




               T  A  B  L  E     O  F     C  O  N  T  E  N  T  S




         SYSTEM REQUIREMENTS____________________________________1
         GETTING STARTED________________________________________1
         DIRECTORY______________________________________________3
              General Directory_________________________________3
              Horse Directory___________________________________3
              Employee Directory________________________________4
         FILES__________________________________________________6
              Training__________________________________________6
              Schedule__________________________________________7
              Breeding__________________________________________9
              Pedigree_________________________________________10
              Competition______________________________________10
              Medical__________________________________________11
                   Schedule with Medical_______________________14
                   Category____________________________________14
                   Template____________________________________15
         CONTRACTS_____________________________________________16
              Sale_____________________________________________16
              Breeding_________________________________________17
              Boarding_________________________________________17
                   Services____________________________________18
              Release of Liability_____________________________18
         REPORTS_______________________________________________19
         LABELS________________________________________________20
              Address & Shipping Label Defaults________________20
         SETUP_________________________________________________20
         MAIL__________________________________________________21
         MAIL MERGE____________________________________________22
         ACCOUNTS______________________________________________25
              Overview_________________________________________25
              Accrual Method___________________________________26
              Cash Method______________________________________26
        CASH BASIS ACCOUNTING__________________________________27
              Accounts Receivable______________________________27
              Header File______________________________________27
              Codes to Income Accounting_______________________29
              Accounts Payable_________________________________30
              Codes for Cash Disbursements____________________31
              Depreciation & Deductible Expenses_______________36
              Depreciation_____________________________________37
                   Timing______________________________________39
              Log______________________________________________42
              Payroll__________________________________________43


















                              SYSTEM REQUIREMENTS

                 * DOS Version 3.3 or above
                 * 570K Minimum available memory
                 * Expanded memory(recommended for performance)
                 * A hard disk with 2.5 Megabytes of disk space
                 * Your Config.Sys file setup with:

                           Files=41
                           Shell=Command.com/P/E:512

                                  INSTALLATION

    To install Xpress put the disk in your current drive type INSTALL &
    press the <Enter> key.  The install program will guide you through the
    process of installing Xpress.


                                NOTES ON EDITING

    * Only enter real dates. When doing so if the month has only 1 digit
      use a 0 before the digit, like (01/01/90).

    * There are also some fields that require you enter more than 3
      characters. In the Competition file, Event is one of them.  Also when
      you go to Reports and use the "File" option (write to disk) you
      should use more than 3 characters.

    * When a field requires that a box should be marked, use an <X> only.

    * It's not necessary to fill in the area code for a phone number.

    * The last four digits of a zip code don't have to be entered.
      Here is an example: 53007-( leave blank ).


                                GETTING STARTED

    1)  Xpress is a menu driven program. All the function keys used within
        this program are displayed with simple explanations. In the various
        menus the functions available within that area will be displayed in
        boxes. In the record entry screens the functions available are
        shown at the base of the screen. Some of these function keys do not
        perform the same function universally throughout the program.  We
        decided not to use multiple key-presses within Xpress. It was our
        intention to cut the amount of time wasted on learning pages of
        commands with multiple key definitions so that you could start
        using Xpress immediately.

         Throughout this documentation these brackets "< >" will
         be used to designate a command.  Sometimes with a function key
         (F1, F2,...), sometimes with a letter and sometimes with a word.

    2)  The very "FIRST" area that you start with within Xpress are the
        Directories. Before MEDICAL, COMPETITION, SCHEDULES or any other




                                     Page 1






        record within the FILE section can be used,  it is necessary to
        first list all information applicable throughout the program within
        the GENERAL and HORSE directories.

          REMEMBER, information used throughout the program must be entered
          and saved first in the General & Horse Directories.  Bypassing
          these directories will corrupt the database.

    3)  Scheduling in Xpress gives the user flexibility. The file section
        includes an area for scheduling horse related activities, feed
        requirements, medication and limitations.  Scheduling can also be
        divided between  Medical, Breeding, Training and the Competition
        file areas.

        Here are some ideas on using the different file sections for
        scheduling.

          Medical: Farrier & veterinary care, medications & immunizations.

          Breeding: Scheduling a stallion for mares that will be covered or
          a timetable for breeding a single mare.

          Competition: Scheduling show or event dates, classes or classes
          for a particular horse.

          Training: Schedule workouts for an individual horse. Also use
          this area to do scheduling for an individual handler.

     Your schedules can be viewed , saved to a disk file or printed.  Most
     areas will allow for listing a start date and an end date for printing
     your schedules.

     4)  The <F1> key, when not used for help in certain fields is open to
         a library.  There you have access to many forms of reference
         material.  You can also create your own references, using your
         wordprocessor.  Save it in ascii format and copy it to the Library
         Directory in Xpress for viewing.  Remember there are help files
         already in this directory (much like this manual) to assist you so
         don't save your files with the same name and overwrite them.  Also
         this function can be used to view reports that have been written
         to a disk file.

     5)  Xpress reads the Medical and Schedule records on loading.  If
         there are pre-entered dates and these dates are within a 7 day
         time frame of the computer date, Xpress will display this on
         screen. You will then have the option to view, print or save these
         records to a file. The format and setup is the same as for doing
         Reports from the Report area.

         Use the <F1> key.  Then cursor up or down using the arrow keys,
         press <Enter> to select a file.  While viewing the text you
         selected you can press <ALT-S> to search for a topic or reference.
         <Alt-A> will list the next occurrence.

         The (<-) and (->) keys reposition the text on the screen.  After
         you are done press <Esc>.



                                     Page 2






                               D I R E C T O R Y

    The Directory is a vital part of Xpress. Information stored in this
    area is used throughout the program.

                               General Directory
                                Adding a record
    From the "Main" menu choose <Directory>, next select <General>.  From
    this menu you can elect to add a record or records, edit an existing
    record or jump to REPORTS. Select the <Add> function.  Enter all the
    businesses, names, addresses and information available to you.  Be sure
    and fill in the Business field.  If no business name is available use
    the persons name that you entered in the name fields or any identifying
    word that would describe this record. If you intend on using this name
    or business for billing, mark the box with an (X).  If the record is
    not tagged for billing, accounts will not recognize this entry for
    access.  Don't forget to also tag the other listings that pertain to
    this entry (breeder, lessons, boarder, ect).  Important ones to
    remember to mark are VETERINARIAN, FARRIER and MANAGER. All three are
    used in Medical for selecting the person that administers care or a
    service to a horse. Categorizing the entries are necessary for doing
    searches and reports. Mark their status in the box.  You can list more
    than one. People not involved with our business can also be kept on
    record also.  Just mark the box <OTHER>.

    A list of available commands are shown at the base of the data entry
    screen.

    <PgDn> to add additional records. When you are finished adding records
    use the <F10> key to save the records.

                               Editing a record
    The edit feature is much like adding a record. The delete function
    allows you to delete a record in the general directory. This function
    will also delete all billing information from Accounts.

                                Horse Directory
                               Adding a record
    In the Horse Directory horses are listed by name and registration
    number.  This information is vary important and supports major
    functions in this program. It's advisable to make sure that the horses
    name is spelled correctly and the registration number is correct also.
    Once the record is saved neither the name or registration number can be
    edited.  If you intend on deleting this record and creating a new one,
    and the FILE section contains records on this horse, create the new one
    first.  Next go into the File section and make the changes necessary
    (By selecting the new entry). Be sure to read the documentation for
    these areas before making any changes reselecting a horse.

        Remember when a horse record is deleted all subsequent files
        using this horse will also be deleted. It may be advisable not to
        delete the old entry because the area where changes cannot be made
        is in "SCHEDULE".  The information in this area will be lost if the
        old horse entry is deleted.
    To select the horses sex, cursor to the field. The program will display
    a listing. Select the proper entry and use the <ENTER> key to write it



                                     Page 3






    to the record.  If the horse is a stallion and is gelded this entry can
    be changed. Cursor over the area to blank it out.  Use <Enter> to
    activate the window for another choice. Now fill in the other fields
    up to Veterinarian This record will list two veterinarians. These
    entries will be taken from the General Directory. The program does this
    automatically as you pass thru the names. If you choose not to list a
    vet at this time use the <ESC> key after the Search Window displays a
    listing of veterinarians.

    Much like the General Directory, the Horse Directory displays a listing
    of entries to tag for the purpose of cataloging the horse entry.  Use
    an (X) when marking an entry. Multiple selection are allowed.

      For example: If you run a breeding farm and the entry is a mare, She
      may be at your facility for a time. Her owner would also be paying
      board fees as well as breeding fees. This means that the mare is
      there for breeding and she will be boarded also. Both Breeding and
      Boarding would be tagged with an (X).

    The <F2> key is used to allow you the choice of selecting a name
    (owner) from the General Directory and write it to the horse record.
    In this instance it is not necessary to first enter the information in
    the General Directory.  You can enter the name and address manually and
    it doesn't have to be kept in the General Directory.  But for billing
    purposes and some reports, it is advisable to first enter the owner's
    name in the General Directory, than allow the program to write it to
    the Horse Directory record.

    A list of available commands are shown at the base of the data entry
    screen. <PgDn> to add additional records.  When you are finished adding
    records use the <F10> key to save the records.

                                Editing a record
    When editing a record in the Horse Directory, all the fields listed
    with the exception of the horses name and registration number may be
    changed. If the listing shows that the horse is a stallion and he has
    now been gelded, go back to that field and manually erase it. (Cursor
    to the beginning and use the space bar to overwrite the field). The
    program will than give you a listing to make another selection from.
    Use this same concept to change veterinarians. Or in this case the
    <ESC> key after erasing the vet name. No listing will be used than.
    Use the <F5> key to delete horses from the program.

                               A word of caution!
       When a horse is deleted from the Horse Directory all relating
       records from Schedule and Pedigree (Only in cases when the
       horse is the first generation) will also be deleted.


                               Employee Directory
    The employee record is a vital part of the financial area. You have to
    be listed in this area if you intend on keeping a log or diary of your
    horse related activities. If you do have employees the information in
    this area is accessed for payroll.

                                Adding a record



                                     Page 4






    Basic employee information asked for is self explanatory. After this
    information is added we can start with the "Start Date:", this is the
    date the employee either starts work or is hired. Whichever way you
    intend to record this. Than enter the hourly wage the employee is to
    receive. Next, the number of dependents, then the exemptions he/she is
    claiming for withholding taxes. The next area allows for additional tax
    withheld from the employes wages, per the employee's request. This is
    for both Federal and State.

    In the boxed in area you can deduct for employee paid medical and
    pensions. You can also keep a record of your payments for medical and
    pensions along with employer paid workmans comp. and unemployment
    insurance(UPI)

    A list of available commands are shown at the base of the data entry
    screen.

    Next, <PgDn> if additional employees are to be added. Then use the
    <F10> key to save the records and return to the previous menu.

                                 Edit a Record
    All information from within an employee record can be edited with the
    exception of the employee's name.

    The employee's name is used as a search field in both the payroll
    records and the log. These records would become inaccessible if the
    name was altered.

    When a record is deleted only that record is erased. If an employee's
    file is deleted all payroll and log records are erased as well.
    Be careful when erasing your records.




























                                     Page 5






                                   F I L E S

    Getting started in this area is fairly simple and straight forward.
    When you choose a file, you can add a record, edit a record, go to
    Reports or return to the Files Menu change the selection or exit back
    to the Main Menu. When a record is going to be added the horse is
    selected from the Horse Directory. Use the arrow keys to cursor through
    the listing to the horse this record is intended for. Press <Enter>.
    The name, registration number and sex will be appended to the new
    record. The field which list the horses sex can be edited at any time.
    Cursor to the beginning , use the space bar to overwrite the field.
    The program will than list the options available. Select one, use the
    <Enter> key to write the change to the record. This option is helpful
    when a stallion is gelded and you wish to change subsequent records.

                                    Training
                                Adding a record
    Training is setup under a file name instead of a horse. This is done
    this way so that each period of training with the same horse can be
    saved as individual records.

    Adding new records to Training takes on two different meanings.

    Add a completely new file for a horse with a new set of records for a
    different training period. Or adding to an already existing file.  In
    both cases these are new entries.

    To add a new file or a new file with entries first fill in the
    information necessary to aid in cataloging the period. For <File>
    use the horses name (either full name or an abbreviated version.
    Leave a space than place the date training is to start.  Remember,
    the field length is 30 characters in length.

    Use your judgement when setting up the method you wish to work with.
    The rest of the information to be listed in this area is the horse,
    training facility, arrival date and the objective.  The results and the
    date of departure will be added after this horses training is
    completed.

    To select a horse (from the Horse Directory) press the <F3> key bring
    up a listing. Make a selection than press <Enter>. Next press <F4> to
    choose a training facility (trainer) from your listing in the General
    Directory. If you are the trainer and this file is used exclusively for
    scheduling this entry can be omitted.

    If the trainer is not listed please add that information before
    proceeding. Also add all people that will be involved in working
    the horse in the Employee Directory.

    After the date of arrival has been added list what you intend to
    accomplish in Objectives.

    Now if this is not a new file and you would like to add to an already
    existing file, use <F2> to select that file.





                                     Page 6






    If there is additional information to add, it should be added before
    going on to the next screen.

      If information is altered from an already existing file, all
      information from previous records will be overwritten with
      the changes.

    When you are finished use the <F10> key to save this information and
    proceed to the area where the additional information is entered for
    each record within the file. Notice the information at the top of the
    screen.  This is the information listed previously. The file, horse,
    training facility, start date and objectives can not be edited from
    this area. The only fields from the previous screen that can be edited
    from this area are the Date of Departure and Results.

    Next the date of the scheduled work can be listed. . To list the
    handler use the <F3> key  and select an employee from the Employee
    Directory.  The employee could be the trainer, but the trainer still
    has to be listed in the Employee Directory to be appended to this
    record as the handler.  <PgDn> to add additional entries.  Notice the
    date from the previous entry has been appended to the next record.
    If this date is not acceptable cursor back and type the new date over
    it. After all entries are completed use <F10> to save and return to the
    Menu.

    In order to save information for this area a date must be posted
    for the scheduled work (for the horse).  If none is listed the
    information will be lost.

                                Editing a record
    Editing can be done on scheduled work, the handler can be changed,
    results added and the date of departure added to complete the record.
    Scheduled work for training can be deleted by using the <F4> key.  The
    entire record can be deleted by using the <F5> key.  Use the <PgDn> or
    <PgUp> key bring up scheduled work for deletion.  Then use <F4> to
    selectively delete portions of the record.  Use <F10> to save the
    changes made to the record and Exit.

    Reports can be printed after exiting the Training file.  Choose Reports
    from this area or from the Main Menu. Move the cursor to the desired
    format, press <Enter>. Now continue on with the variety of search
    criteria available to do the report.


                                    Schedule
    Scheduling is setup to both, provide you with a printed schedule for
    future task and as a reminder for upcoming task or events for selected
    horses.

                                Adding a record
    This record contains 2 windows. The top window is for information that
    will be needed for the horse in general.  The lower window is for
    scheduling task. Paging down <PgDn> in this area allows for adding
    additional task to a horses schedule.

    Selection for a horse to schedule task is always done from the Horse



                                     Page 7






    Directory, weather a new file is being created or task being added to
    an existing file.

    The horses diet (feed and grain), medication and limitations can be
    edited from this area both for new files and existing ones. These areas
    can also be edited when Edit is selected from the Menu.

    If Schedule is used as a Reminder for upcoming task and/or events
    there is a field listed in the first part of the record that allows for
    choosing the number of days you'd want as prior notice.  This field is
    used as a standard for accessing all Scheduled records from the task
    database. The number of days applied to the reminder is universal for
    Schedule and must be entered the same for all horses.

    Continue on by entering the date of the task and a description of the
    task involved. Page down (<PgDn>) for adding additional task.

    When finished use the <F10> key to save the entry and exit to the
    previous record.  Remember, task are only saved when the date has been
    completed.

    Here are some ideas for listing task that are horse related
    (APPOINTMENTS, MEDICAL & HOOF CARE, BREEDING, TRAINING, SHOW DATES &
    EVENTS.  The list is endless and you can use the COMMENTS field to
    describe the task involved.

                                Editing a record
    Editing can be done on these task and/or the general information at
    anytime to reflect changes in feed, medication and schedules. From EDIT
    choose the horse. Then, from within the record use the <PgDn> or <PgUp>
    key to bring up the task.

    The reminder for records with pre-entered dates can be cancelled for
    individual task by overwriting the "Y' with a "N" in individual
    records.  For universal cancellation of all reminders for a horse
    without deleting the record, change the days to "0".

    The data in Task can be deleted as the task are completed. Use the <F4>
    key.  Don't worry, this only deletes the task not the entire record.
    Use <F10> to save the changes made to the record and Exit.

    If you want to delete the file (horse) and all subsequent records
    relating to that horse use the <F5> key.

    Reports can be printed after leaving Schedule. Choose Reports from this
    area or from the Main Menu. Move the cursor to the desired format,
    press <Enter>. Now continue on with the variety of search criteria
    available to do the report.











                                     Page 8






                                    Breeding
                                Adding a record
    Breeding allows the user to save information in three areas "mare,
    stallion and foal". Breeding can be used like a schedule and dates pre-
    entered.  Reports can be generated and posted like schedules.
    These reports can also be updated and used as detailed breeding
    records.  Information in this area is also used to print contracts.

    All horses used in the breeding files are selected from the Horse
    Directory. With the use of the <F4> key from the primary screen choose
    a stallion for the file.  Then use the <F10> key to process this
    information and move on to the next portion of the file to complete the
    record or records for this stallion.

    The first field listed in the record is the  "SEASON". This field can
    be edited/changed at anytime by typing over it. "Season" reflects the
    year of the breeding. Next move the cursor to the Mare. A search window
    with a selection of mares will appear. If the mare you wish to add to
    this record is not listed, you didn't add her to the Horse Directory.
    You will have to abandon this record and return to the Horse Directory
    to do  so. Use the <ESC> to leave the record without saving.  If your
    mare was listed continue with adding information to this record.  Look
    at the information that was carried over from the Horse Directory.  Is
    it correct? Do you wish to list a different veterinarian?  Again, you
    will have to return to the Horse Directory to make the necessary
    changes. If you will notice that the veterinarian listed is the 1st
    listing from the Horse Directory.  This is the primary vet. Now move on
    to the Arrival & Departure Date.  Enter the date the mare is to arrive.
    If no information is available at this time, use the Edit feature at a
    later date to do this. Now choose the method of breeding, pass over the
    field with the cursor key. The program will present a listing, select
    one, press <Enter> to write the selection to the record. If you haven't
    decided on a choice , select #4 to bypass making a selection at this
    time. The next fields to complete are the breeding dates. You can pre-
    enter the breeding dates or do this as the mare is covered. Notice the
    listing "Tentative Foal Date".  This is a calculating field.  If a
    first breeding date is listed and after you cursor through the very
    last field, a listing giving the probable foal date as 340 days after
    the first cover date of the mare is shown. This is for reference only
    and doesn't show up in any breeding reports. The additional information
    about the status of the mare (testing Positive or Negative for
    pregnancy) can be entered at a later time.  Also please note that the
    results are entered using the program much the same way as the breeding
    method was listed.  You will find this is done in many area's of the
    program.  Use the <PgDn> key to add additional mares to this stallion.
    Press <F10> to save the information and exit to the previous window.

                                Editing a record
    To select a record to edit, first choose a stallion from the listing.
    Then, from the next search window select the mare's record. Press
    <Enter> to continue.

    Breeding is linked to the HORSDIR.DBF and when <F4> is used to delete a
    record only the mare is removed.





                                     Page 9






                                    Pedigree
                                Adding a record
    Page 1 is general information on the horse.  Help files are available
    for Legs, Hoof color and Facial.  Use the <F1> key while the cursor is
    positioned on any of these fields for help with describing legs, hoof
    color and facial markings. This information may be helpful for writing
    descriptions necessary for registration.

    Page 2 displays the pedigree of the horse. This area will show 4
    generations preceding the horse the pedigree is intended for. If you
    are adding a record you have the choice of manually entering all the
    information for the pedigree or use pedigrees from the Sire and/or the
    Dam already on file.  Use <F2>=Create to select pedigree/s from the
    listing stored within this program.  Use the edit function from the
    Pedigree menu to browse the records and view both examples of
    pedigrees.  After you are finished return to the menu and select the
    add function to create a new pedigree.  You will be choosing a horse
    from a listing in the Horse Directory for this. After a selection is
    made use the tools described previously to help fill in the fields for
    legs, face, hoof and body.  Body doesn't have any such help like legs,
    head, and hoofs do from using the <F1> key. When you are ready to move
    on to page 2 use the <PgDn> key. In this area new pedigrees are
    created.  Use <F2>=Create to bring up the menu with Mare, Stallion and
    Continue.  Choose <Mare>. Select the mare from the listing. Now select
    <Stallion> and make a choice from the listing.  After you are finished
    move the bar to <Continue> and press <Enter> to remove the pop-up menu.
    Than press <F10> to save the record and return to the Menu.

    Did you notice that both the mare and stallions pedigree's where
    appended one generation to the right?

    When creating a pedigree of your own it may be necessary to make one or
    both of the listing manually. After building a file of new pedigrees,
    creating pedigrees for new foals will not require a lot of manual
    entry.

                                Editing a record
    It's important to note that pedigrees from previous entries can only be
    added while adding a new record. In edit mode both pages 1 and 2 can be
    edited. With the <F3> key the horse can be reselected from the Horse
    Directory. This function is useful for updating the horse information
    when the record in the Horse Directory has been rewritten.

                                  Competition
                                Adding a record
    Competition includes information about the event, handler, rider, good
    points, things to improve, etc. Multiple records for a single event can
    be saved listing different horses in different classes.  Competition is
    setup differently than the other areas.

    Adding new records to Competition takes on two different meanings.
    Add a completely new event or adding a horse or horses to an existing
    event. In both cases these are new entries.
    To add a new event or a new event with entries first fill in the
    information about the event. If this is not a new event use the <F4> to
    choose an existing event. Information shown can be edited (changed) or



                                    Page 10






    added too from the existing event. Now if this is a new event and if
    all information necessary is not available at the present time just
    list the event.  Use the <F10> key to save this information and proceed
    to the next area. Notice the information at the top of the screen.
    This is the information listed previously.  It can not be edited from
    this screen. In this area classes are added along with the horse.  A
    class must be entered in  order to save this record.  If none is
    entered all information that was listed will be lost.  Lets continue
    and add information to Class.

    After a class is listed press the <Enter> key to move on to the
    Entries, than the Placing. If these aren't available (pre-entry)
    use the <Enter> key to pass over them to and through the horse field.
    The program will automatically show a listing of horses from the Horse
    Directory.  Cursor to the desired selection, use the <Enter> key to
    write the horse to the record. If a mistake was made in choosing a
    horse, overwrite the horse with the space bar and use the <Enter> key
    to reselect a different horse. Information on points earned or/and
    earnings can be entered also. Totals for these entries will show up in
    the generated reports.  Comments can be added now or at a later date.
    Judges can also be added. They may be entered manually or if listed in
    the General Directory, use the <F3> key to append their name to the
    record. If this is a one time thing, entering a judges name manually is
    OK.  But if the judge is used in other areas the name should be first
    written to the General Directory than taken from there. Also if the
    judge is not listed in the General Directory the name cannot be used
    for searches.

        (NOTE): the word JUDGE can be interpreted to mean OFFICIAL, STEWARD
        or anyone responsible for the final results in an event.

    Scheduling for events can also be done from within Competition and
    updated as complete records by editing after the event.  Schedules
    created using pre-entered data can be used at events by using the
    blanks left on the uncompleted report to keep notes.  Later these notes
    can be entered into the record.

    When you are finished with this class use the <PgDn> key to add
    additional classes or press <F10> to save the information and exit to
    the previous window.

                                Editing a record
    When a record in Competition is to be edited it means only the class
    from that event. Events can only be edited from the function used to
    <Add> a record.

    To edit a record in Competition first select the event. The next window
    list the horse and class. Make your final select of a record to edit
    from this search screen

    There are two different functions used for deletion in Competition.
    The <F4> key is used to delete individual classes from an event.
    The <F5> key will delete the event and all the classes tied to the
    event. The horse can still be changed by using the space bar and new or
    different judges can be added. along with adding comments. The <Esc>
    key will allow for leaving the record without making changes.



                                    Page 11






                                    Medical
    Medical is used for both keeping an ongoing file on a horses medical
    history and scheduling pre-entered medical maintenance.

                                Adding a record
    Medical records are added by first selecting an existing file or by
    creating a new one. To create a file for adding records type in a file
    name. File names are used for individual horses to allow for duplicate
    entries. An example of this is using a year for the file such as
    "1994".  You may find other reasons for keeping separate records,
    depending upon your use of this area and the kind of management program
    you have.

    Next use the <F3> key to pick a horse for this file. Fill in any
    additional information like allergies, deformities & limitations.

    If a Medical file is used as a Reminder for upcoming medical
    maintenance there is a field listed in the first part of the record
    that allows for choosing the number of days you'd want as prior notice.
    This field is used as a standard for accessing all Medical records from
    the Category database. The number of days applied to the reminder is
    universal for medical and must be entered the same for all horses, in
    all files.

    If a record is being added to an existing file use <F2> to make that
    selection.  These areas most often won't change but can still be
    edited.  Now press <F10> to proceed to the next page to complete your
    entries.

    Start by entering the recording date for this record. When entering a
    new record the date field may list the current date read from the
    computer. If this date isn't what you want, cursor to it, type over the
    date. Now use the <Enter> key to proceed on to Category.  Use the
    <Enter> key again, a listing will appear, make a selection press
    <Enter> to write that choice to the Category field.  Before going on
    any further it's important to let you know that there is HELP available
    for this area working with Categories and their uses.  Use the <F1> key
    while the cursor is in the Category field or on the first line where an
    explanation is going to be listed.  The listing shown defines some
    categories with examples on how they can be applied to medical records.

    The field "Reports" allows for pre-sorting medical records for printing
    reports. If you want to exclude a record from a report put an "N" in
    the box next to Reports. If you want the record to be used in your
    medical reports put a "Y" in that box.

    The reminder for records with pre-entered dates can be disabled for
    individual record by overwriting the "Y' with a "N" were it says
    "Canceled". You can do this also from the menu by choosing "Edit" and
    going to the record.

    Lets continue on to Complications/Treatment/Hoofcare. For each
    occurrence list that which best describes the condition, treatment or
    scheduled maintenance for the horse's well being.

    Many times, scheduled maintenance for a horse's health or hoof care are



                                    Page 12






    reoccurring conditions. Using a predefined template eliminates the need
    to reenter the same information. At the base of the screen, were all
    the commands are listed, you'll see one that says <F3>=Notes.  This
    command will bring into Medical pre-written instructions or conditions
    to be used in the area describing the occurrence.

    The use of templates will not restrict you from making modifications.
    If additional information is going to be added bring in the template
    first or the added entry will be overwritten.

    Here are a few suggestions for Categories and Templates:

       Immunization: List the shots that were given and why.

       Laboratory: Kind of test and results. Coggins, blood, ect.

       Semen Report: Motility, sperm concentration, ect.

       Surgery: What was surgery for and results. (sutured vagina) ect..

       Injury: Describe injury, treatment and results.

       Sickness: Can be disease or ailment, (colic, abortion, cough, scours
       or pneumonia) ect. Treatment can also be listed.

       Estrus: Heat period for mare. In the comments field you can list the
       length of the heat period.  The date that you entered at the top of
       the category window should be the date when the heat period begun.
       Using this date you can chart the Estrus Cycle for use in your mares
       medical report for the best time cover her.  Cycle last from 19-26
       days the average being 21 days.

       Examination: Check horse for breedability, physical wellness.  ect

    To make revisions to the Category use Category/Edit Record.  To add new
    categories choose Category/Add Record.

    To make revisions to the templates use Template/Edit Record. To add new
    templates choose Template/Add Record.

    After Complications/Treatment/Hoofcare there is a box for Veterinarian
    and Farrier. If you intend on having a vet or farrier attend to this
    horse mark one of the boxes with an <X>. Marking one of the boxes will
    tell the program to bring up a listing with either all the farriers
    or veterinarians from the General Directory when the cursor is passed
    through the Name field. After you make a selection press <Enter> to
    write the name to the record. If you are satisfied with the information
    written to the record <PgDn> key to add an additional record or press
    <F10> to save and exit.

                            Scheduling with Medical
    Whether doing a follow-up on an illness or additional procedures in an
    examination. By pre-entering scheduled visits from the farrier,
    veterinarian, worming & medications, just to name a few, you can use
    these reports as (content specific) schedules and post them.




                                    Page 13






    The type of report you want to print adds to the versatility of setting
    up schedules using medical.

                     Using the <F2> key to access Accounts
    This feature will allow for leaving the present record in Medical
    suspended and open up a  window in the Accounts Directory. From
    Accounts select the name  or business to access. Use the <Enter> key
    to process your choice.

    Notice the horse's name has automatically been appended to the account.
    Make your entry, use the <PgDn> key to add additional entries. Than use
    the <F10> key to save the record and return to Medical. This feature
    can be used at anytime while the record is open.

                                Editing a record
    To edit a record in medical first select a horse from the search
    window. From the next area choose the date and the category. Use the
    <Enter> key to proceed. Accounts is not accessible from Medical\Edit.
    When using the edit feature you have two choices for deletion. The <F4>
    will delete only the category that is in view from the screen.  When
    the <F5> key is used all records regarding the horse's medical history
    will be deleted from the program. All other functions used for adding a
    record are accessible for editing purposes. Be sure and use the <F10>
    key and save your records when changes are made.

                      Changing Information About the Horse
    If you want to revise information on the horses name and/or
    registration number this can be done by going to the "ADD" function,
    select the file were the change is to be made. Next use the <F3> key to
    reselect a horse from the Horse Directory. Press <F10> to proceed to
    the next screen. Press <F10> again to save the changed file.

                                    Category
                                Adding a record
    The use of Category has been explained in Medical. This area contains
    the category and definition (if you choose to define the category).
    Use the <F1> key while the cursor is in the Category field or on the
    first line where an explanation is going to be listed.  The listing
    shown defines some categories with examples on how they can be applied
    to medical records.

                                Editing a record
    Use the <F5> key to delete categories from this area. Be careful when
    doing this. Deleting categories will affect searches done using
    categories from Reports. If categories are deleted it is recommended
    that all records using those categories be updated using the edit
    function in Medical to reflect the change.

                                    Template
                                Adding a record
    This area contains the word Template (for defining  each record) and
    the area where a predefined template can be created to be used in
    Medical.  Use the <F1> key while the cursor is in the Template field or
    on the first line where a template is going to be created.





                                    Page 14






                                Editing a record
    Use the <F5> key to delete templates. Unlike categories, templates do
    not effect any part of the program. If changes are made while editing
    use the <F10> key to save the revised template. If you do not want to
    save your changes or no changes were necessary use the <Esc> key to
    return to the previous menu.





















































                                    Page 15






                               C O N T R A C T S

    This area supports contracts for the sale of a horse or horses,
    breeding contracts, boarding contracts and contracts for the release of
    liability.

         PLEASE CONSULT A LEGAL AUTHORITY BEFORE USING THIS CONTRACT,
         IT MAY NOT BE SUITABLE FOR YOUR NEEDS.

                                      Sale
                               Adding a contract
    Choose  <Add Record>. Notice that the program goes directly to the data
    entry screen.  Both the Buyer and Seller will be selected from the
    General Directory.

         Make sure that all prospective buyers are tagged (Buyer [X])
         in the General Directory. Also that all sale horses have the
         same such tag (Sale [X]) placed in the Horse Directory.

    Use the <Enter> key when the cursor is positioned right after Buyer.  A
    search list will appear. Make your selection from this list. Now use
    the <Enter> key again. This will append information about the Buyer to
    the Sale Contract. Do the same procedure for Seller. Now the cursor has
    moved to the first horse. Use the <F3> key to display a listing of the
    horses available from the Horse Directory.  Make a selection and use
    the <Enter> key to again append the information to this contract.  Now
    enter the sale price of the horse. The cursor than moves to the next
    horse.  If only one horse is to be sold per this contract, use the
    <Enter> or <Arrow> key to move on to the next area. If more horses are
    to be added repeat the procedure for adding a horse with the use of the
    <F3> key.  If you wish to remove a horse that was already chosen use
    the <F2> key with the cursor positioned on the horses name.

    Here is the balance of the information needed to complete the contract:

        This contract is Made this (number+th or rd) day of (month),
        (year).  The sum of $0.00 has been paid on the date hereof.
        The additional sum of $0.00 has been paid on or before
        (month)(day), (year). The balance $0.00 Payable in (number)
        consecutive (monthly) installments of $0.00 each, beginning on
        the (number+th or rd) day of each and every (Month) thereafter
        until said principal balance shall have been fully paid, together
        with interest on the unpaid balance thereof at the rate of
        (percent)% per annum. Buyer will at his sole cost and expense
        maintain mortality insurance on the horse and furnish to Seller
        the original policy on or before (month)(day), (year).

    In addition (if you have additional guidelines to use in implementing
    this contract). The type of information used may be changed to
    implement different guidelines for the length of payment period.
    The sum total of the purchase price of all the horses listed will be
    automatically shown in the contract.  After you are finished use the
    <F10> key to save the record and return to the previous menu.






                                    Page 16






                               Editing a contract
    Use <Edit Sale> to make changes to an existing Sale Contract.  To make
    changes to the Buyer and/or Seller use the spacebar to erase
    information within those windows. Than use the <Enter> key to bring up
    a listing of existing entries from the General Directory. Make a
    selection, press <Enter>. Use the <F2> key to erase a horse from the
    contract and the <F3> key to add another selection. The <F5> key will
    delete the contract. And the <F10> key will save the new contract with
    the changes implemented. If an <Esc> key is used the new changes will
    not be used and the program will return you to the previous menu.

    There are two choices available for printing a Sale Contract.
    If this sale is setup on installments and if this sale is a cash
    transaction.

                                    Breeding
                             Editing  a contract
    Unlike Sale, to add a Breeding Contract a breeding record has to be
    opened in Files under Breeding. Than from Contracts select <Breeding>,
    than <Edit Breeding> to complete the information necessary for
    generating a Breeding Contract.

    Much of what is asked for within this record should be easily
    understood. If there is a problem consult Sale, add/edit a record.
    There is an example of terms used for entering information in some of
    the field layouts. No special keys are used in Breeding Contracts.
    And all deletions must be done from Files (Breeding).

    Be sure and use the <F10> key to save any additions or changes to the
    contract before exiting. If none are desired use the <Esc> key to
    go to the previous menu without saving.

                                    Boarding
                              Editing  a contract
    Much like Breeding, the Boarding Contract is established from a
    different record area. The Boarding Contract originates from the Horse
    Directory. When a horse is added to that directory and an <X> is placed
    in the box next to Boarding, a basic contract is established.

    All that is necessary is to add additional information in this area to
    complete the contract. Start out by listing the date you are writing
    this contract. Than list the boarding fees. Next, if the person in
    question is a minor, list the guardian, than the security deposit and
    the grace period when the payments are due. When you arrive at
    "Veterinary & Farrier attention will be arranged by:" select either
    Manager or Owner.  Than after it says "will be invoiced" choose either
    directly or by manager.  An example of this is: "If the service is
    arranged by the OWNER", it is very probable that the billing will go
    directly to the OWNER from either the veterinarian or farrier.  The
    choice is yours in how you wish to setup the billing arrangements.
    Now list the state where this contract will be executed.  Where it
    says, "The following are required:"
    You can place an <X> within the box where you wish these directions to
    be adhered to. Now enter the date this contract takes effect.  See the
    area where it says "Boarding Services"? This is were you list the
    services provided for this boarding contract and another area were



                                    Page 17






    templates are used. Generally most services provided are basically the
    same for all boarders within your facility.  Using the predefined
    templates will eliminate the need to reenter the same information over
    numerous contracts.  The use of templates will not restrict you from
    making modifications or additions to the services.  If additional
    services are going to be added bring in the template first or the added
    services will be overwritten.  At the base of the screen, were all the
    commands are listed, you'll see one that says <F2>=Services.  This
    command will bring into Boarding pre-defined services that you provide.

    When finished with the contract use the <F10> to save it.

    If you intend on deleting this contract, it can only be done by
    deleting the horse from the Horse Directory.

                                    Services
                               Adding a template
    This area contains the word File (for defining  each record) and the
    area where a predefined template can be created to be used in Boarding
    Contracts to list the services provided. Ideas for services include
    training, riding lessons and breeding just to name a few.
    Additional templates can be added by using the <PgDn> key. Be sure and
    save your entries with the <F10> key when finished.

                              Editing a template
    Use the <F5> key to delete templates. If changes are made while editing
    use the <F10> key to save the revised template.  If you do not want to
    save your changes or no changes were necessary use the <Esc> key to
    return to the previous menu.

                              Release of Liability
                               Edit a contract
    Unlike Sale, to add a contract for the Release of Liability the person
    for whom this contract is intended for must first be listed in the
    General Directory. Now select <Edit Liability Release> to complete the
    information necessary for generating a Contract.

    Much of what is asked for within this record should be easily
    understood. If there are questions about how to fill in the different
    fields some of the examples shown under "SALES" may help.

    This contract originates within the General Directory so all record
    deletions must be done from within that directory. Use the <Edit>
    function to alter or erase information from this contract.

    Be sure and use the <F10> key to save any additions or changes to the
    contract before exiting. If none are desired use the <Esc> key to
    go to the previous menu without saving.











                                    Page 18






                                 R E P O R T S

    The REPORT is a summary of stored information that is collected for you
    by this program. The search information input to the program will
    determine the information you receive in the report. The format used
    when choosing information will determine the kind of report generated
    and the method of output you select. There are three choices available
    for the report, a  disk file, to the screen or to the printer. Make our
    selection with the Up or Down arrow keys and press <Enter>.

    When the report is sent to a File a name is necessary for saving the
    report to disk. You are than asked to enter a name for the file written
    to disk. This choice can be aborted and an alternative selection made
    by using the <Esc> key. Or press <F10> to go on and process the report.

    In the next step you can search the records necessary to find the data
    you need for your report.

    The sort criteria may have many choices available (depending on the
    report type and information desired). As an example, from a sort
    criteria window in Medical:

       When choosing a name mark either the veterinarian or farrier
       box with an (X). This enables the program to selectively search
       for and report on vet or farrier related occurrences."  Other
       report sort criteria examples: "There is in many cases a Start
       Date and End Date." If you look at the bottom of the window you
       will notice some <F?> keys in a box named COMMANDS.  These
       function keys help with searches for selecting  information to
       help with your searches.

    One important note about this is that the data available for selection
    is not taken from the search area, but from the General and Horse
    Directories. The reason being there would show up multiple entries of
    the same data in the search window were you select information to write
    to the search criteria window. When you are finished use the <F10> key
    to do your report either to the printer, file or screen.

    If to the printer, make sure your printer is setup with the proper
    drivers installed in ES and is on. All the reports with the exception
    of Pedigree and Inventory print at 10 cpi. These two reports print at
    12 cpi and 8 lines per inch.  Remember, if you don't use the proper
    printer driver you may not get the reports to print properly.  When you
    print to a file the report will be saved with an extension ".TXT" to
    disk in ascii format.  This file will be saved in the LIBRARY
    directory. Your reports can be viewed with the <F1> from within this
    program. When you print to screen a window with the report will appear.
    You can <PgUp> or <PgDn> to view or search using the <ALT-S> for the
    first occurrence and <ALT-A> for each subsequent use.  These commands
    are similar to those used when viewing files using the Library (<F1>
    key.  If the report is wider than the screen, you can use the (<-) or
    (->) arrow keys to scroll the screen.







                                    Page 19






                                  L A B E L S

    The label printing utility is setup to print both pinfed and sheet
    labels. The  one across (3 1/2 x 15/16) pinfed labels are for impact
    type printers. The sheet labels are for laser or deskjet printers.
    It's possible that the sheet labels can be printed on a dot-matrix
    printer with a cut-sheet feeder but I must caution you, this has not
    been tested.

    From the Labels Menu there are choices for printing Address Labels and
    Shipping Labels. There are also choices for setting up the print
    functions of both Address and Shipping Labels. The very first thing you
    must do is setup either or both of these label print utilities before
    trying to print with them.

                       Address & Shipping Label Defaults
    The very first thing you are asked is to select the Letter Quality.
    Than the number of labels across. If the printer is pin fed use the
    number [1]. If you are using a laser or deskjet you may choose [2] or
    [3] labels across. The function for positioning the labels defaults to
    [0]. If you have a problem with where the printing starts on the label
    use <Label Left Margin> to make that correction. Next is a listing of
    the Labels supported by this program.

                        Print Address & Shipping Labels
    Address labels are printed using information from the General
    Directory. Select Address Labels to setup the search criteria. The
    first thing you will be doing is choosing the entries to use in
    printing the Address Labels. Notice where it says "Tagged records to
    print". Presently it says [NONE]. Use the <F6> key to bring up a
    listing of names. At the base of the search screen are commands for
    tagging and untagging entries. Apply these commands for making the
    necessary selections. Now use the <Esc> key and return to the previous
    menu. Notice that [NONE] has changed to [YES]. Other ways of making a
    selection are to enter "x's" to tag groupings like "Trainer".  More
    than one can be tagged. There is a Logic choice available for this
    criteria also (as described earlier in reports).  Use an "A" or an "O"
    when choosing AND OR for Logic. One other thing to mention is that you
    have your choice to print your labels with the Business and/or First
    Name.  A Comment can be added and printed to each label.  After you are
    satisfied with your choices press <F10> to start printing.


                                   S E T U P

    From setup a different printer can be selected. The database can also
    be optimized (repacked). This is done to totally remove deleted
    records. It is recommended that this function be used on a regular
    basis. Registration can be printed from this area also.  Also displayed
    in this area is your system configuration. This information is read by
    the program while it is loading. It is displayed here in this area for
    your convenience







                                    Page 20






                                    M A I L

    Mail has two functions. Form letters can be created and with mail merge
    information stored in Billing and the General Directory can be
    selectively exported in a customized format (delimited ascii file).

                              Create Form Letters
    This area allows you to create 2 page letters and merge information
    from the General Directory. All the letters that you write will be
    stored in a special database and can only be accessed from this
    program. Letters can have up to 80 columns, 66 lines and be 2 pages
    long. There are 10 areas available for storing your form letters.
    The <F1> key in this area provides text sensitive help. The help in
    this area explains the use of the different keys used for adding and
    editing form letters.

    Now that the  choice has been made to work with form letters choose
    [Create/Edit Form Letter]. Now select the first listing.  Don't worry
    about the names used in listing the form letters.  These can be changed
    from within the area used to create your form letter.  Now use the
    <Enter> key to complete your selection.

    Now for creating your letter or form letter familiarize yourself with
    the commands and functions available. At the base of the screen are a
    list of functions that are necessary for creating and editing form
    letters.

                                 Function List
       <F2>=Merge Fields:  The fields used for merging selected information
        are taken from the General Directory. With the <F2> key you are
        able to list these fields and insert them into your letter. When
        you print the letter the program will then replace these fields
        with information from that directory. The same fields may be
        inserted as often as necessary within the same letter.

        Search=<F3>: The <F3> key gives you the ability to search your
        letter for words or phrases. You also have the option to setup for
        what is looked for when a search is made.
        Type in a word or phrase to look for. Use arrow keys to navigate &
        <F10> to start search.

        F4=Replace: Replace works the same way the search feature does but
        goes one step further. You can also replace the word you are
        searching for.
        Type in a word or phrase to search for. Cursor down to the replace
        field and type in the word or phrase to replace the field you are
        searching for to replace. After search locates the word/phrase you
        are given a choice to replace the word and/or all of the subsequent
        occurrences  you can continue to search

        F5=Paste: After marking a word or phrase, and the copy or cut
        function where used, move to the desired area and use this function
        to insert the marked phrase.


        F6=Mark: Press <F6>, than drag the marker over the text that is to



                                    Page 21






        be cut or copied with the arrow keys. Next use the copy or cut
        functions.

        F7=Cut: Cutting text means to remove it from the document. The text
        is then stored in a buffered area. Text can be  re-inserted in the
        same or different area by using the paste function. Be careful when
        using this utility. When other text is marked , then cut or copied
        before pasting the previous text, that previously text will be
        lost.

        F8=Copy: To copy text means to duplicate it. After text is marked
        use this function to store a copy of the text in the buffer. Until
        the buffer is overwritten by another copy or by cutting text, the
        text stored can be inserted as many times as you wish with the
        paste command.

        Shift/F5>=Clear Letter: This function allows you to delete all the
        text that is in the file you have open for editing.

        Shift/F6=Change Name: With the use of <Shift>+<F6> you can change
        the name of the form letter you are editing.

        Shift/F5=Clear Letter: Use both the <Shift> key and <F5> key
        simultaneously to erase all text that was inserted into the form
        letter that is presently being accessed.

        Shift/F6=Change Name: Use both the <Shift> key and <F6> key
        simultaneously to change the name of the form letter presently
        being accessed.

        Shift/F7=Print: Use both the <Shift> key and <F7> key
        simultaneously to print the form letter being accessed.

        F10=Exit: With the use of the <F10> key another menu appears with
        function key assignments and commands for saving the created or
        changed form letter and leaving this area or leaving without saving
        the changes.

    Use the <F1> for additional help in using the edit features from within
    Form Letters.

                               Printer Defaults
    After you have edited your letter and want to print it please check
    and/or reset the printer defaults.  Setting the printer defaults is
    self explanatory.

                               Print Form Letter
    The form letter can be printed through this menu choice or from the
    Create/Edit area.










                                    Page 22






                              M A I L   M E R G E

    This function is setup to export database records into a delimited
    ascii file. There are two choices for exporting mail merge records.
    Each is for a different database.

                                Edit Mail Merge
    Before choosing the records for your mail merge file the order and
    fields necessary for export have to be setup. Set the cursor at the
    position of the first field for import. Next use the <F2> key to list
    the fields available. Cursor to the field desired and use the <Enter>
    key to make the selection. If a group of fields represent a single
    entry put them on one (same) line, spaced according to what the layout
    of the importing structure is. The next field selected should be places
    beneath the previous field. And so on...

                                 Function List
       Mark=<F6>: Cursor to the area you wish to work with and press <F6>.
       Next use the arrow keys to mark the text that you wish to perform a
       function on.

       Cut=<F7>: After text is marked you can remove it from an area by
       pressing the <F7> key.  This  text is then stored in a special
       buffer within the program. If you wish to later insert the text into
       another area move the cursor to that area and press <F5> to Paste.
       The text will be written back to your letter at the new area.

       Copy=<F8>: The copy function moves text to the clipboard like cut
       does.  But copy doesn't remove the original marked text from your
       letter.  With copy you can make duplicate entries within your letter
       without having to retype the phrase.

       Exit/Menu=<F10>:  The <F10> key brings up this Command Menu. From
       this menu you can execute commands with the function keys presented
       or the highlighted letter. The same functions listed at the base of
       the edit screen will show the same commands. Some of these commands
       list alternate methods of execution.  Using the <F10> key  from this
       menu will "Quit & Save" your merge file.  You can also press <Q> for
       "Quit & Don't Save" the file.  Both return you to the previous menu.

                            Export Mail Merge File
    After the fields have been selected and their order has been
    established the records can be exported.

    When a mail merge file is exported punctuation such as commas(,)
    and quotation marks(") are stripped from the records. Both of
    these methods of punctuation are used within the merge file for
    separating fields.

    After returning to the previous menu select the records for export.
    from this listing use the <Enter> key to tag these records for
    mailmerge.


    Use the <Esc> key and return to the previous screen.  The notice at the
    base of the menu is a reminder to let you know if records have been



                                    Page 23






    tagged. Now select [2] to export the mailmerge file.  Next, name the
    mailmerge file than use the <Enter> key to process the records.

    The merge file will than be written to the MERGE directory within EQS.
    From there it can be accessed or copied.






















































                                    Page 24







                                    ACCOUNTS

                                  An Overview
    Records are necessary to provide evidence to document the profit motive
    of a business. If a profit motive is not recognized by the Internal
    Revenue Service, then deductions attributed to an activity will not be
    allowed that are greater than the income generated by the activity. The
    Internal Revenue Service examines the records of the business to
    determine if a profit motive exist.
    Business records that are inadequate reflect a non-businesslike
    operation.  It is important that records are kept up-to-date to allow
    you to maintain cost controls.

    The Tax reform Act requires records to substantiate that the taxpayer
    "materially participates" in his horse business to avoid new passive
    loss limitations under the new act.

    Here are some guidelines to go by:

    1. Use a separate account for the business.
    2. Keep bills and invoices separate from personal records.
    3. Depreciation schedules (maintain them).
    4. Preserve a file for all cancelled checks, bills, receipts and
       bookkeeping records for at least 6 years.

                             Income Tax Accounting
                                Year
    Taxable income must be computed for a fixed period (Taxable Year).
    This period is usually twelve months, although some taxpayers may
    choose to use an annual accounting period that varies from fifty-two to
    fifty-three weeks, if such a period always ends on the same day of the
    week, the last such day of the month.

    Most taxpayers adopt either a calendar or fiscal year. A fiscal year
    ends on the last day of any month except December. The Internal Revenue
    Service will recognize it only if it is established as the taxpayer's
    annual accounting period and only if the books are kept in accord with
    it. A taxpayer without an annual accounting period, or without books,
    must compute the taxable income on a calender-year basis.

                             Account Period Change
    To change from one account period to another generally requires prior
    permission from the Internal Revenue Service and requires filing a form
    for the short period. Approval will not be granted if the Commissioner
    determines that the sole purpose of the change is to maintain or obtain
    a preferential tax status. Approval is generally granted for the change
    in the accounting period if it is established that a substantial
    business purpose exist for making the change.

                               Accounting Methods
    A decision must be made for selecting a method of accounting used in
    the business. In addition to having a fixed accounting period an owner
    must choose to setup the records on a cash or r accrual basis.





                                    Page 25






                                 Accrual Method
    A taxpayer using the accrual method enters income into his records the
    moment he has a right to receive them. Whether or not the income has
    been collected, it is income once it is earned. The expenses are
    deducted in the year they are owed. This method of accounting is used
    when yearly inventories are necessary to reflect purchases and sales
    correctly.

    If a payment is clearly not collectible the taxpayer using this method
    is not required to record the account receivable as income.
    If it has been declared as income than he or she takes a bad-debt
    deduction to offset it.

    If the liability is uncertain than the taxpayer should not record the
    expense until it is certain. If the liability is uncontested but the
    amount is uncertain, than the figure should be estimated and recorded
    at that time. Adjustments can be made later.

    This method of accounting allows the taxpayer to follow the actual ebb
    and flow of finances as the income is earned and expenses are owed.

                                  Cash Method
    The cash receipts and disbursements method of accounting is used by
    must individuals and is available to horse farming under the Tax Reform
    Act. Breeding, raising, training and racing of horses are activities
    normally classified within farming.

    Income is reported in the year it is actually received, either in cash
    or other property. Expenses are deducted in the year they are actually
    paid. (Some restrictions on prepaid items). The cash bases method
    benefits the horsperson, since certain cost of breeding, raising and
    training horses are deductible when paid.  Under the accrual method,
    theses cost must be added to the "basis" of the horse, as if the cost
    is part of the purchase price. Adding this cost to the purchase price
    is called "capitalizing the cost." These cost are recovered over the
    useful life of the horse through depreciation. If the horse is bought
    for the purpose of resale, than these cost may not be recovered until
    the actual sale, when less profit will be recognized. To summarize this
    under the accrual method,  expenses are not recovered until the horse
    is put into use or sold. Under the cash method expenses are deductible
    when paid.

                                  WARNING
    Keep your records. Income taxes can be assessed within three years
    after the original return was filed. (Its the last day prescribed for
    filing if the taxpayer filed early.) A proceeding to collect taxes may
    be begun at any time if a false or no return was filed at anytime. If
    over 25% of the gross income is omitted from the return, the Internal
    Revenue Service has six years to act.










                                    Page 26






                             CASH BASIS ACCOUNTING

    You have to prove a profit motive and active involvement in the horse
    business under audit. Taxpayers with thorough records have more often
    been successful while those with incomplete or inaccurate records have
    been faced with expensive bills from the Internal Revenue Service.

                                     Ideas
    1. Keep your records up-to-date, summarize them and study the figures.
    2. Compare figures from your horse business with those of other
       comparable operations.
    3. Improve or eliminate the week areas of your business and maintain
       the strong ones.
    4. Use your account records when planning your credit needs.

                                Accounts Receivable
         Accounts Receivable is a billing utility. This utility keeps a
        running balance of entries. You can add, edit, delete, print
        statements and reports.

        An Account is established when, after, a Business and name are
        written to a record in the General Directory and the appropriate
        box within the General Directory is written to with an (X).

                                    Example
         ÚÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄ¿
         ³   Use an (X) in the box if entry is used for billing  [X]  ³
         ÀÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÄÙ

                                  Header File
        Before adding entries to Accounts setup the header file, select
        <Edit Header>. The report name listed at the very top is used as
        part of a header for billing purposes. Both the name and address
        originate from a different area (Edit Header). If you choose to use
        your own stationary with a header already printed, omit this
        information from this file.  Remember, this header is also used in
        printing contracts.

        The tax-rate (sales) is established from this area. If you live in
        a state that has an added tax for your services enter that rate
        here.  Remember, if your rate is 5% enter [.0500].  The "Notice"
        that is shown can be used for special announcements. This will be
        printed across the statement just below the last entry.  You can
        omit this if none is necessary. Remember, this entry will appear on
        all subsequent bills unless it is removed from this area.  The
        "Remark" is placed at the base of the statement and generally list
        the terms of payment.  Like all such entries here, it is not
        necessary to list a Remark. After editing this file don't forget to
        use the <F10> key to save it and return to the previous menu.  Now
        proceed to Accounts Receivables and add your entries.

                                 Adding a Record
        The selection for adding accounts is taken from the General
        Directory.  With <Add Accounts> new entries can be added to
        existing records.




                                    Page 27






        Select a business with the <Enter> key. This brings up the data
        entry screen with the business appended to the record. The
        selection for transaction automatically list this record for
        billing. If you are going to deposit funds to this account record
        use the <F6> key to change the type of transaction and redefine the
        screen for data input. Now proceed to complete the record.

        The current date, date taken from the computer system, is also
        automatically listed to the record in the date field.  If the date
        shown is not what is desired for this entry move the cursor to the
        area and overwrite (type over) it.  Then select the tax code that
        this entry is classified under. Use <F3> to do this. If a horse is
        involved for this entry use the <F2> to bring up a listing of
        horses from the Horse Directory. Make a choice than press the
        <Enter> key.  This will append the horse to the record. Add a
        listing of the service performed and/or the materials purchased. If
        the service and or materials are taxable and this entry is used for
        billing, put a [Y] within the box.  If services are not taxable but
        materials are, they will have to be separate entries.

                                   "Caution"
        In order to save your entry to a file the field "Service/Materials"
        must be completed.  If you fail to complete this entry the program
        will not save the record.

        Press <Enter> to move on to the cost or funds received. Enter these
        funds for the service and/or materials.  Use a period to separate
        the dollar amount from the cents. Press <Enter> when you are
        finished.

        If for billing and the box for "Taxable" was marked with a "Y" the
        adjustment will be made to the adjusted balance after the cost has
        been entered and accepted with the <Enter> key.

        Notice the total in the Adjusted Balance has changed. You can go
        back and make corrections to this record and the adjusted balance
        will reflect that change.

        <PgDn> will allow for adding additional entries to this Account.
        If you wish to add additional entries, but to a different Account
        use the <F10> key to save this record, then from the menu select
        <Add Entry> select a different account. Then follow the same
        procedures for data entry.

                               Editing an Account
        You can edit an account to make corrections if a mistake was made
        or to make additional entries to an already existing record.
        Records can also be deleted from Edit using the <F5> key.  Be sure
        and save the changes with <F10>.










                                    Page 28






                                 Delete Billing
    This utility allows you to selectively delete records in an account
    using a range of dates. You can select an account using the <F4> key.
    A Start Date & End Date is listed.  Use  a start and end date to
    selectively delete entries by date.

                            Print Billing Statement
    The statement for billing has various options for selecting accounts
    for billing. Boarder and Lessons are two such options. You may
    recognize both of these words by their placement in the General
    Directory. You can see by their use it is important all  such entries
    in the General Directory be tagged to illustrate for what purpose these
    entries where made. The use of these filters may save time in selecting
    individuals from the accounts file when all such boarders or persons
    receiving lessons are to be billed. as previously mentioned, another
    such function for selecting records for billing is tagging individual
    accounts. Use the <F6> key to display a listing of accounts to select
    from. From this listing use the <Enter> key to tag individual accounts
    for billing.  Now use the <Esc> key and return to the previous screen.
    Notice the reminder at the top of the screen.  This tells you that
    accounts have been tagged and how many.  Now you are ready to choose a
    range of dates.  All entries posted to the account between the selected
    dates will be printed to the statement.  When you are ready to print
    use the <F10> to continue.  Choose the method of output. Send the
    statement/s to the printer, file or to the screen.

                              Report for Accounts
    The report is a summary of an account. The method of setup and printing
    a report is the same as billing.

                           Codes to Income Accounting
    The income account codes are numbered to correspond with Schedule F
    (Farm Income and Expenses) and other applicable returns. These numbers
    will facilitate your own tax return preparation and simplify the work
    of your accountant.

    If you wish to make changes or add codes to this list select
    Code\Receivables from the menu than choose to add or edit this file.

    101  "F"HORSE SALES: Income received from the sale of horses or other
         livestock bought by the taxpayer for resale.

         (These will be reported on Schedule F).

    102  "4797" HORSE SALES: Income received from the sale of horses not
         bought for resale but used in the business for draft, breeding, or
         sport purposes.

         (These will be reported on Form 4797 and on Schedule D for Capital
         Gains).

    103  HOME GROWN SALES: Income received from the sale of horses, other
         livestock, or other products you raised.

         (These will be reported on Schedule F).




                                    Page 29






    104  SALES: Other income received from the sale of merchandise and
         other items you bought for resale.

         (These will be reported on Schedule F).

                               Other Income Codes
    These items will be reported as one total item on Schedule F. A "paper
    track" and planning tool will be provided with a separate accounting
    in the event the Internal Revenue Service has any questions.
                    *
    105  BOARDING: Income received from boarding horses.

    106  COMMISSIONS: Income from horse finding activities.

    107  LEASING: INCOME FROM LEASING HORSES.

    108  Lessons/riding-training fees: Income received from students for
         riding lessons, horse rentals, trail rides, or for individual
         training sessions.


    109  PRIZE MONEY: Income in the form of cash or the equivalent value as
         winnings; or for ridding horses in competition for others.

    110  STABLE FEES: Income for charges such as exercise, grooming, or
         vitamin supplements.

    112-116 INCOME RECEIVED FROM OTHER SOURCES: Set up individual accounts
         if regularly occurring or use the heading "Other Miscellaneous."


                                Accounts Payable
                                Adding a Record
    This area is for posting expenses you incur in the day to day operation
    of your business. To set this area up you must first create your
    accounts. Do this by choosing "Add Account" from the menu.

    The accounts created should mirror those accounts established through
    the institution you do your banking.  Or if need be to keep separate
    files for your expenditures.  Person or business that you deal with,
    either with supplied goods or/and services will be entered into these
    different accounts.  Also accounts can be setup for credit card use and
    payroll or all funds can be directed to one business account.  In most
    cases it's advisable to setup your accounts so that all entries that
    draw on one source for payment are together.  The report section will
    sort out this area for comprehensive reports on individual businesses
    if you need them.

    before proceeding to complete the record make sure that the transaction
    desired in listed to the screen. This would be located at the end of
    the record. When adding a record, all transactions default to
    "PAYMENT". If you want to make a deposit to the account, use the <F6>
    key to change the transaction and the scree format. You can not make
    this change in the edit mode so make sure what you desire is correct.
    If a mistake is made, you already filled in the cash amount and the
    adjusted balance has been amended, "GO BACK AND CHANGE THAT AMOUNT TO



                                    Page 30






    "0"'s, cursor through the record to the end so the adjusted balance
    reflects the correction, then reselect the transaction.

    Once the format is selected use the <F3> key to choose the business
    that is responsible for the service or product. After which, use the
    <F4> key to choose the tax code for the transaction.  Describe the
    service and/or materials that were provided for you.  Choose a horse if
    applicable. Use the <F2> key for this. Then the date of payment.  The
    Account Year is taken from the computer date (system clock). If you
    want to change that, just type over it. Now list the check number, the
    check date, and the amount of the check. After payment is entered, use
    the <Enter> key to make the adjustment to the balance in the account.

    If this record is for making a deposit the only fields that change are
    the Date of Payment, and Payment. That changes to Deposit. If this
    entry was posted to Accounts Receivable from a client, use the <F7> key
    to list all such postings. Now select the one you want to append to
    this record. Press <Enter> to complete that selection.  Use the <PgDn>
    key to make additional entries to this file and press <F10> to save
    your entries when completed.

                                   "Caution"
    In order to save your entry to a file a "Business" must be selected and
    appended to the record from the directory.

                               Editing an Account
    You can edit an account to make corrections if additional information
    is available or to make adjustments to the cash amount.  You cannot
    change the transaction. You can only delete that record and reenter it
    under a different transaction. Use the <F5> key to delete individual
    records. Go to the previous menu and select the function available to
    delete by a range of dates.

                                Delete Payables
    This utility allows you to selectively delete records in an account
    using a range of dates. You can select an account using the <F4> key.
    A Start Date & End Date is listed.  Use  a start and end date to
    selectively delete entries by date.

    Codes for cash deposits were listed in Accounts Receivables. Codes for
    cash disbursements are as follows:

                          Codes for Cash Disbursements
    Listed are the codes for cash disbursements. Both these codes and those
    from receivables can be added to or edited by making a selection from
    the previous menu.

    Accounts for Cash Disbursements have been set up to correspond to items
    listed as deductions on Schedule F "Farm Income and Expenses." All
    ordinary and necessary expenses of carrying on the business of farming,
    breeding, raising, training, and racing of horses is normally
    classified as a farming business.

    201  BREEDING: Incurred for breeding (stud fees).





                                    Page 31






    202  CONSERVATION EXPENSES: The Tax Reform Act limits the expensing
         deduction to amounts consistent with the state conservation plan
         that will satisfy federal standards.

    203  FEED PURCHASED: All feed purchased for horses or other livestock
         and cost for bedding stalls.

    204  FERTILIZERS AND LIME: A farmer, other than a farm syndicate, may
         elect to deduct current expenditures otherwise chargeable to the
         capital account made for fertilizer, lime, ground limestone, and
         other materials for enriching or conditioning the land.

    205  FREIGHT TRUCKING: Charges for delivery and other horse travel
         expenses; vanning. Do not include transportation cost related to
         the purchase of horses; however, these are not currently
         deductible expenses and should be recorded separately with the
         cost of purchasing the horse.

    206  GASOLINE, FUEL, OIL: Cost of operating your automobile for
         business purposes or the horse van or truck.

    207  INSURANCE: Charges for insuring the property owned by the
         business.

    208  LAND CLEARING: Under the Tax Reform Act only routine brush
         clearing and ordinary maintenance activities related to property
         already used in farming are deductible.

    209  LABOR HIRED: All wages to employees are recorded as they are paid.
         Enter net pay when paid to employees, and enter amounts withheld
         for payment of income and social security taxes when such amounts
         are paid to the government.  Any draw by an owner or partner must
         be entered under Account 229 "Personal." See payroll.

    210  MACHINE HIRE: Cost of renting equipment used in the farming
         operation such as a mower or baler.

    211  MORTGAGE INTEREST: Payments made for business charges on any
         business property secured by the mortgage.

    212  OTHER INTEREST: Payments made on interest charges on business
         loans.

    213  RENT OF FARM PASTURE: Rental paid for farm land or buildings.

    214  REPAIRS MAINTENANCE: Cost of any repairs made to business
         machinery, equipment, or the stable.

    215  SUPPLIES PURCHASED: All tack and equipment purchased for
         operational use. Do not include merchandise purchased for resale.
         Cost of horses and merchandise for resale should be recorded in
         separate accounts.

    216  TAXES: Property taxes paid on real property used in the trade or
         horse business, as are state and local taxes imposed on business
         income only.



                                    Page 32






    217  VETERINARY FEES: Fees paid to veterinarians for horse or other
         livestock care, medicines, and other medical expenses.

    These ACCOUNTS under 218 thru 230 correspond to deductible expenses
    tallied on Schedule F under "Other".

    218  ADVERTISING AND PROMOTION: The cost of promoting the business,
         advertising expenses or services, and gifts for good-will purposes
         ($25.00 limit per recipient).

    219  BLACKSMITH: Payments for shoeing and supplies.

    220  BOARD: Payments for boarding horses.

    221  DUES & SUBSCRIPTIONS: Dues paid to professional and business
         associations and subscriptions to newspapers, magazines, and trade
         journals used in business.

    222  EDUCATION: Expenses paid to maintain or improve you in your
         current business. (Education to qualify you for a new business is
         not deductible).

    223  ENTERTAINMENT & TRAVEL: Carfare, trains, buses, taxis, hotel, meal
         and entertainment expenses for business-related activities.  The
         Tax Reform Act limits the deduction to 80% of your cost.

    224  ENTRY FEES: Fees paid for entering rodeos, horse shows, or races.

    225  LEGAL & ACCOUNTING: Legal expenses.

    226  OFFICE: All cost of operating the office, including supplies,
         postage, and business equipment such as computers, printers,
         software etc.

    227  PERSONAL: Any draw by owner or partner to be used for living or
         family, such as personal insurance, rent, food, clothing, medical,
         or pleasure. This draw can not be treated as a salary or wage
         earning under the law.

    228  TELEPHONE: Charges for business phone use. If a home phone is used
         for business record only charges that apply to business; personal
         use is recorded under ACCOUNT, "Personal".

    229  TRAINING FEES: Fees paid for training horses.

    230  OTHER: For seldom-occurring and miscellaneous expenses, or setup
         account numbers following 230 to suit individual business needs
         (loans, receivables, donations, etc). If more space is needed,
         accounts listed above can be changed to suit your individual
         requirements.

    301  HORSES FOR INVESTMENT OR USE: All horses or other livestock
         purchased for draft, sport, or breeding purposes. Do not include
         here horses purchased for resale. Enter each horse under this
         category on the DEPRECIATION SCHEDULE provided.  The yearly
         deduction will be determined on Form 4562.



                                    Page 33






    302  HORSE FOR RESALE: All horses or other livestock purchased for
         resale purposes. The cost of each horse must be recorded, But it
         will not be deducted as a current expense. The cost of the horse
         must be computed to determine the basis for resale purposes.


                                   Inventory
    , keep complete records of goods on hand. Sounds like a simple enough
    task.  Inventory to Xpress is a more than keeping records of material
    things. It is were you enter the primary information used in the
    depreciation schedule. Purchase order processing and a reminder that
    your renewable inventory is low.

    The first part is to add items to the primary record. This record
    serves both Inventory and the Depreciation schedule.

    Start by selecting Inventory from the menu, then choose to add a
    record. This data entry screen is used for entering primary information
    to the file for the item. List the item name, a description, include
    identifying numbers. Where item was purchased. For the vendor, use the
    <F3> key to list them from the General Directory.  If you haven't
    listed this vendor there, do so before using this field.

    If the item is not for depreciation press <F10> to display the next
    entry screen. But if this item is to be depreciated continue to the
    next field.

    The following area is for listing information necessary for the
    depreciation schedule. First one, put an (X) in the box if you intend
    on depreciating this item, Next, the methods will be listed.  Choose
    one. If your not sure, that's alright. This can be changed later. You
    can use the space bar from within the field to erase the entry and
    you'll be given the choices all over again.  To make this correction
    use the Add function from Inventory in the previous menu. The other
    fields can be corrected from this area also.  Remember to save the
    record with the <F10> key.  Use it twice in succession if only making
    corrections and not adding an additional record. Ignore the second
    screen when doing this.

    The next field ask to list the date of purchase. Next, the item cost.
    The Service date is the date you started using this item.  The Life or
    Rate is the number of years you intend to use to depreciate this item.
    And the Allowable Depreciation, the total amount allowed for
    depreciating the item .

    Example of how to list total depreciation:

                 100% is (1.00), 150% is (1.50) and so on.

    As stated before, use the <F10> key to append some of this information
    to the next screen and display that screen for data entry.

    The next screen will  display the item, description,  the vendor,
    append the date purchased, and the item cost from the previous screen.
    These last two entries (item cost and date of purchase) came from the
    boxed area used for depreciation.



                                    Page 34






    If you don't intend on adding anymore than one entry for this item it's
    OK to have the date purchased appended to the date received field. As
    for the item cost, if the cost is a constant and doesn't vary from
    purchase to purchase it's a good idea to have it listed in the primary
    screen under depreciation even if it isn't meant for that purpose.  If
    the vendor changes from addition of new purchases of the same item, use
    the <F2> key to display the listing of vendors available from the
    General Directory. Select your vendor from this listing. If it isn't
    there, go back and put it in before continuing.

    Every item has a unit of measure that is to be listed in inventory.
    Whether it is for a single non-renewable and/or depreciable item or an
    item that has a single unit cost but can be ordered in multiples.
    Don't use the description area to list units of measure.

                                      NOTE
    If a unit you require is not listed from the popup menu drop us a note
    and we will add the addition and mail an updated release to you.

    Choose the unit of measure from the pop-up menu. List the order date,
    the quantity, the unit cost if not listed. Or if it is and it is
    incorrect, type over it. "Be sure to remove it or correct this entry
    from the previous screen when making another addition or by just
    calling up that choice from the ADD function and saving it after re-
    entering the information. After the unit cost, use the <TAB> or <ENTER>
    key to cursor through to the end of the record.

    The "Reorder Date" can be filled in at this time or can be done along
    with the "Date Received" in from the "Edit" function, chosen from the
    Menu. <PgDn> for additional entries of this item. When finished use the
    <F10> key to save the record and return to the previous menu.

    Read on for information necessary for setting up depreciation
    schedules.

























                                    Page 35






                       DEPRECIATION & DEDUCTIBLE EXPENSES

    If you aren't familiar with depreciation and how it effects your income
    taxes, read the following before continuing.

    In the past there have been favorable cost-recovery methods that was
    one of the selling points for investing in the horse business. As a
    legitimate tax shelter, losses from the business with a profit motive
    were fully deductible against other income.

    Under the Tax Reform Act of 1986, such deductions become to the passive
    loss limitations. The new law provides that the taxpayer must
    "materially participate" in the business in order to apply losses from
    this business against his salary, active business income, or even to
    offset his portfolio income. Losses and credits from a passive non-
    participatory horse business investment would only be deductible
    against other passive income. losses which are not currently allowed
    can be carried forward indefinitely and used in subsequent years to
    offset passive income. What this all means is clear. He must keep
    careful records to demonstrate his involvement in the daily operations
    of the business and to document his active role in management. ** The
    importance to document on-going records to prove active participation
    cannot be underestimated this year. An individual must meet the
    requirements of several test if he is to fully deduct losses from the
    horse business each year.

                     Test for Proving Active Participation
    Your time spent must be recorded in a consistent regular manner.  If
    you are asked to prove you are an active participant who has "EARNED"
    her losses, the records documenting your time will be invaluable.

    1. You spent more than 500 hours during the year; or
    2. You spent more than 100 hours during the year and no one else
       (including employees) spent more time; or
    3. You spent more than 500 hours during the year on various activities
       but no less than 100 on any one particular aspect of the business;
       or 4. You participated on a regular continuous, and substantial
       basis during the year and spent at least 100 hours.

    Use the diary provided to keep an accurate accounting of your time.
    Don't make up "BUSY WORK." IF you pay a manager don't record management
    hours. As an investor "The time spent analyzing your investment
    records" doesn't count.

                              At Risk Limitations
    The amount of loss deducted in connection with the farming activity
    cannot exceed the total amount the taxpayer has "at risk" in the
    activity at the end of the year. The amount "at risk" includes cash,
    the basis of property contributed, and any amount borrowed for which
    the taxpayer is personally liable. A buyer is not at risk if he/she
    buys an interest in a horse and the original owner retains an interest
    in the horse. If a loss is not allowed, it may be carried forward to
    the next year.






                                    Page 36






                                  Depreciation
    Breeders and horseowners that are in business to make a profit can
    deduct depreciation of show horses, race horses, and breeding horses,
    including farm buildings and machinery (farm).  When a property is put
    into service (in a business) depreciation begins.
    Depreciation does not begin when the property is purchased or otherwise
    acquired. The depreciable amount is the cost of the animal or property
    allocated and deducted over its recovery period. A horse or horses that
    have been raised cannot be depreciated if the cost of breeding and
    raising them has already been deducted as an expense. Horses held
    primarily for sale can't be depreciated. Horses used for schooling can
    be depreciated.  Sale inventory stock are not. It is a good idea to
    document the purpose and primary uses of your stock.

    The cost of horses acquired in 1987 and after is recovered over a three
    or seven year period. Racehorses more than two years old and other
    horses more than twelve years old can be recovered over three years.
    The Tax Reform Act of 1986 states all other horses are depreciated over
    a seven year period.  This new system views property as placed in
    service in the middle of the first year. In other words, the taxpayer
    must wait an extra year to recover the cost, this extends the three
    year depreciation to four years and the seven year to eight years.
    These are mandatory rules. A taxpayer that doesn't depreciate his
    property losses money, since his basis is lowered as if he calculated
    his cost recovery. At the time the horse is sold , the taxpayer must
    recognize a larger profit or a smaller loss. This applies even if he
    didn't use his depreciation deductions.

    There are three sets of rules to deal with in figuring depreciation.

    1. The "useful life" system of depreciation that applies to property
       placed in service prior to 1981.

    2. The ACRS (Accelerated Cost Recovery System) rules, these apply to
       assets placed in service after 1989 and before 1987.

    3. The Modified Accelerated Cost Recovery System or MACRS rules
       generally governs depreciation allowances for tangible property
       placed in service after 1988  under the Tax Reform Act of 1987.

    You may be involved with (use) any or all three sets of rules for your
    property.

    Under the law a reasonable deduction of allowances for the exhaustion
    and wear and tear of property used in a business or trade or of
    property held  for the production of income. MACRS allows full recovery
    of original cost without reduction for salvage value and employes
    accelerated depreciation values. Most personal property under MACRS is
    classified as three or seven year property.

    Personal property and land can not be depreciated.

    Machinery, farm buildings, and other fiscal farm property are
    depreciable. livestock acquired for breeding or work are depreciable.
    Stallions for breeding, broodmares, school horses and show horses
    (those campaigned for purposes of resale are not).  Horses acquired for



                                    Page 37






    inventory are not depreciable. To summarize this, all your horses used
    in your business are depreciable unless they are home grown (related
    cost have already been deducted).
    Also horses held primarily for sale can not be depreciated.

                             Basis for Depreciation
    In the horse business the owner must know the dollar base for
    depreciation purposes. The BASIS in the horse is the total dollar
    amount that the owner is entitled to depreciate (basis="what you
    paid"). The BASIS is generally the purchase price of the horse, reduced
    (adjusted basis) by any, meaning all, previously taken depreciation by
    the owner. There are special rules when a horse is received on an
    exchange of horses, as a gift, or through succession on death.

    1. If the owners mare has a foal, the basis in the foal equals zero.
       The capital expenditure to acquire the foal is still zero whether
       the owner raised the horse for pleasure or business.
       Note: Breeding fees were deducted when they were paid.

    2. For the owner who purchased the horse for pleasure, the basis equals
       the purchase price. The cost is not depreciable.
       NOTE: When a pleasure horse is sold at a profit, the income is
       taxable and the horse expenses are only deductible from the horse
       related income.

    3. The basis equals purchase price for the owner who purchased the
       horse as inventory, for resale.
       Note: When a horse dealer sells a horse, his taxable income is the
       difference between what he paid and what he receives. His expenses
       related to the horse business are currently deductible from all
       sources of his income, provided a profit motive is established. To
       summarize; Sale stock is not depreciable.

    4. If a owner purchased a horse with a profit motive, the basis is
       equal to the purchase price minus depreciation. Each year the
       depreciable basis (balance) is reduced by last years deduction.

    5. The basis in a taxpayer's breeding stallion is the price paid for
       the horse or, for purposes of syndication, the owners share.
       Later, the Internal Revenue Service "taketh it back" when the horse
       is sold. With the lowered basis the taxpayer will be taxed on the
       difference between the lowered basis and the sale price.

       Example: School horses not purchased for resale purposes would
       likewise be depreciable. With the basis calculated as sales price
       minus depreciation.

    Depreciation for property after 1987 in the 3, 5, 7, 10, 15 and 20 year
    class is calculated using the generally declining balance method of
    computation at the rate of 150%, one and one-half times the straight
    line rate.




                                     Timing



                                    Page 38






    You can claim depreciation at the time the depreciable property is
    placed into service. A stallion becomes depreciable when he is placed
    into service for breeding purposes.

    The depreciable amount is the cost of the animal allocated and deducted
    over its recovery period. The Internal Revenue Service had set out the
    depreciation schedule in the past.  After 1987, for property placed
    into service, the IRS has prescribed the method of depreciation. Horses
    that have been raised by the taxpayer cannot be depreciated if the
    related cost of breeding and raising the horses  have already been
    deducted.

    Racehorses over two years old and other horses over twelve years old
    are depreciable over three years. All other horses can be depreciated
    over seven years. There are certain circumstances were horses can be
    depreciated over longer periods of time, if an election is made.

    Under MACRS, the horse owner must determine (a) the tax basis (purchase
    price), and (b) whether the basis is recoverable over a three or seven
    year period of time. Once the recovery period is determined, the MACRS
    calculation is automatic. If the taxpayer doesn't depreciate he or she
    looses money, since the basis is lowered as if he had calculated his
    cost recovery. When the horse is sold the taxpayer realizes a greater
    profit, or a smaller loss.
    MACRS also generally uses a "half-year convention," Which begins
    depreciation on July 1. This extends the schedules by one year.
    As a reminder. "Do not change depreciation methods in mid-schedule when
    Congress changes the law. Keep depreciating your horse under the method
    in effect at the time your horse was placed into service."  The cost-
    recovery schedules that apply to a horse placed in service during the
    year are as follows.

                            PERCENT OF ORIGINAL COST
                       (*) Three year                     Seven Year
             First year placed in service     25.00%        10.71%
             Year Two                         37.50%        19.13%
             Year Three                       25.00%        15.03%
             Year Four                        12.50%        12.25%
             Year Five                                      12.25%
             Year Six                                       12.25%
             Year Seven                                     12.25%
             Year Eight                                      6.13%

    * For each horses over two years old & other horses over twelve years
      old.

    Example: Lets say a taxpayer bought (1) a broodmare, a stallion or
    share of a stallion, more than twelve years old or (2) a racehorse more
    than two years old for $12,000.00 and placed it in service in 1994, he
    would have $3000.00 of MACRS deductions for the first year.  (25.00% x
    $12,000.00)




    January 1st marks the traditional birthday of horses for the Internal



                                    Page 39






    Revenue Service. A horse more than two years old means twenty-four
    months and one day after its actual birthdate.

    Likewise, a horse is more than twelve years old when it is placed into
    service 144 months and one day after its actual birthdate.

    As stated before, "The period of depreciation starts after a horse is
    placed into service."

    As an example; If a race horse is retired from racing to breeding
    before the three year period, the write-off period must be changed from
    three to seven years and the balance of the basis is recovered over the
    extended period of time.

    A further complex calculation in the recovery schedules is the mid-
    quarter convention. If more than 40% of the cost of business property
    is placed into service during the last quarter of the tax year, all
    property during the year is subject to a reduced rate if depreciation.

    It is advisable to seek the advice of an accountant for the exact
    percentages.

    Exceptions: With international ownership, there are special rules that
    apply to horses or other property used predominantly outside the U.S.
    (physically located outside of the country more than 50% of the tax
    year). Again, it is wise to seek advice from an authority in dealing
    with the exact allowances.

    Mare in foal: There is a special problem that arises when the taxpayer
    purchases a mare in foal. Cases on this issue have been inconsistent.
    the question is whether to allocate a part of the purchase price to the
    foal or to depreciate the entire amount over the useful life of the
    mare. The foal would than have zero basis for tax purposes. When
    livestock are involved, the Internal Revenue Service requires that a
    portion of the purchase price be allocated to the unborn calves (when
    cattle are purchased carrying an embryo transplant). If this reasoning
    is applied to horses, part of the cost of the mare could be allocated
    to the foal.

    It is advisable to review the latest developments in state law.
    The allocation would affect depreciation, gains and losses.

    Cars, light trucks and tractors: These vehicles are depreciated over a
    five-year period. Maximum amount for automobiles for first year is
    $2,660.00 and the maximum the following year is $4,300.00, then
    $2,550.00 the third year and $1,575, each succeeding year.  This
    schedule equates to an automobile price of just under $13,000.00 using
    the present cost-recovery schedule. The Internal Revenue Service does
    not allow luxury cars to be used for tax purposes. Automobiles must be
    used more than 50% of the time for business purposes for any
    depreciation schedule to be allowed.
    similarly, farm equipment, machinery, fencing and single-purpose
    agricultural structures along with everything else except
    general-purpose farm buildings. Like horses, this property was
    reclassified under the Tax Reform Act into a seven-year class.




                                    Page 40






    Farm buildings placed in service after March 16, 1984 are depreciable
    over a fifteen year period using stright-line depreciation or 175
    percent times the stright-line rate.

    The real property placed in service after March 16, 1984 that would
    have otherwise qualified as fifteen-year property is treated as
    nineteen-year property. The percentage is determined by the month the
    property was placed into service. If a depreciable piece of property is
    not held for twelve months during the taxable year, the depreciation
    allowed is prorated.

    Barns and other nonresidential real property are depreciated over 31
    1/2 years at a straight-line basis. The big loser under MACRS was real
    estate.

    Even though the taxpayer has 31 years of tax write-off, this extended
    period greatly reduces the yearly advantage.

    Cost recovery schedules apply to both new and used property.

    For property covered by the Tax Reform Act, depreciation methods are
    prescribed for each MACRS class instead of providing statutory tables.
    The depreciation method generally applicable is the double declining
    balance method, roughly twice the straight-line rate.
    Real estate falls under the straight-line method.

    Under the straight-line method, the cost or other basis is deductible
    in equal annual amounts over the estimated useful life.

    Example: If the taxpayer had property that cost $1000.00, that taxpayer
    would be entitled to deduct $100.00 each year.

    In contrast, the double-declining balance method is greatest in the
    first year and smaller in each succeeding year. The basis is reduced by
    the amount of depreciation. This year, the rate is 150% or one and one-
    half times the straight-line rate.

                         Using Xpress for Depreciation
    The information provided should help you to utilize Xpress's
    depreciation schedule. If you are confused as to what deductions can be
    allowed and the extent of the total time as well as the percentage,
    consult an accountant for further help.

                                Adding a Record
    Adding a record to the Depreciation Schedule means appending
    information to an item that was added to Inventory. Before the this
    area can be utilized the item in question must already be a part of
    your inventory. Also a partial record of allotted time, item cost, and
    type of depreciation allowed must be pre-entered as part of the
    inventoried item. If you haven't done this, go back to Inventory, read
    or re-read the directions and record the item or items as needed.

    What we are doing by adding records to this area are adding individual
    years of depreciation. Select the item from those provided.

    Now if it isn't there and it was a part of inventory, you failed to



                                    Page 41






    check the box listing this item for depreciation.

    The item is chosen, the screen listing shows all the information
    previously entered in the inventory record. Look this information over
    carefully. If it is incorrect, use the <Esc> key to exit and make
    corrections in Inventory. Caution! We don't use the "Edit" function to
    do this. Choose to add a record. Select the item, press <Enter>.  Now
    make your corrections. Use the <F10> key twice to save and exit. The
    first time this key puts you into the next screen. Using it the second
    time saves the corrections.

    After you are satisfied with the information listed to the record.
    List the Life or Rate year. That's the sequence or numbered year of
    depreciation.  Like, if it's the first year, type "1" (omit the Hash
    marks) and so on. Use <Enter> or the <Tab> key to go to the next field.
    For "Year", type the numerical year,  like "1994".  Again, no hash
    marks.  Go on to Percentage. This can be tricky, so here is an example.
    For 5% list ".05". If it is 5¬% list ".0525" and so on. After this
    field is finished use the <Enter> or <Tab> key to move through the rest
    of the record.

    The field "Total Percentage used" calculates the additional entries and
    edits so that you know at all times the Allowable Depreciation left.
    Also "Depreciation" will display the dollar amount to list for that
    year.  After you have completed this record, <PgDn> to the next entry.

    Notice the field "Last Rate Year. The information displayed is the rate
    year and the year from the previous record.  This serves little purpose
    other than to help you list the proper information on the next record
    to prevent you from duplicating the last entry.  This displayed
    information is only available from the area were you add a record.  Not
    available from "Edit". The Total Percentage used is available from both
    area's, and makes an adjustment to reflect deletions and edits.

    When the schedule of depreciation for this item is completed, use the
    <F10> key to save the file and return to the menu. Select the next item
    from the "Add" function and repeat as necessary.

    When editing a record for depreciation, the percentage, year and Life
    or Rate year can be adjusted. The record can also be deleted.  The
    "Last Rate Year" listed when a record is added to the schedule will not
    be adjusted to reflect changes made while editing. So, as long as no
    changes are made to the last year or that year deleted, the information
    listed in this field will be accurate.

    Be sure to use the <F10> key to save changes to the records if they
    have had information altered.

                                      Log
    A very important part of your business is keeping an accurate record of
    activities that have to do with your business.

    You need to spend more than 500 hours per year in business activity. If
    the facts and circumstances show that you participated on a regular,
    substantial and continuous basis than it is possible to list less than
    500 hours. It is still important that you show more than 100 hours of



                                    Page 42






    activity in anyone particular business.

    If all the business activities are at a single location and or several
    businesses are similar and controlled by the same person they can be
    assumed as one undertaking. Now, if the businesses are those that are
    similar in nature they needn't be at the same location.

    This is known as "aggregation rule".

    Your log should be kept up-to-date and everything clearly labeled.

    Times for your log should be kept in increments of: .1 = 6 minutes, 1.0
    = i hour.

       Example: 1.4 hours = 1 hour 24 minutes. To arrive at the ".4" you
                must divide the 24 minutes by 6 (each 6 minutes = .1 tenth
                of an hour).  24 divided by 6 = 4, you times the 4 x .1 to
                = .4

                          Adding and Editing a Record
    Before you can add records to the Log file go to the Employee Directory
    and add your name to a record in that file.

    The Log file accesses this area. You choose a name, yours or an
    employee, to record the activity. Multiple dates and activities can be
    added for one individual by using the <PgDn> key to access an empty
    record. Save the information by using the <F10>.

    To add records for different individuals you must return to the
    previous menu and select ADD, then choose a different name from the
    Employee directory.

    Edits are made from the menu by choosing Edit, then the individual and
    the date. Records are deleted from this area also. A report can be
    generated from Reports in Accounts by choosing a name or names and a
    date range.

                                    Payroll
    Agricultural labor is no longer exempt from withholding. This includes
    breeding and raising horses for sale. Contact the Internal Revenue
    Service for the necessary forms and tables to file and the amounts for
    withholding. Check with the state and local municipalities for
    additional taxes.

                                Adding a Record
    Make sure an account has been established for your payroll records and
    there are sufficient funds in the account to balance your payroll. If
    an account hasn't been setup, do that before proceeding. After the
    account is added, use Accounts Payable to deposit funds to the account.
    Accounts Payable is the only area this can be done.

    Do you have all your employees records established in the Employee
    Directory? This is necessary before proceeding. Read the instructions
    for setting up the Employee Directory before continuing.

    Ready to use the payroll area? OK. Select "Add a Record".  Select an



                                    Page 43






    account to append your payroll records to. Nest is the screen for
    completing the payroll records. Familiarize yourself with the commands
    at the base of the screen. Now use the <F6> key to choose an employee.
    Notice the information from the employee's record was appended to this
    record.

    Choose the hours of work. If extra (overtime) hours were worked,
    include those in the next field "OT Hours". List the last day in the
    work week  where it ask for "Period Ending". If there were additional
    deductions listed in the employee record put a "Y" were the "N" is in
    front of Deductions. Don't worry about "Misc" and Employer FICA".
    That's calculated from entrees made in the employee's record.  If
    federal tax, state tax and FICA tax are to be deducted from the
    employee's check type over the "N" with a "Y". Next shown is the
    Account Year, this field is calculated from the computer date. If this
    is not the year desired, type over it.
    The "Pay Date" is that date you issue the payroll check to the
    employee. And last is the "Check #".

    Use the <Enter> key to complete the record and calculations.
    When finished you can use the <PgDn> hey to add a payroll record for
    another employee. Both dates should be appended to the next record. Go
    over the same procedure as before for the new record.
    When your finished use the <F10> key to save the record/s and return to
    the previous record.

                                 Edit a Record
    To edit a record, select the account, next the employee and date.
    All fields are open for editing except the employee's name. If changes
    are made to the record, the program will recalculate those changes that
    are numerical.

    If you choose to delete a record use the <F5> key, answer the questions
    than press <Enter>.

                                    NOTICE!
    INFORMATION IN THIS PROGRAM IS TAKEN FROM SOURCES BELIEVED TO BE
    ACCURATE. THIS INFORMATION IS PROVIDED WITH THE UNDERSTANDING THAT
    ZORKO ENTERPRISES IS NOT ENGAGED IN RENDERING LEGAL ADVICE, ACCOUNTING,
    OR OTHER PROFESSIONAL SERVICES. IF LEGAL OR OTHER EXPERT ASSISTANCE IS
    REQUIRED, THE SERVICES OF A PROFESSIONAL PERSON SHOULD BE SOUGHT.




                                  The End













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