4
rent, or previous, income statements. The gain or
loss from the sale of breeding livestock, as well
as the base values placed on raised breeding
livestock, can be separated into four categories:
Sale of purchased breeding livestock •
Sale of raised breeding livestock •
Quantity change of raised breeding livestock•
Value change in raised breeding livestock •
Sale of purchased breeding livestock1. : Gain
or loss on the sale of purchased breeding
livestock is calculated as the sale price minus
the undepreciated balance or remaining
basis at the time of sale. This gain or loss is
included in the gross revenue section of the
income statement.
Sale of raised breeding livestock:2. Gain or
loss on the sale of raised breeding livestock
is calculated as the sale price minus the base
value at the time of sale. The gain or loss is
included in the gross revenue section of the
income statement.
Quantity change of raised breeding 3.
livestock: Calves and young breeding
livestock may be transferred into the
breeding herd each year. At the same time,
some breeding livestock may have been
culled and sold, while other animals may
have died. Thus, the total base value of raised
breeding livestock may have increased or
decreased from the beginning to the end
of the period. This gain or loss in the total
base value due only to a change in animal
numbers must be computed, and included
in the gross revenue section of the income
statement. Table 2 is an example of the gain
or loss from the sale of breeding livestock
and the quantity change in raised breeding
livestock (items 1, 2 and 3).
Value change in raised breeding livestock: 4.
If the base values for various raised breeding
livestock are changed for the balance sheet
on a given date, the gain or loss connected
with that change would be included as an
adjustment to the income statement. Table
3 shows an example of the gain and loss
resulting from a change in base values for
raised breeding livestock.
Figure 1. Sample income statement.
John P. Recorder
VFP Income Statement (Farm Business Only)
January 1, 20X1 to December 31, 20X2
Farm business receipts
C
rop cash sales ..............................................................(1A) 35,870
+Ending crop inventory ...............................................(1 B) 17,9 8 0
- Beginning crop inventory .........................................(1C ) 37, 5 0 0
Gross revenues from crops ..........................................(1) 16,350
Market livestock cash sales .........................................(2A) 343,100
+Ending market livestock inventory .........................(2B) 232,650
- Beginning market livestock inventory....................(2C) 184,050
Gross revenues from market livestock ......................(2) 391,700
Gain/loss from breeding livestock sales and quantity
change in raised breeding livestock .......................(3) 1,950
Agricultural program payments ................................(4) 3,100
Crop insurance proceeds .............................................(5) 5,500
Other farm income .......................................................(6) 2,000
Accrued income inventory adjustment .....................(7) 500
GROSS REVENUES (add lines 1 through 7) ............(8) 421,500
Less purchase of market livestock .............................(9) 124,000
Less cost of purchased feed/grain .............................(10) 130,000
VALUE OF FARM PRODUCTION
(line 8 - line 9 - line 10) ..............................................(11) 167,500
Farm business expenses
Labor hired ....................................................................(12) 18,200
Machinery/building repairs .......................................(13) 9,400
Seed/other crop expense .............................................(14) 3,100
Fertilizer/lime ...............................................................(15) 7,000
Machine hire/lease .......................................................(16) 2,400
Farm org. fees, publications ........................................(17) 1,500
Vet/medicine/drugs ......................................................(18) 3,900
Livestock marketing .....................................................(19) 4,600
Gasoline/fuel/oil ...........................................................(20) 10,000
Real and personal property taxes ..............................(21) 2,500
General farm insurance ...............................................(22) 2,200
Cash farm rent ...............................................................(23) 7,800
Utilities ...........................................................................(24) 4,800
Herbicides/insecticides ................................................(25) 4,000
Conservation .................................................................(26) 500
Total cash operating expenses
(add lines 12 through 26) ...........................................(27) 81,900
Accrued expense inventory adjustment ...................(28) (4,000)
Production supply expense
inventory adjustment ................................................(29) 3,475
Total depreciation expense ..........................................(30) 22,425
TOTAL OPERATING EXPENSES
(add lines 27 through 30) ..........................................(31) 103,800
Total accrued interest expense ....................................(32) 16,600
TOTAL EXPENSES (line 31 + line 32) ........................(33) 120,400
NET FARM INCOME FROM OPERATIONS
(line 11 - line 33) .........................................................(34) 47,100
Gain/loss on sale of farm capital assets ....................(35) 0
Gain/loss from change in the base value
- for raised breeding livestock ..................................(36) 0
NET FARM INCOME, ACCRUAL ADJUSTED
(add lines 34 through 36) ..........................................(37) 47,10 0