# Suppose that I bought 600,000 bu. of wheat from the farmers at \$4.15/bu. I sold 650,000 bu. at Galve

Suppose that I bought 600,000 bu. of wheat from the farmers at \$4.15/bu. I sold 650,000 bu. at Galveston for \$ 5.45/bu. My trans-portation cost to Galveston was \$ 0.35/bu. In addition, I incurred\$ 450,000 in other expenses (cost of goods sold such as labor andelectricity). I also sold \$ 350,000 worth of fertilizers,pesticides, etc. (which represents \$ 275,000 in inventory)purchasing \$ 175,000 in additional inventory this year. I paidmyself a salary of \$ 175,000 throughout the year. During the year Ialso purchased a new front-end loader costing \$ 175,000 (assume aseven year life with straight line depreciation). This load wasplaced into service in April. The interest rate on my mortgage 10percent and the interest rate on my operating loan is 12 percent.Compute my income statement for the year. Also, Compute the yearend balance sheet assuming that I paid \$ 470,590 in principal on mymortgage. Also assume that I paid down my operating loan to \$925,000. Also create the Statement of Cash Flows and Change inOwner’s Equity statements. So, this was the first question: Suppose that I am the owner ofTurner Elevator & Supply Store in Willow, Oklahoma. I havegrain storage capacity of 500,000 bu. that I purchased ve years agoat a cost of \$ 15 million. I also purchased other equipment at acost of \$ 2.5 million. I set up a straight line depreciationschedule for the bins assuming 15 years of remaining life at thetime of purchase. I assigned a seven year life to the other assetsat the time of purchase (I assume that both bins and otherequipment have zero salvage value). Currently I have \$ 175,000 ofcash on hand and accounts receivable of \$ 125,000. In addition, Ihave 100,000 of wheat in the bins that I paid \$ 4.05/bu. for atharvest time, and \$ 95,000 of inventories on hand (fertilizer,seed, etc.) for sale. However, based on my operating expenses, Icompute another \$ 0.65 /bu. cost from operations must be added tomy inventory of wheat on hand. My mortgage payable (for thepurchase of the bins stands) at \$ 7.5 million { the originalmortgage was for ten years and I have made the standard paymentsbased on a xed payment schedule. I also have an operating loan atthe local bank for \$ 1 million. Derive my balance sheet at thebeginning of year 5. What is my equity? But I do not believe this info is related to my secondquestion. . . .