INSTRUCTIONS
Goal: For a one-year period, develop an accrual adjusted income statement. This means preparing the following financial reports:
1. Balance Sheet statement at beginning of year, with both cost and market valuations.
2. Balance Sheet statement at end of year, with both cost and market valuations.
3. Income statement, showing inventory adjustments and depreciation.
4. Summary of cash flows including principal borrowings and repayments.
From the accrual income statement and other documents, various profit and financial ratios indicating strengths and weaknesses of the farm business can be calculated. This financial analysis should be performed every year to monitor the business.
Choices: You have three ways to accomplish this.
1. Fill in the worksheets in the following pages to perform a manual a









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