Inventories of Current Assets

Page 19

Page 19 is completed on beginning and

ending dates of the record book.

Page 19 is for entering opening and closing inventories of

Current Assets.

What is an ASSET?

Any item you own that has value is an asset.

For your record book, an asset is any part of the business necessary to conduct the SAEP.

Any asset on hand at the end of the year AND placed in the closing inventory is considered

PRODUCTIVELY INVESTED.

Definition of Current Asset

Examples:

-Market pig for pork production.

-Angus steer for beef production.

What is an INVENTORY?

Answer: An inventory is an itemized list of all assets on hand on a specific date.

A normal inventory usually includes a description of the item(s) on hand and the quantity of each item.

For the purpose of a January-December record book:

• List your SAEP assets on hand at the beginning and then at the end of the record book year.

• Use two dates: January 1 and December 31 of each year. Beginning students use date entered ag class.

Sample Inventory(Using Microsoft Excel)

Non-Depreciable Asset

An example of a NON-DEPRECIABLE item is market livestock. Market livestock, such as market pigs, increase in value. You buy feed for them and then eventually sell them. Because you are constantly placing more money into the animals, their value increases. In fact, when you sell the animals, you expect to make a cash profit on them.

Go to page 19, click “Select a Schedule,” and review the first FOUR schedules. Current assets

will fit into these schedules.

Items to Enter in each Schedule

• 1st: Select the enterprise to which the inventory asset pertains.

• 2nd: Provide a description of the asset.

• 3rd: For the Beginning Date or Ending Date column, enter the quantity and unit.

• 4th: Enter the value of the asset at the inventory date.

Example for Schedule A

Beginning Date versus Ending Date

• If you have an asset on hand at the beginning of the year, then the value and quantity go under the Beginning Date.

• If you obtained the asset sometime during the year and it is on hand at the end of the year, then enter the closing value and quantity under Ending Date.

Beginning Date versus Ending Date

• EXAMPLE: It is December 31 and you are feeding a market hog that you plan to exhibit in late January. List the hog as an asset under “Investment in raised market livestock or poultry” in the columns for Ending Date. That hog will also be listed in the Beginning Date columns in the next record book.

• For first year students, the beginning date may be the first day they enroll in the ag class.

• For graduating students or students leaving the agriculture program, the ending date may be the last day they are enrolled in the ag class.

Beginning Date versus Ending Date

The first schedule is for Harvested and Growing Crops.

Example: You harvested a corn crop earlier, but stored the corn for sale in January. The corn and its market value are entered on the Ending Date columns. Because the asset was not on hand on the first day of the year, nothing is entered in the Beginning Date columns.

Schedule B is for feed, seed, fertilizer, chemicals, supplies, prepaid expenses,

and other current assets.

Example: You have 15 gallons of fertilizer that was not used on the corn field. You will keep the fertilizer for use next year. The fertilizer on hand and the price you paid for it are entered on the Ending Date columns.

The third schedule is for merchandise, crops, and livestock purchased for resale.

Example: You purchased a market barrow for exhibit and sale. Because you were told pigs grow better with other pigs, you bought another pig (gilt) to accompany the market barrow. After the barrow sold in December, the companion gilt was held to be sold in January to its original owner. The ending value of the gilt is the price you paid for her plus the value of the feed and other items placed in her.

Schedule D is for raised market livestock and poultry.

Example: You bought a barrow in September and plan to show it at the county youth show at the end of January. To the price paid for the pig, add the cost of feed, rent, and medicine put into the pig and enter that value at the Ending Date. That same value will go to the Beginning Date in the next record book.

If you have questions about inventories . . .

• . . . always check the “section instructions” if you are confused about what needs to be entered.

• . . . ask your agriscience teacher for help.