Agricultural Accounting

Transcription

1 Agricultural Accounting Steven M. Bragg

2 Chapter 1 Introduction to Agricultural Accounting... 1 Learning Objectives... 1 Introduction... 1 A Note on Terminology... 1 The Economic Entity Concept... 1 Financial Statements... 2 Format of the Financial Statements... 2 Income Statement... 3 Statement of Owner s Equity... 4 Balance Sheet... 5 Statement of Cash Flows... 6 Financial Statement Disclosures... 7 Construction of Financial Statements... 7 Additional Commentary on the Financial Statements... 8 Profits vs. Cash Flows... 8 Accounting Principles... 9 The Certified Public Accountant Accounting Standard-Setting Organizations Financial Accounting and Managerial Accounting Chapter Summary Review Questions Review Answers Chapter 2 Accrual and Cash Basis Accounting Learning Objectives Introduction Cash Basis of Accounting Accrual Basis of Accounting Accrual-Adjusted Approach Converting Cash Basis to Accrual Basis Accounting Chapter Summary Review Questions Review Answers Chapter 3 Accounts Learning Objectives Introduction Transactions Accounts The Chart of Accounts Account Descriptions Double Entry Accounting The Accounting Equation Journal Entries The Trial Balance Chapter Summary Review Questions Review Answers Chapter 4 Accounting Transactions Learning Objectives Introduction Financing Activities Owner Investments Associated Liabilities... 36

3 Owner Withdrawals Loans Investing Activities Asset Acquisitions Asset Sales Asset Exchanges Asset Leases Investments in Perennial Crops Operating Activities Purchases of Market Livestock and Crops Annual Costs for Producing Perennial Crops Feed Purchases Supplies Purchases Billed Expenditures Prepaid Expenses Payroll Taxes Sale of Farm Products Receipt of Payment from Customers Crop Insurance Proceeds Chapter Summary Review Questions Review Answers Chapter 5 Receivables Accounting Learning Objectives Introduction The Billing Process The Invoice Cash Sales The Accounts Receivable Aging Report Estimation of the Allowance for Doubtful Accounts Accounting for the Allowance for Doubtful Accounts The Direct Write-off Method Negative Bad Debt Expense Chapter Summary Review Questions Review Answers Chapter 6 Investment Accounting Learning Objectives Introduction Types of Investments Investment Classifications The Realized and Unrealized Gain or Loss Other Comprehensive Income Purchase and Sale of Investments The Gain or Loss Calculation Conversion of Securities Sale of Securities Accounting for Dividends and Interest Income Stock Dividends and Stock Splits Ongoing Accounting for Investments The Fair Value Option Chapter Summary Review Questions Review Answers ii

4 Chapter 7 Inventory Accounting Learning Objectives Introduction Accounting for Inventory At Period-end Summary of Inventory Valuation Rules Accounting for Inventory Feed Purchase of Feed for Internal Use Purchase of Feed for Resale Raised Feed for Internal Use Accounting for Inventory Crops Purchase of Crops for Resale Growing Crops Raised Crops for Sale Accounting for Inventory Livestock Purchase of Market Livestock for Resale Raised Market Livestock for Sale Livestock Products Inventory Commingling Chapter Summary Review Questions Review Answers Chapter 8 Fixed Assets and Depreciation Learning Objectives Introduction The Nature of Fixed Assets The Initial Measurement of a Fixed Asset Lump-Sum Purchases The Purpose of Depreciation Depreciation Concepts Accelerated Depreciation Sum-of-the-Years Digits Method Double-Declining Balance Method Straight-Line Method Units of Activity Method MACRS Depreciation The Depreciation of Land The Depreciation of Land Improvements Depreciation Accounting Entries Accumulated Depreciation Asset Disposal Accounting Impairment Write-downs Chapter Summary Review Questions Review Answers Chapter 9 Noncurrent Farm Assets Learning Objectives Introduction Land Development Costs Trees and Vines Intermediate-Life Plants Valuation of Raised Breeding Livestock Special Poultry Considerations Animal Cost Tracking Base Value Method Noncurrent Investments Chapter Summary iii

5 Review Questions Review Answers Chapter 10 Payables Accounting Learning Objectives Introduction Accounting for Accounts Payable Early Payment Discounts The Vendor Master File Vendor Master File Usage Supplier Naming Conventions The Payables Filing System Government Reporting The Form 1099-MISC Treatment of Incorrect Filings The Form W Chapter Summary Review Questions Review Answers Chapter 11 Debt Accounting Learning Objectives Introduction Basic Debt Accounting The Amortization Schedule Reconciling the Debt Account Chapter Summary Review Questions Review Answers Chapter 12 Income Taxes Learning Objectives Introduction Overview of Income Taxes Accounting for Income Taxes Tax Positions Deferred Tax Expense Applicable Tax Rate Interim Reporting Chapter Summary Review Questions Review Answers Chapter 13 Derivatives and Hedging Transactions Learning Objectives Introduction The Nature of a Derivative The Nature of a Hedge Other Comprehensive Income Derivative Accounting Hedge Accounting General Hedge Accounting Fair Value Hedges Hedge Accounting Cash Flow Hedges Chapter Summary Review Questions Review Answers Chapter 14 Cooperative Accounting Learning Objectives Introduction iv

6 Cooperative Accounting Inventory Accounting Earnings Allocations Loss Allocations Liabilities Presentation Issues Patron Accounting Deliveries Made to Marketing Cooperatives Inventory Delivered to a Marketing Cooperative Advances from a Marketing Cooperative Accrual of Patronage Refunds Chapter Summary Review Questions Review Answers Chapter 15 Revenue Recognition Learning Objectives Introduction Effects of Inventory Valuation using Net Realizable Value Government Programs Sales to Cooperatives Commodity Credit Corporation Loans Forward Contracts Chapter Summary Review Questions Review Answers Chapter 16 Financial Statement Preparation Learning Objectives Introduction The Accruals Concept Adjusting Entries Common Adjusting Entries Accrued Expenses Accrued Revenue Allowance for Doubtful Accounts Prepaid Expenses Unpaid Taxes Create Customer Invoices Reconcile the Bank Statement Calculate Depreciation Close Accounts Payable Review Journal Entries Reconcile Accounts Close Subsidiary Ledgers Review Financial Statements Accrue Tax Liabilities Close the Month Add Disclosures Issue Financial Statements Chapter Summary Review Questions Review Answers Chapter 17 Financial Statement Disclosures Learning Objectives Introduction Disclosure of Accounting Policies Basis of Accounting v

7 Nature of Operations Use of Estimates Basis of Combination Cash and Cash Equivalents Trade Accounts and Other Receivables Basis of Inventory Valuation Revenue Recognition Income Taxes Commitments Disclosure of Inventory Disclosure of Raised Dairy and Breeding Livestock Disclosure of Fixed Assets Disclosure of Deferred Income Taxes Balance Sheet Income Statement Disclosure of Short Term Notes Payable Disclosure of Long-Term Debt Disclosure of Pension Plans Disclosure of Investments in Cooperatives Disclosure of Dealings with Cooperatives Chapter Summary Review Questions Review Answers Chapter 18 Farm Financial Analysis Learning Objectives Introduction Horizontal Analysis Financial Ratio Analysis Performance Ratios Net Profit Ratio Operating Income Ratio Quality of Earnings Ratio Breakeven Point Efficiency Ratios Asset Turnover Ratio Working Capital Turnover Liquidity Ratios Current Ratio Cash Ratio Debt to Equity Ratio Debt Service Coverage Ratio Capital Debt Repayment Capacity Return on Investment Ratios Return on Equity Return on Assets Net Farm Income EBITDA Livestock Analysis Formulas Chapter Summary Review Questions Review Answers Glossary Index vi