Ohio State University Extension Bulletin

Computerized Farm Record Keeping with Quicken® 2002

Bulletin 897-02


Authors

John Barker
Extension Agent, Agriculture & Natural Resources
Knox County

David Miller
District Specialist, Farm Management
East District

Barry Ward
Extension Agent, Agriculture & Natural Resources
Champaign County

Contents


All educational programs conducted by Ohio State University Extension are available to clientele on a nondiscriminatory basis without regard to race, color, creed, religion, sexual orientation, national origin, gender, age, disability or Vietnam-era veteran status.
Keith L. Smith, Associate Vice President for Ag. Adm. and Director, OSU Extension.
TDD No. 800-589-8292 (Ohio only) or 614-292-6181

Preface

This Quicken self-study manual comes from the demand of Ohio producers for assistance on using an inexpensive, easy to use program for farm record keeping. The objective of this manual is for Quicken users to begin keeping farm records on their home computer by following the step by step procedures outlined in each chapter. The manual will also be useful to the experienced Quicken users as they upgrade to a newer version and continue to improve their recordkeeping skills.

This manual is written for Quicken 2002 Basic. We will make every attempt to keep the manual updated with each new version. Future manuals and updates will be available in OSU Extension offices and on the OSU Extension Ohioline web site [http://ohioline.osu.edu]. In most cases the basics needed to begin your farm record keeping will not change with a newer version.

A commonly asked question is, "Which version of Quicken should I get for my farm records?" Within Quicken 2002 there are three different products available, Quicken 2002 Basic, Quicken 2002 Deluxe and Quicken 2002 Suite. While each product has different features, our experience is that the basic program, Quicken 2002 Basic, will perform most farm record keeping tasks adequately.

We also receive questions about the use of the Quicken Home & Business version versus the use of basic Quicken for farm record keeping. If your farm business requires you to create customer invoices and statements and have accounts for payables and receivables, you need to be using the Home & Business version of Quicken. The Home & Business version can also generate accrual-based profit and loss statements if the program is set up and used properly throughout the year. However, for the majority of cash-basis farm record keepers, the basic version of Quicken will provide more than enough information for management decisions and income tax planning.

We would also like to acknowledge Lee Ann Johnson, OSU Extension - East District Office, for her invaluable help and assistance in typing this manual.

John Barker
David Miller
Barry Ward


Our Disclaimer

This self-study manual was designed to help agricultural producers and agribusinesses learn how to perform farm record keeping using Quicken® by Intuit. Being profitable through better record keeping requires management decisions specific to each operation. We want to stipulate to the user that we are not trying to teach techniques to make you profitable but rather to learn how to keep financial records. We provide you with examples and you enter what you determine is the most appropriate information for your operation.

The Ohio State University Extension makes no representations, warranties, or endorsement of any kind regarding the use of Intuit’s products, and assumes no liability for any errors or omissions. The views and opinions expressed in the training manual when making management decisions do not necessarily reflect the position of the Ohio State University Extension.

This manual may contain references to other information resources, but such reference should not be considered an endorsement of or recommendation by the Ohio State University Extension, nor any agency, officer, or employee at the Ohio State University Extension. Under no circumstances will the Ohio State University Extension, agency, officer or employee be held liable to any party who may choose to rely on information contained within this training manual.

Ohio State University Extension wishes to assist you with farm record keeping. While we have attempted to make our programs available and documented as well as possible, we realize that problems may arise with the software that require technical assistance. If you have specific questions regarding Intuit’s software on it’s operation or upgrades, contact their technical support for assistance [http://www.intuit.com]. Additional resources and information about using Quicken® for farm record keeping are listed in Appendix I at the end of the manual. If you have specific questions regarding this manual contact your county office of the Ohio State University Extension.


How to Use This Manual

This manual is intended to help the farm record keeper use Quicken for their farm records. For the new Quicken user, we suggest that you read the Introduction to Computer Records and the Getting Started chapters before turning on your computer. After you have loaded the Quicken program, follow the step-by-step procedures outlined in the Getting Started chapter while you are on your computer.

For the Quicken user who is upgrading to a newer version, we have included in the Getting Started chapter a section on what needs to be done when you upgrade to the latest version.

Once you are finished with the Getting Started chapter, read the Accounts chapter, the Categories & Classes chapter and the Data Entry chapter. After completing these four chapters, you should now be able to enter your farm records into the program.

The Reports chapter will show you how to summarize data once you’ve entered it. Start with an easier report, like a register report, to get used to the report section of the program. The Reports chapter will become more important as more data is entered and various report deadlines approach, such as, reporting employees’ wages for Workers Compensation reports, information for income taxes, etc. You should review this chapter more in-depth as your need for farm record information increases.

The Reconciling chapter details how to reconcile your checkbook(s) with your Quicken records. We strongly suggest you use the reconciling feature to insure the accuracy of your farm and personal records. Closely following the procedures in the Accounts chapter on setting up your first checking account will make your first reconciliation go smoothly.

Writing checks with Quicken is strictly optional and depends on your needs. Using the computer program to write checks can be started at any time. We suggest you use Quicken for a period of time to become familiar with it before using it to write checks. Review the Check Writing chapter when you want to begin writing checks with Quicken.

Year End File Management is a chapter to be read and reviewed at the end of the first year of computerized record keeping. Be sure to read it first to learn of the various alternatives before trying any of the procedures.

Additional Quicken Topics is a collection of various topics and how to handle them with Quicken. Review whatever sections of the chapter are applicable to your farming operation.

Although this manual is intended for the farm record keeper using Quicken for the first time, it can also be helpful to record keepers who are currently using Quicken to review and improve their record keeping skills. It can be especially helpful to Quicken users who are upgrading to a newer version.

The self-study manual is written specifically for the farm record keeper. The manuals that come with the Quicken software and the help features within the program can answer general questions about Quicken. Help with questions about computerized farm record keeping with Quicken is always available from your local OSU Extension office or District Farm Management Specialist.

We hope computerized farm recording keeping will make your farm records more usable, and the record keeping task more enjoyable.

Introduction to Computer Records

With a computerized farm record keeping system, the recordkeeper can use software to store information, summarize data, generate and print reports and sort transactions into categories and sub-categories.

Storage of data is a very valuable component to a computerized system. The data entry process may take you as long as in a hand written system. The time saver is the summarization of monthly and year end data.

As in any system, good records and reports result from the data entered. The record keeping system can only summarize and report what you have entered.

There are many components to a farm record keeping system including transactions and the end results you generate for your management team. See Fig. 1-1.

Figure 1

Your receipts and expenditures should be entered in a timely manner complete with detail appropriate for the results you want to generate. For example, you should include detail on bushels of grain sold with your grain receipts if you want to know average price per bushel received at the end of the year. Some of the various types of information you can develop from a record keeping system are: Schedule F information (Cash Income Basis), data for tax reports, enterprise records, credit accounts, financial statements (net worth, income statements, cash flow), depreciation records and farm business analysis. See Fig. 1-2.

Figure 2


Introduction to Computer Records

What Quicken Can Do For You

Quicken is an easy to use computerized record keeping software package that enables the user to keep detailed farm financial records. You can think of Quicken as your checkbook. It can also be used to track a total of ten different account types including asset, liability, and all bank accounts.

Quicken enables the user to keep basic cash receipts and expense records and provide financial data to you, your tax preparer and other members of your farm management team (See Figure 1-1). Other Quicken features include easy account reconciliation and income and expense budgeting. Quicken reports that may be generated include income statements, cash flow reports, enterprise summaries, personal and business income tax reports and others (See Figure 1-2). Quicken does not easily track inventories and does not allow you to keep depreciation records.


Introduction to Computer Records

Quicken Organization

Using Quicken begins with setting up a File (see Quicken Figure 3 Organization Flow Cart, Fig. 1-3). A Quicken File contains all of the records for a particular business whether it be a farm business or another home business. Typically, users work with only one file in organizing their finances. See Chapter 2.

Within a Quicken File the user sets up various Accounts corresponding to different bank accounts, loans, credit cards, asset accounts and other liability accounts. For each account there is a corresponding register where transactions are entered. See Chapter 3.

As transaction entries are made into an Account register they are assigned a Category which allows for easy categorization and summarization when generating reports. Examples of categories include feed, seed, fertilizer, fuel, grain sold, and milk sold.

Transactions can be broken down further for more detailed record keeping by assigning them Subcategories. For example, the category fuel may have several subcategories: gas, diesel, and oil. A transaction in Quicken for purchase of diesel fuel would be assigned the category fuel and subcategory diesel.

Lastly, transactions can be assigned Classes and Subclasses. Examples of Classes are: corn, soybeans, wheat, dairy, and swine. Often, classes are used to summarize transactions for reports by enterprise, by field, by farm or another grouping. Subclasses can be used to further detail a transaction. See Chapter 4, Categories & Classes.

An example of a transaction assigned a category, subcategory, class and subclass might be: Diesel fuel purchased for harvesting corn for farm 1. This transaction would be assigned the following: category=fuel, subcategory=diesel, class=corn, subclass=farm1.


Introduction to Computer Records

Common Terms Used In Quicken

To help understand the rest of this manual, some common terms and their definitions follow.


Getting Started

In this chapter, new Quicken users will learn how to create a data folder and a data file. For those users who are upgrading from an earlier version of Quicken, this chapter will go through creating a data folder if needed and copying your old data file to your data folder within Quicken 2002.

And for all users, this chapter will also cover checking and modifying the Quicken 2002 program settings, making modifications to the main toolbar and backing up the data file.

If you are upgrading to a newer version of Quicken from an earlier version, skip the next section and go to the section Upgrading To Quicken 2002 later in this chapter. For new users, go to the next section.

First Time Into Quicken After Being Loaded Onto Your Computer

IGNORE "Welcome to Quicken’s New User Setup". Click CANCEL at bottom of screen. Click YES when prompted "Are you sure you want to leave setup?" This will allow you to setup a new file that will suit the needs for your farm/home/business records.


Getting Started

Creating Your First Data Folder and File

Go to menu bar and Click File, Click New. This opens the window CREATE QUICKEN FILE. The folder appearing in Save in: is the folder where Quicken 2002 is located. At this point there are 15 folders within the Quicken 2002 folder.

In the upper right corner of the CREATE QUICKEN FILE window, there are five icons.

Point to each icon and a description will drop down. Point to the one that says CREATE NEW FOLDER and Click. NEW FOLDER will appear in the list of folders and will be highlighted. Type DATA to replace NEW FOLDER. Click off to side and away from the list of folders. After DATA is one of the folders, Double Click on DATA folder to put DATA in Save in:. The DATA folder is where the file containing your record data will be saved. Creating and using a DATA folder for your data file is not absolutely necessary, but by using a DATA folder your data is separate from the program folders and easy to locate on your computer’s C drive.

Click in the blank to the right of File name: to get the cursor in the blank. Type in a name for your data file. A suggestion would be to use your last name or your business name as your data file name.

Click OK to close the CREATE QUICKEN FILE window and open the QUICKEN NEW USER SETUP window.

Click Next. The next window, "Personalize your Quicken data file" has four questions to answer. The first three questions can be answered however you want. The fourth question, "Will you be tracking a business in Quicken?" should be answered NO. By answering "no" you will be able to create your own farm-related income and expense categories. If you answer "yes" the program will create many non-farm business categories that may not relate to your farm business. Click Next. Click Done.

After the program creates your data file, it will come back to the MY FINANCES page.

On the menu bar Click Finance, Click Category & Transfer List to view the categories contained within your data file. Depending on how you answered the questions mentioned above, Quicken will create a varying number of family living categories. If you answered "yes" to the tracking a business question you will also have a number of non-farm business categories related to Schedule C. You won’t need these categories unless you are also tracking a non-farm business. It will be easier to delete your newly created data file rather than trying to delete all these categories. See Deleting a Data File later in this chapter for instructions on deleting a data file.

While some family living categories are needed to keep track of your business and family finances, there are probably more categories than are needed and some should probably be deleted. Since most farms also have off-farm income, the non-farm income categories at the top of the list, listed as income under the type column, can be left on the list. Examine the family living expense categories to determine if you want to use any of these categories. If you want to delete some of these, go to the Deleting Categories section of the Categories and Classes chapter for instructions.

One category on the list that should be deleted is the category "Cash." We will create a Cash Account later that will be used to track income received and expenses paid by cash. Keeping "Cash" as an expense category creates confusion.


Getting Started

Deleting a Data File

If you make a mistake setting up your data file, the mistake can easily be corrected. The correction in most cases is to simply delete the file and start over. A common mistake is to answer "yes" to the question about tracking a business with Quicken. If this happens there are a lot of non-farm categories that will only add to the confusion as you begin using the program. Rather than trying to delete all these unneeded categories, it is easier to delete the file and re-create it again.

To delete your file, go to the menu bar and Click File, Click File Operations, Click Delete to open the DELETE QUICKEN FILE window. Click on the your file name and Click OK. Quicken will prompt you several times to make sure that you want to delete the file. After the file is deleted, go to the menu bar and Click File, Click New to start the process again.

If you make a mistake in the beginning, don’t become discouraged. It is easier to correct the mistake early in the process than to wait until you have several months of financial transactions entered and then wish you had set up your data file differently.


Getting Started

How Many Files?

If your business is operated as a sole proprietorship, combining your business and personal accounts and categories into one file works best.

If your business is incorporated or operates as a partnership where you receive a regular paycheck for your labor and management, you will probably want to set up one data file for the business and one date file for your personal financial information. To create another file, simply follow the instructions in Creating Your First Data Folder and File.

For the business data file you will need to delete all the categories in the Category & Transfer List. This will allow you to create the income and expense categories that are best suited for your partnership or corporation.


Getting Started

Upgrading To Quicken 2002

After you have loaded Quicken 2002 onto your computer and the program starts for the first time, it will want to open the data file that you have been using with your earlier version and upgrade or reformat your data. Do not open your data file and/or reformat your data yet! Click Cancel so your data won’t be reformatted. If necessary Click Cancel to close any open windows and exit the program by Clicking the X in upper right hand corner of the window.

The following instructions will lead you through the process of creating a new data folder (if needed) within Quicken 2002 and copying your existing data file from your earlier Quicken program to your new version. While creating and using a DATA folder for your data file is not absolutely necessary, a DATA folder separates your data files from the program folders making it easier to locate on your computer’s C drive.

Click the Start button in the lower left corner of your computer’s screen, Click Programs and Click Windows Explorer. If (C:) does not show up in the Address line (or at the top of the left column), Double Click on My Computer in the left column and Double Click on (C:). With (C:) in the Address line (or at the top of the left column), all the folders on the C drive are shown.

Point and Double Click on the folder where your earlier version of Quicken is located. This will open your Quicken folder and show all the program folders that are contained within. If you have been using a DATA folder to keep your data file in, the DATA folder (or whatever else you may have called it) will also appear in the list with the program folders. If you have your data file in a DATA folder, point and Click on the DATA folder to highlight it, Right Click (click the right mouse button) to show the drop down menu. Click Copy.

To finish the process, point and Click on the folder containing your Quicken 2002 program and its folders. Right Click to show the drop down menu and Click Paste. This will put your DATA folder and your data file in the list of folders within your Quicken 2002 folder.

If you have not been using a DATA folder, first create one by pointing and Clicking on your Quicken 2002 folder in the left column to highlight it. At the top of the screen, on the menu bar, Click File, Click New, Click Folder to create NEW FOLDER in the right hand screen. Type DATA to replace NEW FOLDER. Click off to the side of DATA and DATA will appear in the list of folders under your Quicken 2002 folder in the left column.

Now you need to locate your data file. Most likely it will be within the program folders of your earlier version of Quicken. Point and Click on the Quicken folder of your earlier version to highlight it. On the right side of the screen will be a listing of folders and files. Your data file will be made up of 3 (or 4 for some versions) different files, each having your file name on it. Depending on your version of Windows Explorer, there may also be a three letter extension following the file name. Point and Click on the first of these files to highlight it. Hold down the SHIFT key and point and Click on the last file name in the list. This will highlight the list of 3-4 files that comprise your data file. Right Click to get the drop down menu and Click Copy.

In the left column, point and Click on the folder containing your Quicken 2002 program to show the list of folders. Point and Click on the DATA folder created earlier. Point to the right side of the screen which should be blank, Right Click to get the drop down menu and Click Paste to place your data file in the DATA folder. You can now close the Windows Explorer program by Clicking the X in the upper right corner of the window.

As you now start the program it will again want to open the data file at its location in your earlier version and upgrade the data. Click Cancel and close any other windows that might have opened. Go to the menu bar and Click File, Click Open to open the OPEN QUICKEN FILE window. Click on the UP ONE LEVEL icon until (C:) appears in Look in:. Point to the folder containing Quicken 2002 and Double Click. Point to DATA folder and Double Click. Double Click on your data file name and you will open the Welcome to Quicken 2002! window and get the message that the program needs to update your data to the Quicken 2002 format, Click OK at the bottom right of this window to begin converting your data. Click OK when you get the message, "Your file has been successfully upgraded!" and the program will open the My Finances page.


Getting Started

Program Option Settings for Quicken 2002

In the menu bar, Click Edit, Click Options to open the drop down window containing the following options: Quicken Program, Register, Write Checks, Reports and Graphs, Reminders, Internet Options, Web Connect, Desktop and Customize Toolbar. Each option will show the different settings that can be customized. The settings that follow are the suggestions of the authors. After you become familiar with the program and its features, you may want to review these settings and change them to suit your preferences.

General Options

Click OK to close the GENERAL OPTIONS window.

Register Options

Note: The quick fill settings are suggestions. Different users have different preferences for these settings. You may want to experiment with these settings to determine which you prefer.

Click OK to close the REGISTER OPTIONS window.

Check Options

Click OK to close the CHECKS OPTIONS window.

Report and Graphs Options

Click OK to close the REPORTS & GRAPH OPTIONS window.

Reminder Options

Click OK to close the REMINDER OPTIONS window.

Internet Options and Web Connect settings and options are user specific.

Desktop option is set to Save Desktop on Exit and is OK as is.


Getting Started

Setting Up the Main Toolbar

The main toolbar can be used to access parts of the program without having to use the menu bar. This feature works much like the Iconbar in earlier versions of Quicken.

From the menu bar, Click Edit, Click Options, Click Customize Toolbar to open the CUSTOMIZE TOOLBAR window.


OR

Clicking on the CUSTOM button on the main toolbar will also open the CUSTOMIZE TOOLBAR window. Using the CUSTOM button allows easy access to this window to make changes to the toolbar when desired.

Click on SHOW ICONS and SHOW TEXT at the bottom of the window if not already checked.

Within this window you can add items to the Chosen Buttons: list from the Available Buttons: list by highlighting the item you want to add and Click Add-> to insert the item into the Chosen Buttons: list. Likewise, to remove item(s) from the Chosen Buttons: list, highlight the item in the list of Chosen Buttons:, Click <-Remove and the item is removed from the list.

While items can be added or removed from the Chosen Buttons: list at any time, some of the Available Buttons: you might want to consider adding to the Chosen Buttons: are: Account List, Backup, Category & Transfer List, Class List, Exit, Memorized Transaction List, Print Checks and Write Checks. When finished making additions or deletions to the list of Chosen Buttons:, Click OK to close the CUSTOMIZE TOOLBAR window.


Getting Started

Quick Tabs

In the Quicken program settings, Quick Tabs was turned on and placed on the right side of the screen. The purpose of Quick Tabs is to allow you to move around the program easily. Every time you open an account register (checking, cash, etc.), the program adds a Quick Tab to the list. This allows you to go from one account register to another with the click of your mouse. If you open an account register, but don’t want it added to the Quick Tabs list, simply close the account register by Clicking the X in the upper right corner of the register. This closes the account register and removes the account name from the Quick Tabs list.

If you want to minimize (close) the Quick Tabs list so that the account register stretches completely across the computer screen, move your cursor into the Quick Tabs column and Right Click (click the right mouse button) to get a drop down list of available options. Click on Minimize QuickTabs to close the Quick Tabs column. Minimizing the Quick Tabs list may be useful when you are entering data into the register. To show Quick Tabs again, move the cursor to the far right side of your computer screen, right Click to get the drop list again and Click on Restore QuickTabs and the Quick Tabs column will reappear.


Getting Started

Backing Up Your Quicken Data

It is suggested that you have your program set to "Remind to Backup after Running Quicken" to one time. This setting is shown earlier in this chapter under the GENERAL OPTIONS window, GENERAL tab, Backup section. As you exit the Quicken program you will be prompted to backup your data file from the AUTOMATIC BACKUP window. Click Backup to open the QUICKEN BACKUP window. Your data file name and its location should come up in FILE TO BACK UP and under BACK UP LOCATION, A:\ should be in the blank at the bottom of the screen. These settings will use external 3.5" disks to back up your data.

Is this really necessary? YES!! Although the Quicken program makes an automatic backup copy on your computer’s hard drive when you exit, computers sometimes crash, losing all data and programs. A copy of the data on external disks is a safeguard to protect you in case your computer breaks down. It is suggested that you use at least two sets of disks, using one set the first time to back up and the second set the next time to backup. Then use the first set of disks the third time and so on. Quicken 2002 will prompt you to use however many disks are necessary for backing up. Also, if you are entering a lot of data at one time, you might want to backup your data several times while you are working.

To backup your data file without exiting the program, Click File, Click Backup or press [Ctrl+B] to open the QUICKEN BACKUP window. You can also add Backup to the main toolbar (see Setting Up The Main Toolbar above). It only takes one computer crash for you to appreciate the value of backing up your data. Do it frequently!


Getting Started

Exiting and Re-starting Quicken

You can exit the program several ways; from the menu bar Click File, Click Exit or Click the X in the far, upper right corner of your screen or Click Exit if you have added it to your main toolbar.

When you re-start Quicken, it will take you to the My Finances page which is the first center listed on the Quick Tabs list. The Finances page lists all the accounts you have created and you only need to click one of the account names to open the register for that account.

You are now finished with the initial setup of your Quicken program and are ready to move onto the next section.


Accounts

Accounts are set up within your data file to track your income and expenses. You can have over 500 accounts within a data file. Each account will have a register of its own. And you can create additional accounts within a data file whenever necessary.

You can transfer amounts from one account to another. For instance, using an ATM card will reduce the balance in your checking account and increase the balance in your cash account.

The types of accounts that can be set up include:

For a farm business, the most common accounts are checking, savings, cash, asset and liability accounts. If your business uses a line of credit for operating credit, you might want to consider using a credit card account. As you become more experienced with the Quicken program, you may want to add more accounts to track your personal and non-farm finances.


Accounts

Creating Your First Account

After your data file has been created, the easiest account to create is a cash account. You will track your cash receipts and expenditures in this account.

On the My Finances page under the heading of Set Up Banking Accounts, Click the Create New Account button to open the Create New Account window.

Click on Cash. Click Next and enter NAME and DESCRIPTION. You can name your cash account something else if desired. The description is optional and is for your information only. Click Next to enter beginning information. The starting date for your cash account is January 1 of the current year. Use the calendar button to the right to reset the date to January 1 or type the letter "Y" to set the date to January 1. Click in the blank to the right of Amount: and enter the amount of cash you had on hand January 1. In most cases, zero is the amount entered for the cash balance. If the information entered is correct, Click Done at the bottom right of the window.

The name of your cash account now should be listed under the heading of Set Up Banking Accounts on the My Finances page. To open your cash account, simply point and Click on the name and the register will open. The register looks like a check register and is where you will enter your cash transactions.

Why have a cash account? First, to track the cash income and expenses that are incurred by the farm business. Cash family living expenses are also recorded in this register if desired. Second, you will get cash by writing a check, using an ATM card or depositing a check and keeping some of the proceeds as cash. When you get cash, the balance in the cash account will increase. Likewise, as cash expenses are recorded in the cash account register, the cash balance will decrease.


Accounts

Setting Up New And Additional Accounts

From the menu bar Click Finance, Click Account List to open the ACCOUNT LIST window. You can also open the ACCOUNT LIST window by pressing [Ctrl+A] or Click Account if you have added it to the main toolbar. At the top of the ACCOUNT LIST window, the buttons on the toolbar are:

Open - use the selected account,

Hide(x) - hide or unhide the selected account,

Info — enter more information for the selected account,

New - create a new account,

Edit - change the selected account,

Delete - delete the selected account,

Options - change the display settings for this window,

How Do I - help for the account list window,

X - close the ACCOUNT LIST window.

To set up an additional account, Click New on the toolbar of the ACCOUNT LIST window to open the CREATE NEW ACCOUNT window. Click on the type of account you want to create, Click Next and answer the questions regarding the particular account.

Accounts can also be created by Clicking on the Create New Account button in the appropriate section on the My Finances page. This would be the same as the directions outlined in the section above, Creating Your First Account.

Note - most account balances will be as of January 1 of the current year except for your checking account(s). The beginning balance for checking accounts will be the ending balance on your last bank statement prior to January 1.

Note - when setting up a liability account, you will be asked at the end of the account questions "Would you like to set up an amortized loan associated with this account?" If you answer YES you will need very specific information about your loan(s), especially if they are existing loans that you have been paying on for some time. If you don’t have the information or don’t want to set up the amortized loan, answer NO and enter the principal and interest for each payment that is made during the year.


Accounts

Setting Up The First Checking Account

After you have named your checking account, identified it with a financial institution and given it a description, if desired, Click Next and enter the ending date and balance from your bank statement. **IMPORTANT** If you want a January 1 start date for your records, you will need the December bank statement for this checking account. When the program asks for the balance to begin the account with, you will enter the ending balance on the December statement and the beginning date for the account will be the statement ending date. Click Done when you have entered the required information.

To get your checking account(s) to reconcile properly with the bank statements as you start to use the program, you will need to enter into the checking account register all the outstanding checks and deposits that are not shown on the December bank statement making sure to enter the correct check number and dollar amount of the checks and any deposits. You will also then need to enter all checks and deposits between the date of the December bank statement and January 1. All these transactions will be dated prior to January 1, but will not show up on the following year’s reports dated January 1 through December 31.

If you have entered all the previous transactions into the checking account register you should be able to reconcile this checking account with your January bank statement. If you cannot reconcile the January bank statement with your computer records, review this section and the entries you have made. To start your checking account(s) properly, you must be able to reconcile with the first bank statement.

See theSetting Up Your First Checking Account example later in this chapter for the procedure to properly set up your checking account so it will reconcile correctly with your first bank statement.


Accounts

Getting Into An Account

From the menu bar Click Finance, Click Account List (or press [Ctrl+A] or Click Account on the main toolbar) to open the ACCOUNT LIST window. Click on an account to be opened, Click the Open button on the toolbar and the account register will open. An alternative is to point and Click on the account name shown on the My Finances window. Opening the ACCOUNT LIST window will add Accounts to the Quick Tabs list under My Finances. You can then Click Accounts within Quick Tabs to open the ACCOUNT LIST window at anytime.

When you open a register for a checking account, a money market account or a savings account, there will be information regarding using this "bank" account for paying your bills on-line. If this is an option you are not interested in Click the X to the right of this information to close this part of the register. Once closed, this information will not appear again when you re-open this account register.

Once you are into an account register, all the accounts that have been opened are shown on the Quick Tabs list to the right of the register. To move from one open account to another, Click the account tab to open that account’s register. If an account is not open that you wish to use, Click Accounts under My Finances in the Quick Tabs list and follow the steps outlined in the paragraph above.


Accounts

Setting Up Your First Checking Account - An Example

Following is a copy of a page from the 20X1-X2 check register for George and Betty Carter. The December 24, 20X1 bank statement was used to reconcile the check register. Cleared items are marked with a Ö . The ending balance on the December 24, 20X1 bank statement was $14,495.47. There are no checks or deposits outstanding prior to 12/14/X1. Examine the check book register and answer the following questions.

Record all charges or credits that affect your account

NUMBER DATE DESCRIPTION OF TRANSACTION PAYMENT/DEBIT Ö FEE IF ANY DEPOSIT/CREDIT BALANCE

7,449.47

1553

DEP

12/14/20X1

12/15/20X1

DHI, INC.

MMI

134.00 Ö   4,900.00 7,315.47

12,215.47

DEP

1554

12/15/20X1

12/19/20X1

Hank Williams Farms, Inc.

Frank’s Farm Supply

365.56 Ö   3,750.00 15,965.47

15,599.91

1555

1556

12/19/20X1

12/19/20X1

Hale’s Propane

Z.Z. Top Farms

235.00

1,369.00

Ö

Ö

    15,364.91

13,995.91

1557

1558

12/22/20X1

12/22/20X1

Ohio Bell

Rural Electric

126.00

875.00

      13,869.91

12,994.91

1559

DEP

12/23/20X1

12/24/20X1

Select Sires

MMI

210.00

    4,554.80 12,784.91

17,339.71

1560

DEP

12/26/20X1

12/26/20X1

Ken Gumm

Producers Livestock

1,357.65     612.50 15,982.06

16,594.56

1561

1562

12/29/20X1

12/29/20X1

IRS

Freddie’s Feed & Grain

985.94

800.00

      15,608.52

14,808.62

1563

1564

12/29/20X1

12/30/20X1

George Carter

Bank One

1,000.00

2,688.62

      13,808.62

11,120.00

1565 1/3/20X2 Countrymark 1,219.17       9,900.83
1566

DEP

1/3/20X2 Rural Electric

Producers Livestock

385.00     612.50 9,515.83

10,128.33

DEP

1567

1/10/20X2

1/12/20X2

MMI

Frank’s Farm Supply

46.23     4,900.00 15,028.33

14,982.10

1568

1569

1/12/20X2

1/12/20X2

VOID

DHI,Inc.

134.00       14,982.10

14,848.10

DEP

DEP

1/18/20X2

1/24/20X2

Hank Williams Farms Inc.

Countrymark

      225.00

944.02

15,073.10

16,017.12

Questions -

  1. What is the beginning balance to use for the Quicken checking account?
  2. What deposits and checks from 20X1 should be entered into your Quicken checking account so it will reconcile with the next bank statement.

    Deposits: $4900.00 $3750.00 $4554.80 $612.50  
    Checks: $134.00 $365.56 $235.00 $1369.00 $126.00
      $875.00 $210.00 $1357.65 $985.94 $800.00
      $1000.00 $2688.62      

Answers -

  1. The beginning balance for the Quicken checking account is the ending balance on the December 24, 20X1 bank statement, $14,495.47.

  2. The 20X1 deposits that are entered in the Quicken checking account because they did not show up on the December bank statement are the December 24 deposit of $4,554.80 and the December 26 deposit of $612.50. The December 15 deposits of $4,900.00 and $3,750.00 are marked and have been reconciled with the December bank statement.

    The 20X1 checks that would be entered into the checking account register are $134.00, $365.56, $126.00, $875.00, $210.00, $1357.65, $985.94, $800.00, $1000.00 and $2688.62. These checks either were written prior to December 24 (date of the bank statement), but did not show up on the bank statement or they were written December 24 or later.

    The deposits and checks of 20X1 that did not show up on the December bank statement must be entered into the Quicken checking account to have the checking account reconcile properly with the January 20X2 bank statement.


Categories & Classes

Categories are used to divide or classify transactions within Quicken. Examples are income and expense groups on Schedule F, the Ohio Commercial Farm Account Book categories, or those recommended from an accountant or tax preparer. Specific examples of categories might be Grain Sold or Feed Purchased. Each category is designated as tax or non-tax related for report and summary purposes.


Categories & Classes

Setting Up Categories

There are three different methods for adding categories to your account. First, they can be set up ahead of time. Second, they can be set up as transactions are entered into the register. And third, they can be imported into a file using a QIF file. There are detailed instructions on how to import categories at the end of this chapter in the section Importing A Pre-Defined Set of Categories And Classes.

From the menu bar Click Finance and Click Category&Transfer List. This will open the CATEGORY & TRANSFER LIST window.

The buttons on this window’s toolbar include the following:
New - create a new category or sub-category
Edit - change the selected category
Delete - delete the selected category
Report - create a report on the selected category
Options - change the properties of the category list
How Do I - help in the Category&Transfer List window
X - close the Category & Transfer List window.

You may also Click Category from the Main Toolbar (if added) to open the CATEGORY & TRANSFER LIST window.

To set up categories ahead of time, Click New button on the Category and Transfer List window toolbar within the window. This gives you the SET UP CATEGORY window where you will begin entering information for your new category.

First, you must enter the name for your new category (e.g., Grain Sold). Second, you are asked to give a description. While this is not mandatory, it is useful to provide detailed information about the category for future reference. This information can be accessed in the CATEGORY & TRANSFER LIST window. Third, you will be asked to enter a Group for the category. Make sure this field is blank. (Categories may be grouped for budgeting purposes. See Quicken Help for more information on Category Groups.) Fourth, you are asked to select the type of category you are setting up: income, expense or subcategory (more on subcategories later). Fifth, make sure the Spending is not discretionary box is left unchecked. Sixth, you need to decide if the category is tax related. If it is, you need to Click Tax-Related. If it isn’t a tax related category, leave this box blank.

Lastly, you may want to designate the tax form and line on the tax form this category corresponds to. You can choose from two lists of tax forms and lines from the pull-down menu. The Standard Line Item List is an abbreviated list of tax forms. For farm record keeping, the Extended Line Item List should be selected as it includes Schedule F and other farm related forms. Tax related portions of setting up a category are optional and are dependent on the level of detail you wish to obtain on reports. It is recommended that you at least designate whether the category is tax related or not. Click OK when finished.

Categories can also be set up as you are making transaction entries into the register. Simply enter information into entry fields of a transaction as you normally would. When you arrive at the category field, enter the name of the new category. Quicken will prompt you with a NEW CATEGORY window asking DO YOU WANT TO CREATE A NEW CATEGORY WITH THE NAME "NEW CATEGORY NAME"? Click Yes. This will take you to the SET UP CATEGORY window where you will follow the same procedures as described in the previous paragraphs.


Categories & Classes

Editing Categories

To edit a category you first need to have the CATEGORY & TRANSFER LIST window opened. Point to the category you wish to edit and Click to highlight the category. Click the Edit button on the CATEGORY & TRANSFER LIST window toolbar. This will give you the EDIT CATEGORY window where you can change the various different components related to a category: Name, Description, Group, Type and Tax Sections. Click OK when finished.

Deleting Categories

To delete a category, highlight the category to be deleted in the CATEGORY & TRANSFER LIST window. Click the Delete button from the CATEGORY & TRANSFER LIST window toolbar. You will be prompted with a Delete Category window stating "YOU ARE ABOUT TO PERMANENTLY DELETE A CATEGORY." Click Delete Category. Click OK.

You also have the option to replace the category by Clicking Replace Category. This selection and selection of a category from the adjoining pull-down menu enables you to merge the deleted category with the category from the pull-down menu.


Categories & Classes

Subcategories

Subcategories are a further breakdown of an income or expense category designated by a colon ‘:’ between the category and subcategory in the category field when entering a transaction. For example, the Repairs category may have two subcategories, Building and Machinery to separate transactions and their associated dollar amounts for summarizing (e.g. Repairs:Building).

Subcategories are set up in the same way as categories, except when you designate "Type" in the SET UP CATEGORY window, Click Subcategory of, Click the adjacent down arrow to view the pull down menu. Click the category that the subcategory is to be assigned to. Subcategories are edited in the same way categories are edited.


Categories & Classes

Merging Categories

To merge categories you must first make one category a sub-category of another. To do this highlight the category that is to be merged. Click the Edit button on the CATEGORY & TRANSFER LIST window toolbar as you would to edit a category. In the EDIT CATEGORY window, under Type, Click Subcategory of. Click the drop down arrow to view the pull down menu to select the category you wish to merge into. When this category is selected, Click OK. The first category selected is now a subcategory of the second.

Next Click the subcategory (former category) that is to be merged. Click the Delete button from the CATEGORY & TRANSFER LIST window toolbar. You will be prompted with a window asking DELETING SUBCATEGORY. MERGE SUBCATEGORY WITH PARENT? Click Yes. Your categories are now merged.


Categories & Classes

Classes

Classes are a second way of classifying your transaction data so you can summarize by enterprise, landlord, property or farm, e.g., corn, soybeans, wheat, hogs, beef.

Classes may be set up in the same three ways categories are set up: 1) ahead of time, 2) as you enter transactions, 3) imported into a file using a QIF file.


Categories & Classes

Setting Up Classes

From the menu bar Click Finance and Click Class List to open the CLASS LIST window. The CLASS LIST window toolbar buttons are as follows:
New - create a new category or sub-category
Edit - change the selected category
Delete - delete the selected category
Report - create a report on the selected category
How Do I - help in the Class List window
X - close the Class List window.

You may also Click Class from the Main Toolbar (if added) to open the CLASS LIST window.

To set up classes ahead of time Click the New button from the CLASS LIST window toolbar. The SET UP CLASS window will then appear allowing you to enter Name and Description for the class. Click OK when done.

When entering category and class information in the category/class field of a transaction the category name is followed by a backslash ‘/’ to separate it from the class which is typed in following the ‘/’ (e.g. Fertilizer/Corn).

To set up classes as you enter transactions, enter your transaction information as you normally would. When you get to the Category field enter your category followed by ‘/.’ Next, enter the new class name. Click Enter. You will then be prompted with the SET UP CLASS window. Proceed from here as you did when setting up classes ahead of time.


Categories & Classes

Editing And Deleting Classes

Editing and deleting classes require the same steps as for categories, except the edit and delete commands are accessed in the CLASS LIST window toolbar.

Subclasses

A further breakdown of a class, is designated by a colon ‘:’ between class and subclass in the category/class field when entering a transaction (e.g., Fertilizer/Corn:field1). Subclasses are created, edited and deleted in the same way as classes.


Categories & Classes

Printing the Category & Transfer List and Printing the Class List

You may need to have a printed copy of your Category & Transfer List and Class List for quick reference when you begin entering data in Quicken. These printed lists may serve as useful tools as you learn how to properly categorize and assign classes to transactions.

To print a copy of a Category & Transfer List, Click Finance from the menu bar and Click Category & Transfer List to open the CATEGORY & TRANSFER LIST window. Click File from the menu bar and Click Print List. Click OK from the PRINT window.

To print a copy of the Class List, Click Finance from the menu bar and Click Class List to open the CLASS LIST window. Click File from the menu bar and Click Print List. Click OK from the PRINT window.


Categories & Classes

Using A Pre-Defined Set Of Categories And Classes

One of the advantages of Quicken is the ability to create your own categories and classes for your farm record system. However, some record keepers prefer to use a pre-defined set of categories and classes rather than creating their own. The following Category & Transfer Lists were created by OSU Farm Management Specialists. The first list, contained in the FARM&HOME.QIF file, is fairly detailed and contains farm, home and personal categories, classes and suggestions for accounts. The second Category & Transfer List is contained in the FARM.QIF file and contains the same farm categories and classes, but fewer family living and personal categories than FARM&HOME.QIF.

Both lists are available from the authors, your local OSU Extension office or can be downloaded from the OSU Extension website at [http://www.ag.ohio-state.edu/~agnatres/software]. These downloaded files are ZIP files and will need to be converted to QIF files using the WinZip program. If you do not have WinZip on your computer, it can be downloaded at [www.winzip.com].

FARM&HOME CATEGORY/TRANSFER LIST - the following categories are in the FARM&HOME.QIF file. Home/personal categories start with an "H", other categories are farm business categories.

CATEGORY TYPE TAX DESCRIPTION
CCC Loan Inc   IF NOT USING LIABILITY ACCOUNT
CCC Loan as Inc Inc Tax CCC Loan Inc or Redeemed
Custom Work Inc Tax  
Gas Tax Refunds Inc Tax  
Gifts Received Inc    
Govt Payments Inc Tax Government Payments
Grain Sold Inc Tax Crop Sales
HDiv&Int Inc Tax Nonfarm Interest & Dividends
HOtherInc Inc Tax
HWages Inc Tax Nonfarm Wage Income
Inc, Int Inc Tax Interest Income
Inc, Invest Inc Tax Investment Income
Inc, Rents Inc Tax  
Loans Receipts Inc   IF NOT USING LIABILITY ACCOUNT
LS Sold Inc Tax Livestock Sales
     PBreedLT Sub Tax Form 4797, Long Term Capital Gains
     PBreedST Sub Tax Form 4797, Short Term Capital Gains
     PFeeder Sub Tax Purchased Feeder Livestock Sold
     RBreedLT Sub Tax Form 4797, Long Term Capital Gains
     RBreedST Sub Tax Form 4797, Short Term Capital Gains
     RMarket Sub Tax Raised Market Livestock Sold
M&E&B Sold Inc Tax Mach & Equip & Other Cap Assets Sold
     LT Sub Tax Form 4797, Long Term Capital Gains
     ST Sub Tax Form 4797, Short Term Capital Gains
Milk Sold Inc Tax  
Other Farm Inc Inc Tax  
Patr Div-C Inc Tax Cash Portion Qualified Patronage Dividend
Patr Div-NC Inc Tax NonCash Portion Qualified Patronage Div
Poultry & Eggs Inc Tax  
Refund, Tax Inc Tax State & Local Tax Refunds
Wool & LS Prod Inc Tax Other Livestock Products
Auto & Truck Exp Tax  
Bank Charge Exp Tax Bank Charges for Farm Account
Capital Purch Exp   IF NOT USING ASSET ACCOUNT
CCCGrCost Exp Tax Expense of Grain with CCC Loan as Income
Chemicals Exp Tax Crop Herbicides, Insecticides, Supplies
Drying&Storage Exp Tax  
Dues Exp Tax  
Feed Purchased Exp Tax  
Feeder LS Exp Tax Feeder Livestock Purchased for Resale
     Cost Sub Tax Purchase Cost Deducted at Time of Sale
     Purch Sub   IF NOT USING ASSET ACCOUNT
Fees Exp Tax  
Fert & Lime Exp Tax Fertilizer & Lime
Fuel & Lube Exp Tax  
HAuto Exp   Personal Auto Expense
HCharity Exp Tax Charitable Contributions
HClothing Exp    
HFamily Draw Exp   IF NOT USING A CASH ACCOUNT
HFood Exp   Groceries & Restaurants
HGifts Exp    
HHouseImpr Exp   Furniture, Appliances, Repairs
HInsurance Exp   Auto, Life, Personal
HInterest Exp   Personal Interest
HIntMort Exp Tax Deductible Home Mortgage Interest
HMedical Exp Tax Health Insurance, Doctors, Prescription
HMisc Exp   Miscellaneous Home & Personal Expenses
Insurance Exp Tax Farm Insurance
Interest Exp Exp Tax Interest Expense
Interest, Mort Exp Tax Mortgage Interest Expense
Lease Exp Tax Lease Payments
Loan Principal Exp   IF NOT USING LIABILITY ACCOUNT
Mach Hire,Truck Exp Tax Machine Hire & Trucking
Marketing Exp Tax Marketing Charges
     Brdg&Cap Sub Tax For Breeding LS & Capital Asset Sales
     Crops Sub Tax For Crop Sales
     Mkt LS Sub Tax For Market Livestock Sales
     Other Sub Tax For Other Farm Related Sales
Misc Exp Tax Miscellaneous Farm Expense
Payroll Exp Tax Payroll Expenses
     Comp FICA Sub Tax Employer Paid FICA
     Comp MCARE Sub Tax Employer Paid Medicare
     Gross Sub Tax Gross Wages Paid
Pre-Tax Exp Tax Pre-tax Deductions
     Dent Ins Sub Tax Pre-tax Dental Insurance
     Life Ins Sub Tax Pre-tax Life Insurance
     Med Ins Sub Tax Pre-tax Medical Insurance
Pre-Tax, Spouse Exp Tax Pre-tax Deductions, Spouse
     Dent Ins Sub Tax Pre-tax Dental Insurance
     Life Ins Sub Tax Pre-tax Life Insurance
     Med Ins Sub Tax Pre-tax Medical Insurance
Prof Services Exp Tax Accounting, Legal, Consultants
Rent Exp Tax Cash Rent Paid
Repairs Exp Tax Repairs & Maintenance
     Building Sub Tax Building & Fence Repairs
     Mchy Sub Tax Machinery Repairs
Resale Items Exp Tax Other Items Purchased For Resale
     Cost Sub Tax Cost of Items Deducted At Time Of Sale
     Purch Sub   IF NOT USING ASSET ACCOUNT
Seeds & Plants Exp Tax Seeds & Plants Purchased
Subscriptions Exp Tax Farm Publications
Supplies Exp Tax General Farm Supplies
Supplies LS Exp Tax Livestock Supplies
Tax Exp Tax Taxes Paid
     Federal Sub    
     FICA Sub   Soc Sec Tax — Farm & Non-Farm Earnings
     Hprop Sub Tax Home Property Tax
     Other Sub Tax  
     Property Sub Tax Farm Property Tax
     State Sub Tax State Tax
Utilities Exp Tax  
     Electric Sub Tax Farm Share
     Heating Sub Tax Farm Share
     Hutilities Sub   Home & Personal Utilities
     Telephone Sub Tax Farm Share
Vet & Med Exp Tax  
Workers Comp Exp Tax Workers Compensation

Classes are another way of classifying (in addition to categories) farm record data by enterprise, landlord, farm, etc. The following classes would be possibilities for a crop/livestock farm and are included in the FARM&HOME.QIF file and the FARM.QIF file.

Beef
Corn
Dairy
Gen Farm
Hogs
Home
Soybeans
Wheat

The following accounts are types of suggested accounts to be set up and used in lieu of several of the categories identified in the above list. These are not part of the FARM&HOME.QIF file or the FARM.QIF file, but would need to be created by each record keeper. See the Accounts chapter for information on creating accounts.

[CASH] Cash Cash account for recording taxable & non-taxable cash transactions
[LOAN] Liability Liability account(s) for recording loan disbursements & loan principal payments
[RESALE INV] Asset Asset account(s) for recording feeder livestock purchased for resale
[CAP PURCH] Asset Asset account(s) for recording capital purchases

The FARM.QIF category & transfer list contains the same farm business categories, classes and accounts as listed above, but significantly fewer home/personal categories.


Categories & Classes

Importing a QIF File

  1. If your FARM&HOME.QIF (or FARM.QIF) file is on a disk, insert the disk into the A: drive. If you downloaded the file, go to the next step.
  2. Click File, Click Import and Click QIF File.
  3. Click Browse.
  4. Click the down arrow adjacent to Look in: to view the pull down menu. If on disk, Click (A:), Click FARM&HOME.QIF and Click OK. If you downloaded the file, Click (C:), Double Click the folder where your FARM&HOME.QIF file is located, Click FARM&HOME.QIF and Click OK.
  5. Under Quicken Account to Import into: Click the down arrow to view the pull down menu. Click <All Accounts> to import the FARM&HOME.QIF file into the destination file.
  6. Click Category List. Remove all other check marks and Click OK.
  7. After the importing is finished, from the menu bar Click Finance, Click Category & Transfer List to view the list of categories. Click Finance and Click Class List to check the list of classes imported.
  8. To print a list of categories and classes, refer to the section Printing the Category & Transfer List and Printing the Class List earlier in this chapter.

Data Entry

The following examples cover common farm business transactions. We start with simple single category transactions and move to more complex multiple category income and expense transactions. You will learn how to enter, edit, void and memorize transactions.

The following transactions are explained in this chapter:

Example 1.Making an Entry
Example 2.Correcting an Entry
Example 3.Voiding an Entry
Example 4.Using a Split Screen
Example 5.Entering a Rebate
Example 6.Sale of Different Classes of Livestock
Example 7.Split Transactions using the Calculator
Example 8.Memorizing a Transaction as Percentages
Example 9.Recalling a Memorized Transaction - Percentages
Example 10.Memorizing a Transaction as Amounts
Example 11.Recalling a Memorized Transaction - Amounts
Example 12.Create Liability (Borrow Money for Operating Loan)
Example 13.Making a Loan Payment
Example 14.Create Liability - CCC LOAN
Example 15.Cash Purchase


Data Entry

Example 1: Making an Entry

You write a check to Anywhere Feed Mill for $3524.36 for hog feed.

Num: Click on Num field, Click Next Check Num. If this is your first check or if your checks are out of sequence you will need to type the check number.
Date: Click the calendar in the Date field. Click << to move to previous month or >> to advance to next month. Once you are in the proper month Click on the correct day.
Payee: Click on the Payee field, Type Anywhere Feed Mill.
Payment: Click on the Payment field. Now you can manually enter the amount of the check or, Click on the number pad located in the right side of this field and Click the appropriate numbers.
Category/Class: Click on the down arrow in the Category field. Click Feed Purchased (feed purchased will now appear in the category field). To add a class, Type /hogs.
Memo: 17 tons of hog feed.
**Note** Memos are optional to get more detailed info, e.g., tons of feed, pounds of milk sold, bushels of grain, etc.
Record: Review your entries. If everything appears correct Click Enter. This will record your transaction. Notice that your checking account balance has been updated.

Once your transaction has been recorded, it should look like the entry shown below.


Data Entry

Example 2: Correcting an Entry

If after recording an entry, you notice an error, making a correction is easy, e.g., Anywhere Feed Mill was misspelled.

To correct the error, complete the following steps:

Payee: Double Click on the incorrect spelling and make necessary changes.
Record: Review your entries. If everything appears correct Click Enter. This will record your correction.
**NOTE** You must Click Enter to update your changes.


Data Entry

Example 3: Voiding an Entry

You can void an entry. Click on any field in the transaction to be voided. Click Edit in the bottom right hand corner of the transaction.

Click Void Transaction. You will notice **VOID** in front of the payee name.

Record: Review your entries. If everything appears correct Click Enter. This will record your transaction.
**NOTE** You must Click Enter to update your changes.


Data Entry

Example 4: Using a Split Screen

You write a check to Farm Supply of Anywhere for $2512.00 for soybean chemicals and soybean seed.

Num: Click the down arrow in the Num field, Click Next Check Num. If this is your first check or if your checks are out of sequence, you will need to type the check number.
Date: Click the Date field. Use the "+" key to advance the date one day at a time or the "-" key to backup one day at a time.
Payee: Click on the Payee field, Type Farm Supply of Anywhere.
Payment: Click on the Payment field, Type 2512.00.
Category/Class: Click Split in the lower right hand corner of the transaction. The SPLIT TRANSACTION WINDOW will appear. Click the down arrow in the Category field on line 1, Click Chemicals, Type /s. After typing /s you will notice the rest of the word soybean is highlighted. Click in the Memo field and Type 50 gal. Roundup, Click in the Amount field and Type 2000.00. Click Next,
**Note**
The remaining amount of the payment will now appear in line 2 of the Amount field.

Click the down arrow in the Category field on line 2, Click Seed & Plants, Type /s (for Soybeans class). Click in the Memo field and Type 25 bags FSoA 397RR, Click Next,

**Note** Look at the Amount field. If this is the last entry for this transaction a number should not appear in the Amount field on line 3. If there is a number in this field, you have either made a mistake or have another entry to make. Also note that a zero appears in the Remainder: in the lower right hand corner of the window.

Record: Click OK.
Click Enter.


Data Entry

Example 5: Entering A Rebate

You receive a rebate check from Monsanto for $8.00 per gallon for each gallon of Roundup herbicide you purchased this year.

Num: Click on Num field, Click Deposit.
Date: Click the Date field. Use the "+" key to advance the date one day at a time or the "-" key to backup one day at a time.
Payee: Click on the Payee field, Type Monsanto.
Payment: Click on the Deposit field, Type 400.00.
Category/Class: Click the down arrow in the Category field, Click Chemicals, Type /s. Click in the Memo field and Type Rebate $8/gal, 50 gal. Roundup,
Record: Click Enter.

**Note**What happens to your Soybean Chemical Expenses when this rebate is applied? An income amount (deposit) with an expense category reduces the over-all total in that expense category. Below is a transaction report for soybean chemicals (for more information on reports see the Reports chapter). As you can see, the $400.00 rebate reduced soybean chemical expenses from $2,000.00 to $1,600.00.


Data Entry

Example 6: Sale of Various Classes of Livestock

You sell two cull dairy cows and two bull calves at the Livestock Sale of Anywhere. The two cows sold for $987.50 with deductions of $28.90 and the two calves sold for $224.25 with deductions of $14.90. The net check is for $1167.95.

Num: Click the down arrow in the Num field, Click Deposit.
Date: Click the Date field. Use the "+" key to advance the date one day at a time or the "-" key to backup one day at a time.
Payee: Click on the Payee field, Type Livestock Sale of Anywhere.
Payment: Click on the Deposit field, Type 1167.95.
Category/Class: Click Split in the lower right hand corner of the transaction. The SPLIT TRANSACTION WINDOW will appear. Click the down arrow in the Category field on line 1, Click LS Sold:RBreedLT, Type /d (for dairy class). Click in the Memo field and Type 2 cows, 2935 lbs., Click in the Amount field and Type 987.50. Click Next, Click the down arrow in the Category field on line 2, Click Marketing:Brdg&Cap, Type /d. Click in the Memo field and Type cow marketing deductions, Click in the Amount field and Type -28.90.

**Note** On a deposit that is a check that has amounts deducted from the sales amount, enter the gross sales amount under the appropriate income category with the deductions entered as MINUS amounts under the appropriate expense category(ies).

Click Next, Click the down arrow in the Category field on line 3, Click LS Sold:RMarket, Type /d. Click in the Memo field and Type 2 calves, 225 lbs., Click in the Amount field and Type 224.25. Click Next, Click the down arrow in the Category field on line 4, Click Marketing:Mkt LS, Type /d. Click in the Memo field and Type calf marketing deductions, Click in the Amount field and Type -14.90.

**Note** Look at the Amount field. If this is the last entry for this transaction a number should not appear in the Amount field on line 5. If there is a number in this field, you have either made a mistake or have another entry to make. Also note the zero at the bottom right hand corner of the window.

Record: Click OK.
Click Enter.

**Note**The cow sales and deductions need to be reported separately from the calf sales and deductions since the two sales are reported on different tax forms.


Data Entry

Example 7: Split Transactions using the Calculator

You write a check to Farm Supply of Anywhere for $3498.76 for the following corn inputs:

Bicep 15 gallons $589.54
18-46-0 5 tons $984.50
28% 500 gal. $670.31
Spirit 40 oz. $471.16
K20 5 tons $783.25
Total Due   $3,498.76
  3 items are Fertilizer/Corn
2 items are Chemicals/Corn
 

Num: Click on Num field, Click Next Check Num.
Date: Click the Date field. Use the calendar or +/- keys to set proper date.
Payee: Click on the Payee field. Click Farm Supply of Anywhere.
Payment: Click on the Payment field. Type 3498.76.
Category/Class: Click Split in the lower right hand corner of the transaction. The SPLIT TRANSACTION WINDOW will appear. Click the down arrow in the Category field on line 1, Click Fert & Lime, Type /c (for corn class), Click in the Memo field and Type 18-46-0 5T., 28% 500 Gal., K2O 5T., Click the calculator button in the Amount field, Click 984.50 + 670.31 + 783.25, Click = Enter on the calculator, Click Next, Click the down arrow in the Category field on line 2, Click Chemicals, Type /c (for corn class), Click in the Memo field and Type Bicep 15 Gal., Spirit 40 Oz., Click the calculator button in the Amount field, Click 589.54 + 471.16 Click Enter on the calculator, Click Next, Click OK.
Record: Click Enter.

**Note** The amount in Remainder: is 1060.70. This indicates that 1060.70 of the 3498.76 entered into the payment field needs to be categorized yet. In this example the second line would be Chemicals/Corn for category and 1060.70 in the amount column.


Data Entry

Example 8: Memorizing a Transaction as Percentages

A memorized transaction is a transaction that is saved so you can reuse the steps on later transactions without keying them all in again. This is useful for payments that you make on a repeated basis, e.g., utilities. If you memorize the transaction as a percentage, the next time you use this transaction, Quicken will automatically split the amount of the transaction based on the percentage of the first transaction you memorized.

You write a check to American Electric Power for an electric bill. You have one meter on the farm. Home use and farm use are on the same bill. You have determined that 75% of every bill is for farm use and 25% is for home use.

Num: Click on Num field, Click Next Check Num.
Date: Click the Date field. Use the calendar or +/- keys to set proper date.
Payee: Click on the Payee field. Type American Electric Power.
Payment: Click on the Payment field. Type 125.00.
Category/Class: Click Split in the lower right hand corner of the transaction. Click the down arrow in the Category field on line 1, Click Utilities:Electric, Type /g (for Gen Farm class), Click in the Memo field and Type 1500 Kilowatt hours, Click the calculator button in the Amount field, Click 125 X .75 Click Enter on the calculator, Click Next, Click the down arrow in the Category field on line 2, Click Utilities:Hutilities, Type /h (for Home class), Click in the Memo field and Type 500 Kilowatt hours, Click Next, Click OK.
Memorize: Click Edit (in lower right hand corner of transaction), Click Memorize Transaction, Quicken will ask you if you want to memorize this transaction as percentages.

Click Yes, Click OK.

Record: Click Enter.


Data Entry

Example 9: Recalling a Memorized Transaction - Percentages

You write a check for $100.00 to American Electric Power for an electric bill. You previously memorized this transaction.

Num: Click on Num field, Click Next Check Num.
Date: Click the Date field. Use the calendar or +/- keys to set proper date.
Payee: Click on the Payee field. Click on the down arrow in the Payee field. Click American Electric Power. The PERCENTAGE SPLIT window appears, Type 100.00,

Click OK.

**Note** To check if the transaction has been recorded correctly, Click on any field in this transaction, Click Split, you will see that this transaction has been split in the following manner:

Utilities: Electric/Gen Farm$75.00
Utilities: Hutilities/Home$25.00

The Kilowatt hours in the Memo fields will need to be adjusted with each bill. Click in the Memo field on line 1 and Type 1200 Kilowatt hours, Click in the Memo field on line 2 and Type 400 Kilowatt hours. Click OK.

Record: Click Enter.

In Example 8 you memorized this transaction with a split of 75% farm use and 25% home use. Therefore, when you recall a memorized transaction memorized as a percentage, Quicken will automatically split future transactions with the same percentages.


Data Entry

Example 10: Memorizing a Transaction as Amounts

You sell 155,758 pounds of milk. The deposit is entered as follows:

Num: Click on Num field, Click Deposit.
Date: Click the Date field. Use the calendar or +/- keys to set proper date.
Payee: Click on the Payee field. Type AW Dairy.
Payment: Click on the Deposit field. Type 10340.15.
Category/Class: Click Split in the lower right hand corner of the transaction.

Enter the following information:

  Click OK.
Memorize: Click Edit in lower left hand corner of transaction, Click Memorize Transaction. Quicken will ask you if you want to memorize this transaction as percentages. Click No, Click OK.

**Note** By clicking no this transaction will be memorized using the exact amounts as they appear above. When you recall this transaction at a later date, you will need to edit the amount figures for each category.

Record: Click Enter.


Data Entry

Example 11: Recalling a Memorized Transaction - Amounts

A month later, you sell 163,514 pounds of milk. The deposit is entered as follows:

Num: Click on Num field, Click Deposit.
Date: Click the Date field. Use the calendar or +/- keys to set proper date.
Payee: Click on the Payee field. Click the down arrow in the Payee field, Click AW Dairy.
Payment: Click on the Deposit field. Type 10057.19.
Category/Class: Click Split in the lower right hand corner of the transaction.

Enter the following information:

  **Note** In the previous example you memorized this transaction as amounts. Therefore, when you use this transaction again the categories and classes are correct and do not need to be changed. But you will need to change the pounds of milk sold in the Memo field on line 1 and enter the correct figures in the Amount field for each category. After making all necessary changes Click OK.
Record: Click Enter.


Data Entry

Example 12: Create Liability (Borrow Money for Operating)

You obtain a loan from the Bank of Anywhere and place money in your checking account to buy inputs. The loan increases the balance in your checking account. It also increases your loan balance or liabilities. The loan is recorded in a liability account, BOALoan, which was created ahead of time. See the Accounts chapter for details on creating accounts.

Num: Click on Num field, Click Deposit.
Date: Click the Date field. Use the calendar or +/- keys to set proper date.
Payee: Click on the Payee field. Type Bank of Anywhere.
Payment: Click on the Deposit field. Type 55000.00.
Category/Class: Click on the down arrow in the Category field. Click [BOALoan]. Type /g (for Gen Farm class).

Memo: Operating loan.
Record: Click Enter.

**Note** Placing [BOALoan] in the category field designates this transaction as a ‘transfer.’ A transfer is neither an income nor expense transaction. It is a transfer of money from one account to another. In this transaction, money was transferred from the loan account to the checking account. The transfer increases the loan balance in the liability account, [BOALoan] and the balance in the checking account.

**Note** To see how this payment affected the balance in your liability account [BOALoan], Click the Accounts tab located under My Finances in the Quick Tabs list. Next, Double Click BOALoan. This takes you to the register in this liability account. You can see a loan balance of $55,000.00.


Data Entry

Example 13: Making a Loan Payment

You write a check to Bank of Anywhere for $56,345.00 for payment on a loan.

Num: Click on Num field, Click Next Check Num.
Date: Click the Date field. Use the calendar or +/- keys to set proper date.
Payee: Click on the down arrow in the Payee field. Click Bank of Anywhere.
Payment: Click on the Payment field. Type 56345.00.
Category/Class: Click Split in the lower right hand corner of the transaction. Click the down arrow in the Category field on line 1, Click Interest Exp, Type /g (for Gen Farm class). Click the Amount Column, Type 1345.00, Click Next, Click the down arrow in the Category field on line 2, Click [BOALoan]. Type /g (for Gen Farm Class).

  Click the Amount field, Type 55000.00 Click OK.
Memo: December loan payment.
Record: Click Enter.

**Note** To see how this payment affected the balance in your liability account [BOALoan], Click the Accounts tab located under My Finances in the Quick Tabs list. Next, Double Click BOALoan. This takes you to the register in this liability account. You can see after making this payment your balance is now $0.00.


Data Entry

Example 14: Create Liability — CCC Loan

You take out a CCC loan on soybeans for $53,500. You treat CCC loans as loans for tax purposes. You have already created a liability account named CCCLoan.

Num: Click on Num field, Click Deposit.
Date: Click the date field. Use the calendar or +/- keys to set proper date.
Payee: Click on the Payee field, Type FSA.
Payment: Click on the Deposit field, Type 53500.00
Category/Class: Click on the down arrow in the Category field. Click [CCCLoan], Type /g (for Gen Farm class).
Memo: 10,000 bushels soybeans.
Record: Click Enter.

**NOTE** For a detailed explanation of CCC Loans, see the CCC Loans Section in the additional Quicken topics chapter.


Data Entry

Example 15: Cash Purchase

You pay cash for oil filters at Farm Supply of Anywhere.

Go to the Cash Account register.

Date: Click the Date field. Use the calendar or +/- keys to set proper date.
Payee: Click down arrow on the Payee field. Click Farm Supply of Anywhere.
Payment: Click on the Spend field,Type 28.43.
Category/Class: Click on the down arrow in the Category field. Click Repairs: Mchy, Type /g (for Gen Farm class).
Memo: Filters for truck.
Record: Click Enter.


Reports

Using a computer to keep your farm records makes record keeping easier. It allows you to make greater use of your farm record data. Time savings may be the greatest benefit. While you may not save time during the data entry stage, the time savings and improved accuracy in the report stage will be significant. The examples in this chapter show some of the common business reports useful in analyzing your farm business.

The following reports can be found in the Reports and Graphs Center.

Select a Topic: Report or Graph Name:
Easy Answer Reports and Graphs
Use Easy Answer Reports and Graphs to answer common questions
Where did I spend my money during the period?
How much did I spend on?
How much did I pay to?
Am I saving more or less?
Has my spending changed in this category?
What am I worth?
Did I meet my budget?
What taxable events occurred?
How is this investment performing?
What are my investments worth?
Memorized Reports and Graphs After customizing a report or graph you can memorize it for future use. To access your list of memorized reports and graphs, Click Reports, Click Reports and Graph Center, Click Memorized reports and graphs.
What Do I Own and Owe Account Balances
Account balances summary.

Net Worth
Assets and liabilities based on account balances.

How am I spending my money? Banking Summary
Income/expenses by category (or other item).

Budget
Annual actual income/expenses against budget.

Cash Flow
Cash coming in and going out by category.

Cash Flow Comparison
Cash coming in and going out by category for two time periods.

Income/Expense
Inocme and expense summary by category.

Income/Expense Comparison
Income/expenses by category for two time periods.

Itemized Categories
Transactions subtotaled by category.

Missing Checks
Transactions and notice of missing/duplicate checks.

Monthly Budget
Monthly actual income/expenses against budget.

Spending
Spending summary by expense category.

How are my investments doing? Capital Gains
Realized gains in security sold.

Investment Asset Allocation
Portfolio allocation by asset class.

Investment Income
Investment income/expense summary by category.

Investment Performance
Investment returns (internal rate of return).

Investment Transactions
Investment transactions by date.

Portfolio Value
Value of securities in investment accounts.

What is my tax situation? Capital Gains
Realized gains on securities sold.

Tax Schedule
Transactions subtotaled by tax line item.

Tax Summary
Tax-related transactions.

How is my business doing? Accounts Payable
Bills to pay by creditor.

Accounts Receivable
Payments due by customer.

Balance Sheet
Equity based on assets and liabilities.

Cash Flow
Cash coming in and going out by category.

Cash Flow Comparison
Cash coming in and going out by category for two time periods.

Missing Checks
Transactions and notice of missing/duplicate checks.

Payroll
Payroll income and expense by employee.

Profit and Loss Comparison
Profit and loss by category compared for two time periods.

Profit and Loss Statement
Profit and loss by category.


Reports

Creating Reports

From the menu bar Click Reports, Click Reports and Graphs Center (or Click Reports & Graphs on the Quick Tabs list), select from the list of topics, and then Click the report or graph you want.

Set the date range you want the report or graph to include. For reports or graphs on a specific balance, such as a net worth, enter one date.

Click Create Report to create the selected report.


Reports

Customizing Reports

Quicken gives you great flexibility in customizing your reports. You can change the layout, date range, accounts to include, and various other settings. You can also filter the report, for example, to include transactions with only certain payees or categories.

Your reports can be customized in two ways. While you are creating the report you can Click the Customize button in the SELECT A REPORT window. Or, once the report has been created, Click the Customize button in the report toolbar.

When the CUSTOMIZE REPORT window is opened there are four tabs to choose from:

  1. Display - this tab allows you to change the report layout. You can set date parameters for the report, change report title, change row and column headings, show cents and percents and change report organization.
  2. Accounts - this tab allows you to set date parameters for the report and select which accounts to include or exclude from the report.
  3. Include - this tab allows you to set date parameters for the report, select which categories to include and sort data by payee, category, class or memo line.
  4. Advanced - this tab allows you to set date parameters for the report, sort transactions by dollar amounts, tax status, transaction type and include or exclude transfers or subcategories.

Reports

Quick Zoom

This feature allows you to examine the detail in some reports, such as a Profit & Loss Statement.

To create a Quick Zoom Report Double Click on the amount in question when the arrow pointer becomes a magnifying glass. To examine a transaction in the register Double Click the transaction in question in the Quick Zoom Report. From the register, to return to either report, simply click the report title in the Report and Graphs section on the Quick Tabs List.


Reports

Memorizing Reports

While the report is on screen, Click the Memorize button on the report toolbar, Type a title, Set the report date and Click OK.

To access your list of memorized reports and graphs, from the menu bar Click Reports, Click Reports and Graph Center (or Click Reports & Graphs on the Quick Tabs list), Click Memorized reports and graphs, and Double Click the memorized report name you want to use.

If changes have occurred in your categories, classes, or accounts since memorizing a report, the next time you use that memorized report you will get a warning message. Review the categories, classes and accounts included in the memorized report, make any necessary changes to the categories, classes and accounts to be included in the report, memorize and replace the memorized report.


Reports

Printing Reports

To print a report, Click File from the menu bar, Click Print Report/Graph to open the PRINT window and Click OK. [Ctrl+P] will also open PRINT window.

If a report is too big to fit on regular paper, Click Customize, Click Cents in Amounts to off. If the report is still too large Click File from the menu bar, Click Printer Setup and Click For Reports/Graphs to try reducing the left and right margins. The heading and body fonts can also be adjusted from this window. Page orientation (portrait or landscape) and font sizes can be adjusted from the PRINT window.


Reports

Types of Reports and Example Reports

The following are types of reports and their descriptions that would be used in a farm business. Examples of these reports and the keystrokes needed to create them follow after the report descriptions.

  1. Register Report

    This is a detailed report listing transactions in the register. This report is useful to check for data entry errors or to have a paper trail of all your transactions. It can be printed daily, monthly, quarterly, etc. A report can be printed for each register or combined into one report.

    Click Report on the register toolbar, Click Register Report.

**Note** This report is for the checking account currently opened. To include all accounts in this report Click Customize, Click Accounts tab, Click Mark All, Click Create Report.


Reports

Types of Reports and Example Reports

The following are types of reports and their descriptions that would be used in a farm business. Examples of these reports and the keystrokes needed to create them follow after the report descriptions.

  1. Transactions Report

    This is a detailed report listing transactions from one or more registers showing individual transactions. To see a running total of balances, print your register and preview it on screen. You can sort and subtotal transactions by payee, category, class, account, or time period.

    From the menu bar, Click Reports, Click Reports and Graphs Center, Click How am I spending my money?, Click Transaction, set report date, Click Create Report.


Reports

Types of Reports and Example Reports

The following are types of reports and their descriptions that would be used in a farm business. Examples of these reports and the keystrokes needed to create them follow after the report descriptions.

  1. Transaction Report - Grain Sales by Class

    Shows transactions sorted by category and class. Use the memo line to help record desired detail in the transactions.

    From the menu bar Click Reports, Click Reports and Graphs Center, Click How am I spending my money?, Click Transaction, set report date, Click Customize, Click Subtotal By Class, Click Include tab, Click Clear All, Click Grain Sold Category, Click Create Report.


Reports

Types of Reports and Example Reports

The following are types of reports and their descriptions that would be used in a farm business. Examples of these reports and the keystrokes needed to create them follow after the report descriptions.

  1. Tax Summary Report

    This report lists transactions with tax-related categories from all accounts. It groups and subtotals the transactions by category income first and then expenses.

    To review the tax status of your categories, Click Finance, Click Category & Transfer List. To change the tax status of your categories, see Editing Categories in the Categories and Classes chapter.

    From the menu bar Click Reports, Click Reports and Graphs Center, Click What is my tax situation?, Click Tax Summary, set report date, Click Create Report.


Reports

Types of Reports and Example Reports

The following are types of reports and their descriptions that would be used in a farm business. Examples of these reports and the keystrokes needed to create them follow after the report descriptions.

  1. Tax Summary - Totals Only

    Same as previous report, but with less detail.

    From the menu bar Click Reports, Click Reports and Graphs Center, Click What is my tax situation?, Click Tax Summary, set report date, Click Customize, Click Totals Only, Click Create Report.


Reports

Types of Reports and Example Reports

The following are types of reports and their descriptions that would be used in a farm business. Examples of these reports and the keystrokes needed to create them follow after the report descriptions.

  1. Cash Flow

    This preset report summarizes your income and expenses by category. It covers all bank, cash, and credit card accounts.

    A cash flow report initially excludes transfer transactions that occur between the accounts included in the report (that is, between bank, cash, and credit card accounts.) For example, Quicken does not include a transfer of funds from checking to savings. However, this can be changed by customizing the report.

    From the menu bar Click Reports, Click Reports and Graphs Center, Click How is my business doing?, Click Cash Flow, set report date, Click Customize, Click Advanced, Click Transfers, Click Include All, Click Create Report.


Reports

Types of Reports and Example Reports

The following are types of reports and their descriptions that would be used in a farm business. Examples of these reports and the keystrokes needed to create them follow after the report descriptions.

  1. Cash Flow - by Quarter

    This report is sorted by quarter. This report can be sorted in other ways.

    From the menu bar Click Reports, Click Reports and Graphs Center, Click How is my business doing?, Click Cash Flow, set report date, Click Customize, Click down arrow by Column, Click Quarter, Click Advanced, Click Transfers, Click Include All, Click Create Report.

    CASH FLOW REPORT BY QUARTER
    1/1/XX THROUGH 12/31/XX
    Category Description 1/1/XX-
    3/31/XX
    4/1/XX-
    6/30/XX
    7/1/XX-
    9/30/XX
    10/1/XX-
    12/31/XX
    Overall Total
    INFLOWS
    Grain Sold 3,500.00 0.00 9,700.00 0.00 13,200.00
    Milk Sold 0.00 0.00 0.00 7,950.00 7,950.00
    FROM Farm 1 0.00 0.00 50.00 0.00 50.00
    Bal Fwd - Farm 1 15,000.00 0.00 0.00 0.00 15,000.00
    TOTAL INFLOWS 18,500.00 0.00 9,750.00 7,950.00 36,200.00
    OUTFLOWS
    Chemicals 0.00 900.00 0.00 0.00 900.00
    Dues 0.00 0.00 0.00 71.00 71.00
    Fertilizer 4,590.00 0.00 0.00 2,400.00 6,990.00
    Fuel & Lube 1,357.00 0.00 0.00 0.00 1,357.00
    Mach Hire, Truck 0.00 0.00 640.00 207.00 847.00
    Repairs:
          Mchy 0.00 450.00 0.00 28.00 478.00
    TOTAL Repairs 0.00 450.00 0.00 28.00 478.00
    Seed & Plants 0.00 1,200.00 0.00 0.00 1,200.00
    TOTAL OUTFLOWS 5,947.00 2,550.00 640.00 2,706.00 11,843.00
    OVERALL TOTAL 12,553.00 -2,550.00 9,110.00 5,244.00 24,357.00


Reports

Types of Reports and Example Reports

The following are types of reports and their descriptions that would be used in a farm business. Examples of these reports and the keystrokes needed to create them follow after the report descriptions.

  1. Profit & Loss Statement

    The P & L (Profit and Loss) Statement report summarizes the revenue and expenses of a business by category. It includes all your accounts.

    From the menu bar Click Reports, Click Reports and Graphs Center, Click How is my business doing?, Click Profit and Loss Statement, set report date, Click Create Report.

    **NOTE** When working with your own records, you will need to review the list of categories and limit them to business income and expense categories for this report to approximate net cash farm income.


Reports

Types of Reports and Example Reports

The following are types of reports and their descriptions that would be used in a farm business. Examples of these reports and the keystrokes needed to create them follow after the report descriptions.

  1. Profit & Loss Statement Report - With Percents

    Same as previous report, but shows percentage breakdown of income and expenses.

    From the menu bar Click Reports, Click Reports and Graphs Center, Click How is my business doing?, Click Profit and Loss Statement, set report date, Click Customize, Click Amount as %, Click Create Report.


Reports

Types of Reports and Example Reports

The following are types of reports and their descriptions that would be used in a farm business. Examples of these reports and the keystrokes needed to create them follow after the report descriptions.

  1. Profit & Loss Statement by Class

    Same as report 8 (P&L statement), but sorted by class to facilitate enterprise analysis.

    From the menu bar Click Reports, Click Reports and Graphs Center, Click How is my business doing?, Click Profit and Loss Statement, set report date, Click Customize, Click down arrow by Column, Click Class, Click Create Report.

    **NOTE** To print this report you must change page orientation to Landscape. See notes at beginning of this chapter.


Reports

Types of Reports and Example Reports

The following are types of reports and their descriptions that would be used in a farm business. Examples of these reports and the keystrokes needed to create them follow after the report descriptions.

  1. Profit and Loss Comparison

    From the menu bar Click Reports, Click Reports and Graphs Center, Click How is my business doing?, Click Profit and Loss Comparison, set report dates, Click Create Report.


Reports

Types of Reports and Example Reports

The following are types of reports and their descriptions that would be used in a farm business. Examples of these reports and the keystrokes needed to create them follow after the report descriptions.

  1. Transaction Report - 1099's

    From the menu bar Click Reports, Click Reports and Graphs Center, Click How am I spending my money?, Click Transaction, set report date, Click Customize, Type Title - Form 1099 Report, Click Subtotal by: Click Payee, Click Totals Only, Click Accounts tab, Click Mark All, Click Include tab, Click Mark All, Click Advanced tab, Click Tax-related Transactions Only, Click Transaction Types, Click Payments, Click Create Report.

    This transaction report lists all the people and businesses you have made tax-related payments to during the year. From this list, you can determine which ones need to be furnished with 1099 information forms.

    Form 1099-Misc. is issued to persons or non-incorporated businesses who are not your employees and who you paid $600 or more during the year for business expenses. Typical expenses reported would be cash rents, custom work, building repairs, accounting and legal fees and other expenses paid to individuals or non-incorporated businesses. Expenditures for seed, feed, fertilizer and lime, parts, fuel, livestock and other supplies are not reported.

    If you are paying more than $600 in business interest to an individual, you would report that interest on Form 1099-Int.


Reconciling

Reconciliation guarantees that the amounts entered into your farm records correspond with the amounts entered into your checkbook. Each month you should reconcile your Quicken checking account with the bank statement. If you have more than one account, you should reconcile each, but you can do only one account at a time. Be sure to review your bank statement for any errors that may have occurred. To reconcile your account, follow the steps outlined below.

  1. Open the account to be reconciled, e.g., the checking account.

  2. Make sure all checks and deposits up through the date of the bank statement have been entered into the checking account register.

  3. From the menu bar Click Banking, Click Reconcile or Click Reconcile on the toolbar in the REGISTER window of the account which you plan to reconcile. This will take you to the RECONCILE BANK STATEMENT: account name window.

  4. Accept the Bank Statement Opening Balance. The first time you reconcile in Quicken, the opening balance should be the balance you entered when you set up the account originally. If not, go back to the Accounts chapter and review Setting Up Your First Checking Account.

  5. Enter the Bank Statement Ending Balance.

  6. Service charges and interest earned can be entered next, if desired, categories assigned and the actual date posted. An alternative is to enter them directly into the register. Be sure to enter them into your checkbook also.

  7. Click OK to open the RECONCILE BANK STATEMENT: account window. The toolbar buttons in this window are:
    New - enter a missing transaction in the register
    Edit - change a transaction in the register
    Delete - delete a transaction in the register
    Statement - modify the financial information entered
    View - change how checks and deposits are ordered
    How Do I - help in the Reconcile window
    X - close the Reconcile window

  8. The RECONCILE BANK STATEMENT:account window contains outstanding deposits and checks. The service charge, and interest earned just entered will show as cleared transactions with a check mark in the CLR column to the left of the item.

  1. Mark each check and deposit that has cleared the bank, as indicated on your statement, by Clicking on the check or deposit. The space bar also acts as a toggle to clear or unclear transactions.

  2. Quicken records a "c" (R after the reconciliation process is finished) in the check register as you mark transactions as cleared. To view the register or to edit a transaction, Click Edit in the RECONCILE BANK STATEMENT:account window toolbar. Click Return to Reconcile to return to RECONCILE BANK STATEMENT:account window.

  3. If the bank statement contains transactions not in the register, you can enter them into the register by Clicking New in the RECONCILE BANK STATEMENT:account window toolbar. Enter the transaction in the register. Click Enter to RECORD. Click Return to Reconcile. Also enter these into your checkbook.

  4. When you are done marking cleared transactions, check the Difference: at the bottom right-hand corner of this window. If the Difference: between the Cleared Balance and the Statement Ending Balance is $0.00, the account is balanced. If differences remain, check dollar amount on each entry, the number and amount of debits and credits with bank statement.

  5. If you are unable to reconcile the difference, see Quicken Help for finding and correcting a difference.

  6. When the Difference: is 0.00, Click Finished and you will be congratulated. You will also be able to print a Reconciliation Report. Take advantage of this opportunity, Click Yes at least until you are easily able to reconcile your accounts.

Check Writing

The ability to write and print checks with the computer is one of the features of a computerized record keeping program like Quicken. The program also allows the payee’s name and address to be printed on the check so window envelopes can be used to further simplify the process of paying bills. Writing checks with the computer allows the bills to be paid, the transaction information (date, payee, amount, category, class and memo) to be recorded in the check register and the checks printed all at one time. Plus your farm records are constantly up-to-date.

The ability to write checks represents one of the biggest time saving features associated with computerized record keeping. You should definitely consider computerized check writing if your business requires you to write a large number of checks and/or you spend a significant amount of time on bookkeeping for the business. To write checks with Quicken follow the steps outlined below:

  1. Open the check account register you want to write checks from.
  2. To open the WRITE CHECKS:account window, from the menu bar Click Banking, Click Write Checks. The WRITE CHECKS window can be accessed by Clicking Checks in the main toolbar if added. See Setting Up the Main Toolbar in the Getting Started chapter. [Ctrl+W] will also open the WRITE CHECKS:account window.

  1. Within the WRITE CHECKS:account window, the toolbar buttons are:
    Delete - delete the current check,
    Find - locate checks in the register,
    Order Checks - buy Quicken checks on the web,
    Payments - view the scheduled transactions,
    Payees - view the online payee list,
    Report - create a report or graph,
    Print - print checks,
    Options - change the check settings,
    How Do I - help in the Write Checks window,
    X - close the Write Checks window.

    Click Options to review the settings for check writing options. These were set back in the Getting Started chapter under the section of Program Option Settings for Quicken 2002, Check Options. These settings can be left as is or changed at any time to suit your preferences.

  2. Complete the check just as you would a hand-written check by entering the date, payee and the amount. The check memo is optional. If you plan to use window envelopes (another time saver), enter the payee’s name and address in the address box.
  3. Enter the category(ies) and class(es). The check can have multiple categories and classes recorded by Clicking Split and making the appropriate entries.
  4. The final step is to Click Record Check. When the check is recorded, it is added to the list of Checks to Print at the bottom of the screen.

  5. Checks can be edited until they are printed. To edit a check, Click on the check in the Checks to Print list and it will come back into the check writing screen. After making the correction(s), Click Record Check. To bring a blank check into the check writing screen, Click on a blank line in the Checks to Print list. [Ctrl+N] will also bring a blank check into the check writing screen.
  6. Checks can also be memorized and used at a later time without having to re-enter all the information. Click Edit, Click Transaction, Click Memorize (or press [Ctrl+M]) will memorize the check and all the information you have entered up to the point you memorize it. Memorized checks can be edited in the MEMORIZED TRANSACTION LIST window like another memorized transaction. Click Banking, Memorized Transaction List (or press [Ctrl+T]) will open the MEMORIZED TRANSACTION LIST window. The Memorized Transaction List can also be added to the main toolbar to open this window.

Printing Checks with Quicken

  1. Checks must be ordered from your bank, Intuit or another supplier. When you purchased your copy of Quicken, information about checks and window envelopes from Intuit were included as part of the package.
  2. Before printing checks the first time, go to the menu bar, Click File, Click Printer Setup, Click For Printing Checks. This opens the Check Printer Setup window where you select the printer to be used, whether your checks are continuous (used with a dot matrix printer) or page oriented (used with a bubble jet or laser printer) and the type of checks you will be using.
  3. Checks can be printed at any time after they have been written in the check writing window. In the number column of the check register, the word Print will appear until the check is printed at which time a check number will be placed in the Num column.
  4. a. Checks can be printed from the WRITE CHECKS:account window by Clicking Print button on the toolbar (or press [Ctrl+P]) which opens the SELECT CHECKS TO PRINT window.
  5. b. If you are not in the WRITE CHECKS:account window, Click File, Click Print Checks to open the SELECT CHECKS TO PRINT window.

  6. In the SELECT CHECKS TO PRINT window, specify the number of the first check to be printed, what checks to print, the style of checks being used and how many checks are on the first page. Once the necessary information has been specified, Click OK to print the checks selected.

A SUGGESTION - print several fictitious checks on a blank piece of paper to determine that all the printer and check settings are correct before using the pre-printed checks. After printing the fictitious checks, be sure to delete them from the checking account register.


Year End File Management

With the increased capacity and power of today’s computers, two years of data can easily be kept in the data file while adding the third year’s transactions. For instance, data from 2000 and 2001 can be kept in the same file while transactions for 2002 are being added. Keeping several years of data in the same file allows you to make comparison reports, graphs, etc. It is also makes it easier to go back to find an earlier income or expense transaction.

Make sure that your current file is backed up before beginning any year-end file management.

Three options can be used to manage Quicken data files at year’s end. Click File, Click File Operations, Click Year-End Copy to open the YEAR-END COPY window for two of these options.

  1. Archive

    Copies the earlier years’ transactions in the current data file to another file. The current file will still contain all transactions including the transactions archived to the new data file. This year-end procedure will allow the user to create a new data file with transactions for a specific year or time period while accumulating several years of transactions in the current data file.

    Example of Archive

    If the current data file, EXFARM, contains transactions for 1998, 1999, 2000, 2001 and part of 2002, the archive function is set to automatically include transactions up through 12/31/2001 into an archive file named EXFARM01. The program will put EXFARM01 in the same folder containing EXFARM. If you want to name the archive file differently, e.g., EXFARM98-01, to be more descriptive of its contents, you can do this when the ARCHIVE FILE window is open. Also, while the ARCHIVE FILE window is open you can change the ending date for the transaction to be archived. For example, you want to archive transactions for 1998 and 1999 in a file named EXFARM98-99, you would specify to archive transactions up to and including 12/31/1999. After creating an archived file, EXFARM will still contain the transactions for 1998, 1999, 2000, 2001 and part of 2002. You can continue to use EXFARM for the remainder of your 2002 transactions.

    Using the data file, EXFARM, Archive cannot be used to create a file that contains 1999 data only. To create EXFARM99 from EXFARM, see Copy later in this section.


Year End File Management

  1. Start New Year

    This copies all the transactions from the current file to a new backup data file (your file name with BKP.QDF added) and then deletes transactions prior to a specified date from the current file. This procedure can be used to delete old transactions from the current data file when the file contains too many years of records. Start New Year should be used to delete transactions from the current data file after those transactions from earlier years have been saved in other data file(s) using Archive.

    Example of Start New Year

    EXFARM now has transactions for 1998, 1999, 2000, 2001 and 2002. You have already archived the 1998 and 1999 data in EXFARM98-99 using the Archive option. You want to use Start New Year to delete the 1998 and 1999 data from EXFARM so it will contain only 2000 and 2001 transactions as you start recording 2002 transactions. When the START NEW YEAR window opens, it will automatically name the backup file EXFARMBKP.QDF and this is where all the transactions from EXFARM will be copied to. If you want to name the backup file something else, the name of the file can be changed here.

    The START NEW YEAR window also asks about the starting date for transactions to remain in EXFARM. If you want to delete the transactions from 1998 and 1999 so only 2000, 2001 and 2002 transactions remain, you will specify the starting date to be 1/01/00. Click OK and EXFARM now has 2000, 2001 and 2002 transactions and EXFARMBKP has 1998 through 2002 transactions. You can delete EXFARMBKP at this point if you want.

    The third option to manage Quicken data files at years end is Copy. Click File, Click File Operations, Click Copy to open the COPY FILE window.


Year End File Management

  1. Copy

    Copy creates a new file with transactions between specified beginning and ending dates. Uncleared transactions should also be copied to the new file.

    Example of Copy

    If the current data file, EXFARM, contains transactions for 1998, 1999, 2000, 2001 and part of 2002 you can use Copy to copy the 1998 and 1999 data into a new file EXFARM98-99. When the COPY FILE window opens it will have automatically named the new file EXFARMCpy.QDF so if the file is to be named EXFARM98-99 the name needs to be changed at this point. Be sure to specify the beginning and ending dates of the transactions to be included since Copy will automatically set the beginning and ending dates to correspond with the beginning and ending dates in EXFARM. Copy can also be used to create files with one year’s data, e.g., EXFARM98, EXFARM99, etc. After using Copy, the original file EXFARM will still contain the transactions for 1998, 1999, 2000, 2001 and 2002.


Budgets

Using Quicken to keep your farm records makes record keeping easier. It also allows you to make more use of your record data than you might with a hand-kept set of records. Using the budgeting feature in Quicken to create and monitor projected income and expenses allows you to use your computer records for more than just tax purposes. By creating budget projections and examining projected versus actual income and expenses on a monthly or quarterly basis, you will know how your business is doing financially and can quickly take needed corrective action. It is too late to take action if you wait until the end of the year to find out that your farm business did not do as well financially as you had planned.

Budgets can be based on the previous year’s income and expense records, but need to be adjusted for any changes in the operations and for price changes for products bought or sold.

Within Quicken, budgets can be created by the following three different methods:

  1. Automatic — Quicken creates a budget based on your existing data
  2. Manual — Quicken creates a blank budget for you to fill in
  3. Copy Current — Quicken copies your current budget for you to edit

  4. **NOTE** This option is only available after you have created your first budget.

Budgets

Creating Budgets

To create your first budget Click Banking from the menu bar, Click Budgeting to open the WELCOME TO QUICKEN’S BUDGETING FEATURE.

Click Automatic, Click Create budget. The CREATE BUDGET: AUTOMATIC window opens.

Set report date, Click Monthly detail, Click Categories, Click Mark all, Click OK, Click OK.

Click Setup tab, Click Rename, type budget name (i.e. 2002 Budget), Click OK.

After your budget has been created, you can change the way it is displayed by Clicking the Options button and selecting Separate View, Income/Expense View or Combined View. We have chosen the combined view.

Click the Summary tab to view the Monthly Budget Summary. To view Monthly Detail click on the month in question, then Click Details.

The MONTHLY SUMMARY window opens.

When finished Click Done.


Budgets

Editing Budgets

To make changes in any of the budgeted amounts Click the Budget tab in the BUDGETING window and Click on the income or expense category you want to change. This will bring up the monthly amounts that are currently in the budget (remember we set the budget originally for monthly detail). Just point and Click on whatever month you want to change. After changing the monthly amount(s) for this category, Click Apply to save the change(s). Repeat this procedure for as many categories as needed to make your budget reflect the proper income and expense projections for the coming year.


Budgets

Budget Report

This report compares the actual income and expenses to the budgeted income and expenses and uses the budget you have created in the first part of this section. With the budget reporting feature you can generate a comparison of actual vs. budgeted amounts for each month. By changing the beginning report date to January 1 and changing the ending date to the last day in the current month, you can create a year-to-date comparison of actual vs. budgeted amounts.


Budgets

Creating a Budget Report

From the menu bar, Click Banking and Click Budgeting to open the BUDGETING window. Click the Reports button and Click Budget Report. Set the report date for either a monthly budget report or a year-to-date budget report. After creating each report, memorize that report by Clicking the Memorize button and naming one report Monthly Budget Report and the other report Year-To-Date Budget Report. Doing this will allow you to use the Memorized reports and graphs section of Reports and Graphs to bring up these reports. Then all you need to do is set the proper date range and Click the Update button to generate the correct report.

A sample year-to-date budget report is at the end of this section.


CCC Loans

Tax law allows for the treatment of CCC loans either as a loan, or as income. Some farmers use the first option and treat CCC loans as loans. Other farmers make the election to treat CCC loans as income. Once elected, you must continue to report in this manner unless you request and the IRS grants permission to revert to the treatment of CCC loans as loans for tax purposes.

Income Tax Treatment of
Various Dispositions of CCC Loans and Commodities
Disposition of the Loan or Commodity Treatment of CCC Loan When Received
Treated as Income (i.e., Farmer Made § 77 Election) Treated as Loan (i.e., Farmer Did Not Make § 77 Election)
Loan paid off by forfeiting grain No further income reported Amount of loan reported as income
Grain redeemed by paying off loan with cash Farmer has basis in grain equal to loan amount Farmer has a zero basis in the grain
Grain redeemed at posted county price (PCP) that is less than loan rate Farmer has basis in grain equal to loan amount minus marketing loan gain Farmer has additional income, marketing loan gain = (loan rate - PCP) x number of bushels
Redeemed grain is sold Farmer has gain (loss) equal to sale price less amount of loan, which is the basis in the grain Farmer has income equal to sale price
Redeemed grain is fed Farmer has a feed deduction equal to the amount of the loan which is the basis in the fed commodity Farmer has no deduction


CCC Loans

CCC Loans As Loans

If you treat the CCC loan as a loan, the procedure for recording the loan is shown in Example 14 in the Data Entry chapter. You will need to create a liability account such as [CCCLoan]. When you get the loan, the money is deposited into the checking account with the category entry being [CCCLoan]. This transaction increases the balance in the checking account by the amount of the loan and transfers the same amount as a liability into the loan account [CCCLoan].

When repaying the loan use the split screen to record the principal payment with the category entry (transfer) of [CCCLoan] and the interest and other expenses are charged to the respective expense categories.

In the case where the CCC loan is paid off for a lesser amount based on the Posted County Price (PCP), the amount of the debt forgiven (the marketing loan gain) needs to be recognized as additional income. Recognizing the marketing loan gain requires an extra line in recording the payoff a CCC loan.

A REPAYMENT EXAMPLE - A farmer takes out a CCC loan on 10,000 bushels of soybeans. The loan rate is $5.35 per bushel and the total amount of the loan is $53,500. Several months later the PCP for the grain is $4.90 and the farmer decides to redeem his beans by paying off the loan for $49,000. He now has a marketing loan gain of $4,500, the difference between the original loan amount and the amount paid to redeem the beans. The register entries in the FARM CHECKING account to pay off this loan at the PCP would be as follows:

Date Num Payee Memo Category Amount Balance
3/1/XX 101 County FSA   --SPLIT-- $49,000.00  
  **Split Screen Detail**  
  Category   Memo   Amount  
  1. [CCCLoan]   Loan payoff   53,500.00  
  2. govt payments   Marketing loan gain   -4,500.00  

If the loan amount shown in the [CCCLoan] account was $53,500, the above entry in the FARM CHECKING register will zero out [CCCLoan] and will recognize the marketing loan gain of $4,500. When CCC loans are repaid using the PCP and the PCP is less than the loan rate, the interest accrued on the loan is forgiven and not considered to be income.

ANOTHER REPAYMENT EXAMPLE - A farmer takes out a CCC loan on 10,000 bushels of soybeans for $53,500. Some time later he locks in the PCP of $4.90 to repay his loan and at the same time contracts his beans for delivery at $5.00. He delivers the beans to the elevator and takes the check for $50,000 to FSA to repay his loan. FSA then issues a check to the farmer for $1,000, the difference between the loan payoff and the check from the sale of the soybeans. The register entries in the FARM CHECKING account to pay off this loan would be as follows:

Date Num Payee Memo Category Amount Balance
3/1/XX DEP County FSA   --SPLIT-- $1,000.00  
  **Split Screen Detail**  
  Category   Memo   Amount  
  1. grain sold   10,000 bu @ $5.00   50,000.00  
  2. [CCCLoan]   Loan payoff   -53,500.00  
  3. govt payments   Marketing loan gain   4,500.00  

**NOTE** If the soybeans had been sold to the elevator at the PCP of $4.90, the deposit amount would be $0 and the grain sold entry would be $49,000. The entries for [CCCLoan] and govt payment would be the same.


CCC Loans

CCC Loans Treated As Income

If you treat the CCC loan as income, the loan is income in the year received. You must set up an asset account and record the amount of the loan. When the loan is redeemed (or forfeited), you offset the asset account, and report the difference between the sale (or forfeiture) of the grain and the basis from the asset account as additional gain or loss. Interest paid and any other associated expenses are charged to the appropriate categories.

Accounts & Categories Needed

An income category and an expense category and two accounts are needed to properly report CCC loans that are reported as income. The categories are included in the Category & Transfer list of the Farm&Home.QIF file in the Categories and Classes chapter.

CCCLoanAsInc

This is an income category used to report the CCC loan as income. This is a tax-related category and is reported on line 7a, CCC loans under election, on Schedule F and is reported in the year the loan is received.

[CCCLoan]

This is a liability account and was discussed previously. This liability account is used regardless if CCC loans are treated as loans or as income.

[CCCBasis]

This is an asset account. The amount of CCC loan(s) treated as INCOME is reported as taxable income in the year the loan(s) is received and creates a basis in the grain equal to the loan amount. This basis (equal to the loan amount) is added to this account. If the grain is forfeited to repay the loan, no additional taxable income is due since the income from forfeiture is exactly offset by the basis. However, the appropriate entries should be made to reflect payment of the loan. If the loan is paid off with cash, this basis can be reported as a tax deductible expense when the grain is sold or fed. If the grain is sold, the basis is reported as CCCGrCost discussed next. If the grain is fed, the grain=s basis is reported in the Feed Purchased category.

CCCGrCost

This is an expense category to record the basis (cost) of the redeemed (or forfeited) CCC grain sold, when you treat CCC loans as income. It is a tax-related category and is reported on line 2 of Schedule F.

Loan numbers, quantities and amounts need to be recorded to help keep track of each loan. If part of a loan is redeemed, part of the cost can be deducted at the time the grain is sold. If redeemed grain is still on hand at the close of the business year, the [CCCBasis] account will show the cost basis, for balance sheet purposes, of redeemed grain to be used for resale or for feed.

Example

On 10/27/20X1 $53,500 is received for soybeans placed under CCC loan. You report CCC loans as income on your tax return for 20X1. On 5/16/X2 the loan is paid off along with $1,951 of interest. The entries would be made in the FARM CHECKING register as follows.

Date Num Payee Memo Category Amount Balance
    Previous Balance       15,000.00
10/27/X1 DEP County FSA 10,000 bu. --SPLIT-- 53,500.00 68,500.00
  **Split Screen Detail**  
    Category   Amount    
    1. CCCLoan As Inc   53,500.00    
    2. [CCCLoan]   53,500.00    
    3. [CCCBasis]   -53,500.00    
5/16/X2 101 County FSA 10,000 bu. --SPLIT-- 55,451.00 13,049.00
  **Split Screen Detail**  
    Category   Amount    
    1. [CCCLoan]   53,500.00    
    2. Interest Exp   1,951.00    
5/22/X2 DEP Farmer’s Grain --SPLIT-- 54,000.00 67,049.00
  **Split Screen Detail**  
    Category Memo Amount    
    1. Grain Sold Sell redeemed CCC grain 54,000.00    
    2. CCCGrCost   -53,500.00    
    3. [CCCBasis]   53,500.00    

The CCC Loan of $53,500 increases the checking account balance, adds $53,500 to the CCCLoan account, and adds $53,500 to the CCCBasis asset account. When the grain is redeemed in May 20X2, the $55,451 comes from the checking account to pay off the loan and the accrued interest. When the soybeans are sold, the basis is used to reduce taxable income. To create the deductible expense, reduce the CCCBasis account by $53,500 and increase the CCCGrCost expense category by $53,500. This has no effect on the checking account balance, but makes the taxable portion of the grain sale $500 ($54,000 - $53,500). The $53,500 was reported as taxable income in 20X1, the year before. If the soybeans had sold for less than $5.35 (the loan rate) per bushel, the taxable portion of the sale would be negative rather than positive as shown in this example.

As discussed earlier, in situations where the posted county price (PCP) is less than the loan rate, the loan can be paid off for a lesser amount (based on the PCP) than the original loan amount and a marketing loan gain results. When CCC loans are treated as income and the loan is later repaid for a lesser amount based on the PCP, the resulting marketing loan gain reduces the basis in the redeemed grain by the amount of the gain.

Using the same facts from the above example, but when the loan is paid off on 5/16/X2, the soybeans can be redeemed and the loan paid off for $49,000 based on the PCP (the original loan amount was $53,500) and the interest accrued is forgiven. The payoff of the loan and the reduction in the basis of the redeemed grain is shown in the FARM CHECKING account register:

Date Num Payee Memo Category Amount Balance
    Previous Balance       $58,700.00
5/16/X2 102 County FSA 10,000 bu. --SPLIT-- 49,000.00 9,700.00
  **Split Screen Detail**  
    Category Memo   Amount  
    1. [CCCLoan] Loan payoff   53,500.00    
    2. [CCCBasis] Marketing loan gain   -4,500.00    

This register entry pays off the CCC loan for $49,000 (original loan amount was $53,500) and reduces the basis in the redeemed grain by the difference between the original loan and the amount to pay it off, $4,500. The basis in the redeemed grain is now $49,000. The $4,500 marketing loan gain will be taxed on Schedule F when the grain is sold with a reduced basis of $49,000. Or if the grain is fed, it will show up as a reduced feed expense due to the reduced basis of $49,000.


Credit Cards & Lines of Credit

Lines of credit are used by many farm operations to pay operating and other expenses during periods when cash outflows exceed cash inflows. Credit cards used for the same purpose are becoming more common in farming operations. Both types of credit can be tracked within your Quicken farm records to help you know where you are financially at anytime.

Setting Up Your Accounts

It is recommended that you create a credit card account for each credit card and line of credit you have. Follow the instructions in the Accounts chapter to set up your new credit card account(s). The information required to create your credit card account is the same as the information needed to create a checking account, except that you can enter the credit limit established for each line of credit or credit card. While the credit limit is optional, it is recommended that you enter this information. With the limit established and the register for a credit card account opened, the balances shown at the bottom of the register include the amount of credit used and the amount of credit remaining for this particular account.


Credit Cards & Lines of Credit

Making Entries

Credit card or line of credit transactions are entered into the appropriate register just like making entries into a checking account register. Each farm related transaction should be entered into the credit card register. Just like in a checking account register, credit card transactions can also be entered as split transactions if necessary. For credit card transactions that are for only personal expenses, it is optional if this type of transaction is entered into the register.

**Note** When you use a line of credit or a credit card to pay business expenses, those expenses are deductible at the time of the charge (or payment from the credit line) rather than when the credit card statement is actually paid. To make sure these expenses are deducted in the correct year, you need to enter the business related charges in your credit card account as soon as possible after the transaction is made.

Example: You and your spouse are going out to dinner for your anniversary. On the way to the restaurant you stop at the Farm & Ranch Store to pick up a few things for the farm. You use your Master Card to pay for the items. At the restaurant, the bill for dinner is $50 and you charge it to your Master Card. The following split transaction is entered into your Farm Master Card account.

Date Payee Memo Category Amount
1/15/XX Farm & Ranch Store   --SPLIT-- $607.50
  **Split Screen Detail**  
  Category Memo   Amount
  1. Fuel & Lube Oil for truck   75.00
  2. Supplies, LS Cattle supplies   400.00
  3. Repairs:Mchy Chisel plow shank   125.00
  4. Hmisc Candy for grandkids   7.50

**Note** This transaction was entered as a split transaction since there are multiple categories. The personal transaction was included since it was part of the transaction at the Farm & Ranch Store.

**Note** Since it is not mandatory that transactions of a personal nature are entered in the Farm Master Card account, the restaurant transaction was not entered. Without the personal transactions entered, the account balance will not be correct. The correct outstanding balance is $657.50, but only $607.50 has been actually entered into the register.


Credit Cards & Lines of Credit

Paying Your Credit Card Bill

When you write the check to pay your credit bill, you transfer money between your checking and credit card accounts if all transactions have been entered. If personal transactions have not been entered, the payment to pay off the account balance will be a split transaction that includes a line(s) for the family living (personal) portion of the payment.

Example: You pay your credit card bill from your farm checking account. In your farm checking account, you write a check to Master Card, Inc. for $657.50 to pay off your monthly credit card balance in full.

Date Num Payee Memo Category Amount
2/5/XX 101 Master Card, Inc.   --SPLIT-- $657.50
  **Split Screen Detail**  
    Category Memo   Amount
    1. [Farm Master Card]     607.50
    2. Hfood Anniversary dinner   50.00

After the above payment is made, the outstanding balance in the Farm Master Card account will be zero.

**Note** If the restaurant charge of $50 had been entered in the Farm Master Card account register, the payment would have been a single line (rather than a split transaction) with the category being [Farm Master Card] and the amount paid $657.50.

**Note** Transactions and payments associated with a bank line of credit would be identical to the example above using a credit card account.


Credit Cards & Lines of Credit

Reconciling Your Credit Card Account

If you enter all your credit card transactions into your credit card account, you can reconcile the account. The procedure is similar to reconciling a checking account.

  1. With the credit card account window open, Click the Reconcile button in the account register tool bar.
  2. Fill in the required information about your credit card statement in the CREDIT CARD STATEMENT INFORMATION: credit card window. Click OK.
  3. Click every transaction that appears on your statement. Missing transactions can be added and transactions can be edited.
  4. Click Finished.
  5. If desired, Quicken will make an entry into a selected bank (checking) account to make a payment on the credit balance. Click Yes if you want this option. Otherwise, Click No.

Credit Cards & Lines of Credit

Credit Card Transactions In Reports

If you are using a credit card account to record expenses paid with a line of credit or charged with a credit card, be sure to include your credit card account(s) in the reports that you use to generate tax-related reports and P&L statements. When generating any of these reports, Click the Customize button either before creating the report or after the report has been created to open the CUSTOMIZE REPORT window. Click the Accounts tab and select the credit card account(s), along with the other accounts, to be included in the report.

Debit and ATM Cards

Debit cards and ATM cards are not credit cards, even though they often carry the name of a major credit card company. When you make a purchase with a debit card, the money is withdrawn from your bank account as if you had written a check. It is different from a credit card in that it is not a loan or advance, but a deduction from your checking account. In Quicken, you record debit card transactions in a bank account register associated with that debit card, not in a credit card account. ATM cards are used to withdraw cash from a checking or savings account. Like the debit card, ATM transactions are recorded directly in the account associated with the ATM card.


Payroll

Payroll regulations can be very complex. Quicken can be helpful in keeping track of payroll-related expenses and employment taxes if your payroll is fairly simple. If your operation has many employees, employees on hourly wages or total payroll greater than $2500 annually, you should consider using QuickPayroll as an add-on program to Quicken. The examples and discussion that follow pertain to a payroll that is straight forward and fairly easy to understand. The following examples relate to agricultural employers ONLY.

The withholding of federal and state income taxes and FICA and Medicare taxes are what makes payroll transactions complicated. If an agricultural employer has total annual payroll greater than $2500, regardless of the number of employees, the employer is required to withhold federal income taxes, FICA and Medicare taxes. If total payroll is less than $2500, then each individual employee who is paid $150 or more in cash wages is subject to withholding of income taxes, FICA and Medicare taxes. If the employees are subject to withholding, the employer must match the employee’s contribution of FICA and Medicare taxes. Withholding of Ohio income taxes is optional and is required only if the employee requests it. If total payroll is less than $2500 and no one employee is paid $150 or more, the employer does not have to withhold on any employee and the payroll transaction is very straightforward.


Payroll

Bookkeeping Tasks For Payroll (Agricultural Employers)

  1. Calculate employee earnings and amounts of federal and Ohio income taxes, FICA and Medicare taxes to withhold. The employer pays the same amounts of FICA and Medicare taxes as is withheld from the employees.
  2. Employers must periodically make deposits of federal income taxes and FICA and Medicare taxes owed. For farmers, the deposits may be required annually, monthly or semi-weekly depending on the amount of taxes owed during the look back period. Consult the current year’s IRS Circular A or Circular E for details.
  3. Employers must make quarterly deposits of Ohio income and any local income taxes withheld. Withholding of Ohio income taxes is optional for agricultural employees.
  4. At the end of the year, employers must give each employee a Form W-2 showing gross wages received, FICA taxes, Medicare taxes and income taxes withheld. Form W-3, Transmittal of Income Tax Statements, must be filed with the Social Security Administration.
  5. At the end of the year, the employer must file Form 943, Employer’s Annual Return for Agricultural Employees, with the IRS.

Payroll

Example Situation

If you are required to withhold FICA taxes, you must also withhold federal income taxes. Your employee has requested that you withhold Ohio income taxes.

Social security taxes are broken into two parts - FICA taxes that are withheld on wages up to $84,900 for 2002 and Medicare taxes that are withheld on all wages regardless of how much the employee is paid. Percentages for withholding of the various taxes are:

  Employee Employer
Federal income tax 0 to 38.6% No Match
Ohio income tax 0 to 8.075% No Match
FICA 6.2% 6.2% Match
Medicare 1.45% 1.45% Match

To determine the amount of federal income tax to be withheld, you should use the withholding tables in the current year’s IRS Circular A since withholding is based on the employee’s filing status, number of exemptions claimed and how often the employee is paid. Similar tables for withholding Ohio income taxes are available from the Ohio Department of Taxation.


Payroll

Example Situation

Example:

An employer has one employee, Bob Jones, who is paid $1800.00 per month before deductions. Bob is married and claims two exemptions. His net paycheck is $1478.10. The details of his paycheck are:

Gross pay $1800.00
-Federal income tax -145.00
-State tax -39.20
-FICA tax -111.60
-Medicare tax -26.10
Net pay $1478.10

In addition, the employer must match and pay $111.60 for FICA and $26.10 for Medicare. The employer’s total labor expense for this month is $1800.00 + $111.60 + $26.10 = $1937.70.

Categories Needed For Payroll Purposes

CATEGORY DESCRIPTION TAX-REL. TYPE
Payroll Payroll expense Yes Expense category
Comp FICA Employer paid FICA Yes Sub-category of payroll
Comp MCARE Employer paid Medicare Yes Sub-category of payroll
Gross Gross wages Yes Sub-category of payroll


Payroll

Example Situation

Accounts Needed For Payroll Purposes

ACCOUNT DESCRIPTION TAX-REL. TYPE
[Payroll-FICA] FICA taxes No Liability account
[Payroll-FWH] Fed. Income taxes withheld No Liability account
[Payroll-MCARE] Medicare taxes No Liability account
[Payroll-SWHOH] Ohio income taxes withheld No Liability account

Following is the register entry for the employee’s monthly paycheck from the FARM CHECKING account:

Date Num Payee Memo Category Amount
1/31/XX 111 Bob Jones   --SPLIT-- 1,478.10
  **Split Screen Detail**  
  Category Amount  
  1. Payroll:Gross 1800.00  
  2. [Payroll-FWH] -145.00  
  3. [Payroll-SWHOH] -39.20  
  4. [Payroll-MCARE] -26.10  
  5. [Payroll-FICA] -111.60  
  6. Payroll:Comp FICA 111.60  
  7. [Payroll-FICA] -111.60  
  8. Payroll:Comp MCARE 26.10  
  9. [Payroll-MCARE] -26.10  

In this paycheck, the first line of the split screen is the gross wages of $1800.00. Items 2-5 are deductions from the employee’s paycheck and are shown as negative entries. Items 6-9 are the employer’s contribution and expense for FICA and Medicare taxes. These entries do not affect the bank balance since the expenses (payroll:comp FICA and payroll:comp MCARE) are offset by the negative amounts being added to the payroll liability accounts ([Payroll-FICA] and [Payroll-MCARE]). After this paycheck has been written, the employer has a liability of $145 for federal income tax, $223.20 of FICA tax, $52.20 of Medicare taxes and $39.20 of Ohio income tax. The total owed to the IRS for employment taxes is $420.40.


Payroll

Example Situation

Deposit Of Employment Taxes

After writing the paycheck, the employer wants to deposit the federal and state employment taxes. The balances in the employment-related employment liability accounts are as follows:

LIABILITY ACCOUNT BALANCE
[Payroll-FWH] 145.00
[Payroll-FICA] 223.20
[Payroll-MCARE] 52.20
[Payroll-SWHOH] 39.20

The checks for these employment taxes written from the FARM CHECKING account are:

Date Num Payee Memo Category Amount
1/31/XX 112 Internal Revenue Service   --SPLIT-- 420.40
  **Split Screen Detail**  
  Category Amount  
  1. [Payroll-FWH] 145.00  
  2. [Payroll-FICA] 223.20  
  3. [Payroll-MCARE] 52.20  
1/31/XX 113 Ohio Dept. of Taxation   [Payroll-SWHOH] 39.20

After writing these checks the balance in the employer-related liability accounts will be zero.


Payroll

Example Situation

Creating Payroll Reports

If you have employees and are using Quicken for your payroll transactions, you will need to retrieve payroll data from your records at various times during the year for reporting purposes. The following reports can be created, memorized and used for various reporting purposes with minor modifications by customizing the memorized reports. As you become more proficient with the capabilities of the report section of Quicken, you may want to develop additional payroll reports for your various reporting needs. The data in the following reports is from the payroll example above.


Payroll

Example Situation

Creating Payroll Reports

  1. Summary Report by Employees for W-2's

    From the menu bar, Click Reports, Click Reports & Graph Center (or Click Reports & Graphs in the Quick Tabs list), Click How is my business doing?, Click Payroll, set report date, Click Customize, Click Accounts tab and Click the checking accounts from which you are writing payroll checks, Click Include tab if you are using a category name other than payroll for your payroll transactions, Click down arrow by Category Contains:, Click the category you are using for payroll transactions, and Click Create Report.

    You have created a summary report of payroll transactions reported by payees that can now be memorized. Click the Memorize button on the Report window toolbar, name the report Payroll Report by Payee and Click OK.

    This payroll report furnishes the information needed to complete the employee’s W-2 form. The employee’s gross wages are $21,600.00, FICA withheld is $1339.20 (one-half of FROM Payroll-FICA), Medicare withheld is $313.20 (one-half of FROM Payroll-MCARE), federal income tax withheld is $1740.00 (FROM Payroll-FWH) and Ohio income tax withheld is $470.40 (FROM Payroll-SWHOH). The figures for TO-Payroll-...are payments made to the IRS and the Ohio Department of Taxation for withheld income taxes, FICA and Medicare taxes.

    The Payroll Report by Payee follows at the end of this section.


Payroll

Example Situation

Creating Payroll Reports

  1. Form 943 — Employer’s Annual Tax Return for Agricultural Employees

    The payroll report created above will provide most of the information needed for this return except for the "Monthly Summary of Federal Tax Liability" needed to complete Form 943. Starting with the previous payroll report (by payees) for the year, Click Customize within the Report window, change Column: to Month in the Display tab and Click Create Report. Or, again within the Report window Click the drop down button for Column:,Click Month and Click Update.

    The resulting report gives all the payroll information in a monthly format. The sum of FROM Payroll-FWH, FROM Payroll-FICA and FROM Payroll-MCARE for each month is the employer’s federal tax liability for that month. You can memorize this report by Clicking Memorize within the Report window, name the report Monthly Fed Employment Tax Liability and Click OK. An example of this report is shown on the following page.

    The Monthly Fed Employment Tax Liability report follows at the end of this section.


Payroll

Example Situation

Creating Payroll Reports

  1. Ohio Department of Taxation Reporting

    The same report as above, but with Column: set to Quarter in the Display tab or Column: set to Quarter at the top of the report, will provide payroll data on a quarterly basis for the Ohio Department of Taxation if needed.The amounts shown in FROM Payroll-SWHOH are Ohio income taxes withheld and TO Payroll-SWHOH are payments made to the Dept. of Taxation of those withheld taxes. You can also memorize this report by Clicking Memorize within the Report window, name the report Ohio Income Tax Withholding by Quarter and Click OK. An example of this report is shown on the following page.

    The Ohio Income Tax Withholding by Quarter report follows at the end of this section.


Payroll

Example Situation

QuickPayroll

If you are considering using Quick Payroll for your business more information can be found at the following Web Site: [http://www.intuit.com/payroll/quickpayroll].


Payroll


Payroll


Payroll


Purchase & Sale of Feeder Livestock & Other Resale Items

Some income may come from the sale of property only partially produced on your farm. An example is feeder cattle (or feeder pigs) that you buy, feed out and sell at a later date. IRS does not allow a deduction for the cost of the feeder livestock until the animals are actually sold. The sales of the purchased livestock is reported on Schedule F, line 1, "sales of livestock and other items bought for resale." The cost of the livestock sold is reported on line 2, "cost or other basis of items reported on line 1." The difference between the sales amount and the cost is reported on line 3. Special accounting is required to keep track of the cost of livestock purchased, especially if the cattle or hogs are purchased in one year and sold in another year.

As livestock are purchased, the cost is added to an asset account (resale inventory) that increases the amount in the resale account and reduces the amount in the checking account. At the time of sale, the resale account is reduced by the cost of the purchased livestock sold and that amount becomes a deductible expense.


Purchase & Sale of Feeder Livestock & Other Resale Items

Categories and Accounts Needed

To handle the sales and purchases, three categories and one account are needed. These are the same as shown in the Category & Transfer list of the FARM&HOME.QIF file in the Categories and Classes chapter. The following example is for feeder cattle.

[Resale Inv]

This is an asset account. When cattle are purchased the cost of the cattle are added to this asset account. When these cattle are sold, the cost is subtracted from this account.

LS Sold:PFeeder

This is the income category to record the cash receipts for the purchased cattle sold. This is a tax-related category and the total amount is reported on line 1, Schedule F. The category name chosen should fit your situation.

Feeder LS:Cost

This is the expense category where the cost of the purchased cattle sold is recorded. This is a tax-related expense category. The amount in this category is reported on line 2, Schedule F. The category name should fit your situation best.

Marketing:Mkt LS

This is a tax-related expense category used to record marketing costs that are deducted from the gross sales amount.

Quantities and Cost

The number of animals purchased and their cost will need to be tracked in the asset account [Resale Inv]. If purchased animals are on hand at the end of the business year, the [Resale Inv] account will show the cost basis of the livestock for a balance sheet. If you buy and sell multiple groups of livestock during the year, you will need to establish a procedure to handle them such as FIFO (first in, first out) or LIFO (last in, first out) if you are not able to track each lot. If any of the purchased animals die, their cost can be deducted in the year they die.


Purchase & Sale of Feeder Livestock & Other Resale Items

Example

On 10/15/X1 you purchase 10 head of steers weighing an average of 500 pounds for $75 per cwt. from XYZ Livestock. On 5/15/X2 you resell these 10 steers averaging 1200 pounds for $65 per cwt. The entries would be made in the FARM CHECKING register as follows:

Date Num Payee Memo Category Amount Balance
    Opening Balance       13,860.00
10/15/X1 1001 XYZ Livestock 10 hd, 5000 lbs, $75 [Resale Inv] -3,750.00 10,110.00
5/15/X2 DEP XYZ Livestock 10 hd. Sold --SPLIT-- 7,660.00 17,770.00
  **Split Screen Detail**  
    Category Memo   Amount  
    1. LS Sold:PFeeder 10 hd., 12000 lbs, $65   7,800.00  
    2. Feeder LS:Cost   -3,750.00  
    3. [Resale Inv]     3,750.00  
    4. Marketing:Mkt LS sale deductions   -140.00  

The above entries in the FARM CHECKING register would result in the following entries in the RESALE INV register:

Date Ref Payee Memo Category Amount Balance
    Opening Balance       0.00
10/15/X1   XYZ Livestock 10 hd, 5000 lbs, $75 [Farm] 3,750.00 3750.00
05/15/X2   XYZ Livestock 10 hd. sold [Farm] -3,750.00 0.00

The purchase price of $3750 reduces the checking account balance by that amount and adds it to the [Resale Inv] asset account. When the cattle are sold in May of the following year, the $6500 is deposited in the farm checking account. To create the deductible expense, the [Resale Inv] account is reduced by $3750 and the expense category, Purch Feeder LS, is increased by $3750. This has no effect on the checking account, but establishes the cost basis for the cattle for tax and P&L statement purposes. Since there are purchased cattle on hand at the end of 20X1, the cost basis of the purchased cattle for balance sheet purposes is $3750, the amount in the [Resale Inv] account.


Qualified Patronage Dividends

Cooperatives generally issue "Qualified written notices of allocation" to their members. As discussed in the Farmer's Tax Guide, at least 20% of the patronage dividend or payment must be in cash to be a "Qualified written notice of allocation." In this case the entire amount of patronage dividend must be reported as income on your tax return.

Categories and Accounts Needed

Two additional categories and an account are needed to track qualified patronage dividends, one category for the cash portion, one category for the noncash portion and one asset account to track the basis in taxable dividends not yet redeemed in cash. Categories names in the FARM&HOME.QIF file in the Categories and Classes chapter are Patr Div-C, Patr Div-NC. The asset account would be named PatrDivBasis.


Qualified Patronage Dividends

Example:

Assume you receive a qualified Patronage Dividend check from XYZ Cooperative for $234.00. The statement attached to the check shows that the full dividend is for $1,170.00. The entry into the check register for FARM CHECKING would be made as follows:

Date Num Payee Memo Category Amount
12/30/XX DEP XYZ Coop. Qualified Patronage Div --SPLIT-- 234.00
  **Split Screen Detail**  
  Category Amount  
  1. Patr Div-C 234.00  
  2. Patr Div-NC 936.00  
  3. [PatrDivBasis] -936.00  

This adds the cash portion, $234, to the checking account. Both the cash and noncash portions are recorded as tax-related amounts and will be reported as income on Schedule F. The offset for the noncash portion is an asset account, [PatrDivBasis]. This will show the tax basis or amount of qualified patronage dividends which have been reported as income for tax purposes, but which have been retained by the cooperative for its use. At some future time you may be able to receive additional cash reimbursement. It will not be taxable because you have already reported the amounts on previous tax returns.

If you receive a non-qualified patronage dividend, simply enter the cash received as income, using the Patr Div-C category. Retain the notice in your permanent records, but no other entry or tax impact occurs at this time. A nonqualified notice of allocation has a zero basis, therefore will not be recorded in the asset account, [PatrDivBasis].


Sale of Capital Assets

Income from the sale of capital assets is treated differently for tax purposes than income from the sale of grain or market livestock. Primary capital assets on the farm are land, machinery and equipment, buildings and livestock held for draft, dairy, breeding or sporting purposes.

Generally, the sale of capital assets used in the business is reported on Form 4797, Sale of Business Property. In addition, they may be eligible for capital gains treatment if they meet the appropriate holding period. If the assets are purchased and depreciable, depreciation that has been deducted and any remaining basis must be reported on the tax return. Raised breeding livestock is also reported on Form 4797, but their basis is always zero for a cash basis taxpayer. There may also be other adjustments to basis such as commissions, sale expenses, etc. associated with the sale of these assets. Other records must be maintained to determine holding period and remaining basis of each asset or group of assets.


Sale of Capital Assets

Categories Needed

The basic categories deal with machinery, raised breeding livestock, purchased breeding livestock and the various holding periods. There are at least six categories needed to report the sale of capital assets, four for breeding livestock and two for machinery, equipment and buildings plus at least one expense category for marketing charges. The sale of other depreciable assets and land can also be reported in the machinery, equipment and buildings sold category since each transaction must be reported separately. By creating these categories and reporting transactions in them, the sales of capital assets to be reported on Form 4797 are separated from sales of ordinary assets to be reported on Schedule F. The following categories are the same as shown in the FARM&HOME.QIF file in the Categories and Classes chapter.

LS SOLD:PBreedLT

Income category for purchased livestock used for draft, dairy, breeding or sporting purposes that have met the holding period of 12 or 24 months.

LS SOLD:PBreedST

Income category for purchased livestock used for draft, dairy, breeding or sporting purposes that have not met the holding period of 12 or 24 months.

LS SOLD:RBreedLT

Income category for raised livestock used for draft, dairy, breeding or sporting purposes that have met the holding period of 12 or 24 months.

LS SOLD:RBreedST

Income category for raised livestock used for draft, dairy, breeding or sporting purposes that have not met the holding period of 12 or 24 months.

M&E&B SOLD:LT

Income category for other machinery, equipment, buildings and other capital assets used in the business that have met the holding period requirement (12 months in most cases).

M&E&B SOLD:ST

Income category for other machinery, equipment, buildings and other capital assets used in the business that have not met the holding period requirement.

MARKETING:BRDG&CAP

Expense category used to report the expenses associated with the sale of breeding livestock or other capital assets. The sale expenses associated with these capital assets are reported on Form 4797 and not on Schedule F and therefore must be kept separate to be reported correctly on the tax return.

The above income categories are only one way of setting up these categories. Another way would be to create one income category with six subcategories. The marketing expense category could also be created as a sub category of the income category. This would simplify the process of keeping track of sale expenses associated with the sale of capital assets. However, what is important is to create an income category(ies) that separates the income from the sale of capital assets used in the farm business from the sale of ordinary assets that are reported on Schedule F.


Analyzing Quicken Farm Records with FINPACK

FINPACK is a computerized farm financial planning and analysis system. It will help you evaluate your financial situation, explore alternatives, and make informed decisions about the future direction of your farm. It is not a record keeping system. Instead, FINPACK gives you the tools to effectively use your Quicken records in managing your farm.

FINPACK includes three programs to help you manage your farm finances:

FINLRB - for long range planning
FINFLO - for cash flow planning
FINAN - for year end analysis

FINAN is a year end financial analysis that answers the question "Where am I?" It provides an in-depth look at financial progress over the previous year and helps identify strengths and weaknesses. FINAN can provide a whole farm analysis and individual enterprise analyses.

FINLRB, or financial long range budgeting, helps chart the financial performance of a farm business under different future courses of action. It answers the "What If?" or "Where do I want to be?" types of questions in terms of liquidity, solvency, profitability, repayment capacity and financial efficiency. Future plans such as expansion, new enterprises, different enterprise combinations or debt restructuring are compared against the current operation or "Base Plan."

FINFLO projects monthly cash flows for future years based on projected or current production, marketing and financial plans. Once you have determined where you want to be, FINFLO helps to answer the question "How am I going to get there?" In addition to cash flow projections, FINFLO can be used to prepare projected income statements and balance sheets for up to 15 years.

These FINPACK programs allow you to analyze past performance, make financially informed future plans and prepare monthly or multiple year cash flow projections for your farm business in terms of solvency, liquidity, profitability, repayment capacity and financial efficiency. All FINPACK programs generate ratios and measures that are consistent with the recommendations of the Farm Financial Standards Council.

The first step in doing any type of analysis on your farm business is the completion of the balance sheet at the end of the business year. The balance sheet shows as of a given date (usually December 31 or January 1) what you own (your assets), what you owe (your liabilities) and your net worth, the difference between assets and liabilities. A complete set of Quicken farm records that includes all your asset and liability accounts will help in providing the financial information needed for your balance sheet.

Critical to the completion of the balance sheet is the need to take inventories at the end (or beginning) of the year. These inventories should include all supplies on hand that are used in the farm business, all market and breeding livestock on hand, all stored and purchased feeds, all grain held for sale and all machinery and equipment. The market value of these current and intermediate assets are added to the market value of your land and buildings (long term assets) to give the market total value of your assets. Other assets that might be included would be the value of non-farm assets including non-farm investments and real estate. These assets will add to your net worth, but will not be included in any analysis of the farm business.

On the liabilities side of the balance sheet will be all your loan balances, the principal due on those balances in the next 12 months plus any accrued interest, accrued real estate taxes and any accounts payable as of the date of the balance sheet. Again, you can include any non-farm or personal liabilities, as these will affect your net worth.

FINPACK includes a balance sheet so that the numbers can be transferred into any of the various programs. The FINLRB and FINFLO programs require a single balance sheet and the FINAN program requires a beginning and an ending balance sheet for the year being analyzed.

The output of the FINPACK programs is primarily financial in nature and includes the sixteen ratios and measures recommended by the Farm Financial Standards Council. These sixteen ratios and measures and their interpretation, in most cases, is based on the market value of the assets included on the balance sheet. The FINPACK output also shows how most of the measures are calculated. Each of the sixteen measures fall into one of the following five categories: liquidity, solvency, profitability, repayment capacity and financial efficiency.


Analyzing Quicken Farm Records with FINPACK

Liquidity is the ability of your farm business to meet financial obligations as they come due, to pay family living expenses and taxes and make debt payments. The ratios measuring liquidity are calculated from the balance sheet and include:

  1. Current ratio - is the ratio of current assets to current liabilities. It measures the extent to which current farm assets, if sold tomorrow, would pay off current farm liabilities.
  2. Working capital - indicates the amount of working capital for the short term from the business. Working capital is the difference between current assets and current liabilities.

    Solvency is the ability of your business to pay all its debts if it were sold tomorrow. Solvency is important in evaluating the financial risk and borrowing capacity of the business. These ratios are calculated from the balance sheet and include:

  3. Farm debt-to-asset ratio - is the lender’s share of the business. It compares total farm debt to the total value of farm assets. The higher the ratio the greater the financial risk and the lower the borrowing capacity.
  4. Farm equity-to-asset ratio - is your share of the business. It compares farm equity to the total value of farm assets. Adding the debt-to-asset ratio and the equity-to-asset ratio must equal 100%.
  5. Farm debt-to-equity ratio - compares the lender’s ownership of the business to your ownership. It also indicates how much the owner(s) have leveraged the equity in the business.

    Profitability is the difference between the value of goods produced and the cost of the resources used in their production. Over time, profits drive the liquidity and solvency of a farm business. Without adequate profits, future growth in net worth from the farm operations is not possible. The following profitability measures come from the income statement:

  6. Net farm income - represents a return to unpaid labor and management and equity invested in the business. Any net farm income not withdrawn from the business for family living and taxes is retained earnings and increases your farm net worth.
  7. Rate of return on farm assets - is the average interest rate earned on the total investment in the farm business. Unpaid labor and management are assigned a value before the return on total farm assets is calculated.
  8. Rate of return on farm equity - is the interest rate being earned on your equity investment in the farm. This return can be compared to returns available if your equity were in alternative investments with a comparable risk.
  9. Operating profit margin - shows how effectively funds are spent on operating expenses to generate business income. If the operating expenses are low relative to the value of farm production, the business will have a good operating margin. A low profit margin can be caused by low product prices, high operating expenses or inefficient production.

    Repayment capacity shows your ability to repay all term debts on a timely basis. Repayment capacity includes non-farm income and is not a measure of business performance alone. These ratios and measures come from the cash flow statement and are:

  10. Term debt coverage ratio - tells whether your business generated enough cash to cover all (farm and non-farm) intermediate and long term debt payments. A ratio less than 100% indicates that the business had to run up open accounts, borrow money or sell assets to meet scheduled loan payments.
  11. Capital replacement margin - is the amount of money remaining after all operating expenses, taxes, family living costs and scheduled debt payments have been made. It represents the money available for purchasing or financing new capital assets or paying off additional debt.

    Financial efficiency - shows how effectively your business uses assets to generate income. Financial efficiency ratios help answer the questions - is each asset being used to the fullest potential? and what are the effects of production, pricing, financing and marketing decisions on gross income?

  12. Asset-turnover ratio - measures capital productivity or capital efficiency. Generating a high level of production with low capital investment will give a high asset-turnover ratio. If the turnover is low, you will want to consider alternatives to use capital invested more efficiently or sell low return investments.
  13. Operating expense ratio - shows the proportion of gross farm income used to pay operating expenses, not including depreciation and interest.
  14. Depreciation expense ratio - indicates how fast the business wears out capital assets and what proportion of gross farm income is needed to maintain the capital used in the business. This ratio should be looked at over time since it can be misleading during major expansions or contractions or if you use depreciation from Schedule F.
  15. Interest expense ratio - shows what percentage of gross farm income is used to pay for the use of borrowed capital.
  16. Net farm income ratio - compares net farm income (profit) to gross income. It shows what percentage of gross farm income is left after all farm expenses are paid.

Analyzing Quicken Farm Records with FINPACK

FINAN, FINLRB and FINFLO generate the above mentioned 16 ratios and measures to serve as guidelines for making decisions about your farm business. The following table, Farm Finance Scorecard, developed by Rick Wackernagel, Dennis Kauppila and Glenn Rogers, University of Vermont Extension, lists all the 16 measures and the suggested guidelines for each of them.

Farm Finance Scorecard

Year20__

Liquidity   Vulnerable   Strong
1. Current ratio _____._____ 1.0   2.0
2. Working capital $__________      
Solvency (market)
3. Farm debt-to-asset ratio ________% 60%   30%
4. Farm equity-to-asset ratio ________% 40%   70%
5. Farm to debt-to-equity ratio ________% 150%   43%
Profitability
6. Net farm income $__________      
7. Rate of return on farm assets ________% 1%   5%
8. Rate of return on farm equity ________% 5%   10%
9. Operating profit margin ________% 20%   35%
Repayment capacity
10. Term-debt coverage ratio ________% 110%   135%
11. Capital replacement margin $__________      
Financial efficiency
12. Asset-turnover ratio (market) ________% 20%   40%
13. Operating-expense ratio ________% 80%   60%
14. Depreciation-expense ratio ________% 20%   10%
15. Interest-expense ratio ________% 20%   10%
16. Net farm income ratio ________% 10%   20%


Appendix I

Websites available for additional information on Quicken for Windows and utilizing it as a computerized farm record keeping system are provided with brief descriptions below.

www.intuit.com - Intuit Homepage. Intuit is the manufacturer of Quicken, QuickBooks, Turbotax, etc.

http://ohioline.osu.edu - Your link to information, news, and education from OSU Extension.

www.agecon.okstate.edu/quicken/index.html - Oklahoma State University Website dedicated to providing educational information for using Quicken for Farm/Ranch Financial management. Includes Instructions on various Quicken procedures, a periodic newsletter, slide shows and other helpful information.

http://stephenville.tamu.edu/~kstokes/QUICKEN.HTM - Texas A&M website dedicated to providing educational information for using Quicken for Farm Record Keeping. Provides Quicken Help Publications on a variety of subjects relating to farm financial management.


Appendix II

Quick Keys and other keyboard shortcuts

Many Quick keys require that you press two keys. For example, "Ctrl+A" means hold down the Ctrl key and press the letter A.

Special Keys  
To Press
Decrease date or check number - (minus key)
Increase date or check number + (plus key)
Go to Register Ctrl+R
Go to Write Checks Ctrl+W
Go to Financial Calendar Ctrl+K
Go to View Loans Ctrl+H
Get Help on the current window F1
Dates  
To switch to Press
Today t
First day of this Month m
Last day of this montH h
First day of this Year y
Last day of this yeaR r
Go to date Ctrl+G
Moving around in a window  
To go to Press
Previous window Alt+ Back arrow
Next window Alt+ Forward arrow
My Finances Center Alt+ Home
Next field or column Tab
Previous field or column Shift+ Tab
Beginning of field Home
First field in transacction or window or first report row Home twice
First transaction in window Home three times
First transaction in register Home four times
First transaction or upper left page of report Ctrl+ Home
End of field End
Last field in transaction or windown, or last report row End twice
Last transaction in window End three times
Last transaction in register End four times
Last transaction or lower right page of report Ctrl+ End
Next window or check PgDn
Previous window or check PgUp
Next month Ctrl+ PgDn
First day of month Ctrl+ PgUp
Up or down one row Up arrow or down arrow
File Operations  
To Press
Back up a file Ctrl+ B
Open a file Ctrl+ O
Register and Write checks  
To Press
Select an account Ctrl+ A
Select a class Ctrl+ L
Copy data from the filed above the currently selected field in the Split Transaction window ‘ (Quote key)
Copy the payee name when the address field is selected in the Write Checks window ‘ (Quote key)
Copy a field in the register Ctrl+ C
Cut a field in the register Ctrl+ X
Paste a field in the reister Ctrl+ V
Delete a transaction or split line Ctrl+ D
Find a transaction Ctrl+ F
Go to a new transaction Ctrl+ N
Set up or pay a scheduled transaction Ctrl+ J
Insert a transaction Ctrl+ I
Memorize a transaction Ctrl+ M
Print Ctrl+ P
Recall the memorized transaction list Ctrl+ T
Scroll up or down the QuickFill list (after you start typing in the Payee field Ctrl+ up arrow or Ctrl+ down arrow
Enter a transaction Enter or Ctrl+ Enter
Open the Split Transaction window Ctrl+ S
Close the Split Transaction window Ctrl+ Enter
Investments  
To Press
Go to Portfolio View Ctrl+ U
Decrease or increase a price by 1/8 - or +
Select a security Ctrl+ Y


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