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CALCULATING NET FARM INCOME
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There are 2 methods for calculating net farm income: cash accounting AND accrual accounting. It is important to understand the differences and how to calculate both. Build the following equations by filling in the blanks. Some terms will be used more than once.
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Use the following terms for calculating net farm income: |
| Gross cash farm income | Gross cash farm revenues | |
| Cash farm expense | Inventory adjustments | |
| 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 |
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Work
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