natural Resources 0
Land, Buildings, and Improvements 650000 $ 680,000.00 Land Buildings and Improvements
Accumulated Depreciation -31000
Total Non-Current Assets $ 856,000.00
Total Assets $ 988,983.33
Liabilities:
Taxes Payable 4000
Accounts Payable 2350
Notes Payable --Due within One Year 10000
Total Current Liabilities $ 16,350.00
Notes Payable --Non Current 0
Real Estate Notes Payable--Non Current 250000
Obligations on Leased Assets 0 $ 5,290.00 non current deferred taxes
Total Non-Current Liabilites $ 250,000.00
Total Liabilities $ 266,350.00

Owner Equity $ 722,633.33

Total Liabilities and Owners Equity $ 988,983.33
 Market Based Accrual Adjusted Income Statement
December 31, 20XX
Cash Crop Sales 120000
Change in Crop Inventories 105500
Change in Raised Crop Inventories 4500
Total Gross Revenue $ 230,000.00
hased Feed Inventory Changes in purchased feed inentory $ (2,850.00)
Change in accounts payable $ 2,350.00
Wage Expense 12000
Payroll Tax Expense 1668
Herbicides, Pesticides 5000
Insurance 5200
Chang in Prepaid Insurance -3033.33
Depreciation Expense 31000
Real Estate and Personal Property Taxes 7200
Toatl Farm Operating Expenses $ 58,534.67
Net Farm Income from Operation $ 171,465.33
Loss on Sale of Capital Assets -1600
Income Before Taxes $ 169,865.33
Income Tax Expense 3,600
Change in taxes payable 4,000
Net Income $ 162,265.33

Problem 5-3
Accrual Adjusted Statement of Owners Equity
December 31, 20XX
Owners' Equity Beginning 80,868.00
Net Cash Income $ 162,265.33
Owners Withdrawals -
Non Farm Income -
Other Capital Contributions/Gifts/Inheritances 480,000.00
Additions to Retained Capital $ 642,265.33
Retained Capital $ 723,133.33
t Value over cost Change in market value over cost $ 66,000.00
Current deferred taxes. Change in Non-current portion of defferred taxes $ (5,290.00)
Owners' Equity, End of the year $ 783,843.33
 Problem 5-4
Accrual Adjusted Balance Sheet
December 31, 20XX
Assets:
Cash $ 17,600.00
Feed inventory raised for sale $ 4,500.00
Crop inventory raised for sale $ 105,500.00
Purchased feed inventory $ 2,850.00
Prepaid Insurance $ 3,033.33
Total Current Assets $ 133,483.33
Machinery and Equipment $ 240,000.00
and equipment Office Furniture and Equipment $ 2,000.00
Perennial Crops and Natural Resources $ -
nd Improvements Land, Buildings, and Improvements $ 680,000.00
Total Non-Current Assets $ 922,000.00
Total Assets $ 1,055,483.33
Liabilities:
Taxes Payable $ 4,000.00
Accounts Payable $ 2,350.00
Notes Payable --Due within One Year $ 10,000.00
Total Current Liabilities $ 16,350.00
Notes Payable --Non Current $ -
Real Estate Notes Payable--Non Current $ 250,000.00
Non Current Deferred Taxes $ 5,290.00
Obligations on Leased Assets $ -
Total Non-Current Liabilites $ 255,290.00
Total Liabilities $ 271,640.00

Owner Equity $ 783,843.33

Total Liabilities and Owners Equity $ 1,055,483.33
Problem 5-8 Use information found in the textbook regarding this problem

Unadjusted Trial Balance

Steve and Chris Farmer
December 31, 20XX
Accounts
ACCT # ACCOUNT NAME
1000 Cash
1600 Machinery and Equipment
1650 Office Furniture and Equipment
1800 Land, Buildings, and Improvements

2310 Notes Payable Due within One Year

2400 Real Estate Notes Payable -Non Current
3100 Retained Capital
3130 Other Capital Contributions/Gift/Inheritances
4000 Cash Crop Sales
6100 Wages Expense
6110 Payroll Tax Expense
6520 Herbicides, Pesticides
6700 Insurance Expense
6710 Real Estate and Personal Property Tax
8200 Gain (Losses) on Sale of Farm Capital Assets
9100 Income Tax Expense

Totals

First closing entry

31-Dec Cash Crop Sales

Second closing entry

 31-Dec Other Capital Contributions/Gift/Inheritances

ACCOUNT 0
Date

31-Dec-20 Beginning Balance

31-Dec
31-Dec

Must match Ending Equity in Statement of Owners Equity.

arding this problem

Unadjusted Trial Balance

Steve and Chris Farmer
December 31, 20XX
Debit Credit

17,600.00
235,000.00
2,000.00
650,000.00

10,000.00
250,000.00
80,868.00
480,000.00
120,000.00
12000
1,668.00
5,000.00
5,200.00
7,200.00
1,600.00
3,600.00

$ 940,868.00 $ 940,868.00

120,000.00
Wages Expense 12000
Payroll Tax Expense 1,668.00
Herbicides, Pesticides 5,000.00
Insurance Expense 5,200.00
Real Estate and Personal Property Tax 7,200.00
Gain (Losses) on Sale of Farm Capital Assets 1,600.00
Income Tax Expense 3,600.00
120,000.00 36268
Retained Capital 83,732.00
 480,000.00
Retained Capital $ 480,000.00

ACCT NO.
Item Post Ref Debit Credit

Beginning Equity 3100

Closing expense, revenue, gains/losses, and tax acc 3100 83,732
Closing equity Accounts 3100 480,000

Owners Equity.
This # should match the net income from Problem 5-2.2
Chapter 5 First Week Problem
 3100

Balance
$80,868
$164,600 Chapter 5 First Week Problem
644,600 This should match the ending owner equity from Problem 5-3.2
Problem 5-9 Use information found in the textbook regarding this problem
Calculate the accrual adjustments. Then determine if the account is Adjunct or Contra

a. Ending Crop Inventories $ 105,500 Place an X in box below

Beginning Crop Inventories $ 108,000 Contra Adjunct
Change in Crop Inventories $ 2,500 X

b. Ending Crop Inventories Hay $ 4,500

Beginning Crop Inventories Hay $ 2,500 Contra Adjunct
Change in Crop Inventories $ 2,000 X

c. Do not do this questions

d. Beginning Prepaid Insurance Expense $ 1,800

Ending Prepaid Insurance Expense $ 367 Contra Adjunct
Change in Prepaid Expense $ 1,433 X

e. Ending Accounts Payable $ 2,350

Beginning Accounts Payable $ 3,500 Contra Adjunct
Change in Accounts Payable $ 1,150 X

f. Ending Taxes Payable $ 4,000

Beginning Taxes Payable $ 4,600 Contra Adjunct
Change in Taxes Payable $ 600 X
P