has an accounting period running from January 1 to Dec e I.M. Farmer 4 Assume Us
ID: 2510622 • Letter: H
Question
has an accounting period running from January 1 to Dec e I.M. Farmer 4 Assume Use the following information obtained for the calendar year 2014. I.M.Farmer Income Statement December 31,2014 Cash crop sales 91 Cash livestock sales Inventory changes: 7,410 12,900 Crops Market livestock Livestock product sales Government program payments Gain/loss from sale of culled breeding stock Change in accounts receivable Other farm income Total revenue 8,890 7,600 4,700 307,940 Purchased feed and grain Purchased market livestock Other cash operating expenses: 21,200 46,500 9,400 9,780 6,410 4,800 5,800 22,600 12,100 3,400 3,800 4,800 5,800 Fertilizer expense Chemical expense Seed purchased Vet. & health expenses Fuel, oi Labor Repairs, maintenance Property taxes Insurance Supplies Misc. expenses Adjustments Accounts payable Depreciatiorn 1,400 28,900 Total operating expenses Cash interest paid Change in interest payable 186,690 33,400 2,400 Total interest expense Total expenses Net farm income from operations Gain/loss on sale of capital assets 31,000 217,690 90,250 Machinery Land 11,100 Total Net farm income 11,100 101,350Explanation / Answer
Requirement 1 Net Farm income from operation 90250 Given in the question itself 2 Net Farm Income 101350 Given in the question itself 3 Return to management = Returns to labor and Management - opportunity cost of labor Where Returns to Labor and management = Net farm income from operation + Interest -opportunity cost of capital So, =(90250+2400-(375675*9%))-24000 34839.25 4 Return to Labor = Returns to labor and Management - opportunity cost of Management Where Returns to Labor and management = Net farm income from operation + Interest -opportunity cost of capital So, =(90250+2400-(375675*9%))-12000 46839.25 5 Return on assets = (Net farm Income from operations + interest - opportunity cost of labor) / Average asset value So, =(90250+2400-(375675*9%))/785000 7.50 % 6 Return on Equity = (net Farm Income from operation - opportunity cost of management)/average equity =(90250-12000)/375675% 20.83 % As per Chegg Policy, we are supposed to answer maximum of four sub-parts of a question. Thank You
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