2004 Missouri FFA
Farm Management Contest
2004 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. There is only one correct answer for each question.
1. A decrease in the value of the U.S. dollar relative to the currency of
other countries should result in
A. more costly imports.
B. less costly imports.
C. decreased exports.
D. no effect on imports or exports.
E. None of the above
2. The best measure of a firm's ability to make a short-term loan payment is
A. debt/asset ratio.
B. solvency ratio.
C. current ratio.
D. leverage ratio.
E. net capital ratio.
3. A $1 deductible expense (before tax) will cost ______ after tax if the
farmer's marginal tax rate is 35%.
A. $0.00
B. $0.35
C. $0.65
D. $1.00
E. None of the above
4. If the U.S. wheat industry has an inelastic demand curve, a decrease in
the amount of wheat supplied to the market would
A. have no effect on total revenues in the wheat industry.
B. increase the total revenues in the wheat industry.
C. decrease the total revenues in the wheat industry.
D. cause a sharp increase in the demand for wheat.
E. None of the above
5. A farmer has a debt/worth ratio of 1:2. The current liabilities total
$30,000 and the non-current liabilities total $110,000. What is the
value of the assets?
A. $420,000
B. $360,000
C. $240,000
D. $120,000
E. None of the above
6. In preparing a cash flow statement, one should not include the following:
A. family living expenses.
B. interest payments.
C. tax refunds.
D. purchases on credit
E. None of the above
7. Livestock, stored grain, land, and personal property used to secure a
loan are
A. collateral.
B. inventory.
C. liabilities.
D. net worth.
E. Illiquid.
8. Which of the following is not a supply shifter for farm products?
A. Weather
B. New technology
C. Government programs
D. Consumer income
E. None of the above
9. The turnover ratio is calculated by dividing _______ by average total
assets.
A. total sales
B. beginning inventory
C. value of farm production
D. net farm income
E. None of the above
10. A farmer purchases 600-pound feeder steers for $1 per pound and plans to
sell the steers at 750 pounds. The farmer estimates the total cost of
gain to be 40 cents per pound. The nearest breakeven price when the
steers are sold at 750 pounds is
A. $0.80/pound
B. $0.8125/pound
C. $0.8533/pound
D. $0.88/pound
E. None of the above
11. How many total acres are included in the "E 1/2 of the NE 1/4 of the
SE 1/4 and the N 1/2 of the SE 1/4 of the SE 1/4 of Section 15,
Twp. 10N, R4W of the 5th Principle Meridian"?
A. 40 acres
B. 80 acres
C. 120 acres
D. 160 acres
E. None of the above
12. How much perimeter fence would be required to completely enclose the
parcel of land described in the previous question?
A. 1.0 mile
B. 1.5 miles
C. 2.0 miles
D. 2.5 miles
E. None of the above
13. A producer is thinking about storing his corn in the local elevator for 5
months. The price at harvest is $2.10 per bushel and the elevator
charges 2 cents per bushel per month for storage plus a 4 cent per bushel
handling charge. He has 5,000 bushels to sell and would need to borrow
$20,000 at 8% annual interest while he stores the corn. What price must
he receive for his corn to break even and cover his storage and oppor-
tunity costs?
A. $2.31
B. $2.38
C. $2.41
D. $2.47
E. None of the above
14. How many pounds of 48% protein soybean meal must be mixed with 11%
protein wheat to make a ton of 17% protein feed?
A. 324 pounds
B. 368 pounds
C. 439 pounds
D. 1,632 pounds
E. None of the above
15. A farmer began the year with an outstanding balance of $50,000 on his
operating loan and accrued interest of $3,000 on the loan. The loan
carries an interest rate of 9% on outstanding principal. Four months
later he makes a $4,000 payment on the loan. After this payment he
will have an accrued interest of
A. $0.
B. $500.
C. $1,000.
D. $2,000.
E. None of the above
16. A feedlot operator purchases a pen of 117 feeder steers with an average
weight of 711 pounds and sells them at an average weight of 1081 pounds.
Total feed cost for the pen is $24,329. Feed cost per pound of gain is
equal to
A. $0.440
B. $0.515
C. $0.562
D. $0.649
E. None of the above
17. A producer sells 13 feeder steers for $84/cwt. The average weight per
steer is 752 pounds. There is a 3% sales commission and yardage fees
of $2.00 per head. The net amount received for the pen of steers
would be
A. $6,027.60
B. $6,028.36
C. $7,049.62
D. $7,939.48
E. None of the above
18. If the interest rate is 8%, what is the present value of a dollar to be
received by a producer two years from now?
A. $0.826
B. $0.857
C. $0.920
D. $1.166
E. None of the above
19. On March 1, 2003, Anna borrowed $3,000 to buy bedding plants. On July 1,
2003, she repaid the $3,000 along with $65.00 interest. What annual
interest rate did she pay?
A. 6.0%
B. 6.5%
C. 7.0%
D. 7.5%
E. None of the above
20. In 2003, Paul Pigraiser had a net farm income of $30,000. Paul had total
business assets of $500,000 and total liabilities of $250,000. Paul paid
$25,000 in interest. Return on assets for 2003 would be
A. 11%
B. 12%
C. 16%
D. 22%
E. None of the above
21. All depreciable property purchased the same year that is within the same
property class must be depreciated using the same method. This applies
to all classes of depreciable property EXCEPT
A. 7 year property.
B. 10 year property.
C. 15 and 20 year property.
D. 27 1/2 and 39 year property.
E. None of the above
22. For tax year 2003, the social security wage base was
A. $80,400
B. $84,900
C. $87,000
D. $89,200
E. None of the above
23. The net business profit for a year would be found on
A. the balance sheet.
B. the cash flow budget.
C. the income statement.
D. a partial budget.
E. None of the above
24. If the price of a commodity increases by 15% and the quantity purchased
decreases by 10%, then the demand for this commodity is
A. upward sloping.
B. inelastic.
C. elastic.
D. unitary.
E. unstable.
25. A trader with a short position in the futures market
A. profits when prices go down; loses when prices go up.
B. profits when prices go neither up nor down.
C. profits when prices go up; loses when prices go down.
D. cannot lose money.
E. None of the above
26. Increasing leverage during a period when a farm's percent return to total
capital is less than the interest rate will mean
A. higher returns to equity.
B. lower returns to equity.
C. lower risk.
D. lower gross income.
E. None of the above
27. A marketing function which tends to regulate the supply of a product and
provide a stable market price is
A. transporting.
B. processing.
C. grading.
D. storing.
E. None of the above
28. Which one of the following would cause an increase in the price of an
agricultural commodity?
A. An increase in supply and a decrease in demand
B. A decrease in supply with no change in demand
C. A decrease in demand with no change in supply
D. All of the above would cause price to increase
E. None of the above
29. Another term for equity is
A. asset.
B. net worth.
C. liquidity.
D. leverage.
E. None of the above
30. A farmer who buys feeder pigs could use the options market to reduce his
price risk by
A. buying a hog Put option.
B. selling a hog Put option.
C. buying a hog Call option.
D. selling a hog Call option.
E. All of the above
31. Corn has an expected yield of 125 bushels per acre and a production cost
of $180.00 per acre. Expected market prices are $2.40 per bushel for
corn and $6.50 per bushel for soybeans. Soybeans can be raised at a
production cost of $100 per acre. At what breakeven yield per acre
would soybeans generate the same net return per acre as corn?
A. 30.2 bushels
B. 33.8 bushels
C. 36.7 bushels
D. 37.3 bushels
E. None of the above
32. A township is six miles square and includes
A. 6 sections.
B. 36 sections.
C. 40 sections.
D. 160 sections.
E. None of the above
33. The present value formula for estimating land prices (PV = annual net
returns divided by discount rate) assumes
A. future prices and yields can be estimated accurately.
B. the discount rate is appropriate.
C. income will continue to infinity.
D. net income will not trend up or down.
E. All of the above
34. A farmer is purchasing a new baler at a cost of $26,000. His dealer will
finance the baler under the following terms: 15% down payment with the
balance repaid in equal payments over the next 6 years at 7% APR. The
farmer expects the baler to last for 8 years and have a salvage value of
$6,000. How much interest will the farmer pay the first year of the
loan?
A. $1,120
B. $1,400
C. $1,456
D. $1,547
E. None of the above
35. The "rule of 72" says to divide 72 by the annual interest rate to
estimate the number of years needed for an initial investment earning
that rate to double. How long would it take for $5 earning 6% a year
to grow to $10?
A. 12 years
B. 24 years
C. 36 years
D. 48 years
E. None of the above
36. A feedlot operator buys feeder steers, finishes them, and sells them.
The operator estimates that finished steers will sell for $74 per cwt.
and that it will cost $175 per head to bring them from the 750 pound
purchase weight to the 1100 pound selling weight. What is the highest
price the operator can pay for 750 pound feeder steers to break even?
A. $70.27/cwt.
B. $74.93/cwt.
C. $79.66/cwt.
D. $85.20/cwt.
E. None of the above
37. The Pig Palace Custom Feedlot purchased a group of weaner pigs weighing
10 pounds each and sold them weighing 260 pounds after feeding them for
160 days. Each pig ate 720 pounds of feed during the feeding period.
Average daily gain for each pig in the group during the feeding period
was
A. 1.56 pounds per day.
B. 1.67 pounds per day.
C. 2.08 pounds per day.
D. 2.88 pounds per day.
E. None of the above
Farmer Douglas will buy 800 pound steers in late November. He will have to
pay $80 per hundredweight for the 800 pound steers. Expected annual prices
for 1150 pound steers is $72 per cwt. However, there is normally seasonal
variation in fed cattle prices. The monthly price indexes for slaughter
steers are:
Index Index
January 102 July 96
February 103 August 97
March 104 September 98
April 103 October 99
May 100 November 101
June 97 December 100
38. What price for 1150 pound steers can Mr. Douglas expect for an April
selling date?
A. $72.00/cwt.
B. $74.16/cwt.
C. $76.22/cwt.
D. $77.00/cwt.
E. None of the above
39. What price can Mr. Douglas expect for a May selling date?
A. $72.00/cwt.
B. $74.00/cwt.
C. $76.22/cwt.
D. $77.00/cwt.
E. None of the above
40. Assuming an April selling date and all costs (excluding purchase of the
feeder steers) total $160 per head, Mr. Douglas can expect a profit of
A. less than $0 (he would lose money).
B. $0 to $29.99 per head.
C. $30 to $69.99 per head.
D. $70 to $99.99 per head.
E. over $100 per head.
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2004 DISTRICT FFA FARM MANAGEMENT CONTEST
Problems Section
Choose the best answer and mark the corresponding numbered space on the answer
sheet. Each question is worth four (4) points. There is only one correct
answer for each question.
PROBLEM I - Market Value Balance Sheet
Using the information below, complete the net worth statement for January 1,
2004:
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,412,000
House . . . . . . . . . . . . . . . . . . . . . . . . . . 140,000
Machinery and equipment. . . . . . . . . . . . . . . . . . 312,000
Cows . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000
Calves . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
Accounts payable . . . . . . . . . . . . . . . . . . . . . 17,652
Autos. . . . . . . . . . . . . . . . . . . . . . . . . . . 59,400
Sows and boars . . . . . . . . . . . . . . . . . . . . . . 22,000
Market hogs . . . . . . . . . . . . . . . . . . . . . . . 75,000
Checking and savings . . . . . . . . . . . . . . . . . . . 17,761
Soybeans . . . . . . . . . . . . . . . . . . . . . . . . . 29,900
Hog buildings . . . . . . . . . . . . . . . . . . . . . . 174,000
Feed and hay . . . . . . . . . . . . . . . . . . . . . . . 10,150
Accounts receivable. . . . . . . . . . . . . . . . . . . . 12,500
Accrued interest owed. . . . . . . . . . . . . . . . . . . 43,175
Accrued taxes owed . . . . . . . . . . . . . . . . . . . . 7,700
30-year land loan balance is $562,500.
$22,500 plus interest is due March 1 of each year.
5-year tractor loan balance is $14,460.
$4,820 plus interest is due August 31 of each year.
20-year home loan balance is $42,500.
$2,500 plus interest is due each March and September.
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, 2004, was
A. $147,811
B. $160,311
C. $182,311
D. $222,311
E. None of the above
2. The total value of non-current assets was
A. $2,097,400
B. $2,119,400
C. $2,137,400
D. $2,159,400
E. None of the above
3. The total value of current liabilities was
A. $29,820
B. $68,527
C. $98,347
D. $107,987
E. None of the above
4. The total value of non-current liabilities was
A. $562,500
B. $592,640
C. $619,460
D. $687,987
E. None of the above
5. The net worth was
A. $2,319,711
B. $1,371,950
C. $1,569,760
D. $1,631,724
E. None of the above
6. The current ratio was
A. 0.61
B. 1.13
C. 1.63
D. 1.75
E. None of the above
7. The debt to equity ratio was
A. 0.377
B. 0.422
C. 0.773
D. 2.374
E. None of the above
PROBLEM II -- Enterprise Budget
Use the dairy cow budget on the next page to answer Questions 8 through 16.
8. Total operating cost per cow is:
A. $521.95
B. $588.65
C. $2,301.76
D. $2,823.71
E. None of the above
9. The return above total operating cost per cow is:
A. $66.70
B. $455.25
C. $501.52
D. $521.96
E. None of the above
10. How many hours of labor are budgeted per cow?
A. 10.69
B. 43.40
C. 60.36
D. 260.40
E. None of the above
_________________________________________________________________
DAIRY COW REPLACEMENTS IN 100 COW HERD
20,000 pounds of milk sold per year per cow unit
39% replacement rate
Operating Inputs Units Price Quantity Value
Gov Dvsrn asses Cwt 0.05 200.00 10.00
Promotion assess Cwt 0.15 200.00 30.00
Milk hauling Cwt 0.57 200.00 114.00
Dairy ration, 16% Cwt 8.70 98.70 858.69
Hay Tons 95.00 5.59 531.05
Salt & minerals Lbs 0.15 130.00 19.50
Milk replacer Lbs 0.75 5.00 3.75
Calf starter Lbs 0.11 50.00 5.50
Pasture AUMS 16.00 3.48 55.68
Breeding fees Dol 25.00 1.00 25.00
Vet medicine Dol 52.00 1.00 52.00
Supplies Dol 39.00 1.00 39.00
Accounting Hd 18.00 1.00 18.00
Utilities Dol 47.00 1.00 47.00
Machinery labor Hr 6.00 10.69 64.14
Equipment labor Hr 6.00 6.27 37.62
Livestock labor Hr 6.00 43.40 260.40
Mach fuel, lube, repair 102.69
Equip fuel, lube, repair 27.74
Total Operating Costs 2301.76
____________________________________
Fixed Costs Amount Value
Machinery
Interest @ 10.675% 371.17 39.62
Depr, taxes, insurance 54.98
Equipment
Interest @ 10.675% 452.75 48.33
Depr, taxes, insurance 70.22
Livestock
Dairy cow, 20,000 1475.00
Dairy heifer, 20,000 520.00
Dairy repl. heifer 20,000 273.00
Interest @ 10.675% 2268.00 242.11
Total Fixed Costs 455.26
______________________________________
Production Units Price Quantity Value
Milk Cwt 12.90 200.00 2580.00
Dairy cows Cwt 43.00 4.44 190.92
Dairy bull calf Hd 105.00 0.48 50.40
Dairy heifers Cwt 60.00 0.04 2.40
Total Receipts 2823.72
_______________________________________
Returns above total operating costs 521.96
Returns above all specified costs 66.70
_________________________________________________________________
11. What is the total budgeted interest cost per cow?
A. $87.95
B. $330.06
C. $3,091.92
D. $3,190.59
E. None of the above
12. If each cow is milked for 305 days, how many pounds of milk are given
per cow per day on average?
A. 8.46
B. 12.90
C. 65.57
D. 200.00
E. None of the above
13. What price per pound is paid for hay?
A. 2.66 cents
B. 4.75 cents
C. 5.59 cents
D. 26.51 cents
E. None of the above
14. What interest rate is used in this budget?
A. 3.900%
B. 10.675%
C. 12.500%
D. 16.000%
E. None of the above
15. What price of milk will cause the returns above all budgeted costs to
equal zero?
A. $12.16/cwt.
B. $12.34/cwt.
C. $12.57/cwt.
D. $12.83/cwt.
E. None of the above
16. If labor costs rise to $7.50/hour, what will be total operating costs
per cow?
A. $2,330.63
B. $2,366.86
C. $2,376.26
D. $2,392.30
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 item.
On April 20, 2003, Sam traded combines. The old combine had a remaining
undepreciated value of $12,404. Sam paid $60,000 "boot" in the trade for the
new combine. Had Sam kept the old combine, he would have been able to claim
$5,961.60 in depreciation on it during 2003.
17. The combine is
A. 3-year property
B. 5-year property
C. 7-year property
D. 10-year property
E. None of the above
18. If Sam does not expense any of the cost of the combine and does not
claim the special 30% first year allowance, then 2003 depreciation will
be equalto ($5,961.60) the carryover depreciation on the trade-in plus
which of the following: (Use regular MACRS and mid-year convention.)
A. $2,400.36
B. $4,178.46
C. $5,571.28
D. $6,428.40
E. None of the above
19. If Sam expenses $20,000 on the combine trade and claims the special 30%
first year allowance and uses the mid-quarter convention and regular
MACRS, the 1/1/04 remaining book value of the new combine will be
A. $8,538.46
B. $12,932.46
C. $24,249.96
D. $40,342.46
E. None of the above
20. If Sam does not expense or claim the 30% special first year allowance
and uses the mid-year convention and straight line depreciation over
the alternate MACRS life, his 2003 depreciation will be $5,961.60 plus
which of the following:
A. $1,950.00
B. $2,600.00
C. $3,000.00
D. $6,140.40
E. None of the above
21. If Sam uses regular MACRS, then the first year the combine will appear
on Sam's January balance sheet with a zero book value will be in
A. 2008.
B. 2009.
C. 2010.
D. 2011.
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 imported into
the U.S.?
A. Q1
B. Q2
C. Q3
D. Q4
E. Q5
25. 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
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 BSE in Canada causes U.S. beef imports to fall by 35%.
27. The change will cause the market equilibrium price to
A. increase.
B. decrease.
C. not change.
D. None of the above
28. For question 28, assume BSE in the U.S. causes U.S. beef exports to fall
by 95%. With BSE in both the U.S. and Canada, U.S. beef prices will
be ________ compared to no BSE.
A. higher
B. lower
C. the same
D. None of the above
PROBLEM V - Marketing
On March 25, a farmer buys 210 head of feeder pigs. He sells them as
slaughter hogs on August 5. Ignore commissions and interest.
March 25 quotes: August 5 quotes:
August futures price = $60.15 August futures price = $58.80
Expected basis = $0.50 under the board Basis = $0.25 over the board
Strike ---- Premiums ---- ---- Premiums ----
price Call Put Call Put
$60.00 $6.05 $0.55 $2.40 $0.21
$62.00 $4.35 $1.15 $0.90 $1.12
$64.00 $3.10 $1.85 $0.45 $2.98
$66.00 $2.10 $2.75 $0.07 $4.71
$68.00 $1.37 $4.00 $0.02 $6.55
29. What is the cash price of hogs on August 5?
A. $58.55
B. $58.80
C. $59.05
D. $59.30
E. None of the above
30. If the farmer sold an August futures contract on March 25 and bought back
the contract on August 5, what would be the realized price per hundred-
weight (cash + net on futures) for these hogs?
A. $58.80
B. $59.05
C. $60.15
D. $60.40
E. None of the above
31. If the farmer bought a $64.00 Put on March 25 and sold the Put on
August 5, what would be the realized price per hundredweight (cash + net
on options) for his hogs?
A. $56.18
B. $57.92
C. $60.18
D. $60.40
E. None of the above
32. If the farmer bought a $64.00 Put and sold a $64.00 Call on March 25,
and sold the Put and bought back the Call on August 5, what would be
the realized price per cwt. (cash + net on options) for his hogs?
A. $55.27
B. $58.40
C. $60.55
D. $62.83
E. None of the above
33. Given all the information above, which of the following actions taken on
March 25 turned out to be the most profitable?
A. Selling a futures contract.
B. Buying a $64 Put option.
C. Buying a $64 Put and selling a $64 Call.
D. Taking no market action.
PROBLEM VI - Inflation
The table below shows average nominal commodity prices and the Consumer Price
Index (1967=100) for various years. Use this data to answer questions 34-36.
Year CPI Corn Hogs Steers Oil
$/bu. $/cwt. $/cwt. $/barrel
2000 515.8 1.82 42.41 69.65 25.73
1998 488.3 2.43 31.82 61.47 10.87
1996 469.9 3.24 53.40 65.21 18.46
1990 391.4 2.36 54.55 77.40 20.03
1985 322.2 2.62 44.50 58.37 24.09
1975 161.2 3.02 48.32 41.89 7.67
1970 116.3 1.16 21.95 29.36 3.18
1967 100.0 1.24 19.37 25.29
1965 94.5 1.17 21.30 24.99
1960 88.7 1.04 15.96 25.09
1955 80.2 1.43 15.19 22.16
1950 71.1 1.24 18.52 28.88
34. What price would steers have needed to be in 2000 to have the same
inflation adjusted price as in 1967?
A. $89.71
B. $112.88
C. $125.29
D. $130.45
E. None of the above
35. Adjusted for inflation, steer prices were highest in
A. 1950.
B. 1955.
C. 1975.
D. 1990.
E. None of the above
36. Adjusted for inflation, hog prices were lowest in
A. 1955.
B. 1970.
C. 1985.
D. 1998.
E. None of the above
PROBLEM VII - Financial Analysis
Bill Blackacre is a cash basis taxpayer. His farm records for 2003 show the
following:
2003 Farm Sales $166,976
2003 Interest Paid 6,295
2003 Net Farm Profit 37,801
2003 Depreciation 40,560
2003 Gain in Inventory 29,800
1/1/03 Total Assets 912,689
1/1/03 Total Liabilities 100,972
37. Bill's capital turnover rate (sales plus inventory change divided by
assets) is
A. 4.14%
B. 15.03%
C. 21.56%
D. 30.82%
E. None of the above
38. Bill's interest expense as a percent of sales is
A. 9.47%.
B. 7.22%.
C. 5.67%.
D. 3.77%.
E. None of the above
39. Bill's net farm profit does not include a charge for his own labor(which
he values at $20,000 per year). Bill will have to pay self-employment
taxes on
A. $17,801.
B. $20,000.
C. $37,801.
D. $67,625.
E. None of the above
40. Bill's operating margin (profit plus inventory change) as a percent of
sales was
A. 3.17%.
B. 4.79%.
C. 15.03%.
D. 40.49%.
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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KEY
2004 DISTRICT FFA FARM MANAGEMENT CONTEST
Multiple Choice
1. A 11. E 21. D 31. B
2. C 12. A 22. C 32. B
3. C 13. A 23. C 33. E
4. B 14. A 24. B 34. D
5. A 15. B 25. A 35. A
6. D 16. C 26. B 36. D
7. A 17. D 27. D 37. A
8. D 18. B 28. B 38. B
9. C 19. B 29. B 39. A
10. D 20. A 30. A 40. C
Problems
1. B 11. B 21. D 31. C
2. D 12. C 22. A 32. D
3. E 13. B 23. C 33. C
4. E 14. B 24. A 34. D
5. D 15. C 25. B 35. A
6. E 16. D 26. D 36. D
7. B 17. C 27. A 37. C
8. C 18. D 28. B 38. D
9. D 19. C 29. C 39. C
10. C 20. C 30. D 40. D