 Welcome to this Farm Accounting 101 presentation on sample accounting entry number 2, recording a farm equipment purchase with a check using the Excel spreadsheet for our financial records. I'm Robert Page, Regional Extension Agent and member of the Farm and Agribusiness Management team with the Alabama Cooperative Extension System at Auburn University. As we've said in earlier presentations, the Farm Accounting 101 series is intended to help Alabama producers improve their farm financial literacy. Farmers like any other small business have the same basic financial transactions every year so we study typical checks and deposits. And we also learn the accounting principles behind these checks and deposits. Today's presentation shows a typical farm check for a farm equipment purchase as it would be entered into an Excel spreadsheet. No entry number 2 is posting check number 2146 for the purchase of a new 8-wheel hay rake for $2,979.45 from a local implement dealer. Our next step is to enter this check into the Excel spreadsheet for this farm so we will switch our view over from the PowerPoint screen to the Excel spreadsheet. Here's our Excel spreadsheet. You notice we're working on tax year 2019. The name of our farm is the APIS Aces Sample Farm and today's date for this particular check is February 7th, 2019. So we enter the date, the check number 2146, the name of the implement dealer and the purchase for the reason for the purchase which was to buy a new hay rake. In column D we enter the total check, credit card, debit card or cash expense amount and in this particular case the check was written for $2,979.45. The last step is to allocate this check to one of our income or expense accounts or an alternative account. In this particular case, this is for a fixed asset. Fixed assets are not entered into expense lines. So let's scroll all the way over to the far right of our expense page and there it is under column AB for other cash usage. We have entered our $2,979.45. Lastly, we take a look, are we in balance? Yes, we've entered a dollar amount in our initial expense column and we've allocated that total expense column to here. Notice this is in sheet two under part two expense. Go to the third section under profit summary and you'll notice that this dollar amount comes over to our other cash adjustments and other cash usages sections of our profit and loss report. So there is no use of this $2,979.45 in our profit and loss report so far. That concludes the Excel spreadsheet portion of it. Now let's go back to our PowerPoint presentation. If you have never used this Excel spreadsheet before, you should be aware that this Schedule F farm income and expense spreadsheet can be downloaded for your own use. Please visit the ACES website at www.aces.edu and select the topic tabs entitled Farming and then Farm Management to find the article entitled Using an Excel spreadsheet for Farm Financial Records. There is a link to this spreadsheet embedded in the article. Now let's briefly review the accounting entry for this check pavement we just entered into Excel. In this example, the Farm Fixed Asset Account went up with a debit entry of $2,945, right there. On the other hand, the cash and bank entry records that the farm balance sheet went down $2,949.45 In other words, farm current assets decreased with this credit entry as it is shown right there. And lastly, like all accounting entries, debit and credit entries must be in balance. In this example, total debits and credits are $2,979.45 for both debits and credits. We close by saying thank you for watching today's presentation on Sample Accounting Entry 2 recording a farm equipment purchase with a check using an Excel spreadsheet. This segment of the Farm Accounting 101 series has been produced by the Alabama Cooperative Extension System Farm and Agribusiness Management Team at Auburn University in Auburn, Alabama. For additional information on the Farm and Agribusiness Management Team and other ACES programs, please visit our website at www.aces.edu.