For 2018, the standard mileage rate for the cost of operating your car, van, pickup, or panel truck for each mile of business use is 54.5 cents. (Up 1 cent form 2017)
Prepare Your Financial Statements
You need records to prepare accurate financial statements. These include income (profit and loss) statements, cash flow statements, and balance sheets. These statements can help you in dealing with your bank or creditors and help you to manage your business.
Proper financial statements require journal entries of all your assets, liabilities, revenues, and expenses. The checkbook part is easy, but the asset entries are complicated. Best to have an accountant do that.
Rule Accounting is ready and available to assist you in preparing your financial statements. Most banks will work with you to prepare the financial information they want to see. To really impress them, have your financial statements professionally prepared.
Of course, the main reason to prepare financial statements is to protect your business. Comparing your companies historical financial statements will show you important trends in your business.
Remember, accurate financial statements are for your benefit.
Brett Bickham, 3/12/19
Rule Accounting
Clifton, TX
Assets
Assets are the property, such as ma- chinery and equipment, you own and use in your business. You must keep records to verify certain information about your business assets. You need records to figure your annual depreci- ation deduction and the gain or (loss) when you sell the assets. Your records should show all the following.
- When and how you acquired the asset.
- Purchase price.
- Cost of any improvements.
- Section 179 deduction taken.
- Deductions taken for depreciation.
- Deductions taken for casualty losses, such
- as losses resulting from fires or storms.
- How you used the asset.
- When and how you disposed of the asset.
- Selling price.
- Expenses of sale.
Inventory Cattle
Inventory is something that you sell. Prepaid supplies are used to assist your business. Raw materials are used to produce inventory. Inventory, prepaid supplies, and raw materials are all current assets. Inventory cattle are raised cattle, available for sale. Current assets are available for sale. Fixed assets are part of your business to generate income. From Schedule F (Form 1040), Profit or Loss from Farming, they refer to mama cows as livestock and other resale items. Implies that cow/calf operations buy cows to resale them. Granted, a lot of cows are culled and sold, but I would not classify them as resale cattle. Calves put on feed and sold the following year, are inventory cattle.
When you do sell mama cows, the IRS wants to know how much you paid for those cows. That amount is to be reported to the IRS on schedule F as “Cost or other basis of livestock or other items reported on line 1a”. The “other basis” is to include any feed given to replacement heifers or bulls.
Continue reading “Inventory Cattle”What is a Derivative?
Just what is a derivative? Well first let’s define a function. A function is a relationship between any two dependent numbers. One number is the independent variable and the other is the dependent variable. This may be used for many applications such as supply and demand, marginal cost and fixed cost, rate of change, velocity, etc.
A derivative is the rate of change at a particular time, or the instantaneous rate of change. On a continuous curved domain line, the derivative of a particular point is the slope, rise over run, of the tangent line to that point. Average rates of change in data are based on multiply points. A rate of change at a particular point is a derivative.
Continue reading “What is a Derivative?”Is Paper Currency Dead?
There are exactly 1,000 $100 bills in a bundle. According to Federal Reserve Bank Services, a bundle is comprised of 10 currency straps of 100 bills each for all bills greater than $1. A currency strap of $100 bills is worth $10,000 and a 10-strap bundle totals $100,000. 100 notes is the worldwide standard count for one strap – regardless of denomination. 10 straps always = one bundle. A “bundle” of strapped cash a/k/a a “brick” contains 1,000 bills.
Continue reading “Is Paper Currency Dead?”Profit is a Relative Term
I recently read several scholarly articles (which I will not cite here as I do not wish to debate such intelligent authors) concerning accounting theory over sustainability of our environment for future generations. That ignited me to thinking about GAAP accounting conceptual framework. Different people have different realities concerning what is “profit”.
Continue reading “Profit is a Relative Term”For anyone interested in basic cattle knowledge, not just accountants.
Exchanging Assets for Assets
Exchanging assets sounds simple. The process involves a method of payment, noting the amount paid, checking a statement periodically, and of course end of year taxes. The process sounds simple. For those of you who are movers and shakers in your community, as your assets grow, so does the process.
To individuals, assets may be their home, savings account, investments, gun collection, etc. These items appreciate in value. Other individuals consider their assets to be their truck, boat, ATV, or music collection. People, these items are not assets. An asset is something that will make you money. Either way, it does not matter for individuals. For individuals, assets (real or not) cost you money. Assets make you money. I use to have horses, now I have cattle. Horses cost me money. Cattle make me money.
Continue reading “Exchanging Assets for Assets”Track of Assets
Keeping track of assets sounds simple. The process is relative. Relative meaning it depends what assets you are tracking. Assets include cash, cattle, feed, equipment, and other items which will make you money. In other words, a return on your investment. Some of these items are definitely easier to keep up with than others.
Continue reading “Track of Assets”