Question

Balance Sheet, Jan 1, 2019
Current Assets	Cost		Current Liabilities	Cost
Cash	13,000		Accounts Payable	35,000
Corn Grain Inventory	20,000		Interest Payable	11,850
Wheat Inventory	10,000		Principal Farm Mortgage	20,000
Prepaid expenses	5,500		Principal Beef Loan	10,000
Feed on hand	80,000		Operating Loan	75,000
Market Livestock	32,000		Property Taxes Payable	15,000
Accounts Receivable	2,000
Supplies	4,000
Total current assets	166,500		Total current liabilities	166,850
Intermediate Assets			Intermediate Liabilities
Machinery	300,000		Beef Loan	100,000
Beef Breeding Stock	55,000
Titled Vehicles	26,000
Total Intermediate Assets	381,000		Total Intermediate Liabilities	100,000
Long-Term Assets			Long-term Liabilities
Land	318,000		Farm Mortgage	170,000
Buildings	67,000
Total Long-term Assets	385,000		Total Long-term Liabilities	170,000
			Total liabilities	436,850
			Owner equity	495,650
Total Assets	932,500		Total liabilites & owner equity	932,500

Create the Beginning Balance Sheet (Jan 1, 2019) in a new spreadsheet.

Question 1

On a new sheet in your spreadsheet file, calculate the annual depreciation for each depreciable asset on your opening balance sheet. The beef breeding livestock on the Jan 1, 2019 balance sheet are purchased. Use a depreciation rate of 10% for the breeding livestock, 10% for machinery and equipment, and 5% for any other depreciable assets. Calculate how much the book value of each depreciable asset would be on December 31, 2019.

Answer 1

Depreciation on varies assets as follows,

Machinery Balance as on 1st December 3,00,000 Less: Dep 10% Balance as on 31st Dec,2019 30000 2,70,000 Beef Breeding Stock Balance as on 1st December Less: Dep 10% Balance as on 31st Dec, 2019 55,000 5500 49,500 Titled Vehicles Balance as on 1st December Less: Dep 5% 26,000 1300 Balance as on 31st Dec, 2019 24,700 Buildings Balance as on 1st December Less: Dep 5% 67,000 3350 Balance as on 31st Dec, 2019 63,650

After passing Depreciation effect balance sheet as on 31st December, 2019 as follows. Depreciation expenses reduced from Owners equity $40150/- ( Total of all depreciation as per above working sheet)

Cost Cost Balance Sheet, December, 2019 Current Assets Cost Cash Corn Grain Inventory 13,000 20,000 Current Liabilities Accounts Payable Interest Payable 35,000 11,850 20,000 Wheat Inventory 10,000 Principal Farm Mortgage Prepaid expenses Feed on hand 5,500 80,000 Principal Beef Loan Operating Loan 10,000 75,000 Market Livestock 32,000 Property Taxes Payable 15,000 Accounts Receivable Supplies 2,000 4,000 1,66,500 Total current assets Total current liabilities 1,66,850 Intermediate Liabilities Intermediate Assets Machinery Beef Breeding Stock Titled Vehicles Beef Loan 1,00,000 2,70,000 49,500 24,700 3,44,200 Total Intermediate Assets Total Intermediate Liabilities 1,00,000 Long-term Liabilities Farm Mortgage 1,70,000 Long-Term Assets Land Buildings Total Long-term Assets 3,18,000 63,650 3,81,650 Total Long-term Liabilities 1,70,000 Total liabilities 4,36,850 Owner equity 4,55,500 Total Assets 8,92,350 Total liabilites & owner equity 8,92,350