Financial Statement Scenario

Tucker Farm Business  Read aloud as a class about the Tucker Farm Business in the business description.  As you are reading, underline or highlight important information.  Have discussions about the farm business and compare and contrast with local farm businesses.

Balance Sheet Information  As a class determine what assets and liabilities are current and what assets and liabilities are non-current. This will get everyone ahead for tomorrow’s lesson.  Write CA, CL, NCA, or NCL by each item. Save this information for tomorrow.  Current Assets: Have a useful life of one year.  Current Liabilities: Are debts that are due this year.  Non-Current Assets: Have a useful life of longer than one year.  Non-Current Liabilities: Are debts that are due beyond this year.

Balance Sheet Information  Accounts Payable with Merchants – Current Liability  Bank Balance – Current Asset  Savings and CD’s – Current Asset  Accounts Receivable – Current Asset  Crops and Feed Inventory – Current Asset  Machinery Buildings, and Land – Non-Current Asset  Market Livestock Inventory – Current Asset  Prepaid Expenses – Current Asset

Income Statement Information  Quickly skim through information in the Income Statement information. This will be used and explained at a later time.

Cash Flow Statement Information  Quickly skim through the cash flow information. This section will also be explained in another lesson.

What is the difference between the three statements?  Balance Sheet: A balance sheet shows a businesses financial situation. It shows how much of the business the operator actually owns.  Income Statement: Shows the profitability of a business  Cash Flow: Shows where money goes into and out of a business in the course of a year. It provides valuable information on what months loans will be needed and what months loans can be paid back.