PRIMARY PRODUCERS

1. 5 PRIMARY PRODUCERS LEARNING OUTCOME: TO PRODUCE THE ACCOUNTING RECORDS AND FINANCIAL REPORTS MAINTAINED BY PRIMARY PRODUCERS THE ACCOUNTING RECORDS INCLUDE WORKING ACCOUNTS, LIVESTOCK ACCOUNTS, A STATEMENT OF FINANCIAL PERFORMANCE AND A STATEMENT OF FINANCIAL POSITION  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

2. KEY TERMS • agistment • average cost • deaths • growing crop • livestock accounts • natural increase • primary producer • rations • stores  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

3. RECORDS • Agistment book • Goods and services tax • Natural increase book • Paddock book • Rations book • Records of livestock deaths • Shearers record book • Station diary • Stores record • Wages record • Wool record  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

4. LIVESTOCK ACCOUNT • Shows only the number of animals maintained on a farm as an income producer and their value  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

5. COMPONENTS OF LIVESTOCK ACCOUNT • Opening stock • Natural increase • Purchases • Deaths • Deaths by disease • Rations • Closing stock  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

6. VALUES FOR NATURAL INCREASE OF LIVESTOCK • The Income Tax Act stipulates the minimum per-head values of natural increase  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

7. OTHER COSTS ASSOCIATED WITH LIVESTOCK • These costs are entered in the profit and loss account: • crutching • stock feed • veterinary fees • freight charges • The number of stock killed for rations for use on the farm are credited to the livestock account  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

8. LIVESTOCK ACCOUNT • Illustration 5A (page 116)  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

9. VALUATION OF CLOSING STOCK CALCULATION:  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

10. RATIONS ACCOUNT • Illustration 5C (page 117) • Comments • Drawings a/c – owner takes stock for food • Wool a/c – stock used for shearers’ food • Profit & loss a/c - general farmhands’ rations  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

11. PRODUCE ACCOUNTS • Separate ledger accounts should be maintained for costs and income associated with the various items of production e.g. wool and wheat • These record expenses incurred and are matched with income from sales • The result is a net gain or loss, which is transferred to the profit and loss account  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

12. PRODUCE ACCOUNTS • WOOL ACCOUNT includes • cost of sheep shearing • other expenses associated with wool production • income from sale of wool bales • often an opening and closing of stock on hand • SKINS AND HIDES ACCOUNT • skins and hides of stock killed on the farm are sold as a by-product  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

13. WOOL ACCOUNT • Illustration 5D (page 118)  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

14. PRODUCE ACCOUNTS • WHEAT AND GROWING CROPS • Crops are usually planted in one accounting period and are not harvested and sold until the next accounting period • Growing crop account • Wheat or other cereals account  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

15. STORES USED • Stores used in farm production may be kept on the property • This account could include purchases for cash or on credit, returns, labour costs associated with distributing the stores • Items used from the store are considered to be issues  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

16. PROFIT AND LOSS ACCOUNT • Income from the livestock account and the produce account are transferred into the profit and loss account with other items covering the business overall  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

17. STATEMENT OF FINANCIAL PERFORMANCE • A farmer may need to prepare a Statement of Financial Performance at certain times e.g. when applying for a bank loan  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson

18. STATEMENT OF FINANCIAL POSITION • Required by accounting standards AASB 1040 • Assets and liabilities are to be differentiated between current and non-current  2003 McGraw-Hill Australia Pty Ltd, PPTs t/a Applications for Financial Accounting by David Willis, slides prepared by Kaye Watson