The flight instructor reported the airplane was flown over a remote grassland area to perform a simulated engine failure with the student pilot. During the maneuver, the flight instructor commanded a go-around about 300 to 400 ft above ground level. The student pilot hesitated, he retracted the flaps without adding power, and the flight instructor took the flight controls to complete the go-around. When the flaps were retracted, the airplane’s stall warning horn activated. As the flight instructor attempted to recover from the possible aerodynamic stall situation, the main landing gear settled onto the ground and the left wing impacted a fence post. The left wing became separated from the fuselage, the airplane traveled through a fence, and it came to rest partially upright on a pasture. The flight instructor and student pilot were able to egress from the airplane without further incident. The airplane sustained substantial damage to both wings and the fuselage. The flight instructor reported there were no preimpact mechanical malfunctions or failures with the airframe or the engine that would have precluded normal operation. The flight instructor further reported that the accident could have been prevented by an improved briefing with the student on training procedures prior to the flight and utilizing a higher go-around altitude during the maneuver to maintain terrain clearance.