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Understanding Tucker Farm's Financial Statements: A Classroom Exploration

This lesson focuses on the financial statements of Tucker Farm, guiding students through a detailed analysis of the balance sheet, income statement, and cash flow statement. Students will engage in discussions to compare Tucker Farm with local agricultural businesses, highlighting the key differences and similarities. The class will categorize assets and liabilities, emphasizing current vs. non-current distinctions. By the end, students will have a foundational understanding of financial statements and their significance in assessing a business's financial health.

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Understanding Tucker Farm's Financial Statements: A Classroom Exploration

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Presentation Transcript

  1. Financial Statement Scenario

  2. Tucker Farm Business • Read aloud as a class about the Tucker Farm Business in the business description. • As you are reading, underline or highlight important information. • Have discussions about the farm business and compare and contrast with local farm businesses.

  3. Balance Sheet Information • As a class determine what assets and liabilities are current and what assets and liabilities are non-current. This will get everyone ahead for tomorrow’s lesson. • Write CA, CL, NCA, or NCL by each item. Save this information for tomorrow. • Current Assets: Have a useful life of one year. • Current Liabilities: Are debts that are due this year. • Non-Current Assets: Have a useful life of longer than one year. • Non-Current Liabilities: Are debts that are due beyond this year.

  4. Balance Sheet Information • Accounts Payable with Merchants – Current Liability • Bank Balance – Current Asset • Savings and CD’s – Current Asset • Accounts Receivable – Current Asset • Crops and Feed Inventory – Current Asset • Machinery Buildings, and Land – Non-Current Asset • Market Livestock Inventory – Current Asset • Prepaid Expenses – Current Asset

  5. Income Statement Information • Quickly skim through information in the Income Statement information. This will be used and explained at a later time.

  6. Cash Flow Statement Information • Quickly skim through the cash flow information. This section will also be explained in another lesson.

  7. What is the difference between the three statements? • Balance Sheet: A balance sheet shows a businesses financial situation. It shows how much of the business the operator actually owns. • Income Statement: Shows the profitability of a business • Cash Flow: Shows where money goes into and out of a business in the course of a year. It provides valuable information on what months loans will be needed and what months loans can be paid back.

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