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TABLE OF CONTENTS PREFACE ACKNOWLEDGEMENTS CHAPTER 1 FARM FINANCIAL STATEMENTS Key Terms Overview of Agricultural Accounting Farm Financial Activities and Financial Statements Income Statement Statement of Owner Equity Balance Sheet Statement of Cash Flows Chapter Summary Bibliography Problems CHAPTER 2 ACCOUNTS Key Terms The Chart of Accounts Definitions of Accounts Assets Liabilities Equity Revenues Expenses Recording Transactions Transactions Analysis Step 1: Transaction occurs Step 2: Determine which accounts are affected Step 3: Determine if the account balance increased or decreased Recording Transactions Two sides to every account Two sides to every transaction Types of accounts Journal entries Trial Balance Chapter Summary Bibliography Problems CHAPTER 3 JOURNAL ENTRIES Key Terms Financing Activities Investments by the owners Non-farm income and owner withdrawals Gifts and Inheritances Loans Loan Payments Investing Activities Purchases of assets Sales and exchanges of assets Leasing assets Investments in perennial crops Operating Activities Sales of farm products Sales of culled breeding livestock Cash received from insurance companies Sale of raised feedstuffs Purchases of market livestock, poultry, and crops Purchase of feedstuffs Cash purchases of supplies Annual costs for perennial crops Payments for parts and services Wages for employees Taxes Posting to the Ledger Chapter Summary Problems CHAPTER 4 END OF YEAR ACCOUNTING PROCEDURES Key Terms Accrual Adjusted Farm Financial Statements Adjustments Inventories Purchase of feedstuffs for use in the operation Purchased feed for resale Purchased crop for resale Raised feedstuffs for use in the operation Raised feed for sale Raised crops for sale Purchased market livestock for resale Raised market livestock for sale Prepaid expenses Prepaid Insurance Cash Investment in Growing Crops Depreciation expense Accrued expenses Accrued interest Unpaid bills Unpaid taxes Accrued revenues Accounts Receivable Change in value of raised breeding livestock due to age progression Changes in base values of raised breeding livestock Income Taxes Income tax expense Current deferred taxes Non-current deferred taxes, first component Posting Trial Balance Chapter Summary Problems CHAPTER 5 FINANCIAL STATEMENT PREPARATION AND CLOSING ENTRIES Key Terms Preparing Financial Statements Income Statement Statement of Owner Equity Balance Sheet Statement of Cash Flows Adjustments to Cash-basis Financial Statements Market-Based Financial Statements Purchased inventory Raised inventory Long-term assets Non-current deferred taxes Closing Entries Adjustments for Subsequent Years Inventories Prepaid expenses Accrued expenses Accrued revenues Income taxes and deferred taxes Chapter Summary Problems CHAPTER 6 REVENUE AND EXPENSE MEASUREMENTS Key Terms Revenue Recognition Government Loans Gains and Losses Sale of farm assets other than inventory Trading in an old asset Depreciation Expense Partial Periods Revised estimates Interest Expense Net Farm Income Extraordinary Items Chapter Summary Problems CHAPTER 7 ASSET VALUATION, PART 1-CURRENT ASSETS Key Terms Valuation Methods Cash Accounts Receivable Inventory Inventories Raised for Sale Inventories Raised for Use Inventories Purchased for Resale Inventories Purchased for Use Prepaid Expenses Chapter Summary Problems CHAPTER 8 ASSET VALUATION, PART 2-NON-CURRENT ASSETS Key Terms Cash Investment in Growing Crops and Perennial Crops Raised Breeding Livestock Base Values Animal Groupings Individual versus Group Approach Changes in Quantity and Changes in Base Values Single versus Multiple Transfer Points Shortcut Alternative Version for Animals Sold or Died Purchased Breeding Livestock, Machinery and Equipment, Land, Buildings and Improvements Disposing of Long-term Assets Investments Investments in Farm Cooperatives Investments in Entities other than Farm Cooperatives Life Insurance Policies Retirement Accounts Leased Assets Disclosure Notes Chapter Summary Problems CHAPTER 9 VALUATION OF LIABILITIES AND EQUITY Key Terms Accounts Payable, Taxes Payable, Interest Payable, and Notes Payable Current Deferred Taxes Non-current Deferred Taxes First Component of Non-current Deferred Taxes Second Component of Non-current Deferred Taxes Capital Leases Owner Withdrawals, Other Distributions, Non-farm Income Valuation Equity Disclosure Notes Chapter Summary Problems CHAPTER 10 ANALYZING FINANCIAL POSITION AND FINANCIAL PERFORMANCE Key Terms Comparative Financial Statements Financial Ratios Liquidity Ratios Current Ratio Working Capital Solvency Ratios Debt to Assets Ratio Equity to Assets Ratio Debt to Equity Ratio Repayment Capacity Ratios Term Debt and Capital Lease Coverage Ratio Capital Replacement and Term Debt Repayment Margin Profitability Ratios Rate of Return on Farm Assets Rate of Return on Farm Equity Operating Profit Margin Ratio Accrual Adjusted Net Farm Income Financial Efficiency Ratios Asset Turnover Ratio DuPont Analysis System Operational Ratios Chapter Summary Bibliography Problems APPENDICES Appendix A Appendix B Combined Financial Statements Appendix C A Numbering System for a Chart of Accounts Appendix D Appendix E Appendix F Appendix G Appendix H Appendix I Long version of valuing raised breeding livestock when animals are sold or have died Appendix J Partial periods for accelerated depreciation methods Appendix K Reporting Income Taxes and Deferred Taxes GLOSSARY
Library of Congress Subject Headings for this publication:
Agriculture -- Accounting.