How would I put this in a balance sheet and income statement? You have been approached...

How would I put this in a balance sheet and income statement?

You have been approached by a person who would like you to help him organize his financial information into financial statements in preparation for filing income taxes. He has a goat operation that runs approximately 350 does who have kids yearly. He sells the kids to other breeders and the fleece/wool from her goats to an out-of-state fiber mill.

He needs to put together Balance Sheets and Income Sheets for the last two yearends - (2017 and 2018).

1. Use the following information to create 1) a Balance Sheet for yearends 2017 and 2018 and 2) an Income Statement for 2018:

He took out a mortgage on the farm several years ago. He makes annual principle payments of $12,000 and interest payments of 6% of the balance of the loan. He makes payments on Dec 31st each year. His balance as of December 31, 2016 was $275,000.
As of December 31, 2017, he had accounts receivable from his primary fleece buyer of $18,000, and from the wool mill of $3,200. He also had an account payable with the local farm supply store with a balance of $5,300, which he charged all his feed and supplies to. As of December 31, 2018, his lamb buyer owed him $24,000 and the wool mill owed $2,500. His farm store account decreased to $3,200.

Solutions

Expert Solution

It is assumed that Opening Balance Pertaining to Mortgage Pertains to Cash Only. Further, all transactions are accounted for and Payables & Recievables are adjusted in next year through Cash.

ekkarill92 answered 1 year ago

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