WIS003 AGRIBUSINESS ACCOUNTING 02/23/1990 01:04 PM D1 298 Lines Agriculture Marketing/Distribution and Retail Services Agribusiness Accounting (20-30 days) This unit deals with the accounting procedures for agribusinesses. Topics include finances, earnings and analysis of the business, and career opportunities. Also included are the federal and state tax considerations and tax schedules to be filed. Objectives To acquaint students with employment information and career opportunities in the agribusiness accounting industry To develop student understanding of the need for accurate, timely records To develop student understanding of fundamental accounting concepts and principles To provide students with instruction in the use of accounting terminology To instruct students in how to prepare basic accounting records To increase student understanding of how accounting records are used to make management decisions in agribusiness operations To help students evaluate farm and agribusiness operations using relevant goals and standards To emphasize to students the need for complete and accurate records for preparing and validating state and federal tax forms To acquaint students with computerized recordkeeping systems for farm and agribusiness operations Competencies At the conclusion of this unit, students will be able to explain current employment information such as job descriptions, job availability, personal and educational requirements, working conditions, opportunity for advancement, and other factors relative to potential employment in agribusiness accounting and relate it to their personal needs and aspirations; define and associate words and terms involving agribusiness accounts; prepare net worth, net income, and labor income statements; compare methods of computing depreciation; prepare an inventory for the farm or agribusiness; analyze strong and weak points of an agribusiness; complete federal and state income tax returns; and prepare a Social Security summary for hired labor. Subject Matter (Basic skills integration areas are shown in brackets following title.) Careers - Current and future employment needs - Job descriptions - Training requirements - Working conditions - Opportunities for advancement - Other factors Comparative methods of doing business [Social Studies] - Individual proprietorship - Partnership - Profit and nonprofit corporations (including pseudo) - Cooperatives Benefits derived from keeping records [Social Studies] - Income tax - Know where you stand Net worth statement Profit and loss Business analysis of strengths and weaknesses - Tool for obtaining credit - Division of profits Basic terms used in keeping records [Mathematics] - Income versus expense - Assets versus liabilities - Net income versus labor income - Net income versus net worth - Partial budgets - Depreciation methods compared Straight line Double declining balance Sum-of-the-year's-digits Accelerated Cost Recovery System (ACRS) Business account records [Mathematics] - Business expense - Business income - Business inventories and depreciation - Net earnings statement - Net worth statement Analysis of business accounts - Profitability Returns to labor and management Rate of return to capital invested Operating income/operating expense ratio - Solvency Current liabilities/current assets ratio Total liabilities/total assets ratio Types of taxes - Real estate or property - Sales - Income - Unemployment Federal income tax forms and schedules - Form 1040, U.S. Individual Income Tax Return - Form 3468, Computation of Investment Credit - Form 4255, Recapture of Investment Credit - Schedule C, Profit or Loss from Business - Schedule D, Capital Gains and Losses - Schedule F, Farm Income and Expenses - Schedule SE, Social Security Self-Employment Tax Motivational Activities Invite a lawyer, accountant, farmer, businessperson, or Internal Revenue Service representative to give a talk on a topic in their field of expertise. View films, slides, and videotapes on agribusiness. Visit an income tax office. Take field trips to local business operations to observe their accounting procedures. Learning Activities Participate in a Supervised Agricultural Experience program. Prepare tax returns on the agribusiness operation used as a class exercise. Determine business income and expenses from available records. Establish production goals for the agribusiness operation used as a class exercise. Set up a depreciation schedule for machinery and equipment on the agribusiness operation used as a class exercise. Prepare a net income and net worth statement from available business records. Set up an agribusiness accounting system. Instructional Materials Textbooks and References Agricultural Economics and Agribusiness by Gail L. Cramer and Clarence W. Jenson. New York: John Wiley and Sons, 1985. Available from National Farm Book Company. Farm Accounting and Business Analysis by Sydney C. James, and Everett Stoneberg. Ames, IA: Iowa State University Press, 1986. Available from National Farm Book Company. The Farm Management Handbook by W.P. Mortenson and R.A. Luening. Danville, IL: Interstate, 1979. An Introduction to Agri-Business Management by Walter J. Willis. Danville, IL: Interstate, 1979. Available from National Farm Book Company. Principles of Management in Agri-Business by Ken Duft. Reston, VA: Reston Publishing, 1979. Available from National Farm Book Company. Bulletins and Pamphlets The following are available from the Cooperative Extension Service. Farm Business Arrangements: Which One for You? NCR50. The Farm Corporation: What It is - How It Works - How It Is Taxed. NCR11. Income Tax Management for Farmers. NCR2. Managing the Financial Future of Your Dairy Farm. NCR225. Managing the Financial Future of Your Dairy Farm - Analyzing Your Numbers. NCR225-3. Managing the Financial Future of Your Dairy Farm - Determining Your Goals and Values. NCR225-1. Managing the Financial Future of Your Dairy Farm - Gathering the Numbers You Need. NCR225-2. Managing the Financial Future of Your Dairy Farm - Using Your Numbers in Decision Making. NCR225-4. Managing Your Farm Financial Future. NCR34. Planning Your General Farm Partnership Arrangement. NCR224. The following is available from the Internal Revenue Service. Your Federal Income Tax The following is available from Doane Agricultural Service, Inc. Tax Management Guide The following are available from the United States Department of Agriculture. Cooperatives in Agribusiness. S/N001-000-04349-8. Financial Well-Being of Farm Operators and Their Households. S/N001-019-0048-5. Periodicals Doane's Agricultural Report Drovers Journal Farm Journal Computer Software The following are available from Hobar Publications. F.A.R.M. Aids. Apple, IBM. F.A.R.M. Problems. Apple. Farm Accounting and Record Management. Apple, IBM. The Farming Game. Apple, IBM. Types and Calculating Depreciation. Apple. The following are available from Photocom. Agricultural Financial Calculations. Apple, IBM. Depreciation. IBM. Farm Records. Apple, IBM. On-line Computer Networks The following are available from Ag Ed Network, AgriData Resources, Inc. Agricultural Business Management. CLF400. Agriculture Management. CSU280. Blank Cash Flow Sheet: Grains. FE2699. Blank Cost Sheet: Cow/Calf. FE647. Equipment Depreciation. CSU918. Income Tax: Corporate/Individual. FE4300. Laboratory Resources The following are available from Ohio Agricultural Education Curriculum Materials Service. Coordinated Financial Statements for Agriculture. 804X. 2nd edition. 1984. Set of Financial Statements. 805X. 1980. You and Your Balance Sheet. 806X. 1985. The following is available from the Internal Revenue Service. Understanding Taxes - Student Workbook. Publication 21, Publication 22. Films, Videotapes, and Slides The following is available from the Bureau of Audio Visual Instruction. Farm Records: The Net Worth Statement. 11342 (VHS videotape, color, 35 minutes). University of Wisconsin, Department of Agricultural Journalism, 1984. The following is available from Doane Agricultural Service, Inc. Increasing Earnings Through Farm Records. 353A (Filmstrip). The following is available from the Grange Farm Film Foundation. In the Pursuit of Excellence - Agricultural Excellence. (16mm film, color, 13 minutes) Equipment and Facilities Computer/printer/modem