Question

For each of the following items, tell me where they would go on a balance sheet or that they would not go on a balance sheet. I want the name of the line on the balance sheet and the section (i.e. accounts payable in current liabilities).

1. You buy fertilizer in December to use the next spring. The fertilizer will not be delivered until it is used.
2. The costs associated with planting winter wheat.
3. You sold hay to a neighbor, but he isn’t going to pay you until February.
4. Feeder calves you purchased and plan to feed out then sell.
5. Replacement heifers.
6. Money owed to Cal Ranch at the end of the year.
7. Mortgage
   1. Principal due within the next year
   2. Principal due beyond the next year
   3. Accrued interest at the end of the year
8. Estimated income tax payable during spring 2015 on income generated during 2014 on the December 31, 2014 balance sheet.
9. Family car
10. Farm truck

Answer 1

Working as follows:

	Balance Sheet	Category
a. You buy fertilizer in December to use the next spring. The fertilizer will not be delivered until it is used.	Assets	Current assets
b. The costs associated with planting winter wheat.	NA	NA: Income statement item
c. You sold hay to a neighbor, but he isn’t going to pay you until February.	Liability	Current liability
d. Feeder calves you purchased and plan to feed out then sell.	NA	NA
e. Replacement heifers.	NA	NA
f. Money owed to Cal Ranch at the end of the year.	Liability	Current liability
g. Mortgage	Liability	Long term
i. Principal due within the next year	Liability	Current liability
ii. Principal due beyond the next year	Liability	Long term
iii. Accrued interest at the end of the year	Liability	Current liability
h. Estimated income tax payable during spring 2015 on income generated during 2014 on the December 31, 2014 balance sheet.	Liability	Current liability
i. Family car	NA	NA: Not a business asset
j. Farm truck	Assets	Property, plant, and equipment