Answer:
(A) $350,000
(B) $8,000,000
Step-by-step explanation:
The following information was gotten from a farm in the Rio Grande Valley
Cash receipts from farm is $500,000
Marketings Receipts of government is $100,000
Payments other income from farm sources $50,000
Production expenses is $300,000 Value of real estate assets is $10,000,000
Value of non-real estate assets is $1,000,000
Financial assets is $5,000,000
Liabilities is $8,000,000
(A) The net income farm income for this operation can be calculated as follows
= Cash receipts from farm + marketing receipts of government + payment from other income from farm sources-production expenses
= $500,000 + $100,000 + $50,000 - $300,000
= $650,000-$300,000
= $350,000
(B) The equity from this operation can be calculated as follows
= value of real estate assets + value of non real estate assets + financial assets assets- liabilities
= $10,000,000 + $5,000,000 + $1,000,000 - $8,000,000
= $16,000,000-$8,000,000
= $8,000,000