KENTUCKY AGRICULTURAL EDUCATION RECORD KEEPING INSTRUCTIONS & EXAMPLES 1. I can describe how to access my finances in AET. 2. I can accurately record paychecks and capital item financial transactions for my AET Experience (SAE).

As with Financial Beginning Inventory, students can get to the Finances link by clicking on the light green box from the AET homepage.

Remember, students can enter any financial entry, including beginning values, transactions, and loans from the Financial Home Page.

Remember, the Experience Manager can easily be accessed from this page, which lists all AET Experiences.

Also, remember that students can review/edit all financial entries from this screen as well.

All beginning values can be accessed/edited from this page.

After entering Beginning Values, another type of financial transaction that will be recorded are SAE Paychecks.

PLACEMENT SAES (UNPAID)

Remember, if a student has an unpaid Placement SAE, all hours should be recorded under the AET Experience Journal.

RECORDING PAYCHECKS (PAID PLACEMENT SAES)

For students who have paid placement SAEs, all paychecks should be entered under the “SAE paycheck” option.

The student will be directed to the “New Paycheck” page. The student should enter the date, total income, any taxes, any expenses that were withheld, and the number of paycheck hours.

Gross Income An individual's total personal income before taking taxes or deductions

Taxes/Withholdings Deductions taken from a student’s paycheck such as local taxes, state taxes, federal taxes, insurance, social security, etc.

Expenses Any expenses made at a place of employment that will automatically be deducted from a paycheck such as boots, tools, uniform, etc.

Paycheck Hours The number of working hours that are represented by the entered paycheck. This number will sync with FFA awards/degrees.

The student’s Placement SAE that was set-up in the Profile section will automatically show under “Paid Placement Experience.” If a student has multiple Paid Placement SAEs, they can split earnings from a paycheck. If multiple SAEs are listed, a student can designate what percent of a paycheck is represented for each listed SAE.

If a paycheck is split among multiple SAEs, AET will automatically calculate the appropriate Gross Income for each SAE. A student can enter a memo as well. Students should either click, “Save and Return” if they are entering a single paycheck, or students should click, “Save/Enter Another” for multiple paycheck entries.

Paid Placement (Paycheck) Example: Brandon has a paid placement SAE at the local Brodhead Veterinary Clinic. He received his first paycheck on August 30, It was for $250. $37.50 was taken out for taxes. Also, Brandon had to purchase his uniform (scrubs) for $50. This check was for 25 hours.

Upon saving, the student will be directed to the financial transaction list. The student should see the paycheck reflected as a credit for their overall SAE. Any taxes or expenses should be reflected as debits. Therefore, only the Net Income will be calculated for a student’s finances.

Net Income An individual's total personal income after taking taxes or deductions Net Income is calculated by: Gross Income – Deductions/Withholdings= Net Income

Net Income Brandon’s Net Income: Gross Income – Deductions/Withholdings= Net Income 250 – ( )= Net Income 250 – 87.50= $162.50

RECORDING NEW CAPITAL ITEMS

If needed, review the following terms. These terms are defined in the “Beginning Inventory” Power Point. Non-Current (Capital) Item Acquisition Cost Salvage Value Depreciation Method/Expense Types of Non-Current (Capital) Items Non-depreciable draft, pleasure, or breeding Depreciable draft, pleasure, or breeding Machinery, equipment, and fixtures Depreciable land improvements, buildings, and fixtures Land Capital Item Useful Life

If a student purchases or sells a non-current inventory item, that transaction should be recorded under the “Non-Current items” option.

The student will be directed to the Non-Current (Capital) Item Manager. All beginning inventory non-current/capital items will be listed here, as well as any non-cash transfers that may have occurred. Below, Brandon’s Non-Current Item Manager is shown.

To record the purchase of a new Non-Current Inventory item, select, “Add New.”

Students should select the type of item from the drop-down menu. They will be given the options of Non-depreciable draft, pleasure, or breeding Depreciable draft, pleasure, or breeding Machinery, equipment, and fixtures Depreciable land improvements, buildings, and fixtures Land

Students should enter the date, the name of the Capital Item, and a short description. If the capital item is jointly owned or partially utilized for personal use, this should be described in the description box.

The vendor, quantity, acquisition cost, estimated salvage value, and depreciation method should all be entered.

The Business Use Percentage should always be 100%. Again, if your Capital Item is jointly owned or partially for personal use, all financial figures should represent the student’s business share of the item only.

Non-Current Inventory Item Purchase Example 1: Brandon bought a Bull from RAM Angus Farms for his breeding herd on June 17 th, 2014 for a price of $2500. He estimates that the bull will have an 8 year useful life and a salvage value of $1100.

After saving, the student will be redirected to the Non-Current/Capital Item Manager. The new item should be shown here.

If the student reviews all financial entries, this capital item purchase should also be reflected as a debit.

Non-Current Inventory Item Purchase Example 2: On June 18 th 2014, Brandon purchased a used Yamaha ATV for $2000 from Brittany Kirby. Brandon used $1000 of his AET Experience money and $1000 of Non-AET Experience money to purchase the ATV. He plans to use the 4-wheeler 50% of the time to feed his cattle and carry farm supplies, and then use the 4-wheeler the rest of the time for recreation. Brandon estimates a useful life of 10 years and a salvage value of $850. *Typically, you can only record up to 50% of the value of items such as ATVs on FFA degrees to account for recreational use.

Non-Current Inventory Item Purchase Example 2: Only 50% of the acquisition cost would be reflected to account for the amount of time Brandon would use the item for recreation. ***Because Brandon used AET Experience (SAE) money to purchase the ATV, a personal expense should also be recorded to account for the other portion of the acquisition cost.***

After saving, the student will be redirected to the Non-Current/Capital Item Manager. The new item should be shown here.

If the student reviews all financial entries, this capital item purchase should also be reflected as a debit.

If Brandon had used had purchased the ATV with only AET Experience money, he would also need to record a personal expense to reflect the other $1000 spent from his SAE funds.

RECORDING THE SALE OF CAPITAL ITEMS

If a student sells a non-current inventory item, that transaction should be recorded under the “Non-Current items” option.

Again, the student will be directed to the Non-Current (Capital) Item Manager. All beginning inventory non-current/capital items, any non-cash transfers, and any new capital item purchases will be shown. Below is Brandon’s Non-Current Item Manager.

To sell a Non-Current (Capital) item, select, “Sell” next to the item that is to be sold.

The date, amount, vendor, and any notes should be recorded for each sale. After entering all necessary information, the student should select, “Sell Item.”

Non-Current Inventory Item Sale Example: Brandon decides to sell Cow 104. He sells the cow to his neighbor, Joe Jones for $1475 on August 10 th, 2013.

Upon clicking, “Sell Item,” the student will be directed back to the Non-Current (Capital) Item Manager. The item should no longer be shown under the “Non-current/capital Item Manager.” To view the item, select, “Sold Items.”

All sold Capital items should be listed here. Details concerning the item, as well as any capital gain that was made from the sale, can be viewed.

When reviewing financial transactions, the Non-Current Sale should be reflected as a credit.

RECORDING CAPITAL ITEM USAGE

An important component of the Non-Current (Capital) Item Manager is recording the usage of capital items. If this step is not completed, these items will not be reflected on FFA Award Applications as inventory. This can affect the overall monetary amounts of AET Experiences.

The detailed section for all beginning inventory items will appear as below. You will designate the usage of each item in the boxes beside each experience. The usage of capital items should equal 100%. If the total usage is not 100%, this item will not be reflected in any Proficiency or Award Application.

Since Brandon’s inventory item is a cow, the usage would be 100% for Brandon’s Beef Cattle AET Experience. If an item is used for multiple SAEs, you would estimate the amount of usage for each experience. If you use an item equally for multiple SAEs, you can double click the boxes and AET will automatically distribute the usage. Again, the usage must equal 100%. Click, “Save” upon completion.

Students will be unable to designate usage on non-current items within the purchase year. Until a year is complete and a student completes the annual review/scope (discussed in later lessons), the option to designate usage is not given. If the purchase year is not complete, there will be no option for a student to designate usage until Jan. 1 of the next year. If a student prints an FFA award/degree and does not see the monetary value of a Non-Current Inventory Item, this is most likely the step that was forgotten.

This concludes instruction for paychecks and non-current inventory items.