f i § f f s rv\ =s s. ^ SLS S.S a , Class, o b-£L(._ Book_.S_l/ (\)p)Tii}hfN" COl»»-KIGHT DEPOSrr. How to Keep Farm Accounts A practical book for the practical farmer By H. L. STEINER << TV 7 ELL, my Friend, thou art now just entering the last month of another year. If ^^ thou art a Man of Business, and of prudent Care, belike thou wilt now settle thy Accounts, to satisfy thyself whether thou hast gained or lost in the Year past, and how much of either, the better to regulate thy future Industry or thy common Expenses.** POOR RICHARD S ALMANACK Toledo, Ohio STEINER & CO. Publishers 1905 LiBH'^HY Jf VJriGKESS Iwo Copies rteCBivca JUL 17 1905 COPY a. Copyright 1905 By H. L. STEINER This book is dedicated to the every-day farmer— the "master-wheel" of prosperity PREFACE GREAT deal has been said about the need of a simple system r\ of accounts for the Farmstead— something possible on the average farm every day of the year— one relieved of useless detail, and still show its earnings and expenses— it's ow^ner's assets and liabilities. Taking the conditions which govern actual work on the farm into consideration, nothing specific has yet been published for the practical farmer, and it is for him this book has been written. It is elementary because many have had no opportunity to study bookkeeping, therefore the man who knows nothing about it has been kept in sight from cover to cover. The illustration given is introduced to show the application of the fundamental principles of accounting to the every-day routine of general farming. No special sets for stock, dairy or fruit farms is thought necessary because the principles of accounts are unchangeable and only vary in their application. All the farmer, dairyman, fruit-grower or stockman really needs is to fully understand the principles when no trouble will be experienced in arranging a system of accounts to suit his wants, which will vary to a certain extent on every farm and with each individual. Bookkeeping is simply a matter of record and to do it correctly only requires that the principles of debit and credit be understood. It is necessary on many farms and useful on all. The question ought not to be, shall I keep some simple set of books, but what form is the most practical? If this book will help you, its object will have been fulfilled. INDEX Account — Definition of 21 Accounts — Arrangement of 30 The Household 5 The Poultry 6 Personal > 24 Real 22 Representative 23 Usefulness of i Accounts with Persons From Whom We Buy Goods 204 Rules for Debit and Credit 205 to 209 At the End of the Year 210 Accounts with Persons to Whom We Sell Produce 197 Rules for Debit and Credit 198 to 202 At the End of the Year 203 Illustration of Plates 86 and 87 Advertising — 73 Annual Statement — (Illustrated) 224 April Cash Account — Example of Plates 8 and 9 Arrangement of Accounts 30 August Cash Account — Example of Plates 24 and 25 Balancing the Cash 51 .52, 66 Banking 95, 215 Reasons for 95 Uses of 95 Bank Account 211 Rules for Debit and Credit 211 to 213 At the End of the Year 214 Illustration of Plates 88 and 89 Bank Checks — How to Write 230. 231 Numbering of Same and Why 96 When Cancelled 96 Bank Note — Form of 245 Bills Payable 97- loi Bills Payable Account 136 Rules for Debit and Credit I37 to 139 At the End of the Year 140 Illustration of Plates 64 and 65 Bills Receivable ^^ 9 Bills Receivable Account 143 Rules for Debit and Credit 144 to 149 At the End of the Year 150 Illuslration of Plates 66 and 6"] Bookkeeping — Definition of 13 Books of Original Entry 17 Books of Record 3 Bran 99 Building and Improvements 74 Building and Improvement Account 129 Rules for Debit and Credit 130 to 134 At the End of the Year , 135 Business Paper — Filing of 8 Remarks on 226 to 237 Capital Stock Account — Its Equivalent on the Farm 117 Cash Book, The 20, 30 At the End of the Year 105^ Definition of 42 How to Balance 51, 66 Posting of 53 to 55 Rules for 42 Ruling of 43 Cash — On hand the first of the month 58 On hand the end of the month 51 When credited 42 When debited 42 When over 52 When short 52 Checks — As receipts 230 How to indorse 235 H|dw to write 230, 231 Nnmbering of same and why 96 Stopping payment of 236 When discrepancies exist 232 When you receive one not endorsed 226. 227 Classification of Accounts 30 Closing the Ledger at the End of the Year 104 Clover Seed 100 Commercial Paper — Forms of 228 to 245 Cost of Production 4 Corn — Rule to find Contents of Cribs 247 Rule for Measuring when on Cob 246 Shrinkage 248 Credit — Laws of 25 Day Book, The 19 Debit — Laws of 25 December Cash Account — Example of Plates 40 and 41 Depreciation — Of Buildings 129 Of Implements 36 Destroying Notes 141 Discount Account 191 Discounting Notes that have Endorsers 228 Discrepancies in Notes, Checks or Drafts 232 Double Entry Bookkeeping 15 10 Drafts — Time or Siglit 142 When Buying 229 When discrepancies exist 232 When you receive one not endorsed 226, 227 Due Bill — Form of 242 End of the Year 104, 105, 220 Errors in Trial Balance 57 Essentials of Farm Accounts 2 Essential Books of Record 16 Extra Help Employed on the Farm 50, 69 Expense Account 161 Rules for Debit and Credit 162 to 164 At the End of the Year 165 Illustration of Plates 70 and 71 Farm Accounts — Essentials of 2 Farmstead, The, Account 117 Rules for Debit and Credit 118 to 120 At the End of tbe Year 117 Illustration of Plates 62 and 63 Farm Help Account, The 117 Rules for Debit and Credit 178 to 180 At the End of the Year 181 Illustration of Plates 78 and 99 Farm Ledger, The 26 Index of 29 Ruling of 28 Size of 2^ 32 Farmer's Mutual Insurance 196 February Cash Account — Example of Plates 48 and 49 Feed Account, The 166 Rules for Debit and Credit 167 to 169 At the End of the Year 170 Illustration of Plates 72 and 73 Fertilizers 80 Filing o^ Business Papers 8 First Entry to Make When Books are Opened 44 First of the Year it Freight 84 Lost in Transit 67 Gestation Table 262 Grain — ^Rule for finding contents of bins 249 Shrinkage of 250 Hay — Exact measurement of 251 Rule for finding tons in windrow 252 Rule to find contents of mow 253 Rule for finding contents of stacks 254, 256, 257 Rule for finding tons in load 255 Rule for finding amout of hay or other products sold by the ton 258 Hogs 70 When taken for personal use 91 How to — Arrange or Classify Accounts in the Farm Ledger. .. 30 to 32 Balance the Cash Account 51, 52 Close the Ledger at the End of Year 220 to 225 11 How to — Enter an order received for Farm Products 48, 49 Enter an order you send for seed 59 Find amount of Hay in Load 255 Find amount of Hay in Windrow 252 Find amount of Hay in Mow 253 Find amount of Hay in Stacks 254, 256, 257 Find percentage of Loss or Gain 225 Find value of Products sold by the ton 258 Find interest at any rate for any time 261 Indorse a check 235 Make claim to R. R. Co., for shipment lost in transit 67 Make a check 230, 231 Open or Beg-in a Farm Ledger 37 to 46 Open or Begin a Cash Account 42 47 Open an Account with Bank 95, 214 Oipen and Close the Bills Payable Account 136 to 140 Open and Close the Bills Receivable Account 143 to 150 Open and Close the Building and Improvement Account 129 to 135 Open and Close the Expense Account 161 to 165 Open and Close the Farmstead or Capital Account 117 to 120 Open and Close the Farm Htelp Account 177 to 181 Open and Close the Feed Account 166 to 170 Open and Close the Implement Account 171 to 176 Open and Close the Interest Account 186 to 190 Open and Close the Labor Account 182 to 185 Open and Close the Production Account 155 to 160 Open and Close the Proprietor's Account 106 to 116 Open and Close the Taxes and Insurance Account 193 to 195 Open and Close an Account with Property other than the Farmstead 121 to 128 Open and Close Accounts with Persons to whom you sell Produce 197 to 203 Open and Close Accounts with Persons from whom you buy goods 204 to 210 Locate errors in the Trial Balance 57 Measure Corn in Crib 247 Measure Grain in Bins 249 Measure Wood 259 Post the Cash Book 53 to 55 Stop payment of a check 236 Take an inventory 7, 34 to36 Take a Trial Balance 56 Horse Shoeing 68 Household Accounts 5 Husking and Shredding 9° Implements — Depreciation of 3^ Repairs on 68 When bought 63, 69 Implement Account 17^ Rules of Debit and Credit 172 to 175 At the End of the Year 176 Illustration of Plates 74 and 75 Index 29 12 Insurance 196 Interest Tables 260, 261 Interest Account, The 186 Rules for Debit and Credit 187 to 189 At the End of the Year 190 Illustration of Plates 82 and 83 Inventory — Denfinition of 34 Examples of 35, 222 Importance of 7 Valuation of 36 January Cash Account — Example of Plates 44 and 45 Joint Note — Form of 244 Journal, The 19 Ju'ly Cash Account — Example of Plates 20 and 21 June Cash Account — Example of Plates 16 and 17 Keeping Separate Accounts with each product 4 With each field 4 Labor 62, 69 Labor Account 182 Rules for Debit and Credit 183, 184 At the End of the Year 185 Illustration of Plates 80 and 81 Lambs 89 Land . loi Laws of Debit and Credit 25 Ledger, The . 18 Index for 29 Ruling of 28 Size of 27, 32 To close at the End of Year 104 Liabilities 221, 224 Statement of Z7^ 39 Linseed Meal 78 Live Stock — Records 31 On hand at beginning of the year 34 Bought during the year 157 Sold during the year 155 Record of Mating and Dates of Birth 31 Locating Errors in a Trial Balance. . . , 57 Loss and Gain Account 216 Rules for Debit and Credit 217, 218 Illustration of Plates 90 and 91 Lost Shipments — How to Collect 6"] Lumber 103 March Cash Account. Example of Plates 52 and 53 Mating and Date of Birth of Live Stock 31 May Cash Account, Example of Plates 12 and 13 Measures and Weights — Tables of 263 Measurement of Corn 246 to 248 Of Grain 249, 250 Of Hay 251 to 257 Of Wood 259 Men — Hired by the Year 62. 104, 105 Middlings 60, 166. 168 13 Money Taken for Personal Use 6 76 83 Money Orders — Express 49 Post-Office 49 Mortgages 97, loi Nails 78 Net Gain or Loss — To Find 224 Net Worth 40, 223, 224 Notes — Forms of 233, 238 to 245 Having Endorsers 228 How Debited and Credited 154 Paid, When Secured by Mortgage 141 Waiving Protest 228 When Given 136 When Paid 136, 234 When Partial Payments Have Been Made 151 When Renewed 152 When Discounted 153, 192 When Discrepancies Exist 232 When Endorsed Over to You 237 November Cash Account, Example of Plates 36 and 37 Oats '7C 167, 168 October Cash Account, Example of Plates 32 and 33 Opening Entries When Books Are Begun 44 to 4? Orders for Farm Products, How to Enter 48, 49 Original Entry, The Books of 17 Partnership . . 107, 108 Percentage of Loss or Gain, To Find 225 Personal Accounts 24 Posting 53, 54 Order of 55 Potatoes 87 Taken for Personal Use 88 Poultry Accounts 6 Present Worth 116 Principles and Definitions of Accounts 12 to 25 Private Accounts 108 Production Account 155 Rules for Debit and Credit 156 to 159 At the End of the Year 160 Illustration of Plates 68 and 69 Products of the Farm — ^When Sold 155 When Taken for Personal Use 88 When Sold on Time 197 When given to help on account 179 Promissory Notes — Forms of 243 Proprietor's Account 104, 106 to 108 Rules for Debit and Credit 109 to 115 At the end of the Year 116 Illustration of Plates 60 and 61 Railroads — Claims Against 67 Real Accounts 22 Real Estate Accounts 121 Rules for Debit and Credit 122 to 127 At the end of the Year 128 Receipts — Forms of 239, 241 14 Receipt — To apply on account 239 In full of account 240 For payment on note 241 Record of Live Stock 31 Red Ink in the Ledger 10 Rent 126 Repairs of Implements 68 Representative Accounts 23 Resources 221, 224 Resources — Statement of Z7- 3^ Rules of Debit and Credit 47 Rules Useful When Taking- the Farm Inventory 246 to 259 Ruling of Cash Book 43 Of Ledger 28 Sales of Farm Products 48 Salt 60 Scales , 74 Seed — Entry of When Buying 59, 81 . 85 September Cash Account — Example of Plates 26 and 2'j Shipments Lost in Transit 67 Shoeing 68 Shredding Fodder 90 Single Entry Bookkeeping 14 Sight Drafts 142 Size of Ledger 25, 32 Statement of Resources and Liabilities 37 Stallion Services 64 Stationery 61 Stock Register 31 Sundry Labor 69 Tables of Weights and Measures 263 Taxes and Insurance Account 193 Rules for Debit and Credit 194 At the End of the Year 195 Illustration of Plates 84 and 85 Threshing yy Tile 102 Time Drafts 142 Timothy Seed 85 To find what you have made or lost 223 to 225 Transactions that occur when you are not at home 9 Transferring an Account to a new page or a new Ledger 140 Trial Balance 54. 56, 65 To locate errors in 57 Usefulness of Accounts on the Farm i Waiving Protest on Notes you discount that have endorsers 228 "Wear and Tear" of Implements 36 Weights and Measures 263 What You Must Know Before You Begin or Open Your Books 40 Wheat 79 Shrinkage of 250 When Ought the Farmer Open his Ledger ii Wood — 'Measurement of 259 Wool— When Sold 68, 158 Yearly Statement 223, 224 15 Part One '^ I would not impose on a busy farmer the keeping of an elaborate set of hooks, but some simple form of accounts vnll be a great aid in successful farming ." James Wilson, Secretary of Agriculture. FOREWORD 1. The farmer who works all day under a blazing sun, nat- urally looks upon the keeping of accounts from' a different view- point than other men in business for themselves. For besides the long hours, rush-of-work and scarcity of help during the busy days from seedtime till harvest, he has the natural aversion to writing and detail common to all who do active physical labor. There- fore, it's not a matter of surprise when we think of the conditions under which the American farmer must labor, that, although he has over twenty billions of dollars invested in his business, he usually leaves the accounting of it for later consideration, with the result that a record is seldom, if ever attempted of his farm- stead's earnings and expenses. Admitting the value of bookkeeping on the farm!, the first question that comes to the mind of the practical farmer is: "What is the best way to keep my accounts." 2. THE ESSENTIALS OF FARM ACCOUNTS.— In farm accounting there are two essentials which ought always be kept in mind. These are accuracy and simplicity. That all bookkeej)- ing must be accurate goes without saying, and that farm accounts should be simple and free from detail is apparent to any one at all familiar with actual every-day farm conditions. 3. THE BOOKS OF EECORD.— The uses of modern com- merce dem^and that the books of record suit the business in which they are used. In the great mercantile and industrial organiza- tions, it is often economy of time to have niany books of record but not so on the farm. Here, the less detail and fewer books of record the better, hence, the method described and illustrated in the following pages makes use of but one book. HOJV TO KEEP FARM ACCOUNTS. It's a common saying that no two men keep their books alike. But the difference if any, comes from the individual, his business and the details necessary to be shown. The matter that goes into the Farm Ledger will depend on the farmer himself. It will be much or little as he may decide. However, let him beware lest his books begun in the flood tide of enthusiasm, when work is slack and evenings long, be not too full of unimportant detail. They are then almost sure to be neglected when the busy days come later on. It is much better to begin a simple account and keep it accurately than to attempt too much. Think of your busiest days, not those in which you have the least to do. 4. THE COST OP PRODUCTION.— Notwithstanding the farmstead with its full complement of live-stock, implements and buildings can be likened to a "plant" of the manufacturer, and al- though the farm is a factory to all intents and purposes, it is questionable whether the practice of cost or departmental ac- counting is practical on the average farm. On this point there may be a difference of opinion, but on the average farm one who would attempt to keep an accurate account with either fields, crops or kinds of stock would have his hands so full during the busy season, that, nine times out of ten, the accounts would be neglected and thought too troublesome to continue. For this rea- son, most farmers should treat their accounts with the farm as a whole — rather than to open an account with each field, with their hogs, their sheep, their cattle, etc. It is true that accurate cost- accounting is a necessity in the factory. The manufacturer must know what it costs to make and put his products on the market, but is it so all-important to the farmer? In nearly every rotation there are certain crops necessary to keep up the farm fertility that can't be accurately set down in figures. The results from the farmstead as a whole, eventually, is of the most importance. And the practical farmer, if he cares to know, can take his pencil, and come as near as is necessary to figuring the cost of growing an acre of corn, or what his cattle or sheep net him. Therefore, don't draw the lines so fine in actual practice that your resolve to keep ac- counts will have died "a bornin;" but remiember, that the cost of production of farm products depends so much on the elements 22 HOIV TO KEEP FARM ACCOUNTS. over which you have no control, and that the details are so many if you would have them accurate, that it is altogether best not to attempt it. It is true, you have seen every now and then in the agricultural press, articles regarding the cost of producing a pound of pork, beef or mutton, and what it costs to grow the dif- ferent grains and grasses. Now, however useful the exact cost may be, the farmer or stockman who would attempt to keep such an account with each crop, and the different kinds of live-stock he would raise, will find it all but an impossible task. Manufactur- ers who deal only with dead things can easily keep exact cost accounts, but living and growing things possess an individuality that varies with the season, with the feeder, and depend on con- ditions w^hich do not admit of hard and fast rules. Recently in The Breeder's Gazette, the author of a standard work on "Feed- ing'' had this to say concerning it: "Feeding has been frequently referred to as a science but it is far from being an exact science. It is still in the empirical state of experimentaion. No other voca- tion of man more thoroughly illustrates the aphorism that a little learning is a dangerous thing. As the result of a single experi- ment we find formulas laid down with all the dictum of authority, and the great army of feeders commanded to "about face," and the very next experiment under similar conditions gives opposite re- sults. Do you know that after fifteen years, during w^hich the Government has expended |225,000 as a minimum, it is impossible to tell the cost in corn of a pound of pork? "The more I learn the mpre I know I don't know." For practical purposes, a "Production" account showing the gross sales less the items which go to make up the general expense of the farmstead as shown by the Loss and Gain account in the illustration herein (Plates 90 and 91) will be all that is needed. Much more satisfaction and real benefit will be found in a simple set of accounts accurately kept, than to attemp one b\i.rdensome with detail, and then at the end of the year find it to be of no value whatever. Far better to keep an account with the farmstead as a whole than to begin the detail of departmental accounting. The one is perfectly reasonable, and requires but little time. The other impractical and impossible to all but the very, very few on the average farm. 23 HOW TO KEEP FARM ACCOUNTS. 5. THE HOUSEHOLD A(XOUNTS.— Now, about the Household Accounts. Are there any reasons why they should be included in the farm ledger? Have you ever known a banker, merchant or manufacturer to include them in the books of his business? Couldn't he, with as much reason for so doing, include them in his books as you in yours? Some argue, that on the farm the household expenses are so closely related to the farmstead's earnings that they must be included. Very true as far as it goes, but they have no place in the farm ledger. Elaborate accounts have been shown in which the "Garden Account" was charged for all labor, seed and other expenses and credited with the dif- ferent vegetables used from time to time at the market price. Do not do this nor allow any more detail to creep into your books of record than will be of use to you. If you think about this a little you will not want to. As for "Garden" or household accounts, re- member that when you hire a man by the year for a certain sum, you allow him in addition to the amount agreed on — pasture for cow and a garden or truck patch. You figure his labor worth the wages you pay him plus the pasture and use of the small plot of ground for his garden. And this is the best plan for yourself too. The live-stock, implements and buildings are a part of the farm- stead's equipment. These, together with the farm, enable you to produce a profit from your labor and management. And for this the farm owes you something each year. You may never have figured on this but if you are going to begin an account with your farm, you should open a "Personal" account and charge yourself with all money you take from its earnings for personal or house- hold use. At the end of the year you should charge the "Labor" account for whatever amount you think you've earned, making your wages large enough to fully meet all expenses for clothing, groc- eries, church, education, relaxation and all other necessaries to which your family is entitled. Whatever you decide that you and your family can get along with — charge to your "Personal" ac- count and keep the detail of household accounts out of the farm ledger. If you do this, the same as any other business man would do, your bookkeeping will be much more simple and satisfactory in every way. 24 HOW TO KEEP FARM ACCOUNTS. 6. THE POULTRY ACCOUNT.— On most farms, unless Poultry is made a specialty, the proceeds is considered the wife's to do with as she sees fit. Sometimes she trades the eggs out at the "store" for different little things needed round about the house, and sometimes she takes the cash, but, generally, whatever is de- rived from this source is considered hers to do with as she pleases. For that reason Poultry is not included in the inventory of the illustration given in the following pages. But if the owner of a farm decides to have an account with "Poultry" he should include it in his inventory, in which case he would have to credit the "Production" account with all proceeds from the poultry — that is treat it as he would his hogs, sheep or cattle. 7. THE INVENTORY.— What has been said about it being necessary to include the Poultry in the inventory, if it is decided to have an account with it represented in the ledger, brings to mind the importance of the inventory. If you have read Prof. Henry's "Feeds and Feeding" you know how much importance he places on the old maxim that "The eye of the master fattens his cattle." Now, in accounting never forget the importance of the inventory. An inventory is the first thing to take before any books can be opened, and it is the first thing to take before they can be closed. It is one of the most important steps in accounting, but even as important as it is, so many business men neglect it, leaving it to subordinates who do not fully realize how vital it is to the success of the business, that fully 95 per cent, of the failures in business can be traced directly to this carelessness or ignorance. By all means take your inventory yourself and carefully. Get ready for it so that when the day comes you can take it without trouble or guess work. Remember that everything should be in- cluded in the Inventory that is used in the maintainance of your farmstead or to increase its products. And further, that the value of each implement, all live-stock, feed and products on hand at the time it is taken should be honestly set down. Make the values just what you could get in the open market for all except the im- plements, and on these deduct a certain percentage each year for "wear and tear" from the prices paid. Some manufacturers de- duct ten per cent., but generally this is too much for farm machin- 25 HOW TO KEEP FARM ACCOUNTS. ery that has bad good care. It often happens that the old 3'OU have will do as good or better work than the newer. You see it depends altogether on the "eye of the master," for ' '//inder $ 100.00 One Weeder 12.00 One Corn Harvester 100.00 One Corn Planter 27. co One ('.rain Hrill 75-0O $ 200. OO' One Mower . 40.00 T.ess 5% for one year's depre- One Calioon Seeder 3.00 ciation 10.00 One 'J\'(I(ler 22.00 One Corn v^lieller . 5.00 $190.00 One Hay Rake 20. 00 One 1 lay & v'^lock Raek 12.00 Two vSets Jiarness at $36.00 72.00 RECAPITULATION. One Set Ivigiit Harness 20.00 Also .-Xxc-s, Forks, Log Chains, Production $1398-45 'Iliree Horse Kvcners, Wheel- ^'^^^ 25.86 barrow, and other miscellan- I nii)U-nH'nts 739-0O eons tools about the place.... 10. OO — $7,^2.00 Total $2163.31 36. lN\'i<:NT()KV N'ALIIATION.— A.H wc liavo already stal- ductiou. The owner u\ust of c(Uirse decide for himself what the de])recialiou amounts to. 37. STATEMENT OF KESOIUCKS AXi) LIAIULITIES.— l'\)\ now has his inventory taken, lie knows what he has on his faiiti and (hat if sold today it would amount to 12,103.31. However, before he can be^iu his books he nnist know not only this; but the exact auu)unl of evei'vthinii; else he owns, what he owes and also what is owinji" him. The easiest way to do this, is to make a state- ment of his Kesourccs (what he has) aud Liabilities (what he owes. To ,u«'t at this, his farui known as"('lovermea(r' consistinji; of 120 acres cost him fSO.OO an acre. He still owes on it |2.000.00 which is in four notes of |r)00.00 each. ])ayable annually with inten\st at per ceut. These notes are secured by Mortiiaui', and are held by 46 HOW TO KEEP FARM ACCOUNTS. a local bank — the First National. He has also |41*i.00 <'ash on hand and a note of |7().00 in his favor which is due July 15, 1001. 38. Ttomizinf]^ tho above, he places under "Itesources" (1) the cash value of his farm. (2) Production (see inventory) which represents his live-stock and the products of his farm on hand at this tim'e. (3) Implements (see inventory). (4) "Feed" (see in- ventory) and by "Feed" he means what he has had to buy — not that which he has «;rown. (5) Bills Receivable (notes owinj^ him) and (()) the Cash he has on hand. These items are all "Hesources" because if necessary he could sell them for lh(? amount set aside each and thus realize that much cash for them — hence, a resource. 39. Under "Liabilities," he places liills Payable (notes he owes). To better understand this, let us set down these items and amounts under their respective heads, so that it will be perfectly clear. RESOURCES. LIABILITIES. (i) Clovermead Farm (2) Production (Inventory) (3) Implements (Inventory) $ 9600 1398 739 00 45 00 Bills Payable owes) Net Worth (Notes he $ 2000 10246 00 3r (4) Feed (Inventory) 25 86 (5) Bill Receivable (Notes owing him 70 00 (6) Cash (Money on hand) 413 00 $12246 31 $12246 31 40. Now, in lookinj^ at the statement above you will see one item under "Liabilities" about which nothing' luis yet been said. It is Net Worth, and is simply this: — Fox's total Resources amount to $12,246.31. Takino- from it the total amount of his debts (|2,000.00) tliere remains the difference of 110,240.31, or his Net Worth. The forejijoing is what Fox must know before he can open his Ledj^cr. It is what you nnist also kn(»w before you can open an account with your farmstead intelli«;ently. 41. Fox mmst next make the opening entries in his book of record and as he is a practical farmer, he wants his accounts to 47 HOW TO KEEP FARM ACCOUNTS. he as simple as cau be and yet be accurate. With this in view, he decides to have as few accounts in his Ledger as possible — to use but one book of record — settinj^j aside the first six pages for the inventory, the next forty-eight pages for the Cash account for the year, and the balance of the book for his accounts in the Ledger proper. But before any accounts or entries can be made in the Ledger, they must appear on the Caslt Book and the 43. CASH BOOK in its original form wns simply the cash account. It was debited for the cash received and credited for all cash paid out — the diiference between the debit and credit sides showing exact amount of cash on hand. But on the farm the Cash Book must answer for a Day Book or Journal as well, and all transactions appear in it. As explained before, in double- entry bookkeeping all accounts have two sides — a debit and a credit. The left-hand side is the debit side and the right-hand is always the credit side. Itemember, then, that he following rules are absolute for the Cash Book. LEFT-HAND OR DEBIT SIDE. On this side enter all cash you re- RIGHT-HAND OR CREDIT SIDE. On this side enter all cash you pay out. 43. Now the sides of the blank book that you are going to use as a Farm Ledger, are ruled exactly alike and you will see by referring to the example below that the first column is for the date, the second for the page of the Ledger to which the entry must be posted. The third is for explanation in which you should write a complete history of the transaction at the time it takes place. This should always be writen out fully so that if at any time later a question arise as to the validity of an account, the details given in this column will remove all doubt as to what it was, when it took place, etc. The Dollars and Cents column at the extreme right of each page are those in which you set down the amount of the transaction. The correct ruling for a Farm Ledger is shown below, which note: THIS THIS THIS THE EXPLANATION COLUMN DOLLARS CCNTS FOR SPACE THE FOR DATE LCDCCR PACK Fox is now ready to make his first entry and the 48 HOIV TO KBBP FARM ACCOUNTS. 44. FIRST ENTRY is to give the owner (Fox) credit for his investment. This is always the first entry when the books are opened. We find his investment as follows: The statement of his Resources and Liabilities shows his net worth to be $10,246.31 of which 1413.00 is in cash (money on hand). By deducting his cask on hand from his Net Worth we have |9,833.31 which repre- sents the net cash value of his Farm, Production, Feed, Imple- ments and Bills Receivable. Therefore, we credit J. Fox (or the owner) by entering on the debit side of the Cash Book |9,833.31j the net cash value of his investment and the |413.00 cash on hand (Refer to Plate 8, item da). Also turn to paragraph 112. 45. THE SECOND ENTRY is to credit Bills Payable for 12,000.00, the amount of notes Fox is owing to the First National Bank. (Refer to Plate 8, item db.) Also refer to paragraph 138. You are wondering why we Credit Fox and Bills Payable, when we enter the«e items on the debit side of the Cash Book. The reason is this: The Cash Book is the cash account. We charge (debit) it for all cash we receive and credit it for all we pay out. But the Cash Book on the farm must take the place of the Journal and when we open (begin) the books, we must of course credit Fox (the owner) for the amount of money he has invested. He now has |9,833.31 in land, live-stock, implements and |413.00 in cash, all of which he is using in his business of farming. He must open an account in the Ledger that will represent his interest in his business. Hence, he must be credited for the amount in- vested and the cash he is using. 46. WE NEXT DEBIT the following accounts with the amount of each as shown by the inventory. Clovermead Farm (Plate 9, item ca. and refer to 118), Production (Plate 9, item cb. and refer to 156), Implements (Plate 9, item cc. and refer to 172), Feed (Plate 9, item cd. and refer to 167), Bills Receivable (Plate 9, item ce. and refer to 144). These items are those that Fox has his money invested in. And as we have previously learned that there must be a debit for every credit, we debit each for the amount invested, because we have given Fox credit for them. If they 49 HOW TO KEEP FARM ACCOUNTS. have been entered correctly the Cash Book should now balance as follows: CREDIT SIDE. DEBIT SIDE. Clovermead Farm Production (Inventory) Implements (Inventory) Feed (Inventory) Bills Receivable Balance $ 9600 1398 739 25 70 413 00 45 00 86 00 00 J. Fox — Investment J. Fox — Cash Bills Payable $ 9833 31 41300 2000 00 ( $12246 31 $12246131 47. Now that Fox has his books begun, somebody or some- thing must be debited for everything brought on the farm, and somebody or something credited for all that is sold or taken from jthe farm. By doing this he will know at any time the exact ■amount of cash he has on hand and the true condition of every account he has in the Ledger. NOTE: — For ready reference each entry on the Debit side of all ac- counts in both Cash Book and Ledger is indicated by the letter "d" and foUoiv each other in alphabetical order, thus: The entry giving Fox credit for his investment is Plate 8, item da., and that of Bills Payable is Plate 8,' item db. The entries on the Credit side are indicated by using the letter "C" to designate the credit side as Clovermead Farm : Plate 0, item ca. .Production, Plate p, item cb., etc., etc. 50 Part Five THE CASH BOOK V HOW TO KEEP FARM ACCOUNTS. c/L a/M//'7o/C^ (^^f / da / (ol iJ^^ax J^W^^feft/" <^f33.3l ( ^y {2^ ^/3.0o /o-^^C^/ db / ^S /^/m (^..,J^py ^^n^ ?i^// /^.^wr "^Qoo on ' _ noT} ^/^//,cf(. j^ y^/o^ .foo°^ // /, „ Vx/o3 rSoa^ // ,, ///^o^ ^oo°- // /y /> /V^-T ffoo"- i^fCf^AJL/. 6h, '^CO^ifCUig OT^x^ ^iztyyT^h/ . Mh^fcyu-a^ (^ "/o ^ dc r ^^ /yt/fr^LA^cti (/y^ /S'^ f7HJ^^7>\y /^-(9n^ iA^ /s oo / / ^ ^//^ Or^^r/mj? ^r^^J 6^7^ — ' V dd a ^q /^^u^ffTK. /:i (hi. czfi^i^cr^^m^ ^4^ {p- /J?.oo / 1^ ^//o ^2^r^^^T^A^//'/m^^i^iiJ^c^. J L/ ^ Co^tS^t^J^ > df A /Z:Zq3 ^/ __ TRANSACTIONS FOR APRIL, 1901. Having opened the Cash Book by entering the items shown in his statement of Resources and Liabilities in the preceding chapter, the transactions comimon to the rotation practiced by Fox follows. APRIL 8. He received a money-order of $15.00 from Wm. George, of Troy, Ohio, for 15 bushels of Seed Corn. Freight C. H & D. R. R. 48. It isn't practical to open accounts with each individual who may buy seed or other products from the farm, so Fox credits all sales to Production, and will open an account in the Ledger under that head. Refer to Plate 8, item dc, and note that full particulars of the transaction are given. This entry should be made immediately after the order is received. Then when he fills and ships it, he checks it, thus: 4-10, as shown on the plate. Note that the date the order is received is in first column, and the full explanation in third column, with the amount in the dollars and cents column. The figures 69 in second column is the Ledger 52 HOW TO KEEP FARM ACCOUNTS. ^ C^^^ /^o/ ^^^^ ^ cb ^ GC cd ce / / ^-y &r A£ I> g;^»^<;\y .^ <^V9ty/7££^t4^-/'yjZ^ J^J'Ct^ a^c ocoo /^^f ^" 13 '^oo j^a. C6, Z&r^y^ry^. -^Mtrz^ 7U^ 2^ oo V/S-f/^ac. Mr'^CA^ ^?l/Mjt^a4^ ^ 'T'n cf y^^' fo ~Z^^ZII^S^^^^^^^^2M- /^'90 *cg 3o /^ ^J'a^t^.-<:^^>^ ^:^ oo Z ^ z Z •ch :z z \L. /Z3^1^ 3/ page to which the entry is posted, and in this book, will mean the number of the Plate. In actual bookkeeping this second column of the Cash Book is used for the Ledger page. APRIL 9. J. Green, of Huntington, Ind., wants I2 bushels of Seed Corn shipped by Wabash freight and encloses a draft for $12.00 to pay for it. 49. This transaction — item', dd — is the same as item do which immediately precedes it. Fox must debit Cash for all money received whether it is in currency, post-office or express money orders, drafts or checks. Always mention in what form it is received. APRIL 25. He pays Ed. Wise $15.00 for 12 days labor at $1.25. 50. To open an account with each person one would have NOTE: — A Star * when found before an entry on either Cash Book or Ledger (see plate above item * eg) indicates that such entry should be ■made in red ink. For reason ivhy refer to paragraph 10. 53 HOW TO KEEP FARM ACCOUNTS. to have as extra help on the farm involves too much detail, so Fox changes "Labor" for the amount of this transaction, because he wants to know what he pays for help during the year, and there- fore, must open an account for "Labor" in the Ledger to which all money paid for help should be charged. Refer to Plate 9, item cf. Refer to 183. APRIL 30. He balances his cash account for April and finds $425.00 on hand. 51. It is now the end of the month and he balances his cash. Balancing the cash is simply footing the two sides of the account and the difference between them should be exactly what you have on hand. The difference for April, Pox finds is |425.00, which is the amount he has on hand. He now closes the account for April by writing in red ink: — the date, the word Balance, and the amount |425.00 on the credit side — see item; eg. He then rules the closing lines in red ink and writes between them in black ink the totals |12,273.31. (See Plate 8 and 9, item df and ch.) 52. WHEN CASH IS OVER OR SHORT.— Every one makes mistakes and should one occur, such as an error in making change or in paying an account and omitting to charge it, and you cannot find it after exhausting every effort, the Cash Book can be made to balance as follows: If your cash is over — having more than you should as shown by the Cash Book, credit this difference to the Production account by writing on the debit side of the Cash Book "Production — Cash Over" which makes it balance. If short — if you have less cash than you should have according to the Cash Book, charge it to yourself, writing on the credit side of the Cash Book, "J. Fox — Cash short" for the amount of difference. In case you locate the eiTor later, debit or credit the difference to the proper account and debit or credit yourself or Production as it may have been entered at the time you could not locate the error. 53. POSTING THE CASH BOOK.— Every entry appearing in the Cash Book must be posted or transferred to some account in the Ledger. The second column is used to enter the page of 54 HOW TO KEEP FARM ACCOUNTS. tlie Ledger to which the entry is transferred. On Plate 8, item da, you will note the Ledger page is 01. Turn to Plate 61, item da, and study the entry, Observe that in posting, items entered on the debit side of the Cash Book are entered on the credit side of the Ledger. The page of the Cash Book from which the entr-y is post- ed, is put in the fourth column of the Ledger. Refer to item db which is posted to Plate 65, items dc and dd are posted to Plate 69. Follow these entries from the time the transaction occurs until they are completed, ie; posted to their proper accounts in the Ledger. The entries on the credit side of the Cash Book are all posted to the debit side of the Ledger. Fox has opened accounts with Clovermead Farm, Production, Implements, Feed, Bills Receivable and Labor. Refer to each item and compare the entry on Cash Book with Ledger entry. You will note the entries are complete in the Cash Book. They need not be so full in the Ledger. The examples given show all that is necessary. 54. The Cash Book must be posted at the end of the month, if it has not been before, and a trial balance taken. This must be done at the end of every month. We take it to see that the books are in balance — that the entries in the Cash Book have been posted correctly. 55. NOTE: — In posting observe the following order: (1) the amount, (2) the date, (3) the page of the Cash Book from which the item is transferred. Before you begin to post your Cash Book write in the second column, the pages of the Ledger to which the entries are to be posted. Then check each item as soon as you have posted it. It's a good plan to finish posting the debit side before you begin on the credit side — you're not so liable to post the entries to tlie wrong side of the account. 56. TRIAL BALANCE.— Now comes the trial balance. Fox has gone through the month and still he doesn't know whether his books "balance" or not. A trial balance is taken once a month to see if all entries were made correctly, that is, if the debit side of the Ledger equals the credit. No set of books or system of ac- 55 HOW TO KEEP FARM ACCOUNTS. counts is worth anything to any business unless there is some check on them that will prove their correctness. That is why a trial balance is necessary, and as accuracy is the first essential in accounts, Fox takes a trial balance, and this is what he finds. Dr. TRIAL BALANCE, APRIL, 1901. Cr. CB Cash $ 425 00 Plate 61 J. Fox $10246 31 Plate 62 66 68 72 74 Clovermead Rills Rec'vable Production Feed Implements 9600 70 1371 25 739 DO 00 45 86 00 65 Bills Payable 2000 00 80 Labor IS 00 $12246 31 $12246 31 His Ledger is in balance. That is the footings of the debit and credit sides equal each other. You will note he first enters on the debit side of the trial balance the amount of Cash on hand at the close of the last day of the month. Then taking the Ledger he goes through it, entering on the debit side of the trial balance all amounts found on the debit side of the Ledger, and on the credit side of the trial balance all amounts found on the credit side of the Ledger. This is always the case unless an account has entries on both the debit and credit side, and then, you find the dift'ereuce between the two sides. For instance, this month the debit side of the Production account (Plate GS) is |1,398.45 and the total of the credit side at this time is |27.00 (Plate 69). The dif- ference the two sides is |1,371.45 which he sets down in the ex- planation column on the debit side of the Ledger in pencil. This, then, is the amount taken in the trial balance. Remember, when an account has entries on both the debit and credit sides, to take the difference between the sums total, and the amount the greater exceeds the smaller is the amount carried to the trial balance. 57. TO LOCATE ERRORS IX A TRIAL BALANCE.— If the debit and credit sides of a trial balance do not exactly agree the books are not in balance and the difference, no matter how 56 HOJV TO KEEP FARM ACCOUNTS. small, must be found. If they don't agree proceed as follows: First. — The footing of the balance should be verified. Second. — From the first account in the Ledger until the last, the addition and subtraction of each account should be carefully gone over. Third. — Examine each entry and see whether or not a debit has been made for every credit, and for every credit a debit for a like amount. Fourth. — If any accounts have been balanced and carried for- ward to a new page, see if the amounts carrier are correct. Finally, if the difference still remains, nothing can be done except to go over the entire work for the month and continue to do so until the error is found, for be it known, the trial balance is simply a copy of the accounts in the Ledger, and if the entries have been made properly the footing of the debit and credit sides will be exactly alike. 57 HOW TO KEEP FARM ACCOUNTS. o(> Mu^/ /(^o/ ^2^ ^7t/^ da / /:3a/ayi<.^uiy ^XS'OO "~~ / / / / / / V db / y, ^z^ oo TRANSACTIONS FOR MAY, 1901. MAY I. Cash on hand $425.00. 58. The amount of cash on hand at the beginning of the month is entered in black ink as shown in Plate 12, item da. MAY 2. He sends J. M. Whiten, Wakeman, O., New York draft for $16.00 for 8 bu. White Mammoth potatoes for seed. The bank charges him 10 cents for draft. 59. Refer to Plate 13, item ca for the proper entry to make for this transaction. As to the reason for charging this to Ex- pense, refer to the matter relating to Expense which follows plate 70. Note that he includes the cost of the draft in the entry. MAY 3. He buys 2 ton Middlings at $22.00 and a barrel of salt $1.50. 60. See Plate 13, item cb. Fox wants to know how much Feed he buys during the year so he opens an account with it. That is also the reason he inventoried the Feed on hand which he had bought previous to April 1st. Read explanatory matter after Plate 72, regarding this account. MAY s. He has one thousand each of Envelopes ($2.50) and Letter Heads ($3.75) printed. 61. On every farm there are certain articles which have to 68 HOW TO KEEP FARM ACCOUNTS. cMf^ /J /^^. /f^/ U4X U^ ^ Q^ ^^"K^ni^PUL^ f/^ u{/iutS ?1^A4^uyy\ff^ -Z£^ r^H^^^^^tiz^ @-^^/^- a/>K "'a^lfp' ^ cb J> ^ -y ^^tcCti^ ^ ^fet^G //a; <^^/6 ' I //^ /^ / ' ^^ 7// ^f p/i^azUc^fZi^ /"/c^^ ^ dv >Ja //fj T-^cT ^ / a)J^'^o / / / / / / / / ^ de y M4- i'/ TRANSACTIONS FOR JUNE, 1901. JUNE I. Cash on hand '$300.15. 66. Immediately after the cash is balanced for the month you must enter amount on hand as shown by item da, Plate 16. This is done every time the cash is balanced — daily, weekly or monthly. If many transactions occur it is best to balance daily, or weekly at the latest, where but few take place, once a month will answer as shown in this illustration. JUNE 2. Wm. George, of Troy, Ohio, to whom Fox shipped Seed Corn on April loth, writes that it hasn't arrived — that it's now too late — he can't accept, and wants his money refunded. Although a shipper's responsibility ceases when goods are delivered to R. R. Co., he refunds the money ($15.00) and makes cleaim to the C, H. & D. R. R. for the amount lost plus the expense of draft. 67. Rather than antagonize a customer Fox decides to col- 62 HOJV TO KEEP FARM ACCOUNTS. {7Urn hho/^0//^, ^ 6e (y^a dcccf/^^m, . g<^t^g^ /^>- ^^'^^^^W;^ c^^^ CiTrM^/zo/or 'Q^i^r^rrZ/? tM^ {^^^r'^ai^jLy /^~<^. ^e^ 7d>^ cb 'y lo M H^AlJl^ X)>c ig^i>>^-/: ^ 7 -y IL (Ji^Yf^/^^ r^^ ^^x...^ ^&/ OyV rjy~^^ /S7o cd_/_ ^ 3 Go /^^'iO.in^ ^n^ 'T^ai-o-^^- ^. c^o ce ^--V d^d? c/!aJzr7- ^^it*tMi^ ^^^ /^° <^ - /^ Oo J^L/r^^ ^ ^^ '-^VYtd YStdMAO^fVCe JilUfU ^^^fUe/ cf :W A' s> 7T ^; ^6^. eg 'y^ u '<^U ^^r,^^^^^^^^ ^<7:? /^t^t^gyj/v^i^c^ *ch ^ 7^- ^r/ ^ 1 ^ 2^ y/ lect the amount of this shipment from; the R. R. Co., himself. First. — He has no account with George, so when he sends draft to George for the amount of loss, he must debit the account to which the sale was credited, to Production. (See Plate 17, itemca.) Second. — The draft costs 10 cents which he charges to Expense. (Plate 17, item cb.) Third. — Fox is now out the Seed Corn and the expense of draft; so he charges the C. H. & D. R. R. with |15.10, the amount he is short by the transaction. Plate 17, item cc.) Fourth. — In double entry there must be a debit for every credit, and having debited the C, H. & D. R. R. with |15.10, he must also credit Production for the same amount. (Plate 16, item db.) In making claims to Railroads they insist on the original Bill of Lading in total losses and both the Bill of Lading and Expense Bill (Freight receipt) where partial loss is sustained. To make claim for loss, such as described in transaction above, the foUow- 63 HOW TO KEEP FARM ACCOUNTS. ing is necessary: (1) Copy of Invoice to George. (3) Original Bill of Lading. (3) attach (1) and (2) to an invoice made out in name of R. R. These shonld be given to the local agent. But R. R'». move slowly in paying claims. After a reasonable length of time it is well to stir them up at intervals, and let them know you are looking after your end — are a business farmer and know what you're about. Refer to 197 and 199. JUNE 8 He sells his wool — 726 lbs., at i6c. Pays 60c for „re-setting" two shoes on Quten, and $3.00 for repairs on Mower. 68. First. — Fox doesn't want accounts opened with every thing he grows — too much detail. His sales are all entered to the credit of his Production account, hence, the Wool sold above is en- tered as shown on Plate 16, item dc. See 158. Second. — The inevitable Expense again. But his horses must be shod, and the Clover is coming on fast. The Mower is now ready. Both charged to Expense. (Plate 17, item cd.) See 161 and 163. JUNE 22. He pays John Dye and Sam Petit each $6.00 for four days' labor. 69. Labor, too, is quite an item and he wants to know how much it costs him for the year. All extra help he employs he charges to Labor account. For entry see Plate 17, item ce. Refer to 183. JUNE 24. He sells 20 Hogs, averaging 230 lbs. each, at $5.40 and pays his June taxes — $32.64. 70. First, — As everything Fox sells off the farm is credited to Production, the proceeds for the Hogs is credited to that ac- count. (Plate 16, item dd.) Second. — He opens an acount for Taxes and Insurance. (Plate 17, item cf. Refer to 193. JUNE 28. Ed. Wise draws $20.00 on account. 71. Although this item is for Labor, yet. Wise is hired by the year and wants to draw his money as he needs it. This neces- sitates opening an account with Wise, and all money drawn by him must be charged to him. (Plate 17, item eg.) Refer to 177 and 178. june 30. He balances his cash — $581.37. on hand. The cash on hand in $581.37 and as that agrees with the bal- ance shown by the Cash Book he rules the closing lines as he did in April. (See Plates 16 and 17, items de, ch and ci.) 64 HOW TO KEEP FARM ACCOUNTS. Dr. TRIAL B^ lLAI SICE, JUNE, 1901. Cr. CB ■Cash $ 581 37 Plate 61 J. Fox i $10246131 1 Plate 62 66 Clovermead Bills Rec'vable 9600 70 00 00 65 Bills Payable 1 2000|00 1 1 68 Production 1006 79 1 70 Expense 6605 72 Feed 73 36 " 74 Implements 754 00 " 78 Wise 20 00 8o Labor 1 27 00 1 " 84 Taxes 32I64 1 « 86 iC. H. & D. Ry. 15 10 1 1 1 I 1 1 1 1$I2246|3I 1 1$ 1 2246 31 Trial balance for June is shown above. 65 //O^F TO KEEP FARM ACCOUNTS. JIT XuL. /f^/ /^^ (^M^'-~<2jo . , V y da / /W^^U^tyl-x^-C-^ .^r/ ^1 db /cr ^7 /J/{'/'j/r'(/Cn\iPn c^ ^/n<^r(^^ /(o ^Lyyt>' ^J <^r^X ^^ /^^^ (g .^?~ >!■ dj£^7jl 6S~S-S. S a part of the farmstead's equipment as much as are fences or sheds. Rather than charge to Improvements and inventory them from year to year, Fox prefers, as they are a fixture, to charge them at once to Expense. (Plate 21, item cb.) Read 129. JULY 28. He buys loo bushels of Oats at 32c. 75. Fox doesn't grow any Oats. He buys them to feed and so charges to Feed as he wants to know how much he pays for it during the year. (Plate 21, item cc.) Refer to 168. JULY 31. 'Cash balance today shows $547.21 on hand. Refer to April, May and June closing of cash accounts. (Plate 21, item cd.) Dr. TRIAL BALANCE, JULY, 1901. Cr. CB Cash $ 547 21 Plate 61 J. Fox $10246 31 Plate 62 Clovermead 9600 00 " 65 Bills Payable 2000 00 68 Production 1006 79 " 83 Interest 4 20 70 Expense 142 41 72 74 Feed Implements 105 754 36 00 78 Wise 20 00 80 Labor 27 00 84 Taxes 32 64 86 C. H. & D. Ry 15 10 1 [$12250 51 ($12250 i£ 67 HOW TO KEEP FARM ACCOUNTS. If care is used when postino- the Cash Book and footing the different accounts in the Ledger no great trouble need be found in taking the Trial Balance. Note the Bills Receivable account doesn't appear in this month's balance. That was paid and as the account balanced, is now closed. 68 Transactions for August, 1901 HOW TO KEEP FARM ACCOUNTS. cJr l^tcuxxAyf^ /^^/ ^^dZ ^^ ^^ da / /^ayayyt.<.cy -^^7 2-t ■IMM / db J^ H (^^r?Ucc:^<>>r^ OOfu^ foo 6w(^fo^ ^¥-0 00 / ^^ ^^ ^^ ^^ > do ^ ), //fl >l TRANSACTION FOR AUGUST, 1901. AUGUST I. Cash on hand $547.21. Refer to previous months. (Plate 24, item da.) AUGUST 3. He gives Ed. Wise $10.00 on account. See Plate 25, item ea. Refer to 177 and 178. AUGUST IS The roads are good and he ha.s time, so he puts in the coal needed for winter — 10 tons, at $5.75. 76. All money drawn for personal use should be charged to Fox. He buys the coal, now that he can put it in for winter, and charges the amount it cost to his (Fox) personal acount. (Plate 25, item cb.) See 110. AUGUST 23. He pays Joe Morgan $24.00 for threshing 800 bushels Wheat, at 3c. 77. Fox charges his threshing bill to Expense because at the end of the year by keeping his Production account distinct it shows at the close just what he annual sales from the farmstead amounts to. (Plate 25, item cc.) Refer to 161 and 163. AUGUST 28. He buys 100 lbs. Linseed Meal at $27.00 a ton, and a Keg of Nails, at $2.70. 78. First. — He charges Linseed Meal to Feed. (Plate 25, item cd.) See 168. 70 HOIV TO KEEP FARM ACCOUNTS. Gid^a^f ^c Oo cb /^ ^o ^^0% 6^ /O^^ <^^^y focrirU (^(77u^ ^ ^ oo ^ (^^*^ Jce 97UrzfA2^yxy cy ^ cd 7^ 7^ ^&^ ry^^^TH/A/ /c^oU<^ (Py/'J''-^ / ^^ / I ce >-^ 7^ ^/t£4i^t /^/^^ O'kf^l/Cl^^ ^ 7" / / ^ *cf 3/ /<^U^UU<-^:^^ /^^/ (^C eg ^ //^7 ^( Second. — The nails to Expense.. (Plate 25, item ce.) Kefer to 162. AUGUST 30. He sells 800 bushels of Wheat at 80c. 79, All products sold — no nuatter wnat, he credits to Produc- tion. (Plate 24, item db.) Refer to 158. AUGUST 31. He balances his cash — $1,091.66 on hand. Refer to April and May closing. The entry, (Plate 25, item cf.) Dr. TRIAL BALANCE, AUGUST, 1901. Cr. CB Cash $ 1091 66 Plate 61 J. Fox $10188 81 Plate 62 Clovermead 9600 00 " 65 Bills Payable 2000 GO 68 Production 366 79 " 83 Interest 4 20 70 Expense 169 II 72 Feed 106 1 71 74 Implemaiits 1 754 00 78 Wise 30 00 80 Labor 27 00 84 Taxes 1 32 64 86 C. H. & D. Ry 15 10 I$r2i93 01 $12193 01 71 HOJV TO KEEP FARM ACCOUNTS. •— / ' ■' — ' 1 da / /^a/a^p^^^^ /^^/ ^c> / / / / / / / / / / / - ' db / /i /OCf f U t=i, TKANb^AOTIONS FOR SEPTEMBEK, IDOl. SEPTEMBER i. Cash on hand $1,091.66. For entry see Plate 28, item da. SEPTEMBER 5. He buys 2jX tons Fertilizer at $18.00. 80. Expense. (Plate 20, item ea.) See 162. SEPTEMBER 7. He sends draft to Geo. E. Scott, Mt. Pleasant. Ohio, for yjVi bushels Fultz wheat for seed at $1.00, F. O. B. Bank charges loc for draft. 81, This transaction charged to Expense. (Plate 29, item ca.) Refer to 155 and 162. SEPTEMBER 8. Two tons of Middlings cost $24.00 a ton. 83. Feed. (Plate 29. item ce.) Refer to IGS. 72 HOIV TO KEEP FARM ACCOUNTS. ^4. wr^ dMf^ny{Ur ^f^/ (^^ ca ci" lo f^c/i/^fuu^ v^eA/7-/AjOr ^'6-^(3>/f eb i 7- ^ oo ■^^t^-i^c^ 7;tJ^(///jL^:^:uY) ^!k^ 9^tcdX^U^^ ^-7^ ^. .S^ f V ^Oo jj^ov a, i^ oy^x^ cd lo. (po ^ ^0 Oo IL ^/u^pt^ut^ -Ve^/(> i?H^--<^^J7l/Aoty^ ZSL ;f O^d ^^ y/'?^ /^f/ SEPTEMBER lo. He gave his wife $20.00. 83. A personal matter with Fox, and charged to his person- al (J. Fox) account. (Plate 29, item cd.) Refer to 110. SEPTEMBER 18. Freight on Seed Wheat costs $2.56. 84. Expense. (Plate 29, item ce.) Refer to 155 and 1G2. SEPTEMBER 20. He buys 4 bushels of Timothy Seed of the Phillips Seed Co., Toledo, Ohio, for which he pays $8.00. 85. Expense. (Plate 29, item cf.) Refer to 155 and 162. SEPTEMBER 28. He pays John Betts $12.50 for ten days' labor. Labor. (Plate 29, item eg.) See 183. SEPTEMBER 30. His cash on hand amounts to $918.00. He balances his cash for the month. (Plate 29, item ch.) 73 HOW TO KEEP FARM ACCOUNTS. Dr. TRIAL BALANCE SEPTEMBER, 1901. Cr. CR Cash $ 91800 Plate 61 John Fox $ioi68|8i Plate 62 Clovermcad 060000 " 65 Bills Payable 2000 00 •• t>8 Production 366 79 " 8.^ Interest 4 20 ;o ]'2xpense 262 27 / - I'Ocd 15471 1 74 ImpltMiients 7541O0 7S Wise 3000 80 Labor 39 5® 84 Taxes 1 32164 86 C. IT. & D. Rv. 1 15 10 l$i2i73loi 1 $12173 01 The Trial Balance is ai?ain taken and is simply the fare of the Ledjrer. It shonld be taken every month. 74 Transactions for October, 1 90 1 HOIV TO KEEP FARM ACCOUNTS. c^ (jCAAf^/f^/ ^^ (y^z^S:i, da / dt> /s /c)a/ayyLXiJg^ ^ £i. (^riTT^AAxtA^r)^ (^Wa:/:^!^ /S'o6a ^^A' £Z l5^ O^rtrr^touctiin^ OcPk/a^ ^^ ^4^ ^ dd >^ £^ X^3 :^i^ de /Z^Ti -r^ TRANSACTIONS FOR OCTOBER, 1901. OCTOBER I. Cash on hand $918.00. Plate 32, item da. OCTOBER 3. He gives Ed. Wise $10.00 on account. Plate 33, item ca. Refer 178. OCTOBER 15. He sells 25 head of Hogs, which average 195 lbs, for $5.25. 86. Production. (Plate 32, item' db.) See 158. OCTOBER 20. He sells 150 bushels of Potatoes at 45c. 87. See Plate 32, item dc. See 158. OCTOBER 25. He takes 20 bushels of Potatoes for personal use, and also gives Ed. Wise 20 bushels, market price 45c. 88. Production should be credited for anything taken for personal use from what is raised on the farm. We credit Produc- tion, (Plate 32, item dd,) and debit both Fox and Wise for the number of bushels thev take. (See Plate 33, item cb aad cc.) Refer to 110 and 179. OCTOBER 30. He pays John Betts $1.25 a day for 15 days' labor. Labor. (Plate 33, item cd.) See 183. HOW TO KEEP FARM ACCOUNTS. ^f^^3 (Pefd^/e^ /^^/ c:^ (^k^^A c: ^ 7/ d^^l£_ <^^^2:ti^eO £2 OCTOBER 31. He balances his cash — $1206.13. Plate 33, item ce. Dr. TRIAL BALANCE, OCTOBER, 1901. Cr. CB Cash $ I206|i3 1 Plate 61 John Fox $10159 8r Plate 62 Clovermead 1 9600 1 00 1 '• 65 Bills Payable 2000 00 68 Production 31 91 83 Interest 4 20 70 Expense 262 27 72 Feed 154 71 •* 74 Implements 754 00 ' 78 Ed. Wise 49 00 80 Labor 58 25 84 Taxes 32 64 86 €. H. & D. Ry. 15 10 $12164 01 $1216401 HO IV TO KEEP FARM ACCOUNTS. <^ /Jc'Trn^.f'^ /^^/ ^^ '^?^^ da / ^i^^^^^- /^^(^ /S db /'r b(Y O^-rTT-r/^^^'A^r^ c^^a^n^^//-) d^, ^/s (If > <^ ^r/ ^'r^^U^-^.^^ -/^a ^Oa^ :^ >o//js (^.rS^ '/J-lc <^^^h^t^.<-:^i^, ^^^ /6oo ^ ^<^^ '^ dd ^. ;^ ■t^ ^ y^ O Oo /1^'^M.a.nu, t<>^/cr ^.^ c;;.^ ./^ ■^'■ V 121 Ct-fyr^i^ Cg- So CC Jl-o tfxr- '^a.^^^rr^ cZU'^uyc^ii^ /o ^^^^ cpSex:uU^ Ho/ C^:^^ ^a^^^ da / ^4/a.^t<^X^^<^^fe- '^^/^yC' ^ZU^P-J>/XS (^. ^J^ Sg<^^x^-^ (^7cro ch. 7^ ck £^^^ /6r-o ^r^2^ /- y^^ DECEMBER lo. He has some shoeing done, $4.75. Expense. (Plate 41, item ec.) Refer to 163. DECEMBER 15. He gives his wife $50.00 and takes $47.00 himself for personal use. 93. Ohapged to his personal account (Plate 41, item cd.) Re- fer to 110. DECEMBER 18. Ha buys 200 bushels of Oats, paying 30 cents. Renews his subscription to the Breeders Gazette, ($2.00) National Stockman, ($1.00) Ohio Farmer, (60c) Farm Journal (40c), Rural New Yorker ($1.00) Practical Farmer, (60c) and the American Sheep Breeder ($1.00) making a total of $6.60. He pays 12 cents for money-orders, and for postage stamps $2.00. 94. Oats charged to tlie Feed account (Plate 41, item ce). Subscriptions to farm papers he charges to Expense (Plate 41, item cf). The money-orders and stamps are also Expense, there- fore, he includes it in the same entry. Refer to 161 and 168. 81 HOW TO KEEP FARM ACCOUNTS. DECEMBER 20. He begins to think he ought to have a bank account. Doesn't like the idea of having so much money in the house, therefore, he opens an account with the First National of his County Seat by depositing $2,750.00. 95. Fox charges or debits the bank for the money he deposits today (Plate 41, item eg) and will open an account with the Bank in the Ledger. It is true that many take exception to keeping the bank account in the Ledger, and some accountants characterize it as "old fogyism" but the conditions which govern farm account- ing are different than those of commerce. The farmer will find it a great source of satisfaction to have it there — ready to refer to at any time. Pui-ther, when the bank returns him his cancelled checks, he can compare those cancelled with those given out and tell at a glance if any have not been presented for payment. But more than all, a farm Ledger should show for various reasons, every .business transaction of the farmstead for the year. It's more than likely the owner himself will keep the books — or rather book, and if death should suddenly ensue, the Ledger ought to be kept so as to furnish a guide to those of his family who take-up the management of the farmstead and continue it along prosperous lines. Refer to 212. DECEMBER 23. He gives Ed. Wise check for $50.00, and also writes another for $10.00 for personal use. 96, He debits Wise for check (Plate 41, item ch) and as this is the first check he has given out, he numbers it No, 1. He has now debited Wise, but as lie is going to open an account with the Bank in his ledger he must also credit the Bank for this check No. 1 which he does in Entry dd, Plate 40. In posting this entry dd to the Bank account (Kefer to Plate 89, item dd) he writes in the explanation column Ck. No. 1, so that when comparing tlit cancelled checks returned by the Bank about the first of the month he can check over the account and see just what checks have been presented for payment. On the stub of his check book he also writes the number so that he can number each check as he makes it without having to refer to the Ledger account to find the number of the last check. He also charges himself for Check No. 2 which he makes for 82 HOM^ TO KEEP FARM ACCOUNTS. personal use (Plate 41. item ci) and credits the Bank (Plate 40, item de for same.) Refer to 110 and 178. DECEMBER 31. Cash balance shows $43-99- Dr. TRIAL BALANCE, DECEMBER, igoi. Cr. CB 1 t Cash 1$ 43(99 Plate 61 J. Fox $10014 53 Plate 62 Clovermead 1 9600I00 1 " 65 Bills Payable 2000 00 70 Expense , 325174 " 69 Production 2029 30 72 Feed 364i7i 1 1 " 82 Interest 4 20 74 f 1 Implements 754loo I 78 Wise 13860 80 Labor 8325 84 Taxes 3264 86 C. H. & D. Ry. 15 10 " 88 First Nat. Bk. 2690 00 $14048 03 $14048 03 88 HOW TO KEEP FARM ACCOUNTS. r-^ j/^^^lMyu^^ /f^ -y ^^aZ ^^^^^ ^^ da / db :^^^ ^j ^ ^ J^Ua^ M/A^r ^/Tt^ ^>-c J^ /^-^ ^^^hJ' S^ cfooP ^X^ Tjt/i^X c:0^ '^^Ca^ / >0 dc />- ^ ^^2^ Ttcf /fh-^C e/:^^ SiD ^ dd__2-_ ^ (5//7<^/€/e _^^^ /^/o de ^ df /^ <^U^ Mf '^^^H^(' ^^v :^ ,Z>^ -?^^4^ Cash on hand $43.S)9. Plate 44, item da. TRANSACTION FOR JANUARY, 1902. JANUARY I. JANUARY 2. He pays his note of $500.00 due today, and interest on mortgage held by his bank. 97. First.— Debit Bills Payable. (Plate 45, item ca.) Refer to 137. Second. — Debit Interest for amount paid on mortgage. (Plate 45, item eb.) Refer to 187. Third. — Credit the Bank for check No. 3, covering the note due today and interest on mortgage. (Plate 44, item db.) Refer to 213. JANUARY 12. He draws $30.00 from the bank for expenses and attends the annual meeting of the State Board of Agriculture. Two Entries. Plate 45, item cc, and Plate 44, item dc. Refer to 110 and 213. JANUARY 22. The C, H. & D. sends him check of $15.10 for his claim made in June, 1901, for Seed Corn lost in transit. The C. H. & D. finally pay him for shipment lost the April previous and as he had opened an account with them, he now credits them. (Plate 44, item dd.) This is equivalent to "Ac- counts with persons to whom we sell "Produce." See 197. JANUARY 30. He pays his December 1901 Taxes, $32.64, by check, and deposits the check for $15.10 received from the C, H. & D. to his credit in the Bank. 98. Taxes debited to Taxes and Insurance (Plate 45, item 84 HOW TO KEEP FARM ACCOUNTS. Uf^ ^S jl^Uu^LM^^ /f^z (^^^k^^^^-'^'C^ ca -y ^^ \{%ZC^(ya^,U^ TT^ ^>7^> 'oF^ cf^i cb ?- f-y cc /> (^ O ^?^^.<^ ^ .-^^^^ "^ ^^y?! ^i>i^Tn^ /^ (^yc*^ .3t^ 2j2 cd ,^ ^ g^^-^o nP?t-M'uuiyH.r^ £-<^y^tYA, C/r'^s' ce^^_^ 6^W /^//^^i.^( X^^/g^ g^ ^>' <,Cy /rS~^0 "Cf ^ /O^yl ^v/ £^ :^ •g ^Z ed). Refer to 194. The C, H & D. check he deposits in the Bank to be credited to his account, therefore, he debits the Bank (Plate 45, item ce) for the amount of the check, $15.10. Refer to 212. He balances his cash — $43.95 JANUARY 31. on hand. Dr. TRIAL BALANCE, JANUARY , 1902. Cr. CB Cash $ 43 99 Plate 61 J. Fox % 9984 S3 Plate 62 Clovermead 1 9600 00 " 65 Bills Payable 1500 00 70 Expense ' 325 74 " 69 Production 2029 30 72 Feed 364 71 74 Implements 754 00 78 Wise 138 60 80 Labor 83 25 82 Interest 115 80 84 Taxes 65 28 88 First Nat. Bk.| 2022 46 $13513 83 $13513 ^ 85 HOW TO KBBP FARM ACCOUNTS. c^ c^i/n^.^i^^/f^z /^z (^£^^f da / /oia/^ ^<£^ db > dc Q_ <^^^<^ 7Pt/^^^^ f A^J- ■^o lo. o^ _^ 2^ h£\: 21- L^ ^^^^€^<^^^ yh- /fjyfv^ jciyi-'n^' Sr^ Z2. ^O a.<^i^ ^f:?,"^ . ^^^^y^a^f ^ ' ./^W 7i^/Ju.nA /V ic^c.t^-K^ J^ SV„ ^a^*i^( ^^tU^^-/^ /M^ ^T^^^c-^ /f^y ^^^i^^gy dZt^ /'A-T^ ff-^r'--^^^e^<^>^<,-t^^/i..0uC ii^-*-i,<^ c-futj^f^^-^a^ '^^"^^r, ' '^^^^f^ .{^^*^ ' ^-^ ' "^^"^ dg ^' dh ^ ^A.^u^ 7U/4^ti^hJC ^/cyo :f >S-o Jj££LZ^. TRANSACTIONS FOR FEBRUARY, 1902. FEBRUARY i. Cash on hand $43.99. FEBRUx\RY 2. He gives Ed. Wise check for $10.00. He has the shoes sharpened and reset on Jack and Jim for which he pays $1.40 in cash. First. — Wise charged with check (Plate 49, item ca). See 178. Second. — Bank credited for this check (Plate 48. item db). Refer to 213. Third. — Shoeing is Expense and paid in cash (Plate 48, item cb). Refer to 163. FEBRUARY 7. He buys a Bob Sled, $15.00, also buys a ton each of Bran, $21.00, and Middlings, $24.00, giving check for same. The Bank gives him his cancelled checks for January. 99. First. — Bob Sled charged to Implements (Plate 49, item cc). Refer to 173. Second. — Bran and Middlings charged to Feed (Plate 49, item cd). See 168. Third. — Bank is credited for both checks No. 7 and No. 8 — given in payment for the Bob Sled and the Feed (Plate 48, items dc and dd). See 213. 86 HOJV TO KEEP FARM ACCOUNTS. cJJmjui^^ -/^(P 'V ^ 'W?v. ca y- cc 7 cd n V- lAX. St t£,-<.'<^ <=K^C, /o ^ -2^ i^ ^ 7^ /^O Z2: ^ ^jc^.-^ /^a,-*^^ //fev -2./ £.' Vj- Oo MuOCiLp^. //^ >4^€_'' A C^^^yr^^^-<^0^ ^'/?^/o e^'Cs ql 2^ hs-- ciUJL L^ tTT'Xyt^f*^..''*^ . y^r2*i,r\. J^^jyl-^ui^ YiP ^^*~^ 33 i 7^, "^ty^^"^"'-^' (^/'x'^ ode eg ^' ^ ^ti^UL^ c2(?o^ ^J^i ^ J> :'^ J^/ALtU About Cancelled Checks, see remarks after Plates 88 and 89. FEBRUARY lo. 4J/2 bushels Clover Seed costs $6.50 a bushel. 100. First.— Expense (plate 49, item ce). Refer to 162. Second. — Credit the Bank for amount of check (Plate 48, item da). See 213. FEBRUARY 15. He has long wanted the 40 acres originally a part of Clovermead Farm, and buys it for $82.50 an acre. The First National Bank loans him the money at 5% on ten years' time, agreeing to accept payment of the whole or any part of principal on any interest day after five years. He secures the Bank by mortgage. 101. Charge Clovermead Farm with the amount of the mort- gage given to the Bank (Plate 49, item cf). Refer to 117 and ]19. Second. — Credit Bills Payable for the mortgage (Plate 48, item df). See 139. FEBRUARY 27. He pays for 2,000 four-inch tile at $12.50 a thousand. Check No. 10. 103. First.— Expense (Plate 49, item eg). See 161 and 162. Second. — Credit Bank for check No. 10 (Plate 48, item dg). Refer to 213. FEBRUARY 28. Cash balance amounts to $42.59. 87 HOW TO KEEP FARM ACCOUNTS. Dr. TRIAL BALANCE , FEBRUARY, 1902. Cr. CB Cash $ 42 59 Plate 61 1 J. Fox $ 9984 53 Pla te 62 Clovermead 12900 00 " 65 Bills Payable 4800 00 ' 70 Expense 381 39 " 69 Production 2029 30 < 72 Feed 409 71 74 Implements 769 1 00 ' 78 E. Wise 148 60 ' 80 Labor 83 25 ' 82 Interest 115 80 ■ ' 84 Taxes 65 28 ( 88 First Nat. Bk. 1898 21 1 I$i68i3 83 1 1 I$i68i3l83 Transactions for March, 1902 HOM/ TO KEEP FARM ACCOUNTS. cA /7ldA^X /f^> (J^ (^a^J'>- /S<^a, da ^ 'iZ^yt-c^ ^7^. :^ db -y ££_ <:^^^-i^ ^i^Pt/Z^x^^C Cfi^ :l. oo dc ^ /^ <^<^ , A yv ±_{^ dd >^ :fj r^^ X3 ^7 de_^y ^ ^^^;^ ; ^^^. /^^t^ ^^^g^oT^ .IZ dg <{^ / # >^ y ^^<^.^^^<^ jiL •^ Z.fc^ tf^iryt^^ !? <^ ^^^^ ^^ -y ca cb 7£ '^:^2^ o^a^ccyf^ cy(^// ^, X <^. .^^fex (J^uc^^-^Uy- t^zrif^o J^t:. ¥rc J^ 7A^/iey>u2je A^i90 /r^t/u^yyt^t^^^ /, /J 7- 7 cd ^/ .£^ ,,,/a!-^7rY ^f^<.^ue // Moa'^a4'^ ^'^^^ ^7^ ^ y^CPV (^^)Uy^jCjt^j f 6oo cf /^^^Z.<.<^j^ ^2- 5-^ ^^ =^ Fox, wishing to close his books, now credits Wise for the 11 months wages (Plate 52, item de) and also credits himself for what he thinks the farmstead should pay him (Plate 52, iteiu df). The amount credited to Wise (|2T5.00) and himself (|600.00) should now be debited to Labor, and this he does (Plate 53, item cd). Refer to 180 and 111, also 184. Dr. TRIAL BALANCE, MARCH, 1902. Cr. |CB Plate I 62 70 72 74 80 82 84 Cash Clovermead Expense Feed Implements Labor Interest Taxes First Nat. Bk $ 42I59 I 12900I00 I 408I39 I 409I71 I 769I00 I 958125 i 115I80 I 65I28 I 1846171 I$i75i5|73 Plate I 61 I I 65 ! 69 I " 1 79 J. Fox Bills Payable Production Ed. Wise $10580:03 I I 4800I00 I 2029I30 1 106I40 I$I75I5!73 105>4. The Cash Book now posted for the year, the Trial Balance is as given above. The books are in balance, and his cash on hand is |42.o9, which will be the first entry on his cash account for April, when he begins his new Ledger for the coming year. For further instructions on what to do at the end of the year, refer to the Chapter on "The End of the Year," which im- mediately folows the Ledger accounts. 91 Part Six THE LEDGER HOW TO KEEP FARM ACCOUNTS. ^Jr. y y c^;^ C<:^S^? <^^ ^& /^^/ ^:^y ^ Z£: zs- <^7 ^o A^/^ /^ ^^ ^ ^ ife T-J- (y^^ccfp-^^ J3 ^ Alo JL ho__ ^/ ^ J^ l>- O'r ^s 3. 9hMAy ^ // ^ ,r^ ^ .5^ ^/ ^ ■^7.>^aJ'^ ■^ /X-70S o /l.<9^a u. THE PKOPKIETORS ACC^OUNT. 106. This account represents the owners interest in the farm. It shows the amount of his investment in the beginning, the additional investments he makes and what he withdraws. It also shows at the time of closing how much he has gained or lost and his net capital or net insolvency. 107. This is true whether there be but one proprietor or sev- eral, but when two or more persons unite in conducting a busi- ness it is called a partnership. In cases of partnership, an ac- count is opened with each of the partners, and each of them credited for what he puts into the business and debited for what he withdraws. 108. Usually, if one proprietor, or several, two accounts are opened with each. One showing the investment and the other (private account) showing what he draws for personal use and his salary, if any. But for ordinary farm purposes two acounts' are not necessary-. In this set the proprietor's account includes his personal account as well, and at the end of the year, he is credited with the salary to which he thinks he is entitled and the net gain. If a partnership, each partner's account would be kept in the same manner — the division of the net gain or net loss 94 HOW TO KEEP FARM ACCOUNTS. (^/ ^/ )WH^ U^X ^ /^OJ 1 1=^ 1 ~~^ ^y / y%yialh^uWf^ ( ^^t^ruA^i^rx,) f /^Z^ 3/ /^oy ?h4i^ 3/ (iTirTn^cca OTLc^^a^^l^ o (li\ ided pro-rata or as agreed upon when the agreement or partner- ship was entered into. This account Is debited and credited as follows: DEBIT. CREDIT. 109. For all the capital he 112. For his net invest- withdraws from the business. ment at the beginning of busi- 110. For all cash he may ness which is found by deduct- draw or products he takes ing the sum total of his Liabil- from time to time, for his per- ities from the sum total of his sonal use. Resources. Ill, For his net loss as 113. P^or all additional in- shown by the Loss and Gain vestments. account at the end of the year. 114. For salary allowed, if any. 115. For his net gain as shown by the Loss and Gain account at the end of the year. TO CLOSE THIS ACCOUNT AT THE END OF THE YEAR, 116. After all the accounts in the Ledger showing losses and gains have been closed into the Loss and Gain account — debit 95 HOW TO KEEP FARM ACCOUNTS. or credit this account for the net loss or net gain, as shown by the Loss and Gain account. Now, find the difference between the two sides. If the credit side is the larj^er, write on the debit side in red ink ''To Balance" and the amount of the difference which will make the account balance. Then, rule the closing lines with red ink and enter in black ink the total amounts between them. After which, write on the credit side just below the closing linee in black ink the date beginning the new year, and the amount of the difference between the sides of the account which is the Present Worth. Refer to Plate 61 and 62 and you will see that the net gain of Fox is $2,123.57 which we credit to him, and then, to balance the account we write in red ink on the debit side the difference between the sides, i e: |12,703.60 and the words "To Balance." We then rule the closing lines and bring down on the credit side in black ink the date and the amount, |12,703.60 — which is hiSi. "Present Worth" at this time. 96 HOW TO KBBP FARM ACCOUNTS. c/jT U&r^A/^x^^ ^aA^f^ny o^^J^tTT^'y^ jm. jljiL vt;in''y>i.o^aip( J9uf^yiitcry^ S- ^^-t<^ C/ii^Ti't^-H^Kj~ i^ T J3i /^.^oo J.^a2: dfL K^ ^^A a.^t^L.c^c^ /2^ OS. THE FARMSTEAD. 117. This account is in some respects equivalent to the capital stock account of a corporation. The proprietors account represents the owner's interest in the business, and this, the busi- ness itself. The principal difference is, that this account continues to stand untouched from year to year unless we add more acreage to the farm or sell from it a part. Therefore, the farmstead ac- count should be debited and credited as follows: DEBIT. CREDIT. 118. At the beginning for 120. For what we sell what it costs us. from it. 119. For all additional land which we buy to include in its acreage. REAL ESTATE. 121. Perhaps you may own other farms beside the one you work, or it may be property in towm. You rent them and wanting to know what they pay you on the investment, you open an account with each. In such cases it is best to enter them by name, such as 98 HOW TO KEEP FARM ACCOUNTS. (Mat/ (^3 CJ^^Tna-fKc^ (^Wt^j^z/ C^ f^o% — * 'p\A^ ^1 Pu. dhun/i^^nny, ^ /T^oo oo ^^^^ ^„^^^ ^^^^ r ^^^^ ' /O^^oo Oo "Beechwood Farm" or the "Brown Property." Debit and credit as follows: DEBIT. CREDIT. 122. When books are open- 126. For all rentals. ed for value. 127. For the amount it 123. For all improve- brings if you sell it. ment. 124. For all taxes. 125. For all insurance. AT THE END OF THE YEAR. 128. To close; write on the credit side, in red ink, "By Inventory" for the amount of valuation. The amount the credit side exceeds the debit is the gain, and next, write on the debit side, in red ink, "To Loss and Gain" for aniount of the gain. Rule the closing lines and enter the totals between them. Next, write in black ink under the closing lines on the debit side "To In- ventory" and the amount of valuation. Carrying the amount of gain to the debit side of "Loss" "Gain" account, writing in black ink, "By Beechwood Farm" and amount gained. In case the debit side exceeds the credit it will be a loss, and in that case the entries are similar to those closing any account showing a loss as explained under the various accounts in the illustration. 99 :u HOW TO KEEP FARM ACCOUNTS. BUILDING AND IMPKOVEMENTS. 129. "The rule of law is, and for centuries has been, that whosoever owns land owns all there is above it and all there is below it. Naturally then, when buyiing or selling farms allj buildings and everything fairly belonging to them go with the farm. In general, whatever the owner of the farm fastens to the ground or to a building is a fixture and he sells it when he sells the farm." — Parson's Laws of Business. Therefore, after a farm is improved, having good fences, is well tiled, and with satisfactory buildings, the small annual ex- penditures to maintain the farmstead might as well be charged to "Expense" unless there is some specific reason for doing other- wise. But if your farm' is unimproved and a new house, barn, fences and tiling is needed or anticipated, an account should be opened for "Building and Improvements" and all money paid for such items should be charged to it. Then at the end of the year when the books are closed this account should be credited "By In- ventory" for the sum total of the debit side of the account, less a certain percentage, say ten, which should be charged to the "Loss and Gain" account each year for depreciation. By doing this the first cost of building and improvements, which, of course, will constantly depreciate, is distributed equally for a period of years. If Fox, in the illustration given herein, had had a '"Building and Improvements" account, the proper entry for the Stock Scales he bought July 22d (Plate 21. item cb) would have been to charge them to that account instead of "Expense," but as his farm is im- proved, it is better in such cases to call items a loss at once than to open an account on purpose for them. However, this is a matter of opinion, and the disposition of such items must be decided by the owner of the farm'. When you have a "Building and Improvements" account you should debit and credit as follows: 100 HOW TO KEEP FARM ACCOUNTS. DEBIT. CREDIT. 130. For the value of the 133. At the end of the buildings and improvements year "By Inventory" for the as shown by the inventory. sum total of the debit side less 131, For the cost of any a certain percentage, say ten, buildings or improvements we for annual depreciation. may build or put in during the 134. By Loss and Gain for year. the difference between the 132. For all repairs we sides. (See below.) have made on buildings. AT THE END OF THE YEAR. 135. To close this account: After having decided what per cent, of depreciation you are going to charge annually for "wear and tear" or having estimated their present value, write on the credit side in red ink "By Inventory" and the amount. Now find the difference between the sides, and the amount the debit exceeds the credit side will be a loss which enter on the credit side in red ink "By Loss and Gain" and the amount of difference which will make the account balance. Rule the closing lines and enter the totals between them in black ink. Next, write on the debit side below the closing lines, in black ink, "To Inventory" and bring down the amount credited when the account was closed. Now, carry the amount lost over to the "Loss and Gain" ac- count, writing on the debit side of that account in black ink "To Building and Improvements" for the amount lost. 101 HOW TO KBBP FARM ACCOUNTS. oJt /dM C^aM <^a^^^ /^oy ■"■ * ^M^ V %oT£ do>^ 'Ma-^ ■ — ~ ^J / c/0 ^Tt^AC^yot^T^^^ 2.0/^ 2-0 PRODUCTION. 155. As simplicity in the first essential in account keeping on the farm, after accuracy, it is necessary to lessen the number of accounts opened in the Ledger as far as practicable. The merchant credits his "Merchandise'' account for the amount of his sales, the manufacturer credits them to "Manufacturing." The farmer can be likened to the manufacturer because he is a pro- ducer and either grows or finishes the products of his farm. The most comprehensive title for his sales is "Production." It isn't a simple matter to keep an account with each field. Much guess- ing or weighing must be done to do this, and the details soon grow irksome with no practical results at the end of the year to show for the extra work required. In the end it all goes into the Pro- duction account anyway, so there's mighty little argument to present for separate accounts with the different products and kinds of stock. But the simplicity of crediting all sales to Production 106 HOW TO KBBP FARM ACCOUNTS. (Ma^Oi^ C^7yKXy(JZoff7x^ M£L al^iifXffTTu £(iL f. /j~.? #- r />- ^iMvu y <:^/ft^-^ ./jhx^ c^^oAj- Z4 /S'/o t IV^HfJ / Z4 //& ^c >l^ /C ^^^ ^ Jk^ -^ >^ (^^o dcv lA ^^^ J'v^ ^^f yi= >j- (yi^-^a^t-a-eo ^v 6-3 in: v^f^- /s- Oo Tio kl ^ oQyi^>v4<7' JC 63 i 63 >o //hy. I/O 3(^ J'^i 7^ ^ &n^7^ JC ^(^o Ak^ ^ ji^£. Yo 3aVy jL ^a ^ S^AS^ ^S- is clear to every one. (See paragraph 48 for further remarks re- lating to this subject.) In beginning,, all live-stock and products are charged to this account. At the end of the year it is credited with what is on hand, the difference between the two sides showing the sales for the year. Then this difference carried to the Loss and Gain ac- count is opposite the items showing the expenses of operating the farm and the difference between them shows the net results of the gain or loss of the farmstead's management for the year. This is the practical side of farm accounting, therefore, we debit and credit the Production account as follows: DEBIT. CREDIT. 156. In the beginning for 158. For everything sold all grain, hay and live-stock of we raise on the farm. every kind we have on hand 159. For all live-stock sold at the market price of each. either grown or bought to feed 157. For all live-stock we and fatten. buy during the year. 107 HOW TO KBBP FARM ACCOUNTS. AT THE END OF THE YEAK. 160. To close this account: We write on tlie credit side, in red ink, the amount of all stock and produce we have on hand as shown bj the inventory. Then find the difference between the two sides, and the amount the credit side exceeds the debit will be the gain or amount of sales for the year. Next write on the debit side, in red ink, "To Loss and Gain" for amount gained or difference between the sides which makes the account balance. Now, rule the closing lines and enter the total amounts be- tween them, after which write on the debit side below the closing lines, the date, "To Inventory" and the amount of the inventory all in black ink. (See Plates 68 and 69 as an example.) After closing the account as above, the amount gained (in the example given |4,043.50) is carried to the credit side of the Loss and Gain account (See Plate 91) writing on the credit side of that account, in black ink, "By Production" and the amount gained. 108 HOW TO KEEP FARM ACCOUNTS. ^ 'U4UU M 01 M^t jl S ih*n^ Mh- A '^:ij2. 2^ X Xo 2iv ys ^ idHifCyf^o^tatd^ K^/ta^A j^tM /JTHfi- eV/fX/H-iiAAjL^ ^^L.^OlHA^>(-'(2AyT^ ^(Uolt^ ^kAjta-'^ccy}^^ (^^^^7. /3 /3 /3 ^ :iZ 2U. >X /& >S H^c 3 LLiL &s 2± /o /o >/ ^IoaJLi >y ^ Afu- s ^jf/g-AiU^ JUv U ^Joo p- A^WTrnt-.u- H 3 Go 11. ^^AjL(y.U- ^ ^ >s:^ -yo Ji^7-Kiy0u^ ^^h-'^t^ 2^ ££o ^no^ ^3 ^^Ucdytt^ r^^^iAjL^afj. jLY^ % S~o Mc l± LL <2yn..^?~C<^.-r^-^ C7H4^L^Al^ ^/ if^: £.Z ^ £>V ^jjt V ^^0-^i-»t-^ ^ / ^ /o (^/nVlAy ch^L^ ^ i:^U.. n ^ ^ AT^ 2lLi^ ^o oUCyyp^-^O-i^r- oTcJ :i" >■ ^OF EXPENSE. 161, No business can be conducted without some expense, and in keeping the farmstead up to the highest plane of its earn- ing capacity there are numerous items which must be charged to this account during the year. As a general rule all items are a loss which go into general improvements or that cannot be in- ventoried at the end of the year, and should be charged to this ac- count, therefore, we debit and credit it as follows: 110 HOW TO KBBP FARM ACCOUNTS. ^^^/ ^filyHM C^ /^ov ''Pm Bl /2^/e(%^ t^/aMr\. ^a ^^ M2L ^ypmif^. j^L '^rr^ 4- 2:lLtL Md4. A 7?vi<^^/i^<^ rdk/4^ AL ^' ro M, 2L 2LL 3 >o j2iu 7^ >J' /.9S c/i /iM F 'T^tc^c^fx/yi^ li^ 2± ^A t^o jW. /J- (E^r^y ^ yj^c ^JU^ Jl. 6UiL -4^/ ^ /jQy AL T^t^^/^i^-^ T'/^-ynyt^^ ^c %■ ^S 'c ^O ^u /<:^o-y ^ c7a ^p7U^-€y**Xj/t-r^ '^ to FEED. 166. This could be included in the Expense account, but as most stockmen and farmers will want to know bow much thej pay out for feed during the year it is best that an account be opened with it. DEBIT. CREDIT- 167. For all feed on hand at the commencement as ►shown by the inventory. 168. For all that we buy during the year. 169. For any feed we sell which had been previously charged to this account. 114 HOW TO KEEP FARM ACCOUNTS. (M V J^^ ^ Mo> 1 ""* /%fj/ 3/ d^ ^HVS5fC^^7V 7¥/o\ * ., ^/ ^ ^^Sa^ r-^^MA^t^ fo JJ^ ^/ ^ ^ ^ ^ ^ ^ L \¥o^ 1' AT THE END OF THE YEAR. 170. To close this account at the end of the year, write oh the credit side, in red ink, "By Inventory" for the value of the feed we have on hand. Find the difference between the two sides and write on the credit side, in red ink, "By Loss and Gain*' for that difference, which will make the account balance. Rule the closing- lines and write between them in black ink the totals. Next bring down the amount of inventory in black ink on the debit side, writing the date and "To Inventory." Then enter on the debit side of the "Loss and Gain" account "To Feed" for the amount of I^ss on this account. (See Plates 72 and 73 and refer to Plate 90. 115 HOW TO KEEP FARM ACCOUNTS. ^^y%^mm.g.^HyC^ (^Z^7^ /^ai ^?2t(^^'nyG~rlyf ^ / ^ ^^ oo -^ Jo C^jir<:^/U£^ c^^^u-iityio;^^ 7^^i-^>^^yrU /d. /S'oc M oy JU X /aH!c<^^ ^c t ;f^ /Ct4 i^ */^ CO^/ ?7u/<€Ai^(in^^ 'Jtw^ ^ ^ 'A 31. z;^/.^?^ r-^. ''yiX.^^,^ ^ J^C. 2k^ AT THE END OF THE YEAR 176. To close this account at the end of the year: Same as the Feed account which immediately precedes this. See plates 74 and 75 and compare amount carried forward to Loss and Gain, Plate 90. 117 HOW TO KEEP FARM ACCOUNTS. Jr ddyA fyU!^ TTyr Ml ^ / 7^ >2 0££, >jr /o a<2 S3 A2.2a !£. (yk^fiLtaii^ J3 ^22 JU^ £_ ^ f^ d^ ^. ;^aA -^3 ^^ ^<=>2. J$c AL -J- ^ -K ^ x«? »c» /^ 7^ (^(S^ »£2 -^O <7 ^/ ^ /of^iJL.^^^ /gC ^ is ^<» FARM HELP. 177. It isn't necessary to open an account with the dif- ferent men employed on the farm by the day. That should be charged to the Labor Account. But if we hire a man or men by the year then a separate account should be opened for each and all money paid to them from time to time charged direct to them, and the wages allowed each credited to them at the end of the year. The example of the Wise account (Plates 78 and 79) show how an account should be kept when we hire a man by the year. Accounts of this nature are debited and cred- ited as follows: DEBIT. CREDIT. 178. For the amounts we 180. At the end of the pay him from time to time. year for amount of wages 179. For all farm products agreed on. taken in lieu of cash on ac- count during the year. 118 HOW TO KEEP FARM ACCOUNTS. (^d^^^ ' ^x.^^^:^ (^ ' / . - - /^o-y 7^u^ 3/ y^^^^^ // 79z^?'?a^ -O >1S Oo ' f y y / / y^ / f y - %n^ oo /^o\- v^ — i — / /^6./ /^ifJk-f-^^je ^-^ /oG ^ AT THE END OP THE YEAR. 181. To close, find the difference between the two sides and enter on the debit side, in red ink, "To Balance" and the amount which will make the account balance. Now, rule the closing lines, enter the totals between them and bring down in black ink the amount of the difference, entering it on the credit side "By Balance" which is the amount due or to his credit at the end of the year. (See Plates 78 and 79.) 119 HOW TO KEEP FARM ACCOUNTS. ^^ /f^/ rjUZ^A j^ '/Cd^ ^ /cT? J^ -h-y ^^^tZ4< V^^. / />- Qa IL ^M /y^ r-Q Jc ^3 /^ 2£ Pkr^i^. d^i^ r-r^l^i^^ a ^ T^S" 90 y^o-y 2^il. Cy^^^^K-^A^^ J3 . ^ ^^( 2:: /> V7 » nf ' AT 66hhf-^ >y^^ >-\ rMr.J^ ~lZ>w>^ ^ (^t^gj^^ ^yC€^^i^i^-Ut^ ^ y ci^>^V- ^y-i W ^<^:. ir TAXES AND INSURANCE. 193. It is a matter of gratification to know what our Taxes and Insurance amount to for the year. All we pay out for either should be charged to this account. DEBIT. 194. For all we pay for In- smrance or Taxes. CREDIT. AT THE END OF THE YEAR. 195. To close, write in red ink, on the credit side the date, '*By Loss and Gain" and the amount necessary to make the ac count balance. Then rule the closing lines and enter between them in black ink the totals of each side. (See Plates 84 and 85.) Then carry the amount to the Loss and Gain account, entering it on the debit side of that account as shown (Plate 90). 196. INSURANCE. — Every farmer and stockman is vitally interested in Insurance that really insures. And very fortunate it is, too, that there is insurance, in such form as to keep him in direct touch with it, and his interests mutual with his fellowB. Of late, it is almost an impossibility to insure farm property in some states in good Stock Companies, but the Farmei^'s Mutual 124 HOW TO KBBP FARM ACCOUNTS. tm^fJ ^^^j^ t^7'2ac?' C^^jL-^^-^ j22k^^ ^ (^s-.is' (^,K Cos. are really safer and much more desirable in every respect, then, too, the cost is less. Of the 109 Mutual Companies writ ing insurance in Ohio in 1899, twenty-five of them made no as- sessments and eight had no losses! The average saving of the Mutuals in comparison with the Stock Companies has averaged 33 cents on every .fl.OO of insurance written on the three year- term plan. This is a consideration worth taking advantage of for "it's the little leaks in business that eat up the profits," and it's the little things on the farm that tend to increase them. No really good business man neglects to insure, and no farmer can afford to carTy the risk of fire himself. Every intelligent farmer understands this and should encourage his county o»^ ganization. If there was one-half the unity of purpose and well- directed effort on the part of the farmers, as a whole, as there is among other business men, much that they now desire and should have would be their's. Stand by your organization and don't be afraid, as the Rural New Yorker says, -"'To use the poet- age stamp on your representatives and Congressmen to have laws passed and enforced which will help you, and those repealed that are not favorable to the best interests of agriculture." 125 HOW TO KEEP FARM ACCOUNTS. ^ ^C^^^^Qg (^a^rc MOL CKt^ti^ ^4^ /^^-t^ /^A^C C^^t^j^r^ /^O/ /Jlo -yo fi^jL^/L^-Xi^^ ^ XfS-o oo /^a-y^ / J^< J^ // ^J- /S'/o / / / / / / / / / / ■ / ^ >'jCs- /o /fe>> ■ M / (yv /daAk-H..J > ^c _/££ M:^ 3 ^^ ^ 0^ O •77 /7- >=/ 'r^^ 3<=> i^ J~ ^<^ S^ 6i£ ^ 72U2L // ->-o JL. ^ /■y- J^ ^o -P^o /3 > 3/ /^ ^<^^^- /f'^C 7^ 2-76 214. To balance, proceed exactly as you would with an account with a person to whom you sell on credit as explained under "Accounts With Persons to Whom We Sell Produce" for the principles are the same in both. 215. BANKS — Banks are a convenience the business farmer can't afford to ignore. They are, for him, safe places for the keeping of money, securities and other valuable paper. The pay- ment of his bills, too, is more convenient by check than with cur- rency, and the checks when returned by the bank are valuable as. receipts. Banks sometimes become insolvent, it is true, but there are safe and conservative banks in every county seat, or perhaps in a town still nearer to you. Select your banker as you would a friend. Be frank with him and never test his generosity by allowing your check to be presented for a larger sum than your balance. If you do this your relations will be pleasant, and if in need of money to move a crop or carry the cattle, sheeD and hogs you are feeding to a finish, you can secure it from him at reasonable rates, providing, of course, you have proven yourself to be a man of character and business ability. Then, too, there are many 129 HOW TO KEEP FARM ACCOUNTS. "don'ts" in business, and if you have selected your banker, as you should, he is the man to go to for advice if in doubt about any business transaction. Assuming that you have a bank account, and that you have left your bank book with them, as you do once a month to have it "writteu-up" when it is returned to you the balance shown by it should agree with the balance shown by the account you keep with the bank in your Ledger or check book unless some of the checks you have given out haven't been pre- sented for payment. When your book is handed to you with the checks presented for payment during the month, stamped paid, compare these cancelled checks with those you've made, and you will know just what checks are still out. This is where the im- portance of numbering each check is found and Avliy it is best to have a bank account in the Ledger intended for farm use. 130 HOW TO KEEP FARM ACCOUNTS. Jr ^P'^i^f^ Arzkc-^ ^^^^^"^^ m^ ^^^-^"^^/a 99UA. 3/ JA^.^^ Xl _f^^ -^ c^^-^.^^ . ^ J SJ-^/ .^ ^^<^!/^^x^''^^-^>t^g->^.^?^ 2^ >y ^^ ^c d±. .^^L:dl frrr- '^J^^ >^ ^^ ^^^^y^^^^jC^f^^-cz^/- h3 //J~^o .^ .-^^A^ t79?7^^ ^^- A^ZJ. .i^ ^ ^Y -J' 2-/7^3 J~n ^o^A3 ro LOSS AND GAIN. 216. This account is kept to show the final summin<>- up of all our losses and gains for the year and is debited and credited as follows: Debit. 217. At the end of the year for all the accounts upon w^hich we have lost during the year. Credit. 218. At the end of the year for all accounts upon which we have gained during the year. AT THE END OF THE YEAR. 219. To close: Find the difference between the two sides. If the debit side be the larger the amount it exceeds the debit is the net gain for the year. If the debit side is the larger, the amount it exceeds the credit side is the net loss for the year. Re- ferring to the examine (Plates 90 and 91), the credit is the larger, so we enter the amount it exceeds the debit side, in red ink, on the debit side, the date, and "To J. Fox," after which rule the closing lines and enter between them, in black ink, the total foot- ings. The amount the credit side exceeds the debit is the net gain of Fox for the year, and after this account is closed, we carry this amount of |2,123.57 to the credit side of the J. Fox account. Then to find his present worth, proceed as explained under the head of "Proprietor's Account" and illustrated by Plate GO and 61. 132 HOW TO KEEP FARM ACCOUNTS. /7^, ^ ^/ a/ ^^-g^<^^^r^UyPry <^^ /f<;v — ' 7P^ ^ ^ ^O^^^i^^c.-c^:^^t<>^. ^f ^a¥3 S^ ^ "^ ^ ^ ^ /> ^^ __ ^ ^o^ ^ AT THE END OF THE YEAR. 220. At the end of the year, when your Ledger is in bal- ance, and you want to close it to ascertain what you have made oi lost, proceed as follows: L^rst. — Take an inventory of all Live-stock, Products, Imple- ments, Feed, and Real Estate you have on hand at that time. Second. — Close all accounts in the Ledger upon which losses or gains have been made, as instructed under each. Third. — Having carried all accounts upon which losses or gains were made into the Loss and Gain account, we close thai account as instructed. (Refer to Loss and Gain Account.) 221. It is well to remember, in this connection, that when we close the Ledger at the end of the year, nothing is left in it but those acounts showing either a Resource or a Liability, and that nothing must be carried to the Loss and Gain account but those accounts upon which we have lost or gained. To help you decide what are Losses or Gains and what are Resources or Lia- bilities, bear in mind that if the debit side of an account is the larger it is always either a Resource or a Loss. That when the credit side of an account is the larger it is always either a Liability or a Gain. As the Resources and Liabilities are not carried to the Loss and Gain account, we must pass them by and do nothing with them. But if the debit side be the greater, and a loss, then balance the account and carry the loss to the debit side of the Loss and Gain account. If the credit side of any account be the larger, and 133 HOW ro KEEP FARM ACCOUNTS. a gain, balance the account and carry the amount of the gain to the credit side of the Loss and Gain account. When the Ledger is closed at the end of the year, there must be no open accounts in it, except those which show a Resource or a Liability, and this is also true when the Ledger is opened. But before the Ledger can be closed, an inventory must be taken, and the one taken by Fox, March 31, 1902, to illustrate the principles of farm, accounting, as shown in the example given herein fol- lows. Note that the totals of the Production, Feed and Im,ple- ments on hand are credited to each, as shown on Plates 68, 73 and 75. Full instructions follow each account as to what you are to do after the inventory has been taken and credited to each of the accounts affected. 134 HOW TO KEEP FARM ACCOUNTS. 222. 31, 1902. INVENTOEY OF CLOYERMEAD FARM, MARCH PRODUCTION. Bay Team Jack and Jim $ i6o oo Bay Alare Queen 75 00 Black ]\Iare Bess 60 00 Two Colts at $15.00 30 00 Chestnut Mare 175 00 Two Cows at $35.00 70 00 One Calf 5 00 15 Poland China Sows at $12. 180 00 I Berkshire Boar 35 00 98 Shropshire Ewes at $5.00. 490 00 I Ram 45 00 I Ram 35 00 I Ram 30 00 807 bu. Corn at 60c 484 20 40 bu. Potatoes at soc 20 00 15 tons Clover Hay at $6.00. . go 00 30 bu. Seed Corn at $1.00... 30 00 $2014 20 FEED. 120 bu. Oats at 38c. . . ; $ 45 60 3^2 ton Middlings at $24.00... 12 00 ^ ton Bran at $21.00 15 75 V2 bbl. Salt at $1.50 75 $ 74 10 IMPLEMENTS. One Wagon $ 60 00 One Farmers' Handy Wagon 39 00 One Surrey 120 00 One Buggy 30 oo One Spring Tooth Harrow.. 14 00 One Adjustable Harrow .... 12 00 One Roller 19 00 Two Plows at $15.00 30 00 One Cultivator 40 00 One Weeder 12 00 One Corn Planter 27 00 One Grain Drill 75 00 One Mower 40 00 Amount up $ 568 00 Brought up $ 568 00 One Cahoon Seeder 3 00 One Tedder 22 00 One Corn Sheller 5 00 One Hay Rake 20 00 One Hay and Stock Rack... 12 00 Two Sets Heavy Harness at $36.00 72 00 One Set Light Harness 2000 Also Axes, Forks, Log Chains, Three Horse Eveners, Wheelbarows and other Miscellaneous tools about the place 10 00 $ 722 00 Less 30% discount for the "wear and tear" of six years' use 219 60 $ 512 40 One Binder $ 100 00 One Corn Harvester 100 00 $ 200 00 Less 5% for one year's depre- ciation 10 00 $ 190 00 One Chicago Sheep Shearing 'Machine $ i5 00 One Bob Sled 15 00 Brought down 51240 Brought down 190 00 $ 732 40 RECAPITULATION. Production $2014 20 Feed 74 10 Implements $ 73^ 40 $2820 70 135 HOW TO KBBP FARM ACCOUNTS. THOE YEARLY STATEMENT. 223. We keep an account with our farmstead, so that we can tell our actual financial condition at least once a year. After the Ledger is closed, to get the facts before us in a nutshell, we make an annual statement. To keep an account for a number of years, and compare the last with those that precede it, is a great aid to successful farming, because it shows us what branch of our management needs more care and attention. The facts we are able to glean from, the statement made up at the end of the year as to our progress, more than pays us for the labor required to keep the Ledger, as it must be kept, to get accurate results. To present these benefits more fully we give the statement as Fox would make it from his Ledger, illustrated in the preceding pages. The statement follows: ANNUAL STATEMENT OF CLOVERMEAD FARM, MARCH 31, 1902. RESOURCES. LIABILITIES. CB Cash $ 4259 65 Bills Payable $ 4800 00 62 Clovermead 1290000 79 E. Wise 106 40 68 Prod'uction 2014 20 61 J. Fox, Present W Drth 12703 60 72 Feed 74 10 74 Implements 732 40 88 First Nat'l. Bank 1846 71 $17610 00 $17610 00 LOSSES. GAINS. mm :•' 90 Expense $ 408 39 91 Production $4043 50 90 Feed 334 bi 90 Implements 36 00 90 Labor 95« 25 90 Interest 115 80 90 Taxes and Insurance 65 28 90 J. Fox, Net Gain 2123 57 $4043 50 $4043 SO _ RESOURCES AND LIABILITIES. 224. Of course, you understand, if you have studied the in- structions, there are no open accounts in the Ledger at the end 136 HOW TO KEEP FARM ACCOUNTS. of the year, after the books are closed, except those showing a Resource or a Liability. To make up the annual statement: (1) Under Resources enter the amount on hand as shown by txxe Cash Book at the close of the last day of the year. When Fox balanced his cash, March 31st (Plate 53), he had |42.59 on hand. This is a Resource, and is the first item entered under that head in the statement. (2) Taking the Ledger (Plate 62), we find ''Clovermead" $12,- 900.00. This also is a Resource, because anything is a resource of value belonging to us; and by value, we mean cash, or some- thing we could realize the cash for if necessary. And Clovermead Farm, as it is today, would fetch this amount; it's worth that much, hence, a resource. (3) The next open account is Bills Payable. These are notes we owe, and as everything left standing on the credit side of the Ledger is either a Liability or a Gain, we must decide which of the two it is. This is eas}^ for we know it isn't a gain, because we owe it; therefore, it's a Liability, and so entered on the statement. (4) The next account Production (Plate 68), is a Resource. The inventory taken today (March 31st), at market price for the Stock, Corn, Potatoes and Clover Hay Fox has on hand is |2,- 014.20. Tliat is the cash value we could realize for it if sold. (5) Feed is next (Plate 72). This is also a Resource, for the same reason that the items in the Production account are. Con- sequently, we enter the amount we have on hand, $74.10. (6) Implements follow Feed, and are also a Resource. In- ventory shows $732.40 as their value today, and they, too, are entered. (7) On Plate 79 we find Wise has $106.40 due him. A Lia- bility is something we owe. We owe Wise this balance of $106.40 for wages he left stand during the previous year, so that amount goes under Liabilities. (8) The next account showing a Resource is the First Na- tional Bank. All cash we have, whether on hand or in the bank, is a resource, and the balance Fox has to his credit, $1,846.71, should be so entered in this statement. (9) This takes all the open accounts in the Ledger except one — the Proprietor's account — J. Fox. After all the accounts show- 137 HOIV TO KEEP FARM ACCOUNTS. ing the Losses and Gains were closed into the "Loss and Gain" account, and the net gain of Fox credited to his account, his ac- count was balanced and closed, and his Present Worth (Plate 61) of 112,703.60 is what the business of the Clovermead Farmstead is owing hhn at this time, therefore, it is a Liability of the busi- ness, and by footing both the Eesources and Liabilities we find they equal each other. The boak^ are in balance, and a glance at this simple statement, or the statement taken from any Ledger, at the end of the year, will show the owner of the business what cash he has on hand and in bank, who is owing him, either by Bills Receivable or open account, and the amount of grain, live-stock, implements, feed, or anything else he may have of value belong- ing to him. It also shows him what he owes, and to whom; and his actual and absolute net worth. Further, the Losses and Gains taken from the "Loss and Gain" account (Plates 90 and 91) will show him the total General Expense, the amount of cash paid out for Feed, the percentage of depreciation, charged to Loss and Gain, on his Farm Implements, what amount he paid for Labor, how much his Interest amounted to, and the Taxes and Insurance for the year. The above are entered under ''Losses," because they are non-productive accounts — nothing can be realized on them in cash. But under "Gains" we have Production, |4,043.50; and this amount represents everything having a cash value that left the farm during the entire year — the total sales. Now, |1,013.50 being the total proceeds of the sales, that amount, less the sum total of the "Losses," will be the net gain of the Proprietor — Fox. The whole cost of conducting this farm for the year, including general "Expense',' "Feed," "Labor," "Interest," "Taxes" and "In- surance," and the depreciation of "Implements," was |1,919.93. By deducting this from the "Gains" (total sales), we have |2,123.57, or, the net gain of Fox for the year. The annual statement, then, is the final summing up of the year's business on the farmstead, and is a most valuable guide to every thinking farmer. 225. And now, if we want to know what percentage of net gain Fox made on his investment, add two ciphers to his net gain, as shown by the "Loss and Gain" account, and divide it by the net amount of his investment. Thus: 21235700—1021631 equals a percentage of 20.72. 138 Part Seven NUBS OF NOTES ON Business Paper, Interest Tables, Rules Useful When Taking the Farm Inventory, etc., etc. HOW TO KEEP FARM ACCOUNTS. BUSINESS PAPER. 226. If you receive a check or draft made payable to the order of the party sending it to you, and he has not endorsed it, it is worthless as far as you are concerned. Return it to the sender for endorsement. 237. Should you have endorsed it before noticing the send- er's failure to endorse, erase your name by drawing lines through it with a pen. 228. If you discount notes at your bank, which have en- dorsers, do not waive protest, as the security may be released. 229. When buying drafts always have them made payable to your cHwn order, and then endorse them over to the person you wish to pay. , 230. All checks should be made payable "To order." They cannot then be transferred without endorsement, and constitute in themselves the best receipt you can hold for money paid. This is one of the many reasons why you should have a bank account. 231. Nowadays all checks are printed to read "Pay to the order of." If you want currency, simply write "Cash" after "Pay to the order of." This is, in effect, the same as making it payable to bearer. 232. If a discrepancy exists between the amount as written in the body of a check, draft or note, and amount in figures in the margia, the former is held to be the intended amount; but banks 233. No particular form is necessary for a note, but it must contain an order to pay or promise to pay. 234. The cancelled note you receive should never be destroyed — tear the signature through the middle and destroy the torn off piece. It isn't of any value then to anybody but yourself, and there may come a time when you will need it as a voucher. 235. INDORSING CHECKS.— If you wish to make a draft or check payable to another, write on the back, about three inches 143 HO]V TO KEEP FARM ACCOUNTS. from the upper, or left-hand end, "Pay to order of," and the name of the party to whom von wish to send or liive it. and then voiir own siiiuatnre, just as it appears on the face. 236. STOPPING PAYMENT OP CHECKS.— If von desire to stop the payment of a check that you have given, notify your bank at once — lose no time — and give the bank full particulars. You cannot stop payment of a check that has been "Certified." 237. NOTES ENDORSED OVER TO YOU.— If you receive a note made payable to another and endorsed over to you, be care- ful to notice whether any payments have been indorsed on it — a note is only worth its face less the payments made on it. 238. FOR:iIS OF BUSINESS PAPER.— The forms of paper used in the ordinary course of business follow. The general farmer doesn't have a great variety of bu>iiness paper to handle-, yet the following may be useful for reference. 239. RECEIPT TO APPLY ON ACCOUNT.— $200.75 Hudson. Ohio. July 12. 1900. Received of ^^ . H. Brown Two Hundred & 75-100 Dollars, to apply on account. W. I. CHAMBERLAIN. 240. RECEIPT IN FULL OF ACCOUNT.— $S^.20 Chicago. III.. March 3. 1901. Received of John Johnson Thirty-Six & 20-:oo Dollars in full of account to date. LANDERS PUBLISHING CO. 241. RECEIPT FOR PAYMENT ON NOTE.— $100.00 Standish. Mich. Jan. 9. 1901. Received of E. H. Mohr One Hundred...-. DQllars. as a partial payment on his note under date Oct. 13, 1899, for Five Hundred Dollars, payable to me. JOHN LIVINGSTON. 144 HOJV TO KUBP FARM ACCOUNTS. 242. DUE BILL.— $12.00 Columbus Grove, Ohio, June 8, 1900. I^"e Ed Wise...., Twelve r> n ' Dollars, on demand. JOHN FOX. 243. ORDINARY PROMISSORY NOTE. $500.00 Newark, Ohio, May 16, 1901. Sixty days after date, I promise to pay Frederick V/eise or order Five Hundred Dollars, value received, with interest. Payable at First National Bank. JOHN FOX. 244. JOINT NOTE.— $^°°°° Osborn, Ohio, August 10, 1900. Ninety days after date, we promise to pay John M. Jamison or order Two Hundred Dollars, value received, with interest, at First National Bank. HENRY BERGH. EDWARD TAYLOR. 245. BANK NOTE.— $300.00 Lima, Ohio, April 10, 1900. Ninety days after date I promise to pay W. E. Harding, cashier, or order. .. .Three Hundred. .. .Dollars, value received, with interest. Payable at Farmers' Na- tional Bank. JACOB ASH. Endorsed on back by Frederick Williams, A. H. Wells. TO MEASURE CORN. 246. ON COB.— Two heaping bushels of corn on the cob will make one struck bushel of shelled corn. Some claim that one and one-half bushels of ear will make one bushel of shelled corn. Much will depend upon the kind of corn, shape of the ear, size of the cob, etc. 145 HOW TO KBBP FARM ACCOUNTS. 247. IN CEIB. — To measure corn in a crib, multiply the length of the crib in inches by the width in inches, and that by the height of the corn in the crib in inches, and divide the product by 2,748, and the quotient will be the num^ber of heaped bushels of ears. If the crib flares at the sides, measure the width at the top and also at he bottom, add the two sums together, and divide by 2, which will give the mean width. 248. CORN SHRINKAGE.— Corn will shrink from the time it is husked in the autumn, in well-protected cribs, from 20 to 30 per cent, by spring. That is, 100 bushels Avill shrink to 70 or 80, according to how dry it was when cribbed. GRAIN IN BINS. 249. TO MEASURE GRAIN IN BINS.— Multiply the length of the bin in inches by the width in inches, and that by the height in inches, and divide by 2,150 for struck bushels, and by 2,748 for heaped bushels. The quotient will be the number of bushels contained in the bin. 250. Agricultural reports estimate that new wheat shrinks 6 per cent, in six months. Ilence, 94 cents in August is equal to fl.OO in February. MEASUREMENT OF HAY. 251. The only exact method of measuring hay is to weigh it, but the rules given below will be found sufficiently exact when taking the inventory. 252. TO FIND THE NUMBER OF TONS OF MEADOW HAY IN WINDROWS.— Multiply together the length, breadth and height, in yards, and divide the product by 25. The quotient will be the number of tons in the windrow. 253. TO FIND THE NUMBER OF TONS OF HAY IN A MOW. — Multiply together the length, height and width, in yards, and divide by 15, if the hay be well packed. If the mow be shal- low, and the hay recently placed therein, divide b^^ 18, and by any number from 15 to 18, according as the hay is well packed. 254. TO FIND THE NUMBER OF TONS OF HAY IN SQUARE OR LONG STACKS.— Multiply the length of the base in yards by half the width in yards, and that by half the height in yards, and divide by 15. 146 HOW TO KBBP FARM ACCOUNTS. 255. TO FIND THE NUMBER OF TONS OF HAY IN A LOAD. — Multiply together the length, width and height, in yards, and divide the product by 20. 256. TO MEASURE HAY IN STACK.— The area of the base multiplied by the the perpendicular height to eaves, plus one- third the perpendicular height from eaves to crest, will give the number of cubic feet in a stack the sides of wdiich are per-pendic- ular to a greater or less height. If the stack slopes uniformly from base to crest, then multiply the area of the base by one-third of the perpendicular height. To find the area of the base, divide the distance around it by 3.141G, take one-half of the result and square it, then multiply by 3.141G. The number of cubic feet necessary for a ton of good', well-settled hay is about 450. 257. ANOTHER METHOD.— Measure the stack for length, width and the "over." To get the "over," throw a tape-line over the stack at an average place from ground to ground, drawing it tightly. Multiply the width by the "over," and divide the result by 4; multiply the result of the division by the length for approxi- mate cubical contents of the stack. To reduce to tons for hay that has stood in stack for less than twenty days, divide cubical contests by 512; for more than twenty days and less than sixty days, divide cubical contests by 422; for more than sixty days, divide by 380. 258. TO FIND THE VALUE OF PRODUCTS SOLD BY THE TON AT A GIVEN PRICE.— To ascertain the value of a given number of pounds of hay, straw or other commodity sold at a given price per ton, multiply the number of pounds by one-half the price per ton, and point off three figures from the right. The result will be the price of the article. MEASUREMENT OF WOOD. 259. A cord of wood contains 128 cubic feet. To ascertain how many cords there are in a pile of wood, multiply the length by the height, and that by the width, and divde the product by 128. 147 HOPV TO KBBP FARM ACCOUNTS. 260. SIX PER CENT. INTEREST TABLE.— Time. | $1 $2 $3 $4 $5 $6 $10 $20 1 $50 $100 $1000 Day s 1 1 2 17 2 1 2 3 38 .< 3 1 3 5 50 >( 4 1 3 7 67 « 5 2 4 8 83 « 6 2 5 10 1 00 (( 7 2 6 12 1 17 « 8 3 7 13 1 33 >( 9 2 3 8 15 1 50 « 10 1 2 3 8 17 1 67 <( 15 1 2 3 5 13 25 2 50 <. 20 1 2 2 3 7 17 33 3 33 <. 25 1 2 2 2 4 8 21 42 4 17 (1 30 1 2 2 3 3 5 10 25 50 5 00 « 33 1 2 2 3 3 6 11 28 55 5 50 u 63 1 2 3 4 5 6 11 21 53 1 05 10 50 « Q3 2 3 5 6 8 9 16 31 78 1 55 15 50 Months 1 1 1 o 2 3 3 5 10 25 50 5 00 2 1 2 'i 4 5 6 10 20 50 1 00 10 00 3 2 3 5 6 8 9 15 30 75 1 50 15 00 4 2 4 6 8 10 12 20 40 1 00 2 00 20 00 5 3 5 8 10 13 15 25 50 1 25 2 50 25 00 6 3 6 9 12 15 18 30 60 1 50 3 00 30 00 7 4 7 11 14 18 21 35 70 1 75 3 50 35 00 8 4 8 12 18 20 24 40 80 2 00 4 00 40 00 9 5 9 14 18 23 27 45 90 2 25 4 50 45 00 10 5 10 15 20 25 30 50 1 00 2 50 5 00 50 00 11 6 11 17 22 28 33 55 1 10 2 75 5 50 55 00 12 6 12 18 24 30 36 60 1 20 3 00 6 00 60 00 261. INTEREST TABLE.— The follov/ing will be found convenient in the absence of ex- tended interest tables: To find the interest on a given sum, for any number of days, at any rate of interest. At 5 per cent., multiply the principal by the number of days and divide by 72. At 6 At 7 " At 8 •• At 10 " At 12 •' 60. 52. 45. 40. 35. 148 GESTATION TABLE. 262. A table showing the period of gestation, or, when colts calves, lambs and pigs may be expected, the date of service beinj known, =• I'ime of Service January 1 " 2 " 11 " 16 " 21 " 26 " 31 February 5 " 10 " 15 " 2'0 " 25 March 2 " 7 " 12 " 17 " 22 " 27 April 1 " 6 " 11 " 16 " 21 " 26 May 1 " 6 11 " 16 " 21 ■' 26 " 31 June 5 " 10 " 15 " 20 " 25 " 30 July 5 " 10 " 15 " 20 " 25 " 30 A.ugust 4 .14 .19 .24 September October 3 November December ....13 ....18 ....23 28 2 .... 7 ...12 ...17 ...23 ...27 ... 2 ... 7 ...12 ...17 ...82 ...27 ...31 Mares 340 Days Cows 283 Days December 11 " 16 " 21 " 26 " 31 January 5 " 10 " 15 " 20 " 25 " 30 February 4 March .14 .19 .24 . 1 April May June July ..11 ..16 .21 .26 .31 . 5 .10 .15 .20 .25 .30 . 5 .10 .15 .20 .25 .30 . 4 . 9 .14 .19 .24 .29 . 9 .14 .19 .24 .29 .\ugust 3 " 8 " 13 18 " 28 " 28 September .... 2 " 7 " 12 " 17 " 22 ^" 27 October 2 " 7 " 12 " 17 " 22 " 27 November .... i " 6 " 11 " 16 21 " 26 December .... i " 5 October 10 " 15 " 20 " 25 " 30 November .... 4 " 9 " 14 " 19 " 34 " 29 December 4 " 9 " 14 " 19 " 34 " 29 January 3 " 8 " 13 " 18 " 23 " 28 February 2 " 7 " 12 " 17 " 23 " 27 March 4 April May .14 .19 .34 .29 . 3 . 8 .13 .18 .23 .28 . 3 June July 13 18 23 28 2 7 12 17 23 27 2 '■ 7 „ 13 17 „ 32 27 August 1 " 6 „ 11 .. 16 „ 21 „ 26 September .... 5 " 10 „ 16 „ 30 „ 35 October 6 " 9 !Ewes 150 Days Sows 112 Days May June July .30 . 4 . 9 .14 .19 .24 4 " 9 " 14 " 19 " 34 " 29 August 3 13 " 18 " 23 " 28 September 2 " 7 " 12 " 17 " 33 " 27 October 3 " 7 12 " 17 " 23 " 27 November 1 " 6 " 11 16 21 ^" 36 December 1 " 6 „ 11 16 31 36 T ' 31 January 5 " 10 15 20 25 ^^ 30 February 4 " 9 „ 14 „ 19 24 March 1 '' 6 11 " 16 ,. 31 ,^ 26 . . 31 April 5 " 10 „ 15 „ 20 ,, 25 ,^ 30 May 5 " 10 „ 15 „ 20 .. 25 39 April May June .22 .27 2 ! 7 .13 .17 .23 .27 . 1 July 11 IG 21 26 1 " 6 " 11 " 16 " 21 " 26 ," 31 August 5 " 10 " 15 " 20 " 25 ^ " 30 September .... 4 14 " 19 " 34 " 29 October 4 14 " 19 " 24 " 29 November 3 " 8 " 13 " 18 " 23 28 December 3 ....13 " 18 " ....23 ** 28 January . . 3 ** . . T " 12 ....17 " ....22 " 37 February . . .... 1 ... 6 " ...U " ...16 " ...21 ' ...26 March ... 3 *' ** ... 8 1 •? " ...23 ...28 April ... 2 ... 7 ...13 ...17 ...21 The first column gives date of service. On the same line under the different columns headed Mares, Cows, etc is t?^en the date the progeny may be expected from such service. 263. WEIGHTS AND MEASURES. — Avoirdupois or Commercial Weight. 16 drams =1 ounce 16 ounces =1 pound 25 pounds =1 quarter 4 quarters or 100 pounds =1 hundrcdvvciglit 20 hundredweight or 2000 lbs = 1 ton Troy or Jewelers' Weight. 24 grains =1 pennyweight 20 pennyweights =1 ounce 12 ounces =1 potmd Apothecaries' Weight. 20 grains =1 scruple 3 scruples =1 dram 8 drams =1 ounce 12 ounces =1 pound Dry Measure. 2 pints =1 quart 8 quarts =1 peck 4 pecks =1 bushel 8 bushels (480 pounds) =1 quarter 36 bushels =1 chaldron Liquid Measure. 4 gills =1 pint 2 pints ;• =1 quart 4 quarts =1 gallon 31^2 gallons =1 barrel 2 barrels, or 63 gallons =1 hogshead Apothecaries' Fluid Measure. 60 minums =1 fluid dram 8 fluid drams =1 fluia ounce 16 fluid ounces =1 pint 8 pints' =1 gallon Line or Linear Measure 12 inches =^1 foot 3 feet ^=1 yard SVz yards or 16'/^ feet =1 rod or pole 40 rods =1 furlong 8 furlongs =1 mile (statute mile) 3 miles —1 league Surveyors' or Chain Measure. 7.92 inches =1 link 25 links =1 rod or pole 4 rods, or 66 feet =1 chain 80 chains =1 mile Square or Surface Measure 144 square inches =1 square foot 9 square feet — 1 square yard 30^ square yards =1 square rod or perch 160 square rods =1 acre 640 acres =1 square mile or section Surveyor's Square Measure 625 square links ^1 square rod or pole 16 poles =1 square chain 10 square chain =:1 acre 640 acres =1 square mile or section 36 square miles (6 miles square) ^1 township Solid or Cubic Measure 1728 cubic inches =1 cubic foot 27 cubic feet =1 cubic yard 16 cubic feet =1 cord foot 8 cord feet or 128 cubic feet =1 cord of wood 24^ cubic feet 1=1 perch LIBRARY OF CONGRESS 0DD577flT7bb /-