Question

Use the following information to create 1) Balance Sheet for yearends 2017 and 2018 and 2) and Income statement for 2018

1) She had 305 breeding does value at $340/head at yearend 2017. She increased her flock in 2018 to 325 head.

2) As of December 31, 2017, she had livestock held for sale (lambs and non-breeding ewes) valued at $38,000. She also had wool inventories valued at $9,000. As of December 31, 2018, her livestock inventories increased to $43,000, and her wool inventories decreased to $8,500.

Answer 1

Solution:

In the absence of other data it is assumed that no sale & purchase done in 2018, and breeding value is same $340 at the year end 2018.

Balance Sheet for 2017
Liabilities	Amount in $		Assets	Amount in $
Capital	150,700.00		Stock
			305 breeding (305 * $340)	103,700.00
			Livestock	38,000.00
			Wool Inventories	9,000.00
	150,700.00			150,700.00
Balance Sheet for 2018
Liabilities	Amount in $		Assets	Amount in $
Capital	162,000.00		Stock
			325 breeding (325 * $340)	110,500.00
			Livestock	43,000.00
			Wool Inventories	8,500.00
	162,000.00			162,000.00

Income Statement for 2018:

Income statement for 2018
Stock as on 31.12.2018
325 breeding (325 * $340)	110,500.00
Livestock	43,000.00
Wool Inventories	8,500.00
	162,000.00
Stock as on 31.12.2017
305 breeding (305 * $340)	103,700.00
Livestock	38,000.00
Wool Inventories	9,000.00
	150,700.00
Profit for the Year	11,300.00
(Increase in the stock)