“Bill Criswell owns and operates a farm in Pennsylvania. During 2011, he produced and harvested 60,000 bushels of soybeans. He had no inventory of soybeans at the start of the year. Immediately after harvesting the soybeans in fall of 2011, Criswell sold 45,000 bushels to a local grain elevator operator. As of December 31, 2011, he had received payment for 30,000 bushels. Additional information relating to the farm follows:Price:Market price per bushel at the time of harvest and sale tot he grain elevator operator $ 3.60Market price per bushel at December 31, 2011 3.60 Costs:Variable production costs per bushel .50Delivery costs per bushel .20Annual fixed cost of operating the farm that are unrelated to the volume of production $50,000Required:1. Prepare a 2011 income statement for Criswell’s farm under each of the following assumptions regarding what constitutes the “critical event” in the process of recognizing income:a. Assuming that production is the critical event.b. Assuming that the sale is the critical event.c. Assuming that cash collection is the critical event.(For simplicity, treat the fixed operating costs as period rather than product costs.)2. Determine the December 31, 2011, balances for Soybeans inventory and Accounts receivable under each of the three income recognition methods in requirement 1.3. Assume that the farm is left idle during 2012. With no harvest, Criswell’s only transaction consists of an October 2012 sale of the 15,000 bushels in inventory at $2.80 per bushel. Further assume that no fixed costs are incurred while the farm is idle. Compute income during 2012 on both the sale and production basis. Discuss the causes for any profit or loss reported under each income determination alternative.