2005 Missouri FFA
Farm Management Contest
2005 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. There
is only one correct answer to each question.
1. If high oil corn has the same production cost per acre as regular corn but
can be sold for 14¢ per bushel more, what yield of high oil corn is needed
to equal 125 bushels of regular corn at $2.30 per bushel?
A. 109.1 bushels
B. 113.2 bushels
C. 117.8 bushels
D. 120.7 bushels
E. None of the above
2. For tax year 2004, the social security wage base was
A. $83,500
B. $85,700
C. $87,900
D. $90,100
E. None of the above
3. A farmer purchases 600-pound feeder steers for $1.10 per pound and plans to
sell the steers at 800 pounds. The farmer estimates the total cost of gain
to be 50¢ per pound. The nearest breakeven price when the steers are sold
at 800 pounds is
A. 80¢/pound
B. 85¢/pound
C. 90¢/pound
D. 95¢/pound
E. None of the above
4. The present value formula for estimating land prices (PV = annual net
returns ÷ 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
5. How many total acres are included in the "S 1/2 of the NE 1/4 and E 1/2 of
the NW 1/4 of Section 15, Twp. 10N, R4W of the 5th Principle Meridian"?
A. 80 acres
B. 120 acres
C. 160 acres
D. 240 acres
E. None of the above
6. How much perimeter fence would be required to completely enclose the parcel
of land described in question 5?
A. 1.5 miles
B. 2.0 miles
C. 2.5 miles
D. 3.0 mile
E. None of the above
7. How many acres are in a section of land?
A. 40 acres
B. 160 acres
C. 640 acres
D. 1,000 acres
E. None of the above
8. 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
9. A soybean producer decides to store his soybeans in the local elevator for
six months. The price at harvest is $6.00 per bushel and the elevator
charges 2¢ per bushel per month for storage plus a 5¢ per bushel handling
charge. He has 5,000 bushels to sell and must borrow $30,000 at 8% annual
interest while he stores the soybeans. What price must he receive for his
soybeans to break even and cover his storage and opportunity costs?
A. $6.17
B. $6.34
C. $6.41
D. $6.71
E. None of the above
10. When a farmer borrows money to purchase land, he usually must offer the
title to the property as security until the debt has been repaid. This
credit instrument is commonly referred to as a
A. sales contract.
B. promissory note.
C. mortgage.
D. check.
E. None of the above
11. 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
12. An increase in the value of farm land will
A. increase the rate of return to equity.
B. increase the rate of return to assets.
C. increase the capital turnover ratio.
D. all of the above.
E. None of the above
13. If the discount rate is 9%, what is the present value of a dollar to be
received by a producer two years from now?
A. $0.842
B. $0.857
C. $0.917
D. $1.188
E. None of the above
14. Last year, Pat Parker had net farm income of $25,000. Pat had total
business assets of $850,000 and total liabilities of $350,000. Pat paid
$30,000 in interest. Rate of return on equity was
A. 2.9%
B. 5.0%
C. 6.5%
D. 11.0%
E. None of the above
15. 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.
16. A constant payment loan with payments consisting of principal and interest
is called
A.an amortized loan.
B.a complementary loan.
C.a discounted loan.
D.a fixed rate loan.
E.a capital loan.
17. 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 $1 earning 6% a year to grow to $4?
A. 12 years
B. 24 years
C. 36 years
D. 48 years
E. None of the above
18. A charge for capital used in a farmer's cattle herd is usually included in
an enterprise budget regardless of the farmer's equity position with
respect to the herd (it does not depend on whether he borrowed money to buy
the cows or not). This illustrates the principle of
A. marginal cost.
B. fixed cost.
C. opportunity cost.
D. variable cost.
E. alternative cost.
19. Net worth is a measure of
A. managerial ability.
B. financial position.
C. profitability.
D. liquidity.
E. All of the above
20. The cost of producing one additional unit of output is called
A. opportunity cost.
B. substitution cost.
C. average cost.
D. marginal cost.
E. None of the above
21. How many pounds of 48% protein soybean meal must be mixed with 7% protein
corn to make a ton of 16% protein feed?
A. 316 pounds
B. 400 pounds
C. 439 pounds
D. 488 pounds
E. None of the above
22. A feedlot operator buys feeder steers, finishes them, and sells them. The
operator estimates that finished steers will sell for $84 per cwt. and that
it will cost $170 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. $84.00/cwt.
B. $96.67/cwt.
C. $100.53/cwt.
D. $103.70/cwt.
E. None of the above
23. 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
24. A farmer has total assets of $630,000 of which land is $400,000. The
farmer's debt/equity ratio is 2.0. What will the farmer's debt/equity
ratio be if the value of land inflates by 10%?
A. 1.60
B. 1.68
C. 1.90
D. 2.10
E. None of the above
25. 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
26. A farmer has a debt/worth ratio of 1:2. The current liabilities total
$30,000 and the non-current liabilities total $90,000. What is the value
of the assets?
A. $420,000
B. $360,000
C. $240,000
D. $120,000
E. None of the above
27. A cattle feeding operation has sales of $730,000, feed purchases of
$300,000, other costs of $400,000, a closing inventory of $380,000, and an
opening inventory of $400,000. What is the net farm income for this
operation on an accrual basis?
A. $10,000
B. $30,000
C. $50,000
D. $730,000
E. None of the above
28. If corn silage as fed contains 65% moisture and 2.4% protein, the dry
matter would be what percent protein?
A. 2.80
B. 3.69
C. 6.86
D. 8.00
E. None of the above
29. On April 1 Kate borrowed $34,000 to plant corn. On December 1 she repaid
the $34,000 along with $1,734.37 interest. What annual interest rate did
she pay?
A. 7.65%
B. 8.52%
C. 9.75%
D. 10.50%
E. None of the above
30. Purchase of a Call option on corn means the buyer
A. is required to sell a corn futures contract at a set price.
B. may sell, but is not required to sell, a corn futures contract at
a set price.
C. may buy, but is not required to buy, a corn futures contract at a
set price.
D. is required to buy a corn futures contract at a set price.
E. None of the above
31. To consider the time value of money in analyzing a farm investment, one
should calculate
A. net present value.
B. net cash flow over the lifetime of the investment.
C. average profits over the investment lifetime.
D. average costs over the investment lifetime.
E. None of the above
32. At the beginning of last year, a farmer had an outstanding loan for
$125,000. The interest rate was 8% APR. If the farmer made one loan
payment at the end of the year of $14,500, what was the outstanding balance
at the end of the year?
A. $104,500
B. $113,750
C. $115,750
D. $120,500
E. None of the above
33. 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.
E. None of the above
34. A trader with a long position in the futures market
A. profits when prices go down, loses when prices go up.
B. profits when prices neither go up nor down.
C. profits when prices go up, loses when prices go down.
D. loses when prices neither go up nor down.
E. cannot lose money.
35. Livestock, stored grain, land, and personal property used to secure a loan
are
A. collateral.
B. inventory.
C. liabilities.
D. net worth.
E. Illiquid.
36. 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
37. If the price of a September Call option is higher today than yesterday,
then one would expect that the price of a September futures contract is
A. higher today than yesterday.
B. lower today than yesterday.
C. unchanged from yesterday.
D. either up or down. There is no relationship between futures
prices and prices of options
E. None of the above
38. The main reason for hedging is
A. to make more profit.
B. to insure against a production loss.
C. to reduce the price risk associated with producing or storing a
cash commodity.
D. to take an opposite position from the speculator.
E. None of the above
39. Cooperatives pay patronage refunds according to
A. one man, one vote.
B. size of farm.
C. amount of business done by patron.
D. total assets.
E. All of the above
40. Roundup ready soybeans are now widely used by farmers. This has caused
the demand curve for Treflan (a grass control herbicide for soybeans) to move
A. upward and to the right.
B. downward and to the left.
C. not at all.
D. None of the above
--------------------------------------------------------------------------------
2005 MISSOURI FFA FARM MANAGEMENT CONTEST
Problems Section
Choose the best answer and mark 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 - Market Value Balance Sheet
Using the information below, complete the net worth statement for January 1, 2005:
Land . . . . . . . . . . . . . . . . . . . .$525,000
House . . . . . . . . . . . . . . . . . . . 120,000
Machinery and equipment. . . . . . . . . . . 90,000
Cows . . . . . . . . . . . . . . . . . . . . 40,000
Calves . . . . . . . . . . . . . . . . . . . 37,000
Autos. . . . . . . . . . . . . . . . . . . . 27,500
Sows and boars . . . . . . . . . . . . . . . 22,000
Feeder pigs. . . . . . . . . . . . . . . . . 12,000
Checking and savings . . . . . . . . . . . . . 8,257
Corn . . . . . . . . . . . . . . . . . . . . . 7,250
Hog buildings. . . . . . . . . . . . . . . . 47,000
Feed and hay . . . . . . . . . . . . . . . . 10,150
Accounts receivable. . . . . . . . . . . . . . 9,111
Accounts payable . . . . . . . . . . . . . . . 6,912
Accrued interest owed. . . . . . . . . . . . 19,175
Accrued taxes owed . . . . . . . . . . . . . . 6,400
30-year land loan balance is $220,500.
$10,500 plus interest is due March 1 of each year.
5-year tractor loan balance is $20,250.
$6,750 plus interest is due August 31 of each year.
20-year home loan balance is $56,000.
$3,500 plus interest is due each 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, 2005, was
A. $74,657
B. $83,768
C. $109,268
D. $149,268
E. None of the above
2. The total value of non-current assets was
A. $829,000
B. $843,500
C. $847,000
D. $871,500
E. None of the above
3. The total value of current liabilities was
A. $29,287
B. $34,675
C. $43,125
D. $53,237
E. None of the above
4. The total value of non-current liabilities was
A. $276,000
B. $286,500
C. $293,250
D. $296,750
E. None of the above
5. The net worth was
A. $391,666
B. $413,808
C. $626,731
D. $849,525
E. None of the above
6. The debt to equity ratio was
A. 0.292
B. 0.345
C. 0.526
D. 0.614
E. None of the above
7. The net working capital was
A. $30,531
B. $45,195
C. $74,620
D. $83,768
E. None of the above
PROBLEM II -- Enterprise Budget
Use the following cow-calf budget to answer Questions 8 through 16.
COW-CALF, spring calving, warm season pasture; cost/return per cow; ranch size
unit; winter DM is 25% non-legume hay
_______________________________________________________________________________
Operating Inputs Units Price Qty. Value Your Value
Non-legume hay Lbs. 0.050 964.000 $48.20 __________
41-45% protein sup. Lbs. 0.130 299.000 38.87 __________
19-20% pro. feed Lbs. 0.080 367.000 29.36 __________
Salt & minerals Lbs. 0.100 30.000 3.00 __________
Summer pasture AUMs 8.400 8.000 67.20 __________
Winter dry pasture AUMs 8.400 3.550 29.82 __________
Vet. service Head 14.650 1.000 14.65 __________
Vet. med., lstk. supplies Head 2.800 1.000 2.80 __________
Marketing expense Cwt. 1.750 4.320 7.56 __________
Personal taxes Head 5.300 1.000 5.30 __________
Herd bulls Cwt. 85.000 0.122 10.37 __________
Hauling Cwt. 0.500 4.320 2.16 __________
Annual operating capital Dol. 0.107 150.000 16.05 __________
Machinery labor Hour 6.000 4.574 27.42 __________
Equipment labor Hour 6.000 0.050 0.30 __________
Livestock labor Hour 6.000 5.330 31.98 __________
Mach. fuel, lube, repair Dol. 27.30 __________
Equip. fuel, lube, repair Dol. 1.18 __________
Total operating costs $363.52 __________
Fixed costs
Machinery: Amount Value
Interest at 10.675% 54.58 5.83 __________
Depr., taxes, insurance 10.69 __________
Equipment:
Interest at 10.675% 13.43 1.43 __________
Depr., taxes, insurance 2.59 __________
Livestock
Beef cow 720.00 __________
Bull 40.50 __________
Beef heifer 60.00 __________
Horse 3.40 __________
Interest at 10.675% 823.90 87.95 __________
Depr., taxes, insurance 10.47 __________
Total fixed costs 118.96 __________
Production Units Price Quantity Value
Steer calves (400-500#) Cwt. 87.00 1.92 167.04 __________
Heifer calves (400-500#) Cwt. 79.00 1.27 100.33 __________
Commercial cows Cwt. 41.00 0.87 35.67 __________
Aged bulls Cwt. 51.00 0.14 7.14 __________
Heifers (600-700#) Cwt. 72.00 0.12 8.64 __________
Total receipts 318.82 __________
Returns above total operating costs -44.70 __________
Returns above all specified costs -163.66 __________
_______________________________________________________________________________
8. Total operating cost per cow is:
A. $16.05
B. $118.96
C. $318.82
D. $363.52
E. None of the above
9. The return above total operating cost per cow is:
A. -$163.66
B. -$44.70
C. $318.82
D. $363.52
E. None of the above
10. How many hours of labor are budgeted per cow?
A. 6.000
B. 9.954
C. 18.000
D. 59.700
E. None of the above
11. What is the total budgeted interest cost per cow?
A. $68.01
B. $87.95
C. $95.21
D. $111.26
E. None of the above
12. What price per ton is paid for hay?
A. $5.00
B. $48.20
C. $50.00
D. $100.00
E. None of the above
13. What are the per cow costs directly attributed to feed?
(exclude interest, labor, and fixed costs)
A. $97.02
B. $119.43
C. $168.25
D. $216.45
E. None of the above
14. How many pounds of cattle are sold per cow?
A. 319
B. 432
C. 450
D. 500
E. None of the above
15. If the price of all cattle sold increases by 30% and the price of hay drops
by 25%, what will be the per cow receipts above total operating costs
(ignore any change in operating capital expense)?
A. $11.28
B. $55.97
C. $63.00
D. $107.68
E. None of the above
16. What will be the returns above all costs if you include the changes from
question 15 and pay only $60 for pasture rent?
A. -$99.81
B. -$70.66
C. -$18.94
D. $188.10
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 June 25, 2004, Jill traded hay balers. The old baler had market value of
$7,000 and a zero remaining undepreciated book value. Jill paid $21,000 "boot"
in the trade for the new baler.
17. The baler is
A. 3-year property
B. 5-year property
C. 7-year property
D. 10-year property
E. None of the above
18. If Jill does not expense any of the cost of the baler and does not claim
the special 50% first year allowance, what will 2004 depreciation be?
(use regular MACRS and mid-year convention)
A. $2,100.00
B. $2,249.94
C. $2,471.88
D. $2,999.92
E. None of the above
19. If Jill expenses $11,000 on the baler trade and claims the special 50%
first year allowance and uses the mid-quarter convention and regular MACRS,
the 1/1/05 remaining book value of the new baler will be
A. $4,330.35
B. $4,711.92
C. $5,060.15
D. $5,996.27
E. None of the above
20. If Jill does not expense or claim the 50% special first year allowance and
uses the mid-year convention and straight line depreciation over the
alternate MACRS life, her 2004 depreciation will be which of the following:
A. $1,050
B. $1,800
C. $2,100
D. $2,500
E. None of the above
21. If Jill uses regular MACRS, then the first year the baler will appear on
Jill's January balance sheet with a zero book value will be in
A. 2009.
B. 2010.
C. 2011.
D. 2012.
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
2005 District FFA Farm Management Graph for Exam
The above graph represents the supply of foreign pork available for import into
the U.S. (SF), the supply of pork produced in the U.S. (SUS), the total supply
of pork in the U.S. (ST), the foreign demand for U.S. pork (DF), the domestic
demand for pork (DUS), and the total demand for pork (DT).
23. What is the market equilibrium price of pork 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 pork 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 pork will be exported?
A. Q1
B. Q2
C. Q3
D. Q4
E. Q5
26. Without foreign trade, the equilibrium price of pork would be
A. P1
B. P2
C. P3
D. P4
E. None of the above
For questions 27 and 28, assume Mexico, a major importer of U.S. pork, has an
economic recession and stops importing pork.
27. The lack of Mexican pork imports will cause the U.S. market equilibrium
price to
A. increase.
B. decrease.
C. not change.
D. None of the above
28. The Mexican recession should cause U.S. pork exports to
A. increase.
B. decrease.
C. stay the same.
D. None of the above
PROBLEM V -- Marketing
In November, a farmer has 5,000 bushels of corn in the bin. He sells the corn
on February 15. Ignore storage, commissions, and interest.
November 15 quotes: February 15 quotes:
March futures price = $2.20 March futures price = $2.30
Expected basis = $0.20 under the board Basis = $0.10 under the board
Strike ---- Premiums ---- ---- Premiums ----
price Call Put Call Put
$1.60 $0.54 $0.06 $0.37 $0.10
$1.80 $0.37 $0.18 $0.20 $0.20
$2.00 $0.25 $0.30 $0.08 $0.35
$2.20 $0.15 $0.45 $0.02 $0.52
$2.40 $0.06 $0.62 $0.01 $0.70
29. What is the cash price of corn on February 15?
A. $1.75
B. $2.00
C. $2.20
D. $2.25
E. None of the above
30. If the farmer sold a futures contract on November 15 and bought back the
contract on February 15, what would be the realized price per bushel
(cash + net on futures) for his corn?
A. $2.00
B. $2.10
C. $2.20
D. $2.30
E. None of the above
31. If the farmer bought a $2.00 Put on November 15 and sold the Put on
February 15, what would be the realized price per bushel (cash + net on
options) for his corn?
A. $2.05
B. $2.15
C. $2.25
D. $2.35
E. None of the above
32. If the farmer bought a $2.00 Put and sold a $2.00 Call on November 15, and
sold the Put and bought back the Call on February 15, what would be the
realized price per bushel (cash + net on options) for his corn?
A. $2.03
B. $2.25
C. $2.30
D. $2.42
E. None of the above
33. Given all the information above, which of the following actions taken on
November 15 turned out to be the most profitable?
A. Selling a futures contract.
B. Buying a $2.00 Put option.
C. Buying a $2.00 Put and selling a $2.00 Call.
D. Taking no market action.
PROBLEM VI -- Substitution
Hogs grow best when grain and protein are mixed to obtain the proper protein
level. However, they will grow on most any mix of corn and protein. The
following rations will all produce about 950 pounds of gain when fed to a pen of
ten, 155-pound pigs.
Lbs. protein
Ration Lbs. corn supplement
A 3500 100
B 2990 300
C 2560 500
D 2200 700
E 1900 900
34. If corn costs 3.5¢/pound and supplement costs 9¢/pound, what is the least
cost ration?
A. Ration A
B. Ration B
C. Ration C
D. Ration D
E. Ration E
35. If corn costs 4.3¢/pound and supplement costs 8¢/pound, what is the least
cost ration?
A. Ration A
B. Ration B
C. Ration C
D. Ration D
E. Ration E
36. Between Ration B and C, it takes _____ pounds of corn to replace a pound of
supplement.
A. 1.80
B. 2.15
C. 3.60
D. 4.30
E. None of the above
PROBLEM VII -- Investment Analysis
On April 1, Dave Dollarmaker purchased 62 head of feeder calves for $1.20 a
pound, averaging 515 pounds. On October 2, Dave sold the 60 head that were
still alive. They averaged 859 pounds.
37. What was Dave's death loss?
A. 2.00%
B. 2.30%
C. 3.23%
D. 3.51%
E. None of the above
38. On average, the 60 head gained
A. 1.87 pounds per day
B. 1.64 pounds per day
C. 1.05 pounds per day
D. 0.91 pounds per day
E. None of the above
39. Dave fed the calves 9,500 pounds of corn (56 pounds/bushel) and 1,500
pounds of mineral supplement. The corn cost $2.20/bushel and the mineral
cost $19/cwt. What was his overall purchased feed cost per calf sold?
A. $8.62
B. $10.97
C. $12.02
D. $19.64
E. None of the above
40. If pasture rent cost Dave $6,500, what price did Dave need to get for his
calves in October to cover feed, purchase of calves, and $70/head sold for
interest, labor and facilities?
A. $73.06/cwt.
B. $77.49/cwt.
C. $80.52/cwt.
D. $96.38/cwt.
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
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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
2005 DISTRICT FFA FARM MANAGEMENT CONTEST
Multiple Choice
1. C 11. A 21. C 31. A
2. C 12. E 22. C 32. D
3. D 13. A 23. C 33. C
4. E 14. B 24. B 34. C
5. C 15. C 25. B 35. A
6. C 16. A 26. B 36. D
7. C 17. B 27. A 37. A
8. B 18. C 28. C 38. C
9. C 19. B 29. A 39. C
10. C 20. D 30. C 40. B
Problems
1. B 11. D 21. D 31. C
2. D 12. D 22. A 32. D
3. D 13. D 23. C 33. C
4. A 14. B 24. A 34. A
5. E 15. C 25. B 35. C
6. C 16. C 26. B 36. B
7. A 17. C 27. B 37. C
8. D 18. B 28. B 38. A
9. B 19. A 29. C 39. B
10. B 20. A 30. B 40. D