Farm records and accounting


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Farm records and accounting

  1. 1. Farm Recordsand AccountingA Report inAgricultural Extension 221:Advanced AgribusinessDr. Cesar T. VillanuevaProfessorRonel D. CañaStudent
  2. 2. I. Introduction Farming is an enterprise; Farmer = Entrepreneur = Businessman; farmer-entrepreneur has tasks such as monitoring farm income, making outside transactions and keeping track of the farm supplies; farmer must employ key tools and methods in order to keep track of and manage his business.
  3. 3. I. Introduction Farm records and accounting forms are key tools where the farmer may base his future decisions; A good farm record is also a tool used in assessing and mitigating farm business risks and opportunities; A little of farming + a little of business = farm record and accounting.
  4. 4. II. Importance of Farm Records Farm records are a management tool – they allow you to measure how efficiently you are using resources and to determine whether or not you are having income; Farm records are also essential for planning and decision making; Farm records is used in obtaining credit; Farm records is used for income tax
  5. 5. III. Items Included in the FarmRecord Keeping System A business checking account to handle all business transactions. An income ledger to record all business income by calendar month. An expense ledger to record all business expenses by calendar month. An inventory that involves both the physical counting and valuation assignment.
  6. 6. III. Items Included in the FarmRecord Keeping System A depreciation schedule pro-rating the original costs of assets over more than one accounting period. A net worth statement or balance sheet summarizing assets and liabilities of the farm. An income or profit and loss statement that lists receipts and expenses by type (and the result is net profit or net loss). Cash flow statement measures the flow of funds into the business and the flow out of the business over the accounting period.
  7. 7. IV. Farm Record Keeping the essential first step in organizing business transactions; simply a record of the money you spend and the money you earn; written on a set of ledger sheets, which contain several columns, to keep track of where money goes and from what source it is earned.
  8. 8. V. Farm Record KeepingSystems two kinds of record keeping systems: ―single entry‖ and ―double entry‖; ―double-entry‖ method is a perfected system with built-in cross checks and automatic balancing; for the purpose of farming, ―single- entry‖ record keeping is advised; this will still provide you with the basic information you need to manage your farm.
  9. 9. VI. Farm Accounting the process of measuring and recording all farm resources and all farm transactions with financial consequences in a systematic way; conduct of farm accounting may take a large part of the farmer‘s time and effort; however this effort is compensated in account of the following reasons:
  10. 10. VI. Farm Accounting itpermits the farmer to find out the size of the income which is derived from the farm; to know the total value of the farm business and to know which part is actually owned by the farmer and which by others; to detect loss or theft of cash or stock; to provide the necessary data for a correct income tax assessment; to claim expenses for work done by
  11. 11. VI. Farm Accounting normally farmers dislike paper work, as they are busy with their farm work; where to keep records may be a real problem for a farmer, as one cannot expect an office or a desk on the average farm; therefore, farm accounting should be kept very simple; it helps when all records can be kept in just one book
  12. 12. VII. Customary BusinessDocuments and Their Use Cash receipt ◦ when merchandise is bought and paid for in cash, the seller in a modern business will make out a cash receipt which is printed in duplicate. The original cash receipt is given to the buyer. The buyer should keep the receipt and later enter it in his Cash Book. The duplicate remains in the book of the seller; later on the seller will summarize the duplicates and enter them in his Cash Analysis Book.
  13. 13. VII. Customary BusinessDocuments and Their Use Invoice ◦ whenever merchandise is sold on credit an invoice is made out in the invoice book which is usually in triplicate. The original invoice is given to the buyer together with the merchandise. Where monthly statements are sent to the buyer, the duplicates will be sent to the buyer together with the statement. The triplicate remains in the book as a record.
  14. 14. VII. Customary BusinessDocuments and Their Use Statement ◦ the seller can summarize all invoices to a customer in a statement; this statement is then sent to the customer for payment. The statement gives the dates of the invoices, their numbers and the amounts which are due, under the heading DEBIT. If during that month any payment or merchandise or credit is received from that customer, it will be accounted for under the heading CREDIT. The difference between debit and credit is entered under the heading BALANCE.
  15. 15. VII. Customary BusinessDocuments and Their Use Purchase order ◦ a written request to a trading business to supply specified merchandise on credit; at the same time it warrants payment when the merchandise (with the invoice) is delivered; commonly called a ‗local purchase order‘ or LPO (in English speaking countries). A purchase order specifies the merchandise in number, kind, size, make, color, etc.. It needs the signature of the person who actually orders and that of the person who must approve the purchase.
  16. 16. VII. Customary BusinessDocuments and Their Use Cheque (check) ◦ A cheque is an order to a bank to make a payment in money. A cheque is the safest and easiest way of paying a debt or a purchase for a person having a bank account.
  17. 17. VII. Customary BusinessDocuments and Their Use Money Order ◦ money order is another kind of order to make a payment. It is a means of transmitting money to persons who have no current bank account. To obtain a money order, the amount to be transmitted plus a fee have to be paid to the Post Office (or any other service provider) or the bank. A money order form has to be completed (sender, payee, name of the office where the money order can be cashed).
  18. 18. VIII. Balance Sheet Measuring and Recording of Farm Resources ◦ to obtain and maintain the most profitable use of the available farm resources; ◦ the resources of a farm business are nature, labor and capital:  ‗capital‘ is commonly meant capital or production goods; not just money!  ‗labor‘ is the resource provided by individual human beings with their free consent (it cannot be owned)  ‗nature‘ and ‗capital‘ are either owned or rented
  19. 19. VIII. Balance Sheet Measuring and Recording of Farm Resources ◦ when making a list of the resources, only those owned by the farmer are considered; ◦ the rented resources are taken into account when the costs of production are calculated; ◦ It is important to know by what financial means the farmer is able to own his farm resources; ◦ the farm resources are also called
  20. 20. VIII. Balance Sheet Measuring and Recording of Farm Resources ◦ A general way of recording the facts about the available farm resources is the Balance Sheet (BS) – also known as the Net Worth Statement; ◦ it is a listing of all the possessions and debts of the farm business at a certain date; ◦ debts (= what is owed to others) are called ‗liabilities‘; ◦ possessions are called ‗assets‘
  21. 21. VIII. Balance Sheet  Schematically, a Balance Sheet looks like: Balance SheetOf ………………… (Name and On …………. (Date)Place)Assets LiabilitiesHow are the farm resources Possessions = all farm resources(possessions) financed:a. by the farmer himselfb. by others = loans or debts
  22. 22. VIII. Balance Sheet The Balance Sheet ◦ its primary use is to establish the financial solvency of the business; ◦ represents a financial snapshot of the business at a specific point in time; ◦ the three components of the balance sheet are assets, or things owned; liabilities, or things owed; and the difference between these, the owner’s equity or net worth. ◦ separate property belonging to the farm business from property belonging to the farmers household.
  23. 23. VIII. Balance Sheet The Balance Sheet ◦ The assets are listed in the following order:  1) the most fixed assets, such as land;  2) the more current assets;  3) and finally the most liquid, such as cash in hand and money to be received. ◦ The total assets, also called Gross Capital, is the total value of all land, capital goods, stocks in store or in the field and money available in the business.
  24. 24. VIII. Balance Sheet The Balance Sheet ◦ Liabilities are also grouped into one of three categories. Current liabilities are those corresponding to current assets, like other debt payments within the calendar year; ◦ Intermediate liabilities relate to working assets, like farm equipment, and include the liabilities or balances due on intermediate assets with terms from one to ten years; ◦ Long-term liabilities include land and contracts on real property exceeding ten years in duration.
  25. 25. VIII. Balance Sheet Balance SheetAll Organic G.M.O. Farm, San Ildefonso, Bul. December 31, 2010 ASSETS LIABILITIESFixed Long Term Farmland (3.0 ha@P500,000) 1,500,000.00 Farm Real Estate 350,000.00 Buildings & Improvements 650,000.00 Building Depreciation 280,000.00 Other facilities 210,000.00 Total Fixed 630,000.00Total Fixed 2,360,000.00 IntermediateIntermediate Machinery Depreciation 50,000.00 Poultry-2,000 hds@P100 200,000.00 Vehicles Depreciation 68,000.00 Machinery & Equipment 800,000.00 Equipments Depreciation 42,000.00 Vehicles 400,000.00 Total Intermediate 160,000.00Total Intermediate 1,400,000.00 CurrentCurrent Accounts payable 250,000.00 Cash, savings account 700,000.00 Bank notes 65,000.00 Supplies 150,000.00 Loans 122,000.00 Securities marketable 100,000.00 Accrued taxes 76,000.00 Cash value of insurance 200,000.00 Total Current 513,000.00 Accounts receivable 350,000.00Total Current 1,500,000.00 Total Liabilities 1,303,000.00Total Assets 5,260,000.00 Net Worth 3,957,000.00 Total Liabilities and Net Worth 5,260,000.00
  26. 26. VIII. Balance Sheet Depreciation ◦ means loss of value; ◦ refers to capital goods or investments; ◦ due to the fact that capital goods (or production goods) do not last forever but wear out, deteriorate and finally become useless; ◦ not only wear and tear, but also age may cause depreciation - something may become what is called obsolete, when it is outmoded.
  27. 27. VIII. Balance Sheet Depreciation ◦ there are various methods of calculating depreciation; ◦ most common method is the straight line method, in situations with no or little inflation.; ◦ this method is commonly used in farm accounting; ◦ depreciation is calculated as if the value decreases by the same amount each year.
  28. 28. VIII. Balance Sheet Depreciation ◦ a capital good still has some value after it is worn out; ◦ this value is called residual, salvage, rest or scrap value; ◦ the scrap value has to be subtracted from the original or initial value of the capital good before one starts to calculate the depreciation.
  29. 29. VIII. Balance Sheet  Straight Line Depreciation Formula: Purchase Value – ScrapAnnual Depreciation = Value Useful life in years
  30. 30. VIII. Balance Sheet Inventory and Valuation of Resources ◦ valuation is the estimation of the value of each asset or item; ◦ inventory is a list of all possessions or assets item by item, at their present value; ◦ in making valuations, the value of farm produce can be based either on its cost of production or on its market value;
  31. 31. VIII. Balance Sheet Inventory of Resources ◦ Land:  does not deteriorate under good husbandry practices and keeps the same value;  may even become more valuable with time;  value entered is the purchase price or the estimated price, based on the value of similar land in the area at the time.
  32. 32. VIII. Balance Sheet Inventory of Resources ◦ Buildings:  stone or brick may last 25 to 40 years;  depreciation is between 4% and 2.5% per year;  wooden buildings depreciate at about 10% per year.
  33. 33. VIII. Balance Sheet Inventory of Resources ◦ Machinery:  Non-motorized machinery (ploughs, harrows and carts) depreciate at about 10% per year;  Motorized machinery (tractors, harvesters and diesel pumps) depreciate at 20% per year or more, depending on maintenance and number of hours which they are operated per year.
  34. 34. VIII. Balance Sheet Inventory of Resources ◦ Small tools:  Includes hammers, pliers, shovels, buckets, etc.,  with small purchase values and written off immediately at purchase (which means that their depreciation is 100%);  on a large, modern farm there may be thousands of such small tools; some might be new and some nearly worn out;  a suitable method is to calculate the new value of all small tools and to enter them on the Balance Sheet for half that value once and for all.
  35. 35. VIII. Balance Sheet Inventory of Resources ◦ Livestock:  listed by kind, age and sex;  each group of animals is valued by multiplying the number in that group by a fixed price;  this fixed price would be the cost of breeding a representative animal of that group;  a ‗standard value‘ may be applied for inventory/valuation purposes.
  36. 36. VIII. Balance Sheet Valuation of Resources ◦ There are many methods for valuing farm assets. Commonly used methods are as follows:
  37. 37. VIII. Balance Sheet Valuation of Resources ◦ The market cost method:  values assets at their purchase price;  use this method for recently purchased assets that will be used in a relatively short time (i.e., feed, fuel, fertilizer, and seed);  must be used to value inventories for tax purposes.
  38. 38. VIII. Balance Sheet Valuation of Resources ◦ The net market price method:  uses the market cost less transportation and marketing charges;  It is the money the farm would have left after selling a product and can be used when liquidity estimates are needed;  net market price could be used for livestock and farm produced crops.
  39. 39. VIII. Balance Sheet Valuation of Resources ◦ Farm production costs method:  determined by the cost of producing a commodity on the farm;  It is useful for farm produced commodities that in turn will be used in other farm enterprises;
  40. 40. VIII. Balance Sheet Valuation of Resources ◦ cost-minus-depreciation method:  applies to investments that have a useful life longer than a year; ◦ capitalization method :  uses the time value of money to estimate current asset value;  based on an annual income stream that an asset can produce in its present use.
  41. 41. VIII. Balance Sheet Valuation of Resources ◦ replacement cost for equivalent function method :  considers the changing function of some assets over time;  replacement cost considered should be related to its current use.
  42. 42. IX. Cash Analysis Book Cash Book, Petty Cash and Diary ◦ cash book is what it says, namely a record of all changes in cash and a record of all cash transactions; ◦ each transaction starts with a new line in the cash book; ◦ farms use a petty cash book in which expenditures and receipts for cash in hand are recorded when they occur; ◦ once a week or once a month the totals are entered in the cash book.
  43. 43. IX. Cash Analysis Book Cash Book, Petty Cash and Diary; ◦ A diary is a book of events, transactions or observations recorded daily or at frequent intervals; ◦ Large farms which keep a complete set of accounting books may use a diary for non financial records, such as work performed by laborers, fertilizer applications on specified crops and fields, dates of sowing and harvesting, servicing, yields, feed given to animals, etc..
  44. 44. IX. Cash Analysis Book The design and use of the Cash Analysis Book ◦ it is not possible to calculate the Net Farm Income from the cash book as such; ◦ receipts and expenditures have to be sorted out, kind by kind. ◦ To be able to manage the farm in such a way that the most profitable use is made of the farm resources, the farmer must:
  45. 45. IX. Cash Analysis Book The design and use of the Cash Analysis Book  distinguish  receipts for farm produce from other receipts, such as sales of capital goods and loans;  expenditures for production purposes from expenditures for other purposes, such as investments and repayments;  calculate the costs and revenues of his separate farming activities (also called enterprises);  compare the output and costs of each activity with the results of previous years and also with the results of other farms.
  46. 46. IX. Cash Analysis Book The design and use of the Cash Analysis Book ◦ it is not possible to calculate the Net Farm Income from the cash book as such; ◦ receipts and expenditures have to be sorted out, kind by kind. ◦ To be able to manage the farm in such a way that the most profitable use is made of the farm resources, the farmer must:
  47. 47. IX. Cash Analysis Book Cash Analysis Book ◦ an extension of the cash book; ◦ the Cash Analysis Book adds several columns to the total +receipts and total expenditures columns of the cash book; ◦ In these columns receipts and expenditures of one and the same kind are recorded a second time;
  48. 48. IX. Cash Analysis Book Different columns in the Cash Analysis Book ◦ columns in which the output and costs are entered for each activity (enterprise or operation) for which separate information is wanted; examples: maize, poultry, citrus, milk, cattle, woodlot; ◦ a column ‗other output‘ on the receipts side and a column ‗overhead costs‘ (or general costs) on the expenditures side, in which output and costs are entered which cannot be allocated to a specific activity;
  49. 49. IX. Cash Analysis Book Different columns in the Cash Analysis Book ◦ a column for livestock sales on the receipts side and a column for purchases on the expenditures side; ◦ a column for non output receipts and a column for non cost expenditures on the expenditure side; ◦ a column for receipts from the household (private) and a column for expenditures for the household; ◦ other columns.
  50. 50. Cash Analysis Book - All Organic G.M.O. Farm, San Ildefonso, Bul., January – December 2010 Receipts Machine Date Description Total Crops Livestock Others Private Rentals1/6/10 Cash in Hand 9,000 9,0001/19/10 1 Organic GMO Cow 15,000 15,0001/30/10 1 Organic GMO Pig 6,000 6,0006/1/10 Landprep rentals 12,000 12,000 Summary for the rest of the year: Crops sold 5,000 5,000 Animals sold 3,000 3,000 Machine rentals 4,500 4,500 Other sources 2,000 2,000 Total Receipts 56,500 5,000 24,000 16,000 11,000 - Expenditures Crops Vet.Serv./ Overhead Date Description Total Other Exp. Private Supp. Purch. costs1/12/10 Fertilizer 5,400 5,4001/20/10 Veterinary services 2,000 2,0001/25/10 Wages 5,000 5,0001/31/10 Building Repair 15,000 15,0007/25/10 Private drawing 1,000 1,000 Summary for the rest of the year: Crop supplies 4,000 4,000 Fuel & Oil 3,600 3,600 Vet. Serv. & Supp. 2,000 2,000 Wages 8,000 8,000 Private drawings 2,000 2,000 House repair 6,000 6,000 Cash Balance 2,500 2,500 Total 56,500 9,400 4,000 16,600 23,500 3,000
  51. 51. X. Income Statement / Profitand Loss Statement the second important financial statement; summary of receipts and expenses and the resulting profit or loss during an accounting period, usually a year; for purposes of estimating profit or loss, the accrual system presents a much better estimate of business performance;
  52. 52. X. Income Statement INCOME STATEMENT All Organic G.M.O. Farm, San Ildefonso, Bul. January 1, 2010 to December 31, 2010FARM RECEIPTS FARM OPERATING EXPENSESCrop Products sold 41,000.00 Organic GMO Seeds 1,800.00Organic GMO Cows sold 15,000.00 Feeds 16,000.00Machinery income 30,000.00 Labor 5,000.00Misc. income 2,000.00 Repairs & Maintenance 3,500.00Organic GMO Pigs sold 12,000.00 Property taxes 900.00Gross Farm Receipts 100,000.00 (1) Insurance 650.00 Supplies 2,000.00 Chemicals 3,000.00 Fuel (Gas, Diesel & Oil) 5,500.00 Waste disposal & Compost 1,200.00 Miscellaneous 650.00 Interests 2,100.00 Total Farm Cash Operating Expenses 42,300.00 (2) Net Cash Operating Income (1-2) 57,700.00 (3)
  53. 53. X. Income StatementADJUSTMENT FOR INVENTORY Crop Accounts Supplies & Accounts Livestock Prod’n. Receivable Materials PayableEnding Inventory 300.00 1,500.00 2,000.00 400.00 -Beginning Inv. 250.00 2,000.00 3,164.00 200.00 -Net Adjustment 50.00 500.00 -1,164.00 200.00 - -414.00 (4) Net Operating Profit (3 +/- 4) 57,286.00 (5)ADJUSTMENT FOR CAPITAL ITEMS Machinery & Equipments Buildings & ImprovementsEnding Inventory 21,000.00 60,000.00Plus sales 500.00Sub-total (6) 21,500.00 60,000.00Beginning Inv. 22,650.00 57,000.00Plus purchases 600.00Sub-total (7) 23,250.00 57,000.00Net Capital Adjustments (6- -1,750.00 3,000.00 1,250.00 (8)7) Farm Profit or Loss (58) 53,536 (9) Net Non-Farm Income 7,000.00 (10) Total Farm & Non-Farm Income (9+10) 60,536.00(11) Income & Security Taxes 1,650.00 (12) Net After-tax Income (11-12) 58,886.00
  54. 54. X. Income Statement Profit and Loss Statement Components: ◦ Receipts  gross returns from the sales of farm products and the value of farm products used in the home;  receipt section of the income statement assigns a value to gross farm production;  to accurately state gross income, receipts must be adjusted for inventory changes;  receipts should also be adjusted for purchases of livestock, feed, and supplies.
  55. 55. X. Income Statement Profit and Loss Statement Components: ◦ Expenses  the outlays for items paid for and used during the time period covered by the income statement ;  include all the cash operating expenses as well as the fixed expenses incurred during the accounting period;  cash operating costs are ―Farm Operating Expenses,‖ and fixed expenses are considered under ―Adjustments for Capital Items.‖;
  56. 56. X. Income Statement Profit and Loss Statement Components: ◦ Inventory adjustments  for prepaid operating expenses such as seed, chemicals, and insurance;  necessary for capital assets such as machinery and building improvements;  reflect purchases and sales that occurred during the year.
  57. 57. X. Income Statement Measures of Business Performance: ◦ Net cash operating income  determined by subtracting the cash operating expenses from gross receipts;  can be used to compare operating efficiencies across farms with different debt structure;  its primary use is related to cash flow and to estimate cash returns when taxes are calculated on a cash basis.
  58. 58. X. Income Statement Measures of Business Performance: ◦ Net operating profit  obtained by adjusting cash operating income for accounts receivable, payable, and inventory changes;  the purpose for making these adjustments is to determine an accrued accounting of income produced during the period.
  59. 59. X. Income Statement Measures of Business Performance: ◦ Farm Profit or Loss  results from adjusting net operating profit for ―Net Capital Adjustments‖;  to compute net income on an accrued basis, adjustments must be made for capital assets;  the ―bottom line‖ profit or loss is the before- tax return to the operator‘s management, capital, risk, and unpaid family labor.;  the trend of the receipts, expenses, and profit over time is valuable in analyzing the financial progress of the farm business.
  60. 60. XI. Enterprise Accounting can help you make decisions about particular components of your farm business; used to pinpoint sources of profit in the farm business and factors affecting profitability focus only on the most meaningful data; rule of thumb in collecting and recording enterprise data or farm records in general is to ask whether the information value in terms of improved decision making equals or exceeds the cost of data collection and analysis.
  61. 61. XI. Enterprise Accounting three enterprise classifications: ◦ Production Enterprises - these are crop and livestock enterprises that produce marketable commodities. ◦ Service Enterprises - include machinery and equipment services, an on-farm retail market, and the farm shop. These enterprises are internal to the farm business and provide services not directly marketed. ◦ Holding Enterprises - these are storage facilities, buildings, capital—enterprises that hold the inputs or farm-produced commodities until they are ready for use in a particular enterprise or are ready for sale.
  62. 62. XI. Enterprise Accounting factors to consider in evaluating crop and livestock enterprises : Livestock enterprises: ◦ Returns per hundred price of feed fed ◦ Feed costs per kg of meat or milk produced ◦ Feed efficiency, kg of feed per kg of product ◦ Total enterprise profits per head or per unit ◦ Other factors that might include such things as pigs weaned per litter, percent calf crop, kg of milk produced per cow, etc. Crop enterprises: ◦ Yield per hectare ◦ Returns above cash hectare ◦ Net enterprise profit per hectare ◦ Gross value of crop produced per hectare ◦ Machinery and power costs per hectare ◦ Fertilizer costs per hectare
  63. 63. XII. Cash Flow Statement know the flow of income and expenses during the accounting period to ensure you can meet your financial obligations on time; helps you assess your ability to pay bills on time; can be completed on an annual, semi- annual, quarterly, monthly, or bimonthly basis depending on the size and type of business; the larger the business and the more capital involved, the more important cash flow planning becomes.
  64. 64. XII. Cash Flow Statement Cash Flow is different from Income Statements: ◦ cash flow statement includes non-farm items such as non-farm income, living expenses, and income taxes; ◦ cash flow also more fully reflects breeding stock and machinery purchases and a more complete accounting of principal payments and loans; ◦ the cash flow can be defined as the sources and uses of funds or a flow-of-funds statement; ◦ it summarizes all the transactions during a
  65. 65. XII. Cash Flow Statement Instructions for completing a cash flow statement: 1. Complete the summary, column by column, starting with the column corresponding to the first period of the year. 2. Total lines 1 through 12 to get Total Cash Available in the period. Place the result on line 13. 3. Total lines l4 through 40 to get Total Cash Required for the period. Place the result on line 41. 4. Subtract line 41 from line 13 and place the result on line 42. If the result is negative, place a minus sign in front of it or place the value in
  66. 66. XII. Cash Flow Statement Instructions for completing a cash flow statement: 5. If line 42 is negative, show at least enough new borrowings (line 43) to cover the deficit. 6. If line 42 is positive, show projected principal and interest payments on the operating loan(s) in lines 44 and 45. 7. If line 42 is negative, subtract it from the amount of money borrowed (line 43) to get the ending cash balance (line 46). If line 42 is positive, subtract principal and interest payments (lines 44 and 45) to get the ending cash balance. 8. Increase the operating loan balance (line 47) by the amount of new borrowings during the period, or decrease it by the amount of principal payments, whichever is appropriate.
  67. 67. XII. Cash Flow Statement Instructions for completing a cash flow statement: 9. Transfer the ending cash balance (line 46 for the period you have just completed) to the beginning cash balance (line l) for the next period. 10. Repeat steps l through 9 for each period of the year. 11. One column should be completed for the total year‘s operation. The figures in this column reflect your total cash flow for the year. Each figure in this column is the sum of the figures in the individual time periods for most of the lines. But, the figures in lines 1, 13, 42, 45, and 46 do not necessarily ―add across,‖ due to the transfer of cash balances from the end of one period to the beginning of the next. If the beginning and ending cash balances were all equal, these
  68. 68. XII. Cash Flow Statement CASH FLOW STATEMENTUse pencil – round to PesosDate Completed: December 31, 2010 CASH INFLOW Period Jan 1-15 Jan 16-31 … 1. Beginning Cash Balance 2. Crops 3. 4. 5. Livestock 6. 7. 8. Custom Work 9. Agricultural Program Payments 10. Patronage Dividends 11. Other 12. 13. Total Cash Available (Add lines 1-12) CASH OUTFLOW 14. Rents and leases 15. Gas, Fuel, Oil 16. Labor hired 17. Machinery repair 18. Machinery hire 19. Fertilizer and Chemicals 20. Seeds 21. Feed Purchased 22. Livestock expense (vet., breeding, etc.)
  69. 69. XII. Cash Flow Statement23. Building and Fence Repair24. Supplies25. Utilities26. Insurance (property, liability, etc)27. Real estate taxes28. Livestock purchased for resale29. Other30.31.32.CAPITAL EXPENSE OUTFLOW33. Machinery purchase34.35. Breeding livestock36. Other37. Family living expense38. Income & security tax39. Fixed loan payments – principal40. Fixed loan payments41. Total cash required (Add lines 14-40)42. Cash available less cash required (13-14)43. Money to be borrowed (if 41 is negative)44. Debt payments (if 42 is negative)45. Ending Cash Balance46. OPERATING LOAN BALANCE
  70. 70. XIII. Field Records Field records for crop production might include such items : ◦ field identification or description; ◦ parcel size; ◦ cropping history; ◦ crops grown, cultural practices used and yield information; ◦ current field activities; ◦ soil test data; ◦ labor hours by activity.
  71. 71. XIII. Field Records Livestock or poultry records also provide useful information. Poultry records should include: ◦ chicken purchases and dates; ◦ mortality rates; ◦ feed records, quantities purchased, and quantities fed; ◦ production records, eggs per day; ◦ cull or damaged eggs; ◦ rodent control activities; ◦ sale of pullets or hens.
  72. 72. That’s it! Thankyou! References: Gletema, Bart. editor. Farm Accounting. Agromisa Foundation. Wageningen, The Netherlands, 2006 Carkner, Richard W., Farm Business Records: An Introduction. Washington State University, Washington DC, USA, 2000 RONEL DIMAYA CAÑA Agriculturist II Provincial Agriculture Office City of Malolos, Bulacan 791-0018/791-0008