2003 District FFA
Farm Management Contest
2003 DISTRICT FFA FARM MANAGEMENT CONTEST
Multiple Choice Section
The Farm Management Contest is designed to test student
understanding of the application of economic principles in farm
management. Each question is worth three (3) points.
Choose the best answer and mark the appropriate box on the score
sheet provided. There is only one correct answer to each question.
1. For tax year 2002, the social security wage base was
A. $73,300
B. $76,200
C. $80,400
D. $84,900
E. None of the above
2. A farmer purchases 550-pound feeder steers for 98 cents per
pound and plans to sell the steers at 750 pounds. The farmer
estimates the total cost of gain to be 38 cents per pound. The
nearest breakeven price when the steers are sold at 750 pounds is
A. 73.75 cents/pound
B. 80.33 cents/pound
C. 81.25 cents/pound
D. 82.00 cents/pound
E. None of the above
3. In January 2001 the exchange rate between the Japanese yen
and U.S. dollars was 132 yen/dollar. In January 2003 the exchange
rate was 119 yen/dollar. This change in the exchange rate would be
expected to cause the price of U.S. goods in Japan to
A. be 10% more expensive.
B. be 10% less expensive.
C. increase by 13 yen.
D. decrease by 13 yen.
E. None of the above
4. If high oil corn has the same production cost per acre as
regular corn but can be sold for 15 cents per bushel more, what
yield of high oil corn is needed to equal 130 bushels of regular
corn at $2.25 per bushel?
A. 113.2 bushels
B. 117.5 bushels
C. 119.4 bushels
D. 121.9 bushels
E. None of the above
5. The two primary methods of describing the size and location
of farmland are rectangular survey and
A. angle and distance.
B. differential elevation.
C. border calibration.
D. metes and bounds.
E. None of the above
6. A producer decides to store his corn in the local elevator
for 4 months. The price at harvest is $2.10 per bushel and the
elevator charges 2 cents per bushel per month for storage plus 5
cents per bushel handling charge. He has 5,000 bushels to sell and
must borrow $20,000 at 7% annual interest while he stores the corn.
What price must he receive for his corn to break even and cover his
storage and opportunity costs?
A. $2.10
B. $2.23
C. $2.28
D. $2.32
E. None of the above
7. Which of the following is not a type bankruptcy?
A. Chapter 7
B. Chapter 11
C. Chapter 12
D. Chapter 13
E. None of the above
8. A hectare equals
A. 0.40 acres
B. 1.74 acres
C. 2.47 acres
D. 5.05 acres
E. None of the above
9. A farmer who wants a real rate of return on his investment
of 5% will use what discount rate if he anticipates inflation of 2%
per year?
A. 2%
B. 3%
C. 5%
D. 7%
E. None of the above
10. An increase in the rate of inflation, everything else equal,
will have what impact on the present value of a future stream of
income?
A. No impact
B. Increase the present value
C. Decrease the present value
D. Cannot tell
E. None of the above
11. Farmer Brown has a debt-to-asset ratio of 53%. His
debt-to-equity ratio must be
A. negative.
B. 47%.
C. Less than 100%.
D. Greater than 100%.
E. None of the above
12. Fred Brown raises corn and feeds it to his hogs. This type
of business structure is an example of
A. vertical integration.
B. horizontal integration.
C. supply company.
D. marketing cooperative.
E. None of the above
13. If the price of a commodity is too low, the demand will be
greater than the supply resulting in a
A. surplus.
B. boycott.
C. monopoly.
D. shortage.
E. None of the above
14. For tax year 2002, a self-employed individual may deduct
_____% of his/her cost for health insurance.
A. 40%
B. 50%
C. 70%
D. 100%
E. None of the above
15. How many pounds of 48% protein soybean meal must be mixed
with 10% protein wheat to make a ton of 16% protein feed?
A. 211 pounds
B. 316 pounds
C. 439 pounds
D. 487 pounds
E. None of the above
16. When the size of the soybean harvest exceeds locally
available farm and elevator storage, what happens to the basis?
A. Basis narrows.
B. Basis widens.
C. Basis goes out of existence.
D. Basis is usually the same all year long.
17. The money you must deposit with a broker to insure
performance in order to trade in the futures market is called
A. basis.
B. margin.
C. commission.
D. spread.
E. None of the above
18. A farmer began the year with an outstanding balance of
$40,000 on his operating loan and accrued interest of $500 on the
loan. The loan carries an interest rate of 8% on outstanding
principal. Six months later he makes a $2,000 payment on the loan.
After this payment he will have an accrued interest of
A. $0.
B. $100.
C. $500.
D. $1,700.
E. None of the above
19. A feedlot operator purchases a pen of 90 feeder steers with
an average weight of 780 pounds and sells them at an average weight
of 1147 pounds. Total feed cost for the pen of steers is $15,500.
Feed cost per pound of gain is equal to
A. $0.469
B. $0.515
C. $0.649
D. $0.720
E. None of the above
20. As a farmer plants more acres of a crop, which of the
following costs is least likely to change?
A. Total variable costs
B. Average variable costs per acre
C. Average fixed costs per acre
D. Average total costs per acre
E. Both C and D
21. A producer sells 10 feeder steers for $86/cwt. The average
weight per steer is 745 pounds. There is a 2% sales commission and
yardage fees of $2.25 per head. The net amount received for the pen
of steers would be
A. $6,027.60
B. $6,256.36
C. $6,958.80
D. $7,049.62
E. None of the above
22. How many gallons of water must be mixed with 2 pints of
herbicide to make a 1% solution?
A. 12.375
B. 12.500
C. 24.750
D. 25.000
E. None of the above
23. Which is lighter, a bushel of shelled corn or a bushel of
soybeans?
A. Shelled corn
B. Soybeans
C. They weigh the same.
D. Depends on whether measured in pounds or kilograms.
E. None of the above
24. If you buy a 35-pound feeder pig for 80 cents per pound and
sell the same animal at 265 pounds for 40 cents per pound, your
breakeven cost of production per pound of gain is:
A. 30.5 cents
B. 33.9 cents
C. 36.2 cents
D. 38.2 cents
E. None of the above
25. A grain farmer who normally stores his soybeans at a local
elevator has decided to use the options market to create a synthetic
storage. To do so he will sell his beans at harvest and
A. buy a put option.
B. sell a put option.
C. buy a call option.
D. sell a call option.
26. During the year, a farmer pays $1,850 principal and $500
interest on a tractor loan. His annual depreciation is $2,000. His
deductible operating expenses (fuel, oil, repairs, etc) associated
with operating the tractor totaled $500. His marginal tax rate is
41%. What is his after-tax cash cost of using the tractor for the
year?
A. $ 750
B. $1,620
C. $2,100
D. $3,600
E. None of the above
27. A record keeping system which records both the addition to
equipment and the reduction of cash when an asset is purchased is
called
A. an income statement.
B. dual effect.
C. a balance sheet.
D. double entry.
E. None of the above
28. The main difference between cash and accrual accounting is
that accrual accounting includes
A. a charge for unpaid family labor.
B. depreciation.
C. an adjustment for changes in inventory.
D. sales of assets.
E. None of the above
29. For 2002, the self-employment tax rate for Medicare was
A. 2.90%.
B. 7.65%.
C. 15.30%.
D. 25.00%.
E. None of the above
30. If the U.S. corn industry has an inelastic demand curve, a
decrease in the amount of corn supplied to the market would (ignore
government payments)
A. have no effect on total revenues in the corn
industry.
B. increase the total revenues in the corn industry.
C. decrease the total revenues in the corn industry.
D. cause a sharp increase in the demand for corn.
E. None of the above
31. A farmer should issue an IRS Form 1099 for which of the
following?
A. $750 paid to a neighbor for hay.
B. $500 paid to a neighbor for custom work.
C. $1500 paid to a neighbor for a bull.
D. $650 paid to a neighbor for land rent.
E. All of the above
32. An LLC (Limited Liability Company) is usually
A. taxed like a corporation.
B. taxed like a partnership.
C. not for profit and therefore not taxed.
D. illegal in Missouri.
E. None of the above
33. On March 1, Sue borrows $50,000 to be paid back in December
and puts it in her checking account. This will cause her current
ratio to
A. increase.
B. decrease.
C. not change.
D. Any of the above
E. None of the above
34. Other things equal, the value of land will be greatest to
the farmer who has the
A. longest planning horizon.
B. shortest planning horizon.
C. highest discount rate.
D. lowest discount rate.
E. None of the above
35. For the rules of depreciation, which of the following is an
example of "listed property"?
A. A home
B. A raised cow
C. A greenhouse
D. A passenger car
E. None of the above
36. Many farmers do a considerable amount of custom work. Their
reason for doing this is
A. to spread the fixed cost of their equipment over
more acres.
B. to earn a return to under-utilized labor.
C. to help out their neighbors.
D. to supplement on-farm income.
E. All of the above
Use the following information to answer questions 37-40.
The national average loan rate for soybeans under the 2002
Farm Bill is $5.00/bushel. Assume on October 15, 2003:
1. Sally harvests 1,000 bushels of soybeans.
2. The local elevator is bidding $4.80/bushel for
soybeans.
3. The posted county price (PCP) for soybeans is
$4.82/bushel.
37. If on October 15 Sally sells her beans at the local elevator
and collects the soybean loan deficiency payment, she will receive a
total of
A. $4.80/bushel.
B. $4.82/bushel.
C. $4.98/bushel.
D. $5.00/bushel.
E. None of the above
38. If on October 15 Sally decides to store her soybeans but to
go ahead and collect the loan deficiency payment, she will get a
government check for
A. $0.18/bushel.
B. $0.20/bushel.
C. $4.82/bushel.
D. $5.00/bushel.
E. None of the above
39. If Sally collects her loan deficiency payment on October 15
but stores his beans until December 15 when she sells them for
$4.90/bushel, she will have received a total of
A. $4.90/bushel.
B. $5.00/bushel.
C. $5.08/bushel.
D. $5.18/bushel.
E. None of the above
40. If Sally does not collect her loan deficiency payment on
October 15 but stores her beans until December 15 when she collects
her loan deficiency payment (PCP is $4.89) and sells her beans for
$4.90/bushel, she will have received a total of
A. $4.90/bushel.
B. $4.91/bushel.
C. $5.00/bushel.
D. $5.01/bushel.
E. None of the above
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2003 DISTRICT FFA FARM MANAGEMENT CONTEST
Problems Section
For the following problems, place your answer for each question in
the corresponding numbered space on the answer sheet. Computations
may be done in the margins or on the back of the paper. Each
question is worth four (4) points. There is only one correct answer
for each question.
PROBLEM I - Balance Sheet
Using the information below, complete the net worth statement for
January 1, 2003:
Land $263,000
Autos 22,000
Machinery and equipment 71,000
Cows 23,000
Calves 5,300
Sows and boars 20,000
Market hogs 68,000
Checking and savings 13,555
Soybeans 10,200
Hog buildings 75,000
Feed and hay 11,750
Accrued interest owed 10,900
Accrued taxes owed 17,800
30-year land loan balance is $120,000.
$9,000 plus interest is due March 1 of each year.
7-year hog building loan balance is $44,000.
$11,000 plus interest is due August 31 of each year.
5-year combine loan balance is $46,500.
$15,500 plus interest is due each February 1.
Current Assets: Current Liabilities:
__________________________________ ___________________________________
__________________________________ ___________________________________
__________________________________ ___________________________________
__________________________________ ___________________________________
__________________________________ ___________________________________
__________________________________ ___________________________________
__________________________________ ___________________________________
Total _________________ Total __________________
Non-current Assets: Non-current Liabilities:
__________________________________ ___________________________________
__________________________________ ___________________________________
__________________________________ ___________________________________
__________________________________ ___________________________________
__________________________________ ___________________________________
__________________________________ ___________________________________
__________________________________ ___________________________________
__________________________________ ___________________________________
Total _________________ Total __________________
Total Assets _________________ Total Liabilities ________________
Net Worth _________________
Questions 1 through 7 refer to PROBLEM I
1. The total value of current assets on January 1, 2003, was:
A. $ 40,805
B. $108,805
C. $128,805
D. $151,805
E. None of the above
2. The total value of non-current assets was:
A. $409,000
B. $431,000
C. $454,000
D. $474,000
E. None of the above
3. The total value of current liabilities was:
A. $ 27,700
B. $ 35,500
C. $ 64,200
D. $175,100
E. None of the above
4. The total value of non-current liabilities was:
A. $64,200
B. $157,000
C. $210,500
D. $239,200
E. None of the above
5. The net worth was:
A. $239,200
B. $343,605
C. $474,000
D. $582,805
E. None of the above
6. The current ratio was:
A. 0.590
B. 0.818
C. 1.142
D. 1.695
E. None of the above
7. The debt to equity ratio was:
A. 0.696
B. 0.509
C. 0.410
D. 0.386
E. None of the above
PROBLEM II -- Enterprise Budget
Use the following hog budget to answer Questions 8 through 16.
____________________________________________________________________
180 SOW CONFINEMENT SYSTEM (PER SOW)
FARROW-TO-FINISH
COMPLETE FEED MILL
Operating Inputs: Units Price Quantity Value
Starter ration Cwt. 13.000 12.206 158.67
Corn Cwt. 5.000 146.050 730.25
41-45% prot. sup. Cwt. 8.000 31.656 253.24
Base mix Cwt. 26.000 5.156 134.04
Young boar Hd. 352.400 0.028 9.79
Utilities Hd. 36.000 1.000 36.00
Trucking Hd. 3.000 22.394 67.18
Vet. medicine Hd. 2.000 22.394 44.79
Young sows Hd. 141.00 0.772 108.88
Annual operating capital % 0.107 891.550 95.17
Livestock labor Hr. 6.00 22.000 131.998
Mach. fuel, lube, repairs Dol. 70.48
Equip. fuel, lube, repairs Dol. 37.78
Total Operating Costs 1878.28
Fixed Costs: Amount Value
Machinery
Interest at 10.675% 285.13 30.44
Depr., taxes, insurance 41.95
Equipment
Interest at 10.675% 1244.27 132.83
Depr., taxes, insurance 205.51
Livestock
Sow 89.44
Boar 0.31
Interest at 10.675% 89.75 9.58
Total Fixed Costs 420.30
Production: Units Price Quantity Value
Sltr (220-240) Cwt. 40.00 52.05 2082.13
Non-breeder gilts Cwt. 36.00 0.32 11.40
Sows Cwt. 32.00 2.43 77.82
Boar Cwt. 26.00 0.14 3.61
Total Receipts 2174.97
Returns above total operating cost 296.69
Returns above all specified costs - 123.61
3 groups of 30 farrowing sows
6.5 litters/year
______________________________________________________________________
8. Total operating cost per sow is:
A. $296.69
B. $420.30
C. $1,878.28
D. $2,174.97
E. None of the above
9. The return above total operating cost per sow is:
A. -$123.61
B. $296.69
C. $2,082.13
D. $2,174.97
E. None of the above
10. How many hours of labor are budgeted per sow?
A. 6.00
B. 22.00
C. 50.75
D. 131.99
E. None of the above
11. What is the total budgeted interest cost per sow?
A. $163.27
B. $172.85
C. $258.44
D. $268.02
E. None of the above
12. What price per bushel is paid for corn?
A. $1.46
B. $2.41
C. $2.80
D. $5.00
E. None of the above
13. What are feed costs per sow? (ignore cost of operating
capital)
A. $730.25
B. $1,142.16
C. $1,276.20
D. $1,751.63
E. None of the above
14. If the price paid for all feed decreases by 20%, what will
be the per sow returns above all specified costs? (ignore changes
in the cost of operating capital)
A. $123.61
B. $131.63
C. $255.24
D. $1020.96
E. None of the above
15. How much will total costs per sow decrease if interest rates
drop to 7%?
A. $32 to $33
B. $60 to $61
C. $92 to $93
D. $175 to $176
E. None of the above
16. If purchased boars weigh 392 pounds and purchased
replacement sows weigh 400 pounds, what is the whole herd feed
conversion?
A. 3.55
B. 3.66
C. 3.77
D. 3.93
E. None of the above
PROBLEM III -- Income Tax Management
Use the tables at the end of this exam to calculate depreciation on
the following items.
On October 15, 2002, Dave bought a new tractor. Dave paid $10,000
"down" and financed the remaining $40,000 over 7 years at 7%
interest.
17. The tractor is
A. 3-year property
B. 5-year property
C. 7-year property
D. 10-year property
E. None of the above
18. If Dave does not expense any of the cost of the tractor and
does not take the special 30% allowance, then 2002 depreciation will
be (use regular MACRS and mid-year convention)
A. $5,357.00
B. $5,892.70
C. $7,366.15
D. $8,250.00
E. None of the above
19. If Dave expenses none of the tractor cost and uses the
mid-quarter convention and regular MACRS and does not take the
special 30% allowance, then 2002 depreciation will be
A. $1,339.50
B. $2,193.72
C. $4,018.00
D. $5,892.70
E. None of the above
20. If Dave expenses the maximum allowable on the tractor and
uses regular MACRS and mid-year convention but does not take the
special 30% allowance, then 2002 depreciation will be
A. $5,892.70
B. $5,357.00
C. $4,285.60
D. $2,785.64
E. None of the above
21. If Dave expenses the maximum and uses the mid-year
convention and straight line depreciation over the alternate MACRS
life but does not take the special 30% allowance, his 2002
depreciation will be
A. $0
B. $500
C. $1,300
D. $2,000
E. None of the above
22. Under MACRS, a grain bin is classified as
A. 7-year property
B. 10-year property
C. 15-year property
D. 20-year property
E. None of the above
PROBLEM IV -- Supply and Demand
|
The above graph represents supply of beef for import into the U.S.
(SF) the supply of beef produced in the U.S. (SUS), the total supply
of beef in the U.S. (ST), the foreign demand for U.S. beef (DF), the
domestic demand for beef (DUS), and the total demand for beef (DT)
in the U.S.
23. What is the market equilibrium price of beef in the U.S.?
A. P1
B. P2
C. P3
D. P4
E. None of the above
24. At the market equilibrium price, how much beef will be
exported from the U.S.?
A. Q1
B. Q2
C. Q3
D. Q4
E. Q5
25. At the market equilibrium price, how much beef will be
imported into the U.S.?
A. Q1
B. Q2
C. Q3
D. Q4
E. Q5
26. At what price would beef imports equal beef exports?
A. P1
B. P2
C. P3
D. P4
E. None of the above
For questions 27 and 28, assume an outbreak of foot and mouth
disease in Australia (the world's largest beef exporter) causes an
increase in foreign demand for U.S. beef and a drop in U.S. beef
imports.
27. The change will cause the U.S. market equilibrium price to
A. increase.
B. decrease.
C. not change.
D. None of the above
28. After the Australian FMD outbreak, U.S. beef exports should
A. increase.
B. decrease.
C. stay the same.
D. None of the above
PROBLEM V - Marketing
On November 10, a farmer has 5,000 bushels of soybeans in his bins.
He sells them on April 5. Ignore commissions, storage cost, and
interest.
November 10 quotes: April 5 quotes:
May futures price = $5.80 May futures price = $7.50
Expected basis = $0.10 under Basis = $0.05 over the
the board board
Strike ---- Premiums ---- ---- Premiums ----
price Call Put Call Put
$5.75 $0.35 $0.30 $1.52 $0.01
$6.00 $0.20 $0.50 $1.27 $0.02
$6.25 $0.10 $0.72 $1.02 $0.03
$6.50 $0.05 $0.96 $0.78 $0.05
$6.75 $0.02 $1.21 $0.55 $0.10
$7.00 $0.01 $1.46 $0.35 $0.20
29. What is the cash price of soybeans on April 5?
A. $5.70
B. $7.45
C. $7.50
D. $7.55
E. None of the above
30. If the farmer sold a futures contract on November 10 and
bought back the contract on April 5, what would be the realized
price per bushel (cash + net on futures) for these soybeans?
A. $4.00
B. $5.70
C. $5.85
D. $7.55
E. None of the above
31. If the farmer bought a $6.00 Put on November 10 and sold the
Put on April 5, what would be the realized price per bushel (cash +
net on options) for his soybeans?
A. $5.22
B. $5.70
C. $6.18
D. $7.07
E. None of the above
32. If the farmer bought a $6.00 Put and sold a $6.00 Call on
November 10, and sold the Put and bought back the Call on April 5,
what would be the realized price per bushel (cash + net on options)
for his beans?
A. $4.15
B. $6.00
C. $6.65
D. $7.25
E. None of the above
33. Given all the information above, which of the following
actions taken on November 10 turned out to be the most profitable?
A. Selling a futures contract.
B. Buying a $7 Put option.
C. Buying a $7 Put and selling a $7 Call.
D. Taking no market action.
PROBLEM VI - Loan Payments
Loan Amortization: You have a $10,000 loan to be paid back over 7 periods in
equal payments.
Outstanding Payment Payment
Principal Loan Portion Portion
Period before Payment Payment Interest Principal
1 $10,000.00 $1,855.53 A $1,155.53
2 $8,844.47 $1,855.53 $619.11 $1,236.42
3 $7,608.05 $1,855.53 $532.56 B
4 $6,285.08 $1,855.53 $439.95 $1,415.58
5 C $1,855.53 $340.86 $1,514.67
6 $3,354.83 $1,855.53 $234.84 D
7 $1,734.14 $1,855.53 $121.39 $1,734.14
34. The value of A is
A. $700.00
B. $709.22
C. $712.86
D. $720.15
E. None of the above
35. The value for B is
A. $1,294.16
B. $1,307.05
C. $1,322.97
D. $1,326.00
E. None of the above
36. The value for C is
A. $4,851.75
B. $4,869.50
C. $4,894.66
D. $4,907.18
E. None of the above
37. What is the outstanding principal after the sixth payment?
A. -$121.39
B. $0
C. $121.39
D. $1,734.14
E. None of the above
38. What interest rate is used for this loan?
A. 7.00%
B. 7.75%
C. 8.23%
D. 17.74%
E. None of the above
39. At the beginning of last year, a farmer had an outstanding
loan for $217,475. The interest rate was 8% APR. If the farmer
made one loan payment at the end of the year of $39,355, what was
the outstanding balance at the end of the year?
A. $17,398
B. $195,518
C. $199,873
D. $204,228
E. None of the above
40. On March 15, 2002, Anne borrowed $25,000 to plant corn. On
October 15, 2002, she repaid the $25,000 along with $1,239.58
interest. What annual interest rate did she pay?
A. 8.50%
B. 9.25%
C. 9.75%
D. 10.50%
E. None of the above
ANNUAL DEPRECIATION PERCENTAGES FOR 5-YR PROPERTY, 150% DB
_________________________________________________________________
MID-QUARTER CONVENTION
Tax MID-YEAR Quarter placed in service --
Year CONVENTION 1 2 3 4
1 15.000% 26.250% 18.750% 11.250% 3.750%
2 25.500 22.125 24.375 26.625 28.875
3 17.850 16.520 17,062 18.637 20.212
4-5 16.660 16.520 16.763 16.567 16.404
6 8.330 2.065 6.287 10.354 14.355
Total 100.000 100.000 100.000 100.000 100.000
_________________________________________________________________
ANNUAL DEPRECIATION PERCENTAGES FOR 7-YR PROPERTY, 150% DB
_________________________________________________________________
MID-QUARTER CONVENTION
Tax MID-YEAR Quarter placed in service --
Year CONVENTION 1 2 3 4
1 10.714% 18.750% 13.393% 8.036% 2.679%
2 19.133 17.411 18.559 19.707 20.854
3 15.033 13.680 14.582 15.484 16.386
4 12.249 12.160 12.221 12.275 12.874
5-7 12.249 12.160 12.221 12.275 12.182
8 6.124 1.520 4.582 7.673 10.661
Total 100.000 100.000 100.000 100.000 100.000
_________________________________________________________________
ANNUAL FRACTIONS FOR STRAIGHT LINE OVER N YEARS (N less than 26)
_________________________________________________________________
MID-QUARTER CONVENTION
Tax MID-YEAR Quarter placed in service --
Year CONVENTION 1 2 3 4
1 1/2 7/8 5/8 3/8 1/8
2-N 1 1 1 1 1
N+1 1/2 1/8 3/8 5/8 7/8
_________________________________________________________________
Depreciation formula: Basis divided by N times number from above
table.
ANNUAL FRACTIONS FOR 27 1/2 YEAR PROPERTY, REGULAR MACRS
_________________________________________________________________
Tax Month Placed in Service --
Year 1 2 3 4 5 6 7 8 9 10 11 12
1 11.5 10.5 9.5 8.5 7.5 6.5 5.5 4.5 3.5 2.5 1.5 0.5
2-27 12 12 12 12 12 12 12 12 12 12 12 12
28 6.5 7.5 8.5 9.5 10.5 11.5 12 12 12 12 12 12
29 -- -- -- -- -- -- 0.5 1.5 2.5 3.5 4.5 5.5
_________________________________________________________________
Depreciation formula: Basis divided by 27 1/2 divided by 12 times
number from above table.
ANNUAL FRACTIONS FOR 39 YEAR PROPERTY, REGULAR MACRS
_________________________________________________________________
Tax Month Placed in Service --
Year 1 2 3 4 5 6 7 8 9 10 11 12
1 11.5 10.5 9.5 8.5 7.5 6.5 5.5 4.5 3.5 2.5 1.5 0.5
2-39 12 12 12 12 12 12 12 12 12 12 12 12
40 0.5 1.5 2.5 3.5 4.5 5.5 6.5 7.5 8.5 9.5 10.5 11.5
_________________________________________________________________
Depreciation formula: Basis divided by 39 divided by 12 times
number
from above table.
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2003 DISTRICT FFA FARM MANAGEMENT CONTEST
Multiple Choice
1. D 11. D 21. B 31. D
2. D 12. A 22. C 32. B
3. B 13. D 23. A 33. D
4. D 14. C 24. B 34. D
5. D 15. B 25. C 35. D
6. C 16. B 26. B 36. E
7. E 17. B 27. D 37. C
8. C 18. B 28. C 38. A
9. D 19. A 29. A 39. C
10. C 20. B 30. B 40. D
Problems
1. B 11. D 21. C 31. D
2. D 12. C 22. A 32. B
3. C 13. C 23. C 33. D
4. E 14. B 24. B 34. A
5. B 15. C 25. A 35. C
6. D 16. C 26. D 36. B
7. A 17. C 27. A 37. D
8. C 18. A 28. A 38. A
9. B 19. A 29. D 39. B
10. B 20. D 30. C 40. A