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CALCULATING NET FARM INCOME

There are two methods for calculating net farm income. Cash Accounting or Accrual Accounting. It is important to understand the differences and how to calculate both. Build the following equations by filling in the blanks with the appropriate phrases. DO NOT USE NUMBERS!
Print out this sheet.Fill out this sheet.

Use the following terms for calculating net farm income. Each column is an equation.

Name: ______________________________________

Name: 

Date: ______________________________________

Date:   

Gross cash farm income Gross cash farm revenue
Cash farm expense Inventory adjustment
Net cash farm income Gross farm revenues
Depreciation Cash farm expenses
Net farm income from operations Depreciation
Gain/loss on sale of farm capital assets Non-cash expenses adjustments
Net farm income Net farm income from operations
Gain/loss on sale of farm capital assets Net farm income
 
NET FARM INCOME NET FARM INCOME
(Cash Accounting) (Accrual Accounting)
   
1. _____________________________________________________ 8. _____________________________________________________ 1. 8.
2. - _____________________________________________________ 9. +/- _____________________________________________________ 2. - 9. +/-
3. = _____________________________________________________ 10. = _____________________________________________________ 3. = 10. =
4. - _____________________________________________________ 11. - _____________________________________________________ 4. - 11. -
5. = _____________________________________________________ 5. =  
6. +/- _____________________________________________________ 12. +/- _____________________________________________________ 6. +/- 12. +/-
7. = _____________________________________________________ 13. = _____________________________________________________ 7. = 13. =
  14. +/- _____________________________________________________ 14. +/-
  15. = _____________________________________________________ 15. =
 

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