Workshop (Continued from Page 41) amount of money we paid for the asset and how much of the investment we have recaptured using depreciation. Equity is the value of the business assets we own outright. Equity changes every day with each trans action. Equity equals retained earnings minus owner draws plus owner contributions plus income minus expenses. Liabilities are everything a business owes, includ ing bank loans, credit card balances, and accounts payable. Costs and receipts should be correctly captured, Peachey believes firmly in the double-entry system for debits and credits. The balance sheet should be able to provide a good “snapshot” of the operation, he said. Those sheets are the navigational markers on the road of business performance. The formula, “assets equal liabilities plus equity” provides “the foundation of double-entry account ing,” Peachey said. And today’s computerized sys tems provide accurate and automatic ways of doing this. Peachey provided examples of ways normal busi- Dairy Farmers of America is all about milk and the 24,124 dairy farm families who produce it. We are and operated by the dairy farmers we serve. We offer cost-effective marketing and movement of milk, global market opportunities, access to branded and value-added markets, access to a wider range of services and programs, and unity to dairy farmers nationwide. Melissa Stoltzfus and her father David Martin, Manheim, fill out a practice worksheet during the Dairy Alliance ac counting conference in Harrisburg. ness practices affect the formula: When you issue a check to pay for feed, expense formulas are af fected. • When you borrow money for an operating line of credit, both assets and liability formulas are af fected. • When you write a check for groceries, you are co-mingling personal and business expenses. “No other business does that,” said Peachey. “It’s some thing culturally with farming operations.” (Turn to Page 44) Dairy Farmers of America y m i
Significant historical Pennsylvania newspapers