/; Gopyiiglit}j°. COPVRIGHT DEPOSn^ Farm Accounting and Business Methods A TEXT-BOOK FOR STUDENTS IN AGRI- CULTURE AND A MANUAL FOR HOME-STUDY BY J. A. BEXELL, A.M. DEAN SCHOOL OF COMMERCE OREGON AGRICULTURAL COLLEGE The Home Correspondence School Springfield, Mass., U. S. A- 1911 ^ ^-^ COPYRIGHT 1909 By J. A. BEXELL Copyright 1911 By the home CORRESPONDENCE SCHOOL Ruled Blank Books with printed headings for use in writing out the exercises, or for practical use on the farm, may be obtained from stationers generally or from The Home Correspondence School, Springfield, Mass. ©C(.A:^s^,o2o TABLE OF CONTENTS Page Chapter I. Introductory 7 PART I. Financial Accounts. Chapter II. First Method— Single Entry : 13 Chapter III. Second iMethod— Modified Double Entry 37 Chapter IV. Household Accounts 56 Chapter V. Third Method— Full Double Entry 70 PART II. Cost Accounts and Special Records. Chapter VI. Cost of Production 91 Chapter VII. Special Cost Records 98 PART III. Business Organizations, Correspondence, and Forms. Chapter VIII. Business Organizations 115 Chapter IX. The Business Letter 123 Chapter X. Business Forms 141 PART IV. Useful Tables 149 Index ■ 160 Digitized by the Internet Archive in 2010 with funding from The Library of Congress http://www.archive.org/details/farmaccountingbuOObexe PREFACE TO THE FIRST EDITION There are a number of works on Farm Accounts now on the market, but I have found none adapted to the class room. An arithmetic would be useless as a text without problems for solution; a text on Farm Records is likewise useless in the class room without exercises for practice. My aim has been to make the exercises as practical and simple as possible, but no attempt has been made to limit the illustrations to actual experience on any particular farm. Hence, both prices and results will probably vary considerably from actual practice, a fact which will not reduce their illus- trative value. The forms suggested contain many new and labor-saving features, conforming with the best modern busi- ness practice. A resourceful teacher will be able to supple- ment the exercises to any extent to suit the time available and the needs of his class. The increasing interest shown in this subject warrants the belief that it will be introduced into the public schools in the near future, and surely there is no subject more worthy of attention or more sadly neglected. Suggestions and criticisms from farmers and teachers interested in the subject will re- ceive careful consideration in a future edition. J. A. Bexell. Oregon Agricultural College October 1, 1909 PREFACE TO THE SECOND EDITION A large number of inquiries from schools of all grades have confirmed my conviction that there is a growing demand for a text-book in Farm Accounts. Such a text-book must be teachable. Without a well graded set of exercises to place before the student it would be as useless in the class room as an arithmetic without problems. Many new exercises have been suggested by readers of the first edition and it is believed that the present volume offers a fairly satisfactory course. Ruled and printed forms have been provided for the exercises in bookkeeping and these forms are also suitable for actual bookkeeping on the farm. Chapters have been added on Business Forms, Business Correspondence, and Business Or- ganizations — subjects of the utmost importance to every student; and it is hoped that the added chapters will make the book more valuable as a business manual. The fundamental principles of accounting being the same in every business, it has been found that the exercises are equally adapted to classes in Mechanic Arts, Domestic Econ- omy, etc., so that the special exercises for this class of students have been omitted. A syllabus of instruction sheets has been prepared for stu- dents who desire to pursue the study at home, which is also available to schools giving correspondence courses. I take this opportunity of thanking all who have contributed in any way toward the improvement of this effort to help the farmer. Special acknowledgment is due Mr. E. B. Moore for his excellent chapter on "The Business Letter." J. A. Bexell. Oreg-on Agricultural College October 1, 1910 FARM ACCOUNTING AND BUSINESS METHODS CHAPTER I INTRODUCTORY It is a truism to say that the financial side of farming is of the utmost importance. But the fact remains that this side of the world's greatest industry is almost entirely neglected by both the farmer and the schools. Professor Bailey says on this subject: "In visiting practically every farm in one of the counties of the state (N. Y.) we did not find one man who knew how much it cost him to produce milk or to raise any of his crops." Prosperity of the Farmer The Secretary of Agriculture, in recent Year Books, points out the remarkable prosperity of the farmer; that the export of farm products is vastly in excess of all other exports com- bined; that a million agricultural debtors have been trans- formed during the last ten years into the same number of surplus depositors; that "contrary to his reputation, the farmer is a great organizer, and he has achieved remarkable and enormous successes in many lines of economic co-operation in which the people of other occupations have either made no beginning at all or have nearly, if not completely, failed." He points out that most farmers live better than the average merchant or mechanic. Causes of Success It is doubtless true that the farmer is becoming a factor to be reckoned with in the business world; that the average farmer knows vastly more about scientific farming than his father did; he understands more thoroughly the value of proper cultivation, of fertilization, of rotation of crops, and of diversified farming; but it cannot be said that he owes (7) 8 FARM ACCOUNTING his success to improved business methods. He has been suc- cessful, rather in spite of his ignorance in this respect, and because of the lavish generosity of mother nature. T-w^o Phases of Farming The business of farming assumes two distinct phases: the productive phase and the exchange phase. The one aims to extract the treasures from the soil; the other, to place them in the hands of the consumer. It is important not only to raise abundant crops, but also to sell the products to advantage. Importance of the Exchange Phase The importance of the exchange phase is often lost sight of. A farm may be forced to yield to its maximum capacity, labor may be managed properly and waste reduced to a minimum; and yet the net result may be a loss at the end of the year. As a general economic proposition, it might be said that large crops often result in serious loss to society as a whole. If the net value to the consumer is less than the labor and capital expended on the crop, society is the loser by the difference. Hence the importance of a thorough understanding by the farmer, as well as by the merchant and manufacturer, of the laws and methods of exchange or commerce. Farming a Paying Business That farming is a science has been emphasized so much that the fact that it is also a business is often lost sight of. It is a real business, and one which pays the United States close to eight billion dollars annually. It has been demonstrated re- peatedly that no legitimate business pays better than farming. It may be a little more uphill work at the start, since most farmers begin business with small capital, but it is incompar- ably safer in the long run, and will insure a competence for old age with greater certainty than any other occupation. But let it ever be borne in mind that the condition for success i« that farming must be conducted on business principles. Importance of Keeping Accounts Accurate records and accounts are absolutely necessary in the management of every business enterprise, great or small. INTRODUCTORY 9 No business can be successful in the long run unless its con- dition can be determined at any time, and no conservative business man will fail to prepare a financial statement at the end of his fiscal year. He must determine how he stands, not only with others, but with himself. One object of keeping accounts is to assist in accumulating property. Another important object is to record a continuous history of business transactions for future guidance. Not only is this profitable, but it is a source of real pleasure and satisfaction to know our standing with those with whom we deal as well as the profits and losses in our business enter- prises. What the Records Should Shovi^ A complete system of farm records should enable the farmer to tell at any time how his business stands with himself and others; the cost of production of staple crops and live stock, and the periodical results of both the productive and the ex- change phase of his operations. The records should also show personal and household expenses, and finally a comprehensive history of the various phases of the enterprise, including plots of crop rotation, fertilizing, etc. Difficulties of Farm Bookkeeping Numerous systems of farm bookkeeping have been proposed, but the trouble with them all is that they are either too com- plicated or altogether unpractical. Professor Bailey says: "The entire subject of farm accounting must be attacked in a new way. The ordinary bookkeeping will not apply." The reason is obvious. Farming is a much more complicated busi- ness than most people suppose. A farmer is both a producer and a dealer. He needs financial records as complete as those of the average merchant and cost records as accurate as the manufacturer's. But the records must be adapted to the business in hand. The farmer is usually a very busy man. His chief difficulty is neither ignorance nor indolence. He has little time for fancy bookkeeping and still less for "red tape." What he wants is a plain, simple, straightforward history of his business, so arranged and classified as to require the minimum effort to keep it up. It may be inter- 10 FARM ACCOUNTING esting- for his children to learn the conventional use of red ink, ruling's, closing of books, the intricacies of journalizing, etc., but all this is not necessary to a proper understanding of farm bookkeeping. Methods of Bookkeeping In the following pages I suggest three methods of farm bookkeeping whereby the yearly profit or loss may be determined and compared from year to year. The first is ex- tremely simple Single Entry; the second method is a com- prehensive, but very simple. Modified Double Entry, by which the financial standing, the cost of production, profits and losses, etc., can be ascertained at any time; the third is a system of complete Double Entry, generally used in enter- prises doing an extensive credit business. Any farmer with average intelligence will be able to master either method with small expenditure of time and labor. PART I FINANCIAL ACCOUNTS First Method Being the simplest form of single entry, employing only one book, which may be purchased anywhere. (See page 10.) FINANCIAL ACCOUNTS CHAPTER II SINGLE ENTRY, THE SINGLE-BOOK SYSTEM The Day Book The most important record in this method of bookkeeping is the Day Book, or what might properly be called the History of the Farm. This should be written in the form of a diary, without attempting a close classification of the entries. Al- ways bear in mind, however, that it is safer to give too much rather than too little information in the records. The Day Book should contain any memoranda which might prove valu- able for future reference. Conditions of the weather, time of planting, breeding, division of fields, sales, purchases, loans, attendance at conventions, valuable recipes, etc., are proper subjects for entry. Though it is advisable to keep the book as neat as possible, it is unnecessary to spend much time for that purpose. It is more convenient to jot down items in lead pen- cil as they come along, and then, as time allows, classify them under their respective heads. The Day Book and Gash Book Combined In the form on page 19, the Day Book and Cash Book are combined. The ruling is that of an ordinary stock Day Book. In the left-hand column are entered all sums received and in the right-hand column all payments. While the combined Day Book and Cash Book has the advan- tage of extreme simplicity, it is often more satisfactory to devote a part of the Day Book, or a separate book, exclusively to cash transactions. Where this plan is followed, it is un- necessary to record all the cash items in the Day Book. The left-hand page is used for cash receipts and the opposite page for payments. (13) 14 FARM ACCOUNTING Bill and Receipt File A very important part of the farm records is the Bill and Receipt File. A part of the Day Book can be devoted to that purpose, but it is better to provide a separate book. In it should be securely pasted all bills for machinery, implements, tools, live stock, nursery stock, furniture, etc., which will be subject to inventory, but not bills for supplies, feed, table ex- penses, etc. ; also receipts for the payment of money, canceled notes, certificates of pedigree, important clippings from peri- odicals, and any other matter of interest. This will prove an invaluable record for future guidance. (See illustration, page 24.) Many prefer the Pocket File, illustrated on page 16. The Inventory The inventory may be considered the foundation of the farm records, because without it no results at all can be obtained. It should be taken at such a time as will give the most accurate results with the least expenditure of labor. This differs widely in different localities. January 1st seems the most natural beginning of the fiscal year, but the objection is that at this time there is apt to be a large quantity of feed and supplies on hand. April 1st would be a better date so far as the stock on hand is concerned, but inconvenient in many localities on account of the pressure of spring work. When- ever it is taken, it should be accurate. No guesswork should be tolerated. Weigh and count ; do not estimate. Then assign the actual market value to the property, taking due account of depreciation. Depreciation Neither an old wagon nor an old horse is worth as much as new ones. The same holds true with very few exceptions of all equipment, animals, houses, and improvements. The ques- tion as to what rate shall be charged off annually, so as to create a sinking fund with which to renew the depletion, has been an open question with accountants since time immemorial. It is particularly difficult to determine the depreciation of live stock, work horses, and depletion of the fertility of the soil. Without entering into a discussion of the subject, I SINGLE ENTRY 15 give below the experience and opinion of the best authorities on the subject. The thoughtful farmer will find no difficulty in adjusting these rates to suit his conditions. For the pur- pose of general estimates, the following rates on the cost or market value are fairly accurate: — Buildings (including insurance and repairs) .... 5 per cent. Horses, above 5 years . 10 per cent. Milch cows (after 3d year) 8 per cent. Machinery and tools 10 per cent. HoM^ to Determine the Profits The all-important question at the end of each year is : Has the work for the year been a financial success or failure ? To determine the profits or losses is, therefore, a problem to be solved each year. As a matter of fact, it is a very simple problem, and it becomes easier the oftener it is done. Let us assume that heretofore you have kept no books what- ever, but you have now decided to make a start. You have procured a simple, substantial Day Book (may be purchased at any stationery or drug store) and, after listing all your prop- erty, you are prepared to make the entries shown in the illustration. April 1st is selected as the beginning of the fiscal year, because on that date the supplies, grain, feed, etc., are usually low, and the average farmer has considerable time to spare. Of course, this varies in different localities, and any other date may be adopted to suit the farmer's convenience. The proper opening entries, including the inventory, are shown on page 18. A Year Later At the end of the year we are ready to determine the result of the year's work. If we have kept only memoranda in the Day Book, the best we can do is to take another inventory exactly similar to the last one. It is evident that the differ- ence between what we are worth now and our net worth last year will be the net gain. The second financial statement and the statement of Profit and Loss are illustrated on page 20. 16 FARM ACCOUNTING Net Earuin^s The net profit shown in the illustration, page 20, includes the interest on the investment and the wages of the members of the family. To find the net earnings of the proprietor, the value of the household goods, life insurance, cash, and the cost of the dwelling should be deducted from the last year's inventory. Then find the interest on the remainder at a fair rate; this deducted from the profit gives the earnings of the family. It can be apportioned in any way the proprietor sees fit. This is illustrated further in Lesson 11. If members of the family, engaged in productive work, receive regular pay before the statement is made, the final result is the net profit above wages and interest. The question might be asked : why deduct the value of the dwelling before the interest is taken? The reason is that the dwelling is not a productive investment. It is apt to be more or less valuable than the average standard, according to the taste and ability of the owner. Amounts drawn for personal use should, of course, be added to the net earnings. ALPHABETICAL BILL FILE SINGLE ENTRY 17 1 Goj^fZnt^eJ J/^Jenfor/es ^■f^fi*.^ Memo. Ajy.', oii\ J!/>./,af Aly.l.'fo 1 /Tbi/ii 1 farnt^ /^o A. "^^etcT^ ~^c Jc H} e^Se/fff/J (j-v^^J ■> " X <^o C- i'o jL C^e J.!-t Sis-fiAM. , :e ?%J\J n K'jc /o- i3 4t {jasA. /■ 7a /; '.^d^ Y 7^/^/ yfe. ■ffurfes w I'-/, /Jfi '.Z3o Jia/ir< . ^^#- > w AciOH-fr/s l^^a-p/f 1 T.J /J* H /^.■?1 :dc//s /i^/> u/<»< SO <^2- Aa "^ /oTa/ Ajia/ c/t/cffi 'V' ia /-i J^, i-j^% //ef ^Km : 4^v t-^^{. /OJ. ^a^i .-J CONTINUED INVENTORIES 18 FARM ACCOUNTING v^^ v^^/T, y//>^^S^-t<-.^.^..<-g^.-~---^ y^ / ^A'a.yt^c^^ ^ ^. ^U^Y d£^ r ^ /bo .^. f^ft-t-a-t^-j/^^^ -zj~a.-^^_^,j _£o. /i-o-e:^Lc^c.je- • ■>0 ^.^eo. - /xTo ^/<^ d^^. Jl^. 2c o ^^*.*:-i fJ /^- ^c .^'^ ^Z-^. _^1?^ Zi^ :?:::^ //■ 3"^' /:? ,^Vi;? ^ :5?^2_ u fli'/'j^ /.^■^t/ ;^v'/ /-^<^^^<^-^^--o d\/x^d^*^^y' yii-^ ga-^^--^g,-^ ,2r_ /y^r.^^:^^^^ ^ /\Z,5X/J ±1 .dli \/5 f¥i3fC OPENING ENTRY AND INVENTORY SINGLE ENTRY 19 a>UaY S^Lrf-^ , /^::^d^uy, /faf. /fp^^.t^.A^ /^t-eJg/ DAY BOOK 20 FARM ACCOUNTING i..^*^*«i^^yl^^^.^^ ..^..^ ^^ZL ^ /. /^^■f ^^..^ ?f,^ a/irr^it- t: J.O 1,1:^ ^ .HziJi' Idd^ipL. ^<^^^ .'fe-^ c^y = ^^ _iL //tff PERSONAL ACCOUNTS SINGLE ENTRY 23 'U OuJe OfLr PERSONAL ACCOUNTS 24 FARM ACCOUNTING L SAFE PLACE TO TRAk>B .J8e4_ CORVALLIS ORE^iQH SOLD TO I'^artin Harris, Blodgett, Oregon. Saturday, Oct. Srd, 1908. CorvallU, Oregon,. _Aprl l 3. 1906 M lartln Harris Harvrsting Machineiy. Guns & AmiDimibon All Kmd. ol Toolfc FIno Cullcry. To It H. HUSTON, Dr. SHELF AMD HEAVY HABDWABE AgDCuitaal Iny'-r"*-, Wt«au. Cumgn, Etc STOVES & TIMWARE. PbunUng • Speciehy. Buggies, PftiotB ud Oik Tinware, Gmiitcwaie. Pumps, Pipe, Rope. Etc Cash Diamond Hay Carrier" IbB. Manilla Hoy Hop* f" Hay Pnlloys Hay Fork tif Tb. CorvcUlis, Oregon, ^^z-,z,iA^, .. y^H^^ ^y 190 f ' In account with a ]. BLACKLEDGE GENERAL HOUSE FUItNISHER . ^ CAItPKTS. UNOLEOM AND MATTLNO M tY J.d. CO ir.oo 39.60 BILL AND RECEIPT FILE See also p. 16 SINGLE ENTRY 25 Continued Inventory The illustration on page 17 shows a very convenient form of a continued inventory. The items are written only once in as many years as there are money columns. Besides sav- ing space and labor, it avoids the possibility of omitting im- portant items, if the first list of items is correct. The prices will also be more accurate, since they may be easily compared from year to year. Two or three blank lines should be left under each heading for new items which may appear in the next inventory. The ordinary trial balance book, for sale at any stationery store, is a good form, or additional columns may be ruled in the Day Book or Journal. Banking The enormous increase in bank deposits in rural communi- ties is the best evidence that the farmer is beginning to appreciate the value of better system in his finances. It is claimed that fully ninety-five per cent, of the country's busi- ness is done by credit currency, such as checks, drafts, money orders, notes, and the like. Many good business men keep only their bank book, and this is far more satisfactory than no bookkeeping at all, especially if bills and receipts are filed for reference. The bank account may be carried entirely independent of all other records. Banking carries with it many advantages. Important among them are : — 1. The depositor's credit and influence are measured largely by the size and regularity of his bank account. 2. A tendency to economize by a desire to increase the bank balance. 3. The banker becomes your bookkeeper and business counselor. 4. Security against fire and robbers. 5. Indorsed checks are both records and receipts of pay- ments. 6. A benefit to the community by keeping the money in circulation. 7. Convenience in making change. 26 FARM ACCOUNTING BANK ACCOUNT SINGLE ENTRY 27 8. The bank will always loan to a good depositor in pref- erence to one who is not a depositor. There are only two operations in banking which need dis- cussion here — depositing and checking. The banker will give all necessary directions regarding both, except as to keeping the individual account. This is illustrated on page 26, and will be thoroughly understood after Lesson 5 has been worked out. The special column Cash Book, pages 44 and 45, is an excellent form for keeping the bank account. If all cash is deposited and all payments made by check, the dif- ference between the total columns represents the bank bal- ance. As to deposits, it is preferable to deposit all cash, and then draw out for personal use as needed. The method of handling checks is as follows: Record the payee, number, and amount, as illustrated under Cash Re- ceipts, page 44. The checks are satisfactory receipts, but the itemized bills should be pasted in the Bill File and bear the same number as the checks. The bank will usually furnish all necessary stationery free of charge. The bank balance is considered a part of the cash on hand, so that no special account except the check stubs and pass book need be kept with the bank. The bank balance is proved each month as follows : Arrange the checks returned numerically. List the checks not returned; add the outstanding checks to the bal- ance shown in the check register; the sum should agree with the balance in the pass book. It is often convenient to keep a special check register. Following is a convenient form, showing the method of proving the balance at the bottom of the page. 28 FARM ACCOUNTING A WORD TO THE READER The real aim of this book is to improve the business methods on the farm which the reader owns now or expects to own in the future. Merely reading the book will, doubtless, create a vague conviction that the subject is important, but it adds but little to the reader's knowledge of accounting and correct busi- ness method. This is accomplished only by working out problems typical of the actual experience of the average farmer. In the process of such exercises the conviction will become strong that the business phase is of such importance that no farmer who aspires to success can afford to neglect it. It is suggested that a systematic study of the Illustrative Lessons be taken up in each family, especially where there are boys and girls advanced far enough to profit by the study, and that actual accounts of the home be started wherever it is practicable. For instance, it will be found exceedingly inter- esting for the boys to take an actual inventory of the home- stead after having worked out Lesson 1, and the girls will find Lessons 12 and 13 especially helpful and interesting. It will be found that each lesson will contain suggestions which will prove valuable to every reader, whether he is engaged in farm- ing or in any other occupation. It is an excellent practice for farmers to come together occasionally to exchange views on any subject pertaining to their common interests. Why not organize a Farmers' Com- mercial Club and enjoy good fellowship as well as the benefit of each other's experience? One important number of the permanent program could be a discussion of business methods. A leader should be appointed to conduct a regular class for several weeks. An outline for such a course is found on page 161. The publishers will be glad to furnish the necessary material for working out the exercises or for practical use on the farm. SINGLE ENTRY 29 Illustrative Lessons LESSON 1 THE INVENTORY I. General Instructions. In preparing these lessons, the student should use great care as to neatness and form. It is not necessary to use the printed forms provided for the purpose, but better work will be done with good stationery. All the work should be done with ink, if practicable. Do not pass by anything that is not clearly understood. Ask questions. The amounts given are totals in all the lessons, unless the word "at" precedes the price. Hand in each lesson when completed for approval. II. Written Wo7'k. 1. Use three-column Journal paper found in your account book. This lesson is illustrated on page 18. 2. Write at the top of page 1 of your Day Book: Mon- day, April 1, 1908. Then copy the following opening state- ment. All work must be done neatly in ink. Opening Statement Six years ago to-day I purchased my present farm, investing cash, $6,000. Below is an accurate inventory of all my prop- erty, and a statement of my affairs as they stand to-day. 3. Skip one line, then arrange the following statement of Resources and Liabilities exactly as illustrated on page 18. Inventory, April 1, 1908 Resources : Farm, 160 A., market value, $8,000. Produce : 200 bu. Corn @ 50c. ; 150 bu. Oats @ 45c. ; 200 bu. Wheat @ 85c. ; 20 tons Hay @ $6.00 ; Potatoes and Vegetables, $50.00. Stock: 6 Horses, average $100.00; 20 Cows, average $40.00; 11 Steers, average $12.00; 5 Heifers, average $11.00; 12 Hogs, average $6.00; 100 Sheep, average $3.00. Poultry: 150 Chickens @ 45c. ; 21 Turkeys @ 75c. Implements : 1 Binder, $125.00; 2 Plows @ $10.00; 2 Harrows @ $12.50; 1 Mower, $40.00 ; 1 Hay Rake, $15.00 ; 1 Grain Drill, $50.00 ; 2 Wagons, together, $110.00; 2 Sets Harness, together, $90.00; 1 Buggy, $100.00; Tools, $50.00. Supplies, $25.00. Household Goods, 30 FARM ACCOUNTING $350.00. Life Insurance (paid-up value), $964.36. Cash, $170.00. Liabilities: Labor (unpaid), $75.00. Accounts Payable, $125.15. Mortgage, favor Iowa Trust Co., $3,000.00. Your work, if correct, will be exactly as shown on page 18, except that you will fill in the omitted part of the illustration. LESSON 2 DAY BOOK AND CASH BOOK I. General Instructions. Use three-column Journal paper. This lesson is illustrated on page 19. The Day Book should contain a complete history of the business. Here the cash account is carried in the two money columns. It is often convenient to carry this account on special pages. II. Written Work. Copy the following entries in the Day Book on the next page after the last statement. Head the pages and columns the same as in the illustration. (1) Heavy rain storm. Shod ''Cap" and "Maud" at Scow- scroft's ; paid $3.00. Bought 2 tons of Coal @ $4.00 per ton. (2) [Skip a line between each date.] Attended Breeders' Convention at Portland. Program and report on file. Paid expenses, $8.40. (3) Paid Grocery bill at Murdock's, $11.40. (4) Bought Milch Cow of J. C. Smith; paid cash, $40.00. Attended concert of the Boston Jubilee Singers, with family; paid expenses, $2.00. (5) Sold one Calf to P. A. Anderson for cash, $7.00. Bought 1 pr. Gloves, $1.50. (6) Bought at La Fount's for cash : 1 Ax, $1.00; 1 Ham- mer, 45c.; Nails, 50c. Went to Portland to select farm implements ; expense, $3.00. (7) Attended church with family. Dr. E. Hamilton preached on "Civic Honor." Collection, 25c. SINGLE ENTRY 31 (9) Bought Shoes for Teddie, $2.00. ■ (10) Bought 5 bu. Tested Seed Corn @ $2,00 per bu. (11) Rain all day. Fannie dropped calf. (12) Sold 3-year-old Horse, "Cap," for $125.00. (13) Bought one Studebaker Top Buggy; price, $135.00; discount, $15.00; net amount paid, $120.00. (14) Attended church with family. Our pastor preached on the "Prodigal Son." Collection, 25c. Paid quarterly dues, $10.00. (15) Mother took sick suddenly. Dr. Brown considers her case very serious. (16) Hired Frank Johnson for six months @ $30.00 per month and board. Mother is better. (17 to 28) [Student will insert at least one imaginary entry for each date. Try to use good judgment as to what might happen and what might be purchased and sold during the remainder of the month. Be care- ful not to pay more money than you have received.] (29) Paid the following bills: Skinner Bros., Dry Goods, $14.50; Murdock's, Groceries, as per bill on file, $15.60. Sold Murdock's 20 doz. Eggs @ 20c.; 12 Dressed Spring Chickens @ 30c. (30) Received Cream check. See Statement on file, $45.30. You will now balance the cash. Add the two col- umns; find the difference and enter it on a new page, as shown on page 19. LESSON 3 PERSONAL ACCOUNTS I. General Instructions. Use three-column Journal paper. This lesson is illustrated on pages 22 and 23. Read carefully page 21. II. Written Work. Prepare two sets of accounts, one entitled "Others Owe Us" and the other "We Owe Others." (a) "Others Owe Us." 1. Mrs. Richard King, a neighbor, has been buying dairy and poultry products on account. Her ' ac- 32 FARM ACCOUNTING count is illustrated on page 22. Prepare her account with the following entries : — May 1. There was a balance due from April, $3.80 ; 1 lb. Butter, 20c. May 3. 2 doz. Eggs @ 15c. May 5. 1 Chicken, 30c. May 12. 2 lbs. Butter @ 20c. May 18. 2 qts. Strawberries @ 15c. May 25. 1 qt. Cream, 20c. May 31, 1 lb. Butter, 20c.; paid cash, $5.00. [Balance the account as illustrated.] 2. In a similar manner prepare an account with the Adams Mercantile Co., with whom we are trading and who are buying produce from us. The entries are as follows : — June 4. 5 bu. Potatoes @ 75c. June 8. 60 bunches Onions @ 40c. per doz.; 10 doz. Sweet Corn @ 20c. On the same date we bought goods as per their bill on file, $6.50. June 15. 8 crates of Strawberries @ $1.75; 20 doz. Eggs @ 15c. On the same date we bought a Suit for William for $13.00. [Prepare this account; rule and balance the same as Mrs. King's account. The balance due is $5.25.] 3. In a similar manner prepare three additional original accounts of not less than ten entries to each. (6) "We Oive Others." 1, Frank Johnson, one of the farm hands, has requested that his wages be left on account, and that he be allowed to draw as he needs from time to time. The following items enter into his account. [Prepare it exactly the same as the five preceding accounts.] April 30. Wages for April, $30.00. May 1. Cash, $10.00. May 5. Bought Clothing for him at Goddard's, $7.20. May 10. Cash, $5.00. May 20. Cash, $3.00. SINGLE ENTRY 33 May 31. Credit Wages for May, $30.00. [Rule and balance as heretofore.] 2. July 1. Bought a 3-year-old Horse, "Jim," for $150.00, on condition that it was to be paid for at the rate of $25.00 per month. Four payments have been made on the first of each month, beginning August 1st. [Write up the account. Rule and balance as heretofore.] LESSON 4 STATEMENT No. 2 I. Genei'oL Instructions. We have now arrived at the end of the year and we are ready to prepare the second financial statement. Use three- column Journal paper. This lesson is illustrated on page 20. Read carefully pages 15 and 16. II. Written Work. Step 1. Take inventories of all your property, listing and placing a fair valuation on it, same as in Lesson 1. Step 2. Go through your personal accounts, balance them as illustrated in Lesson 3, and extend the amounts under the various headings in the inventory — Grain, Stock, etc. Step 3. If you own any notes, stock, or other valuables, list them under Bills Receivable. Be sure not to omit any- thing you own or owe. The above directions merely indicate how an inventory is taken. The following inventories are assumed and you will prepare a statement exactly as heretofore. Compare the values and find totals. See page 20. Inventory, April 1, 1909 Resources: Farm, $8,620.00. Produce: 150 bu. Corn @ 55c.; 175 bu. Oats @ 43c.; 253 bu. Wheat @ 87c.; 20 tons Hay @ $6.50; Potatoes and Vegetables, $40.00. Stock: 6 Horses @ $100.00; 1 3-year-old Horse, "Jim," $150.00; 22 Cows @ $42.00; 14 Steers @ $13.00; 4 Heifers @ $11.00; 11 Hogs @ $6.00. Poultry: 165 Chickens @ 45c.; 25 Tur- keys @ 75c.; 10 Geese @ 70c. Implements: 1 Binder, 34 FARM ACCOUNTING $120.00; 2 Plows @ $9.00; 2 Harrows @ $11.50; 1 Mower, $40.00; 1 Hay Rake, $13.00; 1 Grain Drill, $45.00; 2 Wagons, $40.00 and $60.00; 1 new Wagon, $100.00; 2 Sets Harness, $25.00 and $65.00; 1 Surrey, $130.00; 1 Light Buggy, $50.00; Tools, $50.00. Supplies, $30.00. Household Goods, $350.00; Piano, $300.00. Life Insurance, $1,073.40. Cash and Bank, $126.04. Liabilities: Labor (unpaid), $85.00. Accounts Payable, $142.32. Mortgage, favor Iowa Trust Co., $3,000.00. Note, favor Western Lumber Co., $200.00. Due on Piano to Smith Bros., $200.00. Having completed the statement of Resources and Liabili- ties, you will now determine the profit for the year. Skip one line and write the following statement, inserting the net worth in Statement No. 1 and what you find above. statement of Profits and Losses Net worth now $ Net worth last year (Statement No. 1) $ Net profit (or loss) $ Your result will agree with the illustration on page 20, if correct. Dividing the gain with last year's net worth, we find that you have made a gain of about nine per cent, on your investment and labor. LESSON 5 THE BANK ACCOUNT I. General Instructions. Study the remarks on banking on page 25. You are sup- posed to have opened an account with the Citizens' National Bank and to have performed the transactions given below. The bank has given you a pass book in which the teller will enter the deposits as they are made, and the checks, when they are returned once a month. You have kept a private account with which you check monthly. II. Written Work. 1. Enter the following on a sheet of Journal paper, as SINGLE ENTRY 35 illustrated on page 26. Extend the balance after Nos. 351, 354, 358, 368, and 371. Deposits: April 1, $98.35; (3), $70.00; (6), $90.00; (9), $40.50; (13), $125.00. The checks drawn, beginning with No. 350, are as follows : April 1, Mrs. Martin Harris, $30.00 ; Odell Seed Co., $10.00. (3), Emma Johnson, $1.50; Brown & Pickett, $3.00. (5), Salem Implement Co., $20.00; E. Skidmore, $65.00; Empire Lumber Co., $3.75. (6), County Recorder, $3.00. (8), Earle & Crockett, $80.00; Farmers' Supply Co., $15.40. (9), Frank Johnson, $10.00; Goddard Hardware Co., $3.50; Mrs. Martin Harris, $30.00; Crown Fertilizer Co., $6.40; 0. N. Smith, $15.80. (13), County Treasurer, $30.40; Kimball Livery Cp., $15.00; Brown & Pickett, $2.50. (20), C. J. Olson & Son, $15.00; Horning & Bacon, $10.00; Crawford Hardware Co., $10.50. (23), Brown & Pickett, $13.30. 2. At the end of the month add the checks and deposits and find the difference. The resulting balance should be $29.80. 3. The bank has returned your pass book with the canceled checks. You have arranged them numerically and find that all are returned except Nos. 361, 366, and 369. In other words, the bank has paid all except these checks. By adding the outstanding checks to your balance you find that the bank balance ought to be $58.30, which you find agrees with the pass book. The canceled checks should be filed numerically and kept for future reference. Second Method A system of modified double entry in which the special column Journal, or Cash Book, is the basis. It is the most satisfactory and labor-saving system in a cash business, where personal accounts are few and where accurate results are desired. The personal accounts are to be carried exactly as in the first method, if such accounts are kept at all. CHAPTER III MODIFIED DOUBLE ENTRY, THE SPECIAL COLUMN CASH BOOK Not many generations ago it was considered sufficient for the average manufacturer merely to record his cash receipts and expenditures and to keep a tolerably accurate check on the cash balance. In many instances the left trousers pocket served as the debit side and the right as the credit side of the "Ledger." Modern business methods and sharp competition have changed these notions until to-day it is necessary to know the cost of production in advance to the smallest detail. An- cient business methods prevail yet, very generally, on the farm. The wonderful progress of the American farmer is due to marvelous natural resources, labor-saving inventions, and natural ingenuity, rather than to wise and prudent manage- ment. Necessity of Careful Accounting In certain respects, a farmer must combine the methods of the manufacturer and the merchant. He must learn, not only how to increase production, but also how to facilitate the prof- itable exchange of his products. He must reduce the cost of production to the minimum by increasing the quality and the quantity of his products, and by getting full value out of labor. He must manage so that his working force, farm hands, chil- dren, horses, all, are constantly employed. This requires most skillful management in the rotation of crops, in the division of labor, in selecting seeds, fertilizers, and stock; and, above all, it requires general prudence in purchasing equipment and supplies, and in marketing products. Progressive farmers require a variety of records to assist in the proper manage- ment of their business. A first-class set of books is just as indispensable to them as to the banker or to the manufacturer. Superiority of Double Entry A careful comparison of the results obtained in the last chapter with the balance sheet given on page 47 will convince (37) 38 FARM ACCOUNTING the reader of the superiority of double entry. It will be ob- served that the only result obtained by a comparison of inven- tories was the net profit or loss. The source or causes of these results cannot be obtained by this method. The method sug- gested in Chapter II has this advantage: There is not a farmer so busy or so ignorant that he cannot adopt it and derive great benefit from its use. But the ambitious, progress- ive farmer will not be satisfied with this primitive method any more than a wide-awake merchant will be satisfied with single entry bookkeeping. He will adopt a system which will give him at any time reliable information as to his financial standing, cost of production of crops, live stock and poultry, household expenses, etc., and by which he can prove that his work is correct. Single and Double Entry Compared The distinction between single and double entry is unimpor- tant for our present purpose, but it may be a satisfaction to the student to know that the method we are now to consider is double entry. The important distinction between the two methods is that in double entry accounts are kept with per- sons, property, and allowances, while in single entry accounts are kept with persons only. In double entry there is a corre- sponding debit for every credit; the total debits and credits must therefore be equal, and must balance at any time. This becomes clear by referring to the Cash Book, page 44. In the first entry, the amount is entered in both the Total and in the Sundries column; and the same is true of all the succeeding entries. Hence the sum of columns four to ten inclusive must equal the total in column three. You will find the same to be true of the Payments, and of the Household Accounts. Additional Books Needed Very important books in double as well as in single entry are the Day Book and the Bill File. They are to be kept in exactly the same way as suggested under single entry, except that no cash entries are recorded in the Day Book. It is used only as a diary. The important consideration now is to adopt additional records that will furnish the necessary informa- MODIFIED DOUBLE ENTRY 39 tion in systematic and tabular form requiring the minimum amount of labor. The Gash Book The Cash Book is the basis of classification. A very con- venient form is given on pages 44 and 45. The special col- umns take the place of a Ledger. All money columns except the total column will be referred to as distribution columns. They are in reality separate accounts, and this form might, therefore, properly be called a combined Ledger and Cash Book. The form suggested has the important advantage of being self -balancing. A trial balance can be taken at the end of each page, month, or year, as illustrated on page 57. The process of preparing a financial statement becomes extremely simple by this method. A few observations regarding equip- ment and supplies, improvement and repairs, will be of assist- ance in using the distribution columns. lEquIpment and Supplies In accurate accounting, the question often arises: What shall be considered equipment, and what supplies? Supplies are defined as expendable or consumable materials, which are incapable of being used more than once; while equipment is of more permanent character, articles which can be used repeatedly. Fuel, lubricating oil, cotton waste, feed, etc., are supplies; while machinery, furniture, and apparatus of all kinds are equipment. Improvements and Repairs The distinction between improvements and repairs is not always clearly understood. An improvement adds value to the property, in the shape of equipment, buildings, drains, fences, and the like, while repairs merely keep up the property. A coat of paint on an unpainted building is an improvement; repainting is classed under repairs. This distinction is very important in making an inventory. Improvements are added to the inventory, repairs are not. 40 FARM ACCOUNTING Gash Balance and Sundry Columns The cash balance is found as follows : — Total receipts $653.14 Total payments 578.80 Balance $74.34 Note that the totals of the distribution columns equal the total of column on both sides of the Cash Book. The Sundries column contains all entries which do not fall under the special columns. At the end of the year the items are segregated under various titles. The segregation for the month of April is as follows : — Sundry Receipts Column Balance $126.04 Labor 10-00 Wood . . • - • 22.40 Total $158.44 Sundry Payments Column Interest $22.00 Taxes 33.40 Accounts Payable • • • 15.80 Insurance • • 35.10 Total .$106.30 Improvements and Repairs Column Improvements $80.00 Repairs 34.60 Total . . '. - .$114.60 Trial Balance In the language of the accountant, a trial balance is a test of the equality of the debits and credits in a set of double entry books. Our trial balance is much simpler ; it is simply a test of equality of the total columns and the distribution columns. In the Cash Book, merely add the distribution columns on each side and note that their sum equals the respective total col- MODIFIED DOUBLE ENTRY 41 umns. The Household accounts are balanced in the same manner. The Ledger With a special column Cash Book, the Ledger can be dis- pensed with in most cases. The further classification of the Sundry columns can be done at the end of the year, as illus- trated on page 46, and a few pages of the Day Book can be devoted to "What We Owe Others" and ''What Others Owe Us." Where a special Ledger is found necessary, the form shown on pages 77 or 82 can be used. The old-style Ledger possesses some advantages over any other form. The debit appears on the left and the credit on the right side on the same page. It is used either in double or single entry. The difficulty of keeping the Ledger in bal- ance prevents the use of the double entry Ledger to a very large extent. This is especially true if an attempt is made to use the ordinary Journal. Direct entries into either the double or single entry Ledger present less difficulties, and the method is recommended where the classification of accounts is such as to make the combined Cash Book and Ledger unpractical. This need scarcely ever be the case, however, because if ruled sheets cannot be ob- tained without headings, a blank sheet may be ruled with any number of columns and headed with titles to suit. For example, an orchardist would head his Receipt columns Apples, Prunes, Peaches, Small Fruits, etc.; while an exclu- sive stock farmer would devote special columns to the different kinds of stock. The advantage of the Ledger method is that each account is more condensed, while the self-proving and labor-saving fea- tures are important in the special column Cash Book. Pre- paring a trial balance and balance sheet, and closing the Ledger properly, though very simple for the experienced accountant, requires a proficiency in bookkeeping that few farmers possess. On page 77 is an illustration of the ordinary form of direct entry Ledger, showing the entries for April 1st. Compare these with the first entries on pages 44 and 45, and note the similarity of results. In the form follow the arrows and note 42 FARM ACCOUNTING that there is a debit for every credit, and vice versa. In the column marked (a) is entered the Day Book page, if the entries have been previously made in that book. The Annual Statement The annual statement exhibits in a condensed form the financial operations for a given period. It shows the resources and liabilities, the cash receipts and expenditures, the profits and losses, the net profit or loss, and the net worth. It enables the proprietor to analyze his business with considerable ac- curacy and to trace the sources of profits and losses. There are various forms of statements, but the illustration on page 47 seems best suited to the farming business. Statement No. 3 shows the results of a month's business only. The inventories are obtained from separate schedules and the cash receipts and expenditures are the totals found in the Cash Book. The profit and loss accounts are fully analyzed after Statement No. 4. MODIFIED DOUBLE ENTRY 43 Illustrative Lessons LESSON 6 CASH RECEIPTS, SET 1 I. General Instructions. Use Forms 2 and 3. This exercise is illustrated on page 44. The result of your work will be exactly as illustrated on that page, if correct. Do not merely copy page 44, but compare your work with the illustration after you have done your best. Before beginning your written work read very carefully pages 37 to 42. This should convince you that double entry is far superior to single entry. II. Written Work. 1. Turn to Form 2 in your Cash Book and enter the following items in the proper columns : — April 1, Balance forwarded, $126.04 (Total and Sundry columns) ; 2 tons Clover @ $6.00; 80 bu. Corn @ 65c. (3) 12 Cabbages @ 10c. ; 25 lbs. Butter @ 25c. (6) 2 Steers @ $40.00; 20 Spring Chickens @ 45c.; Hauling Coal, 1 day, $5.00. (9) Jersey Calf, $10.00; 2 cords Wood @ $4.00; 5 bu. Potatoes @ $1.00. (12) Heifer, $25.00; 10 lbs. Butter @ 28ic. (13) 75 bu. Corn @ 65c.; Work on County Road, $5.00; 4 bu. Apples @ $1.50. (15) 20i doz. Eggs @ 20c.; 36 lbs. Butter @ 25c.; 2 tons Clover @ $6.00. (17) 100 Apple Trees @ 20c.; 1 Steer, $37.00; 12 Cedar Posts @ 20c. (19) 6 Spring Chickens @ 40c. ; 95 bu. Corn @ 60c. ; 3 tons Hay @ $6.00. (20) Jersey Calf, $10.00; 50 bu. Oats @ 35c. (23) 1 Turkey, $1.40; 1 bu. Clover Seed, $1.50. (26) 18 lbs. Cheese @ 15c. (29) 3 cords Wood @ $4.00; 10 bu. Barley @ 40c.; 4 tons Timothy @ $5.50. 44 FARM ACCOUNTING RECEIPTS 4 ri / i90^ ■ "■■' ,..MS .„,„ '— "i'.™' s,.c. — ,,-»..,... / ^a /a^ r P F0»«AI10ED 17/. 0^ /3/ <"/ 2.~/'t>iis n/o i/f r /? /2. - Ko Dt^ . (^ n y ^7 . / ■7,0 z/M.rud>V .^,r / 7.? / ?.)■ (. 2 Sfe e fs ^0 Fo i.cSirij^^ 6/rc./- /cf^s ,'/S ^ ?,f y-i ■ /oJi/ Jc^Tffr- .:^g'/^ n /f^.^ ^ g6 - /?> 7J Oii. 6orfr CS^ '^!< -rJ <^^ 7.f ^nr-A Ofi ^oc<^f^ /FcaJ ,< '/Su.Ml/es ^ (, (, (f 5.6'/^j:lai.'£t!<;s .Xo ^ ^^ 4 /o 3C/1. ^^7^,- .Jii' i/e Trees .. :}o / Sfe/r ^7 J7 JX 6^eJar- /esTi . 'l ^„ - ? /° --? 4^« "f ^Ser^^*^f 0^/cc/Ce?^T.S- ■? "^ OS^ ou . -^/^a rtr 'io ,r-7 J-7 /> n }f> l/ersfc/ ~^6^// /o /o "j-o /oT^Ocl/S ^ JS <7i f .To 7^ / /u-r-Zce^ ^/ «^; ■/ / 'A' / ,ro / ro HC //// (f^eese ■/£■ V ■7n i? fo ■?'? J 6^.Js l^f^.J /z ' 1 /? /o /au. ^a ,>-/>' Jo Jo Z^/-. ^^.A .%'J^u^ 7 ,rc y J-D \<;7iJ/.s ^ 3S JJ /'Z 7a. i^e s ,rj J" ¥" Jo •/o !•, ■P^rs..^/ £^ J J-" J Sb / /it P \S(n ^ ? ST> i. So ' \\^ \ 4"^ >l> 0^ ,>" \M> r^l' 0*' 23 77-efs y S^rc<.ls r,^ JS 'io 3.} 'ge jf//^/4^ Sercf J Xo J Xo ^, J)ej '//■■f /i>rfi ^,^. / ^fi 9 c rix (^a «- / <3 /o /o A'. At. J... -J.././ ^, .f ■f C &cller /ra./,5 u J /J So ■ / So u 4^f^a. ir^ ffn nri/r s e SVa //S '/J So A^i/s7e)-r e ./le Ao >'^ p r^ a ' /o To /o So if Z tr-ee s e J J jfi^/f -Je /C e Ji a ^o_ 7.f /o J 76 Jo JujYe r- Ifra // e >- i / 7^ / 7-f — UfJ.s'.yre^i^^. ii JS j.-f //Jj^cr ^^./^.^sr/./J /S OS //liJi FO»W.»OED flflio /lis6 (■?, 00 ^c ^C Jo 9° fc fo 2/ <5J //v u /oC }P CASH BOOK 46 FARM ACCOUNTING (30) Produce for Household Use, Orchard, and Garden, $5.25; Dairy, $6.50; Poultry, $6.30. 2. Add the columns. The correct results are as follows: Total, $653.14; Grain, $179.25; Hay, $65.50; Orchard and Garden, $37.45; Stock, $162.00; Dairy, $27.30; Poultry, $23.20; Sundries, $158.44. Note that the total of the distribution columns equals the total column. 3. The Sundry column contains the following items : — Balance, April 1st ... $126.04 Labor 10.00 Wood 22.40 Total $158.44 Verify Step 3 by setting down each item under its appro- priate head and adding. Arrange your work as shown above. LESSON 7 CASH PAYMENTS, SET 1 I. General Instructions. See Lesson 6. You will fill in the items between the 15th and 23d, omitted in the illustration. If payments are made by check and the bills filed for reference, the items need not be entered in the Cash Book. The payee, the amount of the check, and the distribution are sufficient entries. IL Written Work. 1. Enter the following expenditures for April on Form 3. (See page 45.) April 1, on Household Expenses, $30.00 (Total and House- hold columns) ; 12 bu. Seed Wheat @ 83^jC. (3) Labor in Garden, $1.50; shod "Cap" and "Maud," $3.00. (5) Interest M. P. Co., $20.00; Jersey Cow, $65.00; Laths and Shingles, $3.75. MODIFIED DOUBLE ENTRY 47 Financial Statement. Year Ending' vy*? . ?^-. . ^'^ 19 .^ A Receipts Balance forwarded Graia Hay Orchard and Garden Stock Poultry Sundries. Machine and Implements Hired Labor C&sh Receipts and Paytnenti^ Dairy Producte / j .0 1 1 Totol Payments. !i.«f. %/ fSZSP Houaebold Trees, Seeds and Fertilizers. Labor General Kxpeuee Stock Machin'M and Lnplements. . Farm (improvements) Repairs Sdndkies: — Life Insurance PerF>oQal Expense Accounts Payable . Interest. Taxes . Gifts. Insurance. iff* ^OMHdr^. vaO^ <**f^**. Balance on hand . Total.. %^f Rosourc«* aLiul U«j3Uni««. Besociicks. Farm (market value) %f01/C<>P, Cash and Bank '^T.h f" Life Insurance (Paid up value) . . /. /. A* . tP. j.f¥isp Stock* Grain* Hay* Orchard and Garden* Dairy Products* Poultry* Machines and Implements* Household Goods General Supplies .....4/6 ^C9. ../ QQ JTJf ..fS'3\.'>,«. jq .io. %/M7f.47('- LlABILITIia. Hired Labor Bills Payable Accounts Paymbla . Gifts , 9....% Inf. CHT^JesA.^y •^y^JU L, ANNUAL STATEMENT 48 FARM ACCOUNTING Accoiints SKowing' Profit or Loss. Year Ending .//7.4.r.'..K/... 19^;^ (Araounls are lali-.n from Inveotories, Cash Book, and Special Records.) GRAIN Invr.Dtory las Labor Inter. f,Land. 47P ^^ if' 7 to. 7/ Present Inventory . . Receipts from Sales Fed to Stock Fed to Poultry . .7. /.JL ■n 'J-.Q /a .0.7 .0.'? '.f./.S,\-Slo %Jif./Z ^.a STOCK Net Profit To J^. l2A / }.f / 7J is /o 2A ;>,<• ■ triA ei <7i 21 t4, 4 4c -/ -Z4 L6 If +^ lie ■> (.0 ■(V, < Vf. -- - i£i <^ fn 1 /Z/i Jl oS_ JL ££ /2 4^ Jk U. ^ c£ M. ^ _L il Jl LS. _i i£ _L s± _L. 2i .J. h >1. * 40c. should be classified as Poultry. CASH BOOK 62 FARM ACCOUNTING SUMMARY OF HOUSEHOLD ACCOUNTS, \j /^yt.C^ l^/. .19^f_ 797? /yoy -/^'^Ji'// iii ^J •ks Ss-i // /^ /2 Sj6 4o J 2i d. ^Ltk J.'io s s u i/io ^ ^0 1U il^ !£. 2c fo /b6'4o S^ £o £o 2o fc_ Jo_ iii^ /Of JAIM /Mdirn m. m. /oij£/o5o± /o3Ji 'mMl io jidsl: TraJe/r^e. /£^.^t.n. ^Y^ Ail /OS J L(S_ JZe i'l J_l Sxc d^ ^^ i^'^^ 2^_l ^ J eo /iM J^LZ A'^ ^So ^^ A^ ^- 2L •k ^^ J'Sc ^Ji i£i? iSZo U-L luL iiljf^ J.iA. jft. lA. J^ /2m /J%0 Ai /OSh /lie /i M 6 / 3l ¥o lA // Jo M H zA -?-'- :^2A/A So 'k^ Cf2 -A 'i-U j£^& j:j4 ^^^ fl£o A 'I'lA'^Q^ y_^'_d_pi 4 A_^U_i3i'J_^ ± ^M\ j^^ lA i-e V# II J2^ /I i^__^^ /o N^k. lA M'Jl± /^. ^':ZAsio A lAJSJcJl^jS-M'Jd^ /^^ /^So lfl?A IS r- ^ ^'- ?4^ SAo ^- Si 2£^ SI Jiac oje^ J e J CO J\ t^iZ.t.^-»-< _^ ^ /■/ y f J /• 1 1 i 1 ' 1 1 1 ", ,! 1 ~ 1 DOUBLE ENTRY LEDGER 78 FARM ACCOUNTING DOUBLE ENTRY JOURNAL DOUBLE ENTRY 79 Deposit all cash as it comes in and make all pay- ments by check. (2) Bought store and fixtures of Wm. Hayward & Co., 110 W. Green St.: Building and Lot, $2,000.00; Fur- niture and Fixtures, $500. Paid (check No. 1) $1,000.00 ; gave our note, due in 60 days, for the balance. (Dr. Real Estate, and Furniture and Fix- tures; Cr. Cash and Bills Payable. Rules 1 and 2, page 73.) (3) Rented store room. No. 9 Canal St., for $40.00 a month. Paid one month in advance. (Dr. Ex- pense; Cr. Cash. The expense account is some- times divided into Rent, Salaries, Light and Fuel, etc., but here the expense account includes all such items.) (4) Bought of Willard Johnson, Ames, Iowa, on account: 20 tons Timothy Hay @ $15.00; 25 tons Prairie Hay @ $12.00. (Dr. Grain and Feed; Cr. Willard Johnson.) Paid freight on above, $85.00. (Dr. Freight; Cr. Cash.) Sold to Richard Morris, 340 W. 10th St., on account: 10 tons Timothy Hay @ $18.00. (Dr. Richard Morris; Cr. Grain and Feed.) (5) Sold to John Rollins, 432 E. 5th St., on account: 5 tons Prairie Hay @ $15.00. (6) Paid Willard Johnson for invoice of June 4. Bought of Winkle Elevator Co., Bancroft, Iowa : 1 car Wheat, 997 bu. @ 97c.; 1 car Barley, 830 bu. @ 51c.; 1 car Corn, 1,073 bu. @ 69c. (Freight pre- paid; Dr. Grain and Feed; Cr. Winkle Elevator Co.) (8) Received cash of Richard Morris, on account, $100.00. (9) Sold to Star Milling Co., Detroit, Mich., on account: 500 bu. Wheat @ 99c. Received of John Rollins his note, due in 10 days, payable at Citizens' Na- tional Bank, in full of his account; interest, 6 per cent. (10) Bought of Horton, Brown & Co., Spring Valley, Iowa, on account: 1,500 doz. Eggs @ 21c.; 500 lbs. But- ter @ 27ic.; 100 lbs. Y. A. Cheese @ 15c. Paid 80 FARM ACCOUNTING Freight on above, $3.50. Paid Cramer & Co. for Office Supplies, $15.00. (Dr. Expense; Cr. Cash.) Sold to Hotel Emery, on account, 90 doz. Eggs @ 25c. (11) Accepted Horton, Brown & Co.'s draft on us in favor of Richard & Lytton, at 3 days' sight, payable at Citizens' National Bank, for amount of invoice of June 10. (Dr. Horton, Brown & Co.; Cr. Bills Payable.) Sold to Western Produce Co., Chicago, on account : 900 doz. Eggs @ 25c. ; 300 lbs. Butter @ 29c. (12) Paid Winkle Elevator Co., on account, $1,000.00. (13) Sold to Chicago Malting Co., on account, 415 bu. Barley @ 60c. Received remittance from Star Milling Co., in full of invoice of June 9. (15) Paid our acceptance of June 11, due to-day. Gave Winkle Elevator Co. our note at 30 days, payable at First National Bank, for balance of account. (16) Gave Edward Harvey a check of $100.00 for his private use. (Dr. Edward Harvey; Cr. Cash.) (17) Sold to Empire Livery, on account, 300 bu. Corn @ 75c. (18) Sold to G. W. Gardner, for cash, 25 bu. Corn @ 74c. (Dr. Cash; Cr. Grain and Feed.) (19) Received cash of John Rollins for his note due to-day, with interest at 6 per cent. (Dr. Cash; Cr. Bills Receivable and Interest.) (20) Sold to Henry Simmons' Sons 300 bu. Barley @ 60c. They paid $100.00, balance on account. (Dr. Henry Simmons' Sons, $80.00, Cash, $100.00; Cr. Grain & Feed, $180.00.) (22) Sold to Condon Construction Co., on their 60-day note : 10 tons Prairie Hay @ $12.25 ; 10 tons Timothy @ $15.00; 300 bu. Corn @ 75c. (23) Student renders an itemized bill for small expense items paid in cash as follows: Stationery, $3.25; Collections and Exchange, $3.40; Entertainment, $5.40; Postage, $3.00; Telegram, $1.75; total of Check, $16.90. (Dr. Expense; Cr. Cash.) DOUBLE ENTRY 81 (24) Paid for 6 tons Coal @ $4.00, for use in store. (25) Sold to Hotel Emery, on account: 50 doz. Eggs @ 25c. ; 105 lbs. Butter @ 30c. (26) Bought of Iowa Produce Co., on account: 100 boxes Gano Apples @ $2.50; 100 boxes Mo. Pippins @ $2.25; 50 boxes Winesaps @ $3.50; 25 crates Pine- apples @ $1.75. Paid Freight on above, $11.30. (27) Prepaid our note in favor of Wm. Hayward & Co., given June 2, for which they allow a discount of 6 per cent, to maturity — 35 days. (Dr. Bills Pay- able; Cr. Cash and Discount.) (29) Sold to H. E. Johnson, 27 Canal St., on account: 25 doz. Eggs @ 25c. ; 50 lbs. Cheese @ 17c. (30) Credit each partner with his salary as per articles of copartnership. (Dr. Expense; Cr. each partner.) Paid monthly dues and expenses as follows: Tele- phone Rental, $3.00; Commercial Club, $5.00; Pay Rolls for June, $150.00; Water Rent, $4.00. (Dr. Expense; Cr. Cash, four checks.) Now add all the columns of the Journal and see if the sum of the two debit columns equals the sum of the two credit columns. The cash balance should be $1,938.67. LESSON 17 POSTING I. General Instructions. As explained on page 72, posting consists of transferring debits and credits from other books into the Ledger. The left half of the Ledger page is devoted to the debits and the right half to the credits. Every amount found in the Journal debit columns must be found on the debit side of the Ledger (either in individual items, or in totals) under the appropriate ac- count; and all credit items in the Journal must be found on the credit side of the Ledger. It is, therefore, evident that since the Journal balances, the Ledger will also balance, if the work is correct. 82 FARM ACCOUNTING DOUBLE ENTRY LEDGER DOUBLE ENTRY 83 II. Written Work. 1. Study very carefully page 82 and note how the titles are written. Note that the cash items in the Journal are not posted separately, but only the totals at the end of the month. 2. Take three sheets of Ledger paper and number the pages from 1 to 6. On the first page give one fifth page to each of Student, Edward Harvey, Cash, Real Estate, and Fur- niture and Fixtures; page 2, give equal space to Grain and Feed, and Produce; page 3, equal space to Bills Receivable, Bills Payable, Expense, Freight, Interest and Discount; pages 4 to 6, one fifth page to each personal account as they occur. 3. You are now ready to post. Place the Ledger to your right and the Journal to your left. Turn to Student's account and in the date column write July 1, 1910; in the folio column, 1 (meaning that the entry is found on page 1 in the Journal) ; in the amount column, $3,000.00. Now write 1 to the left of your name in the Journal, indicating that the amount is posted on the first page of the Ledger. This is very impor- tant. Next turn to Edward Harvey and post this item in the same manner. In the same way proceed with all the credit items. The last item to be posted is the total credit of cash, $5,016.45, under June 30. The numbers in the folio columns will be the same until new pages are turned. The number opposite the entry in the Journal is always the page of the Ledger on which the account appears. Add the totals of the Ledger accounts and observe that the grand total equals the total of the credit columns of the Journal. 4. Proceed in exactly the same manner with posting the debit entries and prove your work the same as the credits. If the debit and credit postings are equal, your work is prob- ably correct, though amounts may have been posted to the wrong account. Such errors could not be detected except by checking. 5. Observe tlT.at several accounts balance, such as Horton, Brown & Co., Willard Johnson, and others. Draw a red line across the money columns under the last amount on both sides of all accounts which balance. Accounts having a number of entries on either or both sides should be totaled and the 84 FARM ACCOUNTING amount written under the respective columns in very light pencil figures. You are now ready to take the trial balance. LESSON 18 THE TRIAL BALANCE I. General Instructions. The trial balance is taken for the purpose of discovering whether the Ledger is in balance or not; that is, if the debits equal the credits. It may be taken either by using the totals of the debits and credits of each Ledger account or by taking the difference between the two sides. The latter method has several advantages. Both methods should be used if there is any difficulty in getting the balance. The only satisfactory rule for discovering errors in the trial balance is the follow- ing: Check all the work. n. Written Work. Take a sheet of Journal paper and write the page, title, and balance of all the accounts in the Ledger, except those which balance, as follows : — TRIAL BALA^XE, JUNE 30, 1910 1 Student ? 1 Edvv^ard Harvey ?■ 1 Cash ? 1 Real Estate . , ? etc., etc Total $7,913.38 $7,913.38 LESSON 19 THE BALANCE SHEET L Gefieral Instructioiis. The balance sheet consists of two statements: one showing the losses and gains, the other showing the resources and liabilities. These statements consist of the items found in the trial balance and of the inventories. Having completed the trial balance and inventories, the books are not needed further in preparing the balance sheet. Losses or gains are DOUBLE ENTRY 85 generally found in accounts of allowances and property in which we deal, or which show a rise or fall in value ; resources and liabilities are generally found in accounts representing property and persons. Resources appear on the debit side; liabilities and gains, on the credit side. II. Written Work. 1. The first step is to take an inventory. This consists of property on hand, including Grain and Feed, Produce, Fur- niture and Fixtures, and Real Estate. Going through the stock we find : — GRAIN AND FEED PRODUCE 748 bu. Corn @ 69c. 435 doz. Eggs @ 21c. 115 bu. Barley @ 51c. 95 lbs. Butter @ 27{rC. 497 bu. Wheat @ 97c. 50 lbs. Cheese @ 15c. 10 tons Prairie Hay @ $12.00 25 crates Pineapples @ $1.75 100 boxes Ganos @ $2.50 100 boxes Pippins @ $2.25 50 boxes Winesaps @ $3.50 Real Estate and Office Fixtures at cost value. Prepare tha inventory as illustrated on page 20. 2. Going through the trial balance we find that the fol- lowing accounts represent losses or gains (fill in the amounts) : — ■ LOSSES AND GAINS Expense ? Grain and Feed (2) . ? Freight ? Produce (2) ? Student (1) ? Int. and Discount. . . ? Harvey (1) ? Total ? Total ? (1) The difference between the two sides, usually written in red ink; (2) is found by subtracting the amount in the trial balance from the inventory. 3. Since the loss and gain account is made up only at the end of the balance period, it should always be closed and the balance transferred to the proprietor's accounts. 86 FARM ACCOUNTING 4. The resources and liabilities are as follows (insert the figures and total) : — RESOURCES A^^D LIABILITIES Cash ? Robert Morris Real Estate ? Henry Simmons Co. . Fur. and Fixtures. . ? Western Produce Co. Grain and Feed (In- Bills Payable ventory) ? Iowa Produce Co. . . . Produce (Inventory) ? Student Bills Receivable .... ? Edward Harvey. . . . Chicago Milling Co. . ? Empire Livery ? Hotel Emery ? H. E. Johnson ? Total $7,964.01 Total $7,964.01 LESSON 20 CLOSING THE LEDGER I. General Instructions. The object of closing the Ledger is to balance the loss and gain accounts and to bring the final net gain or net loss into the partners' accounts and thus leave only the accounts show- ing resources and liabilities open for the next balance period. The balance sheet furnishes a perfect guide as to the accounts to be closed. All the accounts represented in the loss and gain statement must be closed. Accounts showing resources and liabilities are not closed, but any account may be balanced if it contains a sufficient number of entries to justify it. Bal- ancing an account consists of canceling' equal amounts from both sides of the account, ruling it, and bringing down the balance on the proper side below the ruling. II, Written Work. With the balance sheet before you, turn to the Grain and Feed account in the Ledger. Enter the inV-entory on the DOUBLE ENTRY 87 credit side, as illustrated on page 82. The difference between the diebits and credits is now $537.60, or the gain on this branch of the business. Enter this on the smaller, or debit, side, then rule the account as illustrated on page 82. (The ruling may be done in red or black ink as desired.) Note that the ruling appears on the same blue line on both sides of the account, even if there are more entries on one side than on the other. The single line crosses the money column only; the double line crosses all except the explanation columns. Next bring down the inventory on the debit side below the ruling. The reason for this is that having entered it on the credit side temporarily, in order to show the proper gain, it must also be entered on the debit side in order to restore the balance of the Ledger. Proceed in the same manner with the remaining loss and gain accounts, except that where there is no inventory the account is closed as it stands in the Ledger. Next enter half of the net gain, shown in the loss and gain statement, on the credit side of each partner's account. Close the account as illustrated on page 82 and bring down the present worth. This completes closing the Ledger. Note carefully the steps leading up to closing a set of books : — 1. The trial balance. 2. The balance sheet. 3. Closing the Ledger. Never rule an account until the trial balance and balance sheet are known to be correct. LESSON 21 (Optional) ORIGINAL ENTRY LEDGER L General Instructions. It was stated on page 76 that it is not necessary to jour- nalize, but that it is very helpful in order to avoid mistakes. Most business men prefer the Journal and Cash Book for the original entries. The difficult thing to carry out in practice without journalizing is to post every entry tivice, on both the debit and the credit sides. Thus, when a sale of grain is made 88 FARM ACCOUNTING for cash, cash is debited and grain is credited, according to the rules of journalizing. Since the full explanation is writ- ten in the Ledger, it is best to use the ordinary Day Book form as illustrated on page 22 and used in Lesson 3. 11. Written Work. On two-column Journal paper open the same accounts as in Lesson 3 and post the transactions in Lesson 16 directly into the accounts, as illustrated on page 22. The result will be exactly the same as given in Lesson 17. It will, therefore, be unnecessary for you to prepare the statements and close the Ledger. The trial balance must be taken, however, same as heretofore. PART II COST ACCOUNTS AND SPECIAL RECORDS COST ACCOUNTS AND SPECIAL RECORDS CHAPTER VI COST OF PRODUCTION Too often a good farm is compelled to carry unprofitable experiments and the whole business is pronounced a failure without an adequate attempt to find a remedy. In addition to the foregoing records (Second Method), Mr. Harris has kept accurate cost accounts of the main branches of his business. In cost accounting there are four principal elements to con- sider: Cost of material, labor, interest, and depreciation. The cost records are independent of all the rest and may be kept of every branch of the business, if desired, or limited to one or more phases. In this instance cost records have been kept of live stock, grain, hay, dairy products, and improve- ments. The Agricultural Experiment Stations are always willing to give the farmer important advice and assistance regarding the stock, grain, fruit, etc., best adapted for differ- ent localities and purposes. But conditions frequently arise where it is important for the farmer to carry on his own experiments. Your own Experiment Station will doubtless be glad to cooperate and suggest methods for carrying on such experiments even to the extent of furnishing necessary blanks and material. Important bulletins on the subject may be had for the asking from the Department of Agriculture, Wash- ington, D. C. The following announcement in the Crop Reporter for May, 1908, indicates what the government is doing in this direc- tion : — " Cost of Producing Farm Products " "The Bureau of Statistics is making an investigation of the cost of producing farm products in different parts of the United States. Blank forms have been printed upon which (91) 92 COST ACCOUNTS AND SPECIAL RECORDS to make reports, and this Bureau desires to receive the names of such farmers as have kept records of cost of producing crops, or are well informed upon the subject of cost of crop production in their locality, in order that blank schedules may be sent to them to fill in. Individual reports will not be pub- lished — only the average of many reports. Names should be sent to the Bureau of Statistics, Department of Agriculture, Washington, D. C." Every farmer should avail himself of this important free service. "Keeping posted" is one of the characteristics of the progressive and successful farmer. There are three ex- ceptionally valuable bulletins on the subject which ought to be in the library of every farmer : U. S. Department of Agri- culture, Bureau of Statistics, Bulletin No. 48, and University of Minnesota, Agr. Ex. Station, Bulletins Nos. 73 and 97. Goat of Live Stock Either of three methods may be employed in finding the cost of live stock: — First Method. — Ascertain exactly the total amount of grain, hay, and roughage on hand at the beginning of the year, and produced during the year. From this subtract the quantity sold, including amount used by household and for seed, and the amount on hand at the end of the year. The difference is the quantity used for live stock. The value at market prices is the expenditures of feed for live stock. Find the total amount received for dairy products, including amount used by the household. The difference between the cost and the receipts is the gain. The disadvantages of this method are that no account is taken of individual animals nor of different kinds of stock. The herd as a whole may be a paying investment and still there may be individual animals carried at a loss. It is desirable that such records be kept, at least occasionally, as will enable the farmer to eliminate un- profitable animals. Second Method. — The following actual record of a dairy herd of twelve cows illustrates a much more satisfactory test than the preceding. Individual record was kept of the milk produced by each cow, but the feed was weighed for the COST OF PRODUCTION 93 entire herd, and the average cost charged to each animal at market prices. Tests of Dairy Herd for March, 1909 No. Lbs. Milk Cow. for Mo. *Test. Lbs. Fat. Val. at 36c. Cost of Feed. Net Profit. 1 465 4.5 20.93 $7.53 $6.21 $1.32 2 372 5.0 18.60 6.70 6.21 .49 3 620 5.0 31.00 11.16 6.21 4.95 4 372 7.0 26.04 9.37 6.21 3.16 5 496 4.8 23.80 8.57 6.21 2.36 6 682 4.7 32.05 11.54 6.21 5.33 7 558 4.4 24.55 8.44 6.21 2.23 8 620 4.1 25.42 9.15 6.21 2.94 9 496 4.2 20.83 7.50 6.21 1.29 10 651 4.9 31.90 11.48 6.21 5.27 11 558 5.0 27.90 10.04 6.21 3.83 12 589 5.0 29.45 10.60 6.21 4.39 * These figures were obtained by the Babcoek test, which is described in every modern work on dairying. It may be seen in any creamery. Feed for the Month of March Hay, 4,900 lbs. @ $9.00 per ton $22.05 Kale, 9,600 lbs. @ $2.50 per ton 12.00 Bran, 1,800 lbs. @ $30.00 per ton 27.00 Shorts, 900 lbs. @ $30.00 per ton 13.50 Total $74.55 $74.55 divided by 12 equals $6.21, average cost of feed. With this average before him, a careful feeder will be able to make mental corrections for each individual animal, accu- rate enough for most practical purposes. The milk record has been kept, as illustrated on page 102. Third Method. — The difference between the second and third methods is that in the latter accurate records are kept of indi- vidual feed rations, while in the second method an average is taken. The error resulting from averaging the feed between all the animals in a large herd may be such as to unduly favor certain animals and do injustice to others. The only abso- lutely accurate method is to keep an account with each animal, 94 COST ACCOUNTS AND SPECIAL RECORDS at least with such annuals as show a tendency to be unprofit- able. Page 97 shows an individual account with one of the milch cows on the Harris farm. It is arranged on the regular Ledger form. Opposite pages of the Day Book may also be used. The detailed information regarding feed, milk, labor, etc., is found in the respective records, illustrated on pages 102 and 103. Similar accounts are kept of each animal, tested preferably during the entire lactation period. It is only in this way that the careful farmer can determine whether each animal is kept at a gain or a loss. The weeding out of one or two unprofitable animals a year will pay for the labor of keeping the cost records many times over. Extension Bulletin No. 3, Iowa State College, says on this subject: — "There are a variety of different methods used among suc- cessful dairymen for securing records of their cows. When accurate records are imperative it is necessary to weigh and sample each cow's milk at each milking. For all practical purposes, however, it is not necessary to weigh and sample the milk from each cow of tener than twice a day for three days of each month. Usually samples are taken on the first, tenth, and twentieth of each month, thereby making six milk weights on the record sheet and six separate samples of milk which have been placed in a sealed jar bearing the cow's name. "Directions. "1. Arrange the scales, milk sheet, sample jars, and sampler in a convenient place behind the cow stalls. "2. Put at least one preservative tablet in each jar in- tended for a composite sample. Be sure to place the remain- ing tablets where children cannot get them, as they are poisonous. "3. Weigh the milk from each cow separately and record the amount on the record sheet. "4. Use a reliable sampler, or if one is not at hand use care in mixing the milk by pouring from pail to pail before taking out a sample with a small dipper. This is important. COST OB^ PRODUCTION 95 "5. Keep the bottles where the children cannot get at them, as the preservative is poisonous. "COMPUTING THE MONTHLY YIELD FOR A COW "After summing up the weights of milk from one cow for the three days of the month you have the total pounds of milk for an average three days. Divide the sum by 3 and you have the average for one day, which multiplied by the number of days in the month will give the monthly yield. It is not ex- pected, nor is it essential, that these records be accurate to a pound in ordinary dairy herds. When the milk is tested with the Babcock machine the result is read as per cent, of butter fat, — as 3.7 per cent, or 4.3 per cent. This indicates that there are 3.7 pounds or 4.3 pounds of butter fat in 100 pounds of milk. Multiplying the weight of the cow's milk for the month by the test the result indicates the pounds of butter fat which the cow has produced for the month. At the end of the year 96 COST ACCOUNTS AND SPECIAL RECORDS it is a simple matter to add together the twelve monthly records of butter fat. Multiply the sum of these weights by the price per pound and the result indicates the value of the product. The record for each member of the herd can be thus worked out. A study of these records shows the comparative value of the various cows in the herd. "In order to know whether the cow is paying a profit or not the owner must have a definite idea of how much feed she has consumed in making this product. Knowing this, the actual values of all the cows are easily determined. On dairy farms where the hand separator is used it is safe to charge a cow for food only while in milk. The skim milk will usually pay for the cow's board while dry, and the calf and manure should more than pay for the labor it takes to care for her. Why not milk fewer cows and make more money?" Cost of Crops The principles laid down in respect to the cost of animal products hold true also for the cost of farm crops. Two meth- ods suggest themselves : Accounts with the various crops and accounts with the different fields. Either method requires de- tailed records of the labor, seed, fertilizer, etc., expended on the crop and of returns not only for cash sales, but for prod- ucts used by the household and for feed. On page 97 is illustrated an account with the wheat crop in 1908. COST OF PRODUCTION 97 /^^t.^'i^ ^M-g.^^ If- 1^.- /i-i- .Co ^^^t^-^^Ut-*!^ /,? lA //J i4 Ji- /3 1 X /3 /V /i l4 /V /,? // /fo 7, (^,C• - /o // // /" /^ ^ // /I /j-j 'fl V/^k^-.-c-'^ II // J1 10 II /3 / /J n /» II /J- /o /^ 10 // /I II /I- /o /St (a., /'eeJ ^eco >^/, ^)a t ry (}ei,fj, ^u n e . /f o ^ Yle.^l,i A^ameor//o. 1 Z 3 ¥ 6 C -J i <^ioini\ii".iiiiijiS /for/^fu^f,/'?o^ (2c c o ctn/ 1 2 3 4 .i i T i ^ icitaiSiinSi Li-]liiiUlizxti2i,ti2iiT!SVI'>ojl Hn ?.^ /«/ Ttfrntifh (^f-t^^t^ 'i'^'i '^ Ji ,ia /o go ^.U^flZl—. Xu.^ ^t^fcyt ^ _ i ^ Jc J u a^J'^^^ J Z / ^ /S '>0 ^-£M,d^'C^^-t'^~c.^^-^ V 4 J ^ ^ /S f f-> kl.Jc.<.e^'nJuJ^ '/ 2 / 3 ^ /J ^ es _ 1 [J SPECIAL RECORDS ■iTid of Slocic J^ViiW' L-rzi'-o SPECIAL COST RECORDS FEED RECORD 103 .'■JJ/fo^ 10O. NAME OR NUMB A^ i-* [^....^A ^'/i-C3 . v'//: miA \3Uz Tour 'M. -iik'fi 0/0 c/r /fecoro, Ji ccr-r is' rayjn /tf. ' A mm J ^Afl^^e •^^''^'^ (jX ^""V^")' Sc cy. Me %-& PrUi 3S CfuT- J- 5oU ^ \}.5mii/x 1000 10. 3L JZeie^ 5,//. Mc '&u 7LS JaL ^cJ/^ Se, /ISO ^ M> '(n4-£^ MauJ Qa^ J^ 4 s /Q DreeJcf^q nee or a, //0-i/^. fo-^^^ ■ Sa mj. J SPECIAL RECORDS 104 COST ACCOUNTS AND SPECIAL RECORDS ^ xyj^firo^/e/rri'*ffS , /rone (^nth of„jL^^:__t9^f NAME I a 3 4 B « i,*i«ni»i8 u'^ ^ isp esjee n 28 a 30 SI ti% .X T'!£ /'.//^^J^C^id^ ^ff ' lUt__. -^ ^ ^ ^ //«^:} /^ /^ _i£5_ Q^.. v^^.>^. f 9 .1U2-- - y n ^ -^^iiit^ n4 /"' 7/i> (IV,..,.,^ a^'^^^^ 7*''* --* H^ O — ■:s.^%-^,^ 17 <;; — r /7^^J:j^yr^^L^^ f _ 1 f _ . ■<> m /^/^^^>w^ 7f -^5^£ —t- w *3 _:_ ': ^ s . y v^ K ^ c < TTl '>» / ^ N^ ^ Z "^ {i)OrcAen-c/ _ ^ N ^J/fM-yW f ^2 1 \^ J/^^^-e:^ h ^y / . c A y^ts 6oaAr C^if. ^6 -! '!'^>..7t.^ ~)]atci'^ > ^ ^ a tu^,i Ted J-' ^ ^.Vafiu SMTeo^t f f c,- sVr^^o ■ > ,U V-'P.';"'^ •f-or y/ffj c/>f'/^ ^' _^^ ■J f .'In •: ■} re •^ - --^ 4 /(''t IC t' ^ ^~oV'' — )f fiouy^ ' 1 1, J 5^ TIME AND SALES BOOK SPECIAL COST RECORDS 105 //of o/ r/ctrns' /ur/^ /yog THE FARM PLOT 100 COST ACCOUNTS AND SPECIAL RECORDS Illustrative Lessons LESSON 22 MILK RECORD I. General Instructions. The milk record illustrated on page 102, Form 10, is kept for the purpose of ascertaining the profitable and unprofitable cows. As explained on page 94, it need not be a continuous record, but should be kept for a week or a month whenever the information is desired. It is very important, however, that this **weeding-out" process be performed regularly once a year. The success or failure of the dairy farmer is likely to depend, to a very large extent, on this practice. Let us take for illustration a herd of fifteen cows. Form 10 is tacked to a" board and hung in a convenient place in the barn. A spring balance, graduated to tenths of pounds, is suspended near the record, as illustrated on page 95. II. Written Work. Following is the record of a mixed herd for the week ending June 5, 1909, representing an actual Oregon herd. The fig- ures in the first column under each day represent the morning milking; those in the second, the evening. Record the follow- ing data on Form 10 : — Sun. Mon. Tues. Wed. Thur. Fri. Sat. Test. Kate, 12-10 12-11 10-13 11-13 12-11 11-12 12-12 4.5 Anthia, 13-13 13-14 12-13 12-13 14-13 14-12 13-11 5.0 Digit, 7- 8 8- 7 8- 9 8- 8 10- 8 10- 8 9- 9 7.0 Lady, 12-11 10-11 10-12 10-11 11-10 12-11 11-11 4.8 Beauty, 11-11 11-10 11-13 14-12 12-11 12-12 13-11 4.7 Glenco, 12-13 11-12 11-12 10-12 10-11 11-11 12-10 4.4 Pet, 12-10 11-10 13-12 12-11 11-12 13-12 12-11 5.1 Bess, 10-11 11-11 10-12 11-10 11-12 11-10 11-12 4.6 Cynthia, 12-13 11-12 12-11 12-12 11-12 13-12 11-11 4.9 May, 9-10 10-10 10- 9 9- 9 9-11 11-10 10- 9 5.4 Gertie, 10-11 10- 9 10-12 10-10 9-10 11-12 11-10 5.8 Alta, 12-12 13-14 13-12 14-13 13-13 12-13 13-14 4.7 Ruby, 8- 9 7- 9 8- 9 7- 8 8- 8 9- 9 9-10 6.2 Pauline, 14-15 14-14 14-13 14-15 15-15 14-15 15-15 4.3 Princess, 16-17 16-16 17-18 17-17 16-17 16-18 17-17 4.4 SPECIAL COST RECORDS 107 Find from the record : — 1. The total weight of milk. 2. The total weight of butter fat. 3. The weekly income from each cow, assuming that but- ter fat is worth 31c. per lb. and skimmed milk 25c. per cwt., allowing 10 per cent, for loss of weight in skimmed milk. 4. The gain per cow based on the feeding record, Lesson 23, Form 9. 5. How can the result in (3) be proved correct? LESSON 23 FEED RECORD I. General Insti^uctions. The feeding record, page 102, Form 9, is a companion to the milk record. Lesson 22. One is not kept without the other. Both are kept for the purpose of checking up the profits of the dairy cows. Three methods are fully discussed on pages 92 and 93. This and the preceding lessons have refer- ence to the third method. Suppose that Form 9 is tacked to a board and hung in a convenient place in the dairy barn. Below is the feed record of the herd in the last lesson. IL Written Work. Enter the following results in the respective columns. Only the last six cows were fed hay. Kate, weight, 800 lbs. ; Sunday, grain, 4 lbs. ; soiling, 64 lbs. ; Monday, 4-63 ; Tuesday, 3^-63 ; Wednesday, 4-65 ; Thurs- day, 4^-64 ; Friday, 3.1-62 ; Saturday, 4-64. Anthia, 975 lbs.; 8-80, 8-80, 8-80, 8-80, 7-80, 7-82, 7-81. Digit, 1,460 lbs.; 6-92 daily. Lady, 1,120 lbs. ; 8-90 daily. Beauty, 830 lbs. ; 4-68 daily. Glenco, 1,440 lbs.; 6-100, 6-110, 6-110, 6-100, 6-100, 6-100, 6-110. Pet, 950 lbs. ; 7-80 Sunday, Monday, Tuesday • 7-83 Wednes- day, Thursday, Friday, Saturday. Bess, 1,000 lbs. ; 6-86 daily. 108 COST ACCOUNTS AND SPECIAL RECORDS Cynthia, 1,270 lbs. ; 8-100 daily. May, 850 lbs.; 5-65 Sunday, Monday, Tuesday, Wednesday; 4-60 Thursday, Friday, Saturday. Gertie, 900 lbs. ; 6-70 daily. Alta, 1,375 lbs. ; 8-100 daily. Ruby, 1,050 lbs.; 24 lbs. hay, 4^ grain, 42 soiling; 25-4-43, 23-5-45, 24-41-44, 25-4-43, 25-41-45, 23-5-43. Pauline, 1,300 lbs. ; 27-6-45 daily. Princess, 1,350 lbs.; 30-7-48 daily. Find from the record : — 1. The total feed per cow and enter the result in the proper column. 2. The weekly cost per cow when the grain mixture is worth 95c. per cwt., soiling $1.05 per ton, and hay $10.50 per ton. 3. What changes should be made in the herd? LESSON 24 LABOR RECORD I. General Instructions. As explained on page 98, a labor record may be prepared monthly or weekly. The monthly form, illustrated on page 102, has many advantages. In the first column may be listed either the various accounts to which the labor is to be charged, as in this exercise, or a sheet may be devoted to each account and the names of the laborers listed in the first column. The latter plan is preferable in large enterprises. Sundays fall on May 6, 13, 20, and 27. Mark "S." above those dates and avoid placing any figures in the Sunday columns. II. Written Work. 1. On Form 6 prepare the following pay roll for the month of May, 1910, as illustrated on page 102 : — Labor on Corn, Man and Team, May 7, 8, 9, and 10, 9 hrs. each @ 30c. per hour. SPECIAL COST RECORDS 109 Live stock, Man and Team, 18, 4 hrs. ; 28, 8 hrs. @ 30c. per hour. Orchard, 3, 3 hrg. ; 14, 2 hrs. ; 23, 1 hr. @ 15c. per hour. Improvements, 7, 4 hrs.; 12, 4 hrs.; 19, 3 hrs.; 25, 2 hrs. @ 15c. per hour. Machinery and Implements, 1, 1 hr. ; 5, 2 hrs.; 15, 1 hr. ; 22, 3 hrs. @ 15c. per hour. Wheat, 4 and 5, 9 hrs. each ; 16 and 17, 9 hrs. each, Man and Team, @ 30c. per hour. Onions, 1 and 2, 9 hrs. each; 11, 6 hrs. @ 15c. per hour. Potatoes, 21, 9 hrs. ; 24, 6 hrs. ; 25, 5 hrs., Man and Team, @ 30c. per hour. Hay, 11, 3 hrs.; 14, 6 hrs.; 15, 4 hrs.; 18, 3 hrs., Man and Team, @ 30c. per hour. Oats, 26, 29, and 30, 9 hrs. each ; 31, 7 hrs., Man and Team, @ 30c. per hour. 2. Add the number of hours under each account and enter in the hour columns. 3. Find the amount under each account, and, finally, the total labor. LESSON 25 THE FARM PLOT Read the suggestions regarding the farm plot on page 99. On Form 11 draw to scale any farm with which you are acquainted, preferably your own farm, if you own one. Lay out the various fields and mark the crop and the acreage, as shown on page 105. Draw it first in lead pencil, then in ink. Supplementary Exercises (Optional) 1. THE INVESTMENT The census for 1900 gives the following apportionment for land and improvements, buildings, implements, machinery, and live stock for every $10,000.00 invested : — 110 COST ACCOUNTS AND SPECIAL RECORDS Division. N. Atlantic States. S. Atlantic States. N. Central States . . S. Central States. . Western States . . . Total. Land and Impr. Buildings. Imp. and Mach. Live Stk. $10,000 $5,737 $2,567 $606 $1,090 10,000 6,661 2,720 332 1,362 10,000 6,055 825 500 2,620 10,000 4,114 1,114 373 4,356 10,000 4,463 693 593 4,251 Total $50,000 $27,030 $7,919 $2,404 $13,679 Average $10,000 $5,406 $1,584 $481 $2,736 Compare the above with two or more typical farms with which you are acquainted. 2. PRIVATE ACCOUNTS The student will find it a valuable exercise to keep account of his personal receipts and expenditures on a form similar to No. 2. The columns may be headed as follows: Receipts — Earnings, From Home; Payments — Fees (Books and Sta- tionery), Board, Room, Clothing, Recreation. A semester's record of the student's actual expenses will be given special credit. Whether submitted for credit or not, all students are urged to keep an accurate record of their personal expenses. 3. AGRICULTURAL STATISTICS It is desired to obtain accurate data on farm management, and you are required to write to two or more farmer friends for certain information. Copies of a letter will be furnished by your teacher. (A copy of the proposed letter will be fur- nished any teacher by the author.) Tabulate the result and prepare a report to be discussed by the class. 4. COST RECORDS OF CROPS As illustrated on page 97, prepare a cost record, showing the net profit or loss of two crops, from information secured from reliable sources. Any local crop may be taken, such as pota- toes, wheat, oats, hay, etc. Two months will be allowed for the work. SPECIAL COST RECORDS 111 Hand in your work with a letter of explanation of the system. 5. COST RECORDS OF STOCK According to either the second or third method outlined on page 92, prepare a statement of the net profit or loss of not less than five milch cows. Your information may be drawn from any farm, from the college department of dairying, or from agricultural bulletins. The records required are : Labor, milk, feed record, and the individual Ledger account of each animal. Two months will be allowed for this work. Use Forms 1, 6, 9, and 10. Hand in your work with a letter of explanation of the system. PART III BUSINESS ORGANIZATIONS, CORRESPONDENCE, AND FORMS BUSINESS ORGANIZATIONS, CORRESPONDENCE, AND FORMS CHAPTER VIII BUSINESS ORGANIZATIONS The tendency of to-day in all important business enterprises is toward organization and cooperation. What would be im- possible for an individual to accomplish becomes a compara- tively easy task when the resources of a number of persons are combined. While no business organization should be effected without the assistance of competent legal counsel, it is important that the parties should understand the nature of the organization and the necessary steps required for their promotion and the form of contracts in common use. This is all that will be attempted in this chapter. The legal aspects of each organization must be studied under commercial law. The most important among business organizations are Part- nerships, Joint Stock Companies, and Corporations. Partnership Two or more individuals competent to make contracts under the law may combine their labor and capital in any lawful business enterprise. When this is done without any legal formality it is called a partnership. The agreement is called the Articles of Copartnership and should always be in writing and prepared by a competent attorney. Any name may be adopted which cannot be shown to cause an injury to another's business. Each partner is personally liable for all the debts of the partnership unless it is clearly held out before the public that another agreement exists between the partners. This liability extends to the personal property of each partner as well as to the partnership assets, — one of the subjects most often misunderstood by the layman. Nor does the liability (115) 116 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS depend on the amount invested or the service rendered by each partner. So long as the business is solvent, the profits or losses are divided according to the articles of copartnership, but if the business fails and only one partner is able to pay, he is responsible for all the debts of the firm. Following is a standard form of articles of copartnership : — Articles of Copartnership This Agreement Witnesseth, That John Doe of Auburn, Illinois, and Edward Harvey of Auburn, Illinois, have this day agreed to associate themselves together as a copartnership, for the purpose of engaging in the business of buying and selling for profit Feed and Produce, at Auburn, Sangamon County, Illinois, under the firm name of Doe and Harvey, the term of said copartnership to continue five years from and after the first day of June, 1910, unless sooner dissolved. The investment contributed by the aforesaid partners is to be as herein set forth, to wit : John Doe contributes $3,000.00 in cash, and Edward Harvey contributes $3,000.00 in cash. The profits or losses of said partnership business are to be shared equally. With respect to the time and services given, and the com- pensation to be received, it is agreed that both parties shall give their entire time to the business. John Doe shall be allowed a salary of One Hundred Dollars ($100.00) per month, and Edward Harvey Eighty Dollars ($80.00) per month, unless otherwise agreed between the parties. It is also agreed that aside from the profits and compensa- tions heretofore mentioned, neither partner is to withdraw from the business any money or other property, except with the written consent of the partners. It is especially agreed that neither of the parties to this contract shall sign or indorse any bank note, draft, or com- mercial paper, nor sign any official or other bond, nor do any other act to create a financial liability or obligation, with- out the written consent of his copartner. At the expiration or sooner determination of said copartner- ship, the business and property of said firm may be closed out by sale; and, after all debts and liabilities are paid and dis- BUSINESS ORGANIZATIONS 117 charged, the amount remaining shall be divided between the partners in the ratio of their respective interests; or, if the parties so agree, the copartnership may be continued for such further time, and upon such terms, as the members thereof may be able to agree upon. Witness our hands this first day of June, 1910. WitTiP^s . f F. W. Brown, John Doe, witness. |g ^ Johnson, Edward H. Edward Harvey. EXERCISE 1 Write articles of copartnership for any firm with which you may be acquainted, using the articles on page 116 as a model. Joint Stock Companies A joint stock company differs from a partnership in its organization and membership only, not in the liability of the members. Its organization is like the corporation; the lia- bility of its members and its formation are like the partner- ship. No legal steps are necessary to form a stock company. The capital is usually divided into shares like the corporation, and, in voting, a member of a stock company has but one vots regardless of his interest in the business, while in the corpora- tion the voting power depends on the amount of stock held. The stock company has power of succession, but has no seal. A suit must be conducted in the name of all the stockholders and not in the name of the company through its officers. The advantages of a stock company over a corporation are : (1) less formality in organization ; (2) less publicity; (3) not affected by the corporation tax; (4) no public reports re- quired. EXERCISE 2 Write a paragraph pointing out how the Hood River Apple Growers' Union could be changed into a joint stock company.' (See Articles on page 119.) Corporations Because of its adaptability to a large variety of conditions, the corporation has become the favorite form of business organizations. Many corporations have stockholders in all 118 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS parts of the world, but the organization is represented in its sphere of business and before the law by its officers and directors. Thus a corporation may be defined as an artificial person, created by law, either under special enactment or under general statute, to act as one person, through its officers, in its business capacity and before the law. The formation of a corporation should be thoroughly under- stood by every citizen, but it is extremely inadvisable to or- ganize without the assistance of a competent attorney. It is not safe to lay down many general rules governing the organi- zation of corporations, since the laws differ materially in the several states. Reliable information can be obtained free of cost from the Secretary of State in each state of the Union. The corporation differs from the partnership in several important respects. (1) It is created by law; that is, no corporation is recognized before the law unless it is organized exactly as set forth in the statutes of the various states. (2) The liability of the stockholder extends only to the amount of his stock, unless otherwise provided in the articles of associa- tion. (3) A corporation can sue and be sued in its own name through properly qualified officers. (4) It has the power of succession; that is, the organization is not affected by the death or disability of any stockholder. (5) The interest of a stockholder may be transferred without affecting the organi- zation. (6) The voting power of each stockholder is propor- tional to the amount of his stock. From a careful study of the constitution and by-laws given below, it will be seen that the articles of association must set forth (1) the intention of forming a corporation; (2) the corporate name; (3) the purpose of the organization; (4) the place of business; (5) election of officers; (6) powers and duties of officers; (7) amount and division of stock, etc. The advantages of the corporate organization are many and important. By it the cooperative spirit is fostered; in union is strength. The small means of a large number are collected and effective capital is secured for large enterprises ; members may enter or withdraw without disturbing the organization; through organization, special talents are utilized to best ad- vantage; waste of material, labor, and capital are reduced to BUSINESS ORGANIZATIONS 119 a minimum; the publicity required by law has a wholesome influence against corruption and dishonesty. It is not out of place to give a word of caution to the unin- itiated in the subject. Schemers often promote corporations for fraudulent purposes and hide their own designs behind innocent stockholders. Do not rush into incorporating; a majority of the corporations formed are failures. If you wish control of the corporation, you should control at least fifty-one per cent, of the capital stock. Every stockholder should be provided with a copy of the constitution and by-laws and also with the annual report. See to it that the minutes of the board of directors and all books of account are carefully kept. Every stockholder has the right to inquire into the business methods of the corpora- tion. The legal aspects of stock issue, kind of stock, dividends, surplus, etc., are subjects for commercial law. The constitution and by-laws of the Hood River Fruit Growers' Union is given below as a model : — Constitution and By-Laws of the Hood River Apple Groovers' Union Article I The name, place of business, capital stock, and purposes of this corporation are set forth in the articles of incorporation, which are referred to as part of these by-laws. Article II The membership of this corporation shall be confined to actual growers of fruit of Hood River Valley and vicinity. Article III The board of directors ^hall consist of nine members, four of whom shall hold office for more than one year. They shall be elected annually and shall serve until their successors are elected and qualified. They shall qualify as directors within ten days after their election, and within ten days thereafter they shall elect from their number a president, vice-president, and secretary. They shall also choose a treasurer, who shall be required to give bonds, with surety in such sums as they 120 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS may deem ample. They may choose a bank as treasurer with- out bonds. The annual meeting shall be held on the first Saturday in April in each year. Article IV The directors shall have the power to levy and collect assessments on the capital stock not to exceed fifty per centum of the stock subscribed at any one time and not oftener than every sixty days, the same to become delinquent in thirty days from date of notice of such assessment in the local newspaper. The directors shall sell shares of stock to actual fruit growers only. Article V The directors shall employ such agents or other employees as are necessary to do the business of the corporation, and shall fix their remuneration; provided, that the board of directors shall receive no salary for acting as directors. They shall have daily account sales rendered to the members of the union each day, as received by them or their agent, giving a statement by whom sold, gross sales, commission, freight, or express, and amount due members of the union; also giving condition of fruit, if there be any complaint. Article VI The directors may refuse to receive for shipment, under the brand of the union, any package of fruit not considered prime from any cause. They shall refuse to receive for shipment fruit from any person not holding stock. Article VII This organization through its board of directors shall have the exclusive and unqualified power to market all apples grown by any of its members. A contract between each member and the board will be required. Article VIII The duties of the secretary shall be to keep a record of the proceedings of the meetings of the stockholders and directors. He shall keep the corporate seal of the association and shall BUSINESS ORGANIZATIONS 121 be custodian of all deeds, articles of agreement, and other valuable instruments of writing belonging to the association. He shall keep all books of the issuance and transfer of stock and shall countersign all certificates of stock and affix the seal of the board of directors and stockholders, and shall keep, or cause to be kept, all books of account necessary to the transaction of the general business of the association. The manager of the union shall be placed on a flat salary. Article IX The board of directors shall provide the necessary means for carrying out the purposes for which the association is formed by reasonable charges and commissions for the service rendered by the association to its members and customers. Article X The duties of the treasurer shall be to receive all moneys due or paid to the association and deposit the same as the direc- tors may instruct; to pay out said funds upon the written order or check of the president, first vice-president, or general manager, when countersigned by the secretary. Article XI All notes or other evidence of indebtedness of the associa- tion shall be signed by the president and countersigned by the secretary of the board of directors. Article XII The president shall instruct the secretary to call a meeting of the stockholders whenever in his judgment the necessities of the union require it, by giving one week's notice through the local newspaper and send each a notice on a postal card. Article XIII No union label shall be placed on a box of fruit except by the manager of the warehouse just before shipping. Article XIV Each packer will be held responsible for his own work by a 122 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS system of fines. No fruit will be received unless put up by a packer employed by the union. Article XV The union will have no packing- house foremen except those employed by the union. Article XVI A majority of the stock subscribed, upon which all legal calls or assessments have been paid in full, shall constitute a quorum at any stockholders' meeting, and no vote shall be counted which is not represented by one share of the stock upon which all calls or assessments have been paid. Article XVII These by-laws may be amended by vote of the majority of the stock upon which all calls or assessments have been paid, at any regular or called meeting, provided that notice to amend the by-laws shall have been given in the call for a special meeting. Article XVIII Any member desiring to dissolve his connection with this corporation may do so by surrendering his stock to the secre- tary thereof or by transferring it to any member in good standing on the secretary's books. exercise 3 Write a letter to your instructor describing in detail how you would organize and incorporate a creamery. Point out the peculiarities of the incorporation laws of your state. (You can secure a copy of these laws free from the Secretary of State.) CHAPTER IX THE BUSINESS LETTER In this age of complex business activity, where a large volume of the business of the country is done by letter, it is essential that the farmer, as well as the merchant, be able to write a correctly-arranged, direct-to-the-point business letter. Therefore, the purpose of this chapter is to set forth in as clear and concise a manner as possible the customary forms and arrangement of business letters. Business letters include all correspondence relating to the writer's financial, professional, or official dealings with other people, and should clearly set forth the subject matter of which they treat. In order for a mechanic to do good work he must have suitable material and good tools with which to work. In order for the writer of letters to do good work and create a good impression he should use a good grade of paper and pens, and ink that flows freely. We judge people largely by their surroundings and the associates they choose. The writer of a letter is judged largely by the general arrangement, wording, and neatness of his letter, and by the quality of stationery used. The preceding paragraph brings us to another important matter emphasized elsewhere in this text. Every farm, no matter how small, should have a suitable name. In fact, the importance of selecting a name for your farm cannot be overestimated. It not only lends value to your farm and dignity to your community, but it is a source of satisfaction to have neatly-printed stationery bearing the name of your farm, the name of the proprietor, and in some instances a sketch or small photograph indicating the products of the farm. (See models on page 124.) It is v/ell, however, to bear in mind that crowding too much on a letter head detracts from rather than adds to its value. Your post office address, including your box or R. F. D. number, should also appear on (123) 124 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS Standish Brotiikrs Fri'it Ranch (^J FlMTAf'AIIA. OrKOON. «•'■«,««*' «*«*' ^Xe^-^" C^J (4^ Anbrrann a (!9rrljar& i^otn^ iFarm iSal r nl . ©rpgoi '». ■ / T^>-^ //" lan ^r t3^..> titi> ^^ ^^ S:^ ^"<t4^iA.y^^^-.^yvU'^*\ A- ,.^^^cj4^ ^'^^^j- ^i2^,f^ ^::)^ ^^^^^^^y^—- '■X- G o y reel lor/n. >i THE FORM THE BUSINESS LETTER 127 (e) Salutation, as Dear Sir, Gentlemen, My dear Mr. Smith, etc. (/.) The beginning of the body of the letter. Strictly speaking, the salutation is a part of the first paragraph ; how- ever, for the sake of uniformity, it is well to begin the first paragraph of the body of the letter as far to the right of the left-hand margin as succeeding paragraphs. Note that all paragraphs are uniformly indented. (g) Complimentary close, as Yours truly, etc. (h) The writer's signature. Note that the signature be- gins as far to the right of the complimentary close as the second line of the heading (5) begins to the right of the first line (a). The Heading The heading of a letter includes the address of the writer and the date. It may occupy one, two, or three lines, depend- ing on the length of the address. The following forms illustrate one, two, and three line headings : — Form 1 (a, b) Corvallis, Oregon, July 15, 1910. (c) .., (d) (e) :— (/) Form 1 shows a one-line heading begun far enough from the left-hand margin to fill the remaining space to the right. Should it be necessary to begin a heading to the left of the center of the body of the letter, in order to get it on one line, a two-line heading should be used. It is not good form for the heading to extend to the left of the middle of the sheet. Observe carefully the punctuation of the heading. Form 2 ((l) 68 Sixth Street, (5) Portland, Ore., July 5, 1910. (c) ..., (d) (e) :— (/) 128 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS Form 2 shows a two-line heading, the first line begun at or a little to the right of the middle of the page, and the second line begun as far to the right of the first as the second line of the introductory address (d) is begun to the right of the first line of the introductory address (c). Form 3 (a) Chehalis, Lewis County, Wash., (b) July 15, 1910. (c) , (d) (e) :— (/) Form 3 shows a two-line heading with the post office address occupying one line and the date the other. Form Jf. , (a) Corvallis, Ore., July 12, 1910. {h) R. F. D. No. 2. (c) , id). (e) :— if) Form 4 shows a two-line heading where it is desired to give the rural route. Form 4 might also be arranged as follows : — R. F. D. No. 3, Corvallis, Oregon, July 25, 1912. The models on page 126 illustrate incorrect and correct forms of a business letter. Note the arrangement of the head- ing, lines one and two. The R. F. D. or box number or street number should always be written in connection with the head- ing. Also note that line three has been skipped. This is done for the purpose of lending balance to the letter head. Punctuation The heading of a letter may be separated into distinct parts for the purpose of punctuation. A comma should follow each THE BUSINESS LETTER 129 part of the address except the last, which should be followed by a period, as shown in the models. EXERCISE 4 Write, punctuate, capitalize, and correctly arrange the fol- lowing headings: — 1. Albany Oregon March 29 1888 2. Vancouver Washington may 3 1912 3. bloomington Indiana 821 Fifth street October 1 1910 4. 321 seventh Street peoria Illinois May 4, 1911. 5. 1907 Oregon agricultural College Sept 25 corvallis Oregon 6. Write headings for four or more places with which you are familiar. Introductory Address and Salutation The introductory address of a letter is made up of two parts, (c) consisting of the full name and title of the person addressed, (d) consisting of his street number, P. 0. box, and post office address, or such other information as the person to whom you are writing may designate. The salutation is the term Dear Sir, Dear Madam, Gentle- men, etc., and should begin on a line with the body of the letter, that is, flush with the left-hand margin. Custom as well as courtesy requires that some title be used with the name. Individual titles generally used are Miss, Mrs., Mr., Dr., Rev., Esq., Prof., and Hon., depending on the rank or profession of the person addressed. When a part- nership or corporation requires a title, Messrs. may be used. A title should not be used if the name of the firm begins with "the." Only one title should be used, and it should be placed before or after the name, as Mr. John H. Brown, or John H. Brown, Esq., not Mr. John H. Brown, Esq. Models The following are good models showing the heading, intro- ductory address, salutation, and complimentary close, the body of the letter being omitted. The line after the complimentary close indicates the position of the signature. 130 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS Form 1 Aurora, 111,, March 10, 1912, Montgomery, Ward & Co., Chicago, Illinois. Gentlemen : — Yours truly. Form 2. 67 Wabash Avenue, Chicago, June 24, 1910. Mr. A. P. Robinson, 211 Globe Block, Seattle, Washington. Dear Mr. Robinson: — Sincerely yours. Forfn 3 Michigan University, Ann Arbor, Michigan, June 14, 1911. Dear Frank: — Sincerely, To Mr, Frank Huntington, Beloit, Wisconsin. Form U The Ideal Farm, McMinnville, Oregon, October 12, 1914. Mr. Silas Blank, 212 Second Ave., Portland, Oregon. Dear Sir: — Yours truly, Punctuation Carefully observe the arrangement and punctuation of the models. Notice that each part of the introductory address is THE BUSINESS LETTER 131 followed by a comma, except the last, which is followed by a period. The salutation should be followed by a colon and the complimentary close by a comma. The writer's signature should be followed by a period. Capitalization Every sentence should begin with a capital letter, and every important word of the address should be capitalized; also observe that all titles are capitalized and that the first and last word and every noun in the salutation should begin with a capital. EXERCISE 5 Write the following headings and introductory addresses, arranging and punctuating them according to the models given : — 1. Wise Virginia June 15, 1910 Mr. F. B, Goshen Clint- wood Virginia Dear Sir 2. Berkeley Calif April 11 1910 Mrs. James P. Hadley Eugene Oregon Dear Madam 3. Raymond Washington 821 Fourteenth street July 18 1909 Mr. T B Stidham 321 Railroad Ave Doty Wash 4. 821 Second Avenue Seattle Washing May 4 1910 John P Randolph Esq 741 I street Tacoma Washington 5. Ames Iowa, Dec 23 1908 The Pure Food Grocery Co City gentlemen 6. Kalispell Mont Nov 8 1911 The Home Lumber Co Fargo N Dak gentlemen The Body of the L.etter The mechanical arrangement of the heading, introductory address, salutation, body of the letter, and complimentary close can be mastered in a short time by any one who is care- ful and painstaking. However, the composing of the letter proper is an entirely different matter, and by far the most difficult part of letter writing, and a good style can be acquired only by careful and painstaking effort. It is not the purpose of this chapter to give you certain forms of letters, worded in a specific way, for the various subjects about which it may be necessary for you to write. But it is rather its purpose to give you suggestions which will 132 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS be of assistance to you in the writing of your business letters, and that will enable you to put into your letters your own originality in a clear, forceful, convincing manner. Some reference should always be made to the letter which is being answered, but in order to secure the best effect this reference should be made incidentally. Such opening phrases as "Your esteemed letter of the 10th inst. is received and in reply would say" are overworked and should be avoided. They are used by those who have fallen into a rut, or by those who lack originality. It would serve your purpose better to open your letter somewhat as follows : "The suggestion contained in your letter of the 15th inst. meets with my entire approval," or some similar opening that would be in conformity with the letter to which you are replying. It is an inexcusable mistake to fail to date a letter. With- out the date a letter is, in many cases, of no value. Especially is this so should it be necessary to bring the letter into court for the verification of some transaction about which the letter may have been written. The heading, including the date, should be written before taking up the body of the letter. A letter should always contain the complete address of the writer, even though you are corresponding with those who may reasonably be expected to know your address. This precaution often saves time and money, and preserves friend- ship. A business letter should be as brief as the nature of the subject about which you are writing will permit. If you are ordering goods by letter, you should clearly set forth the nature of the articles you desire, the way you wish to have them shipped, whether by express or freight, or whether they should be sent by mail. (See model on page 133.) If you are a regular customer of the firm, and have an account with them, you should clearly state the terms on which you desire to make this particular purchase. However, should it be your first order, you should either make sufficient remittance to cover the amount of the order or give some responsible person as reference. Should you be seeking information by letter, ask for that information in much the same way as though you were talking THE BUSINESS LETTER 133 to the person. At all times be courteous, but do not try to overdo it. In writing to a person about a subject in which he is not directly interested, you should inclose a self-addressed stamped envelope for his reply. Remittances and Orders Remittances in the form of currency should never be sent through the ordinary letter. This is not only unsafe, but the sender has no evidence that the amount in question was sent or that the person to whom it was sent received it. You should choose as the safest and most convenient way of mak- ing a remittance one of the following methods : Postal money order, express money order, registered letter, check, or bank draft. Probably the most convenient method to those who live in rural districts would be the postal money order. In making a remittance, no matter how small the amount, you should state in your letter accompanying the remittance for what it is intended, the exact amount, the nature of the remittance, whether it is a check, money order, or otherwise. Model Order Sterling, Illinois, June 15, 1910. Ginn & Company, Publishers, 2301-2311 Prairie Avenue, Chicago, Illinois. Gentlemen : — I inclose herewith postal money order for $4.72, for which please send me, by prepaid express, the following books: — The Working Principles of Rhetoric, by John F. Genung, 12mo, cloth, price $1.40; Lockwood and Emerson's Composition and Rhetoric, 12mo, cloth, price $1.00; Library of Anglo-Saxon Poetry, Vol. I. Beowulf, 12mo, cloth, price $1.12; Allen and Greenough's New Latin Grammar, 12mo, half leather, price $1.20. I should like to have these books reach me not later than the 20th inst., as I expect to use them in my summer school work beginning on the 21st. Yours truly, Inclosure. Student & Company. 134 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS Where more than one item is ordered in a letter, as in the foregoing model, it is better to write them in a line or column, that is, assigning to each item a separate paragraph, followed with a complete description of the item, including the price, number, size, color, weight, and any other information that would insure your securing just what you wanted. Taste and Neatness As suggested elsewhere, the writer should throw his own originality into his letters ; but it must be steadily kept in mind that this must not be done in a haphazard, careless manner. One of the purposes of a letter is to get action. In order to do this the writer must, if possible, put himself in the place of the receiver of the letter and, having done this, carefully consider just what it would be necessary for some one else to do or say to get the desired action from himself. It would be quite impossible to lay down definite rules as to just how this should be done, but I am sure all will agree that the letter should be free from misspelled words, ink blotches, grammatical errors, slang, undue criticism, sweaty or dirty finger prints, or any other similar defects that would be un- pleasant to the eye. A business woman writing to a stranger should never neg- lect to prefix to her signature the title Miss or Mrs. in parenthesis. It is embarrassing to both the writer and the person who receives the letter, should a woman be addressed as Mr. In case a letter is received where it is evident that the writer is a woman, but she has merely signed "Mary Jones," omit the title and address her: "Mary Jones, Cedar Rapids, Iowa, Dear Madam : — " It is not supposed that those for whom this is intended would have the time to go into the real science of letter writing, as do the great majority of the large manufacturing concerns of the country who conduct extensive advertising campaigns, and for this reason our suggestions cover merely those points it is thought would be of assistance to the ma- jority of those who are pursuing this course. The letter should be arranged artistically on the page. You should endeavor to arrange the letter so that there will be an THE BUSINESS LETTER 135 equal blank space at the top and at the bottom of the page. If the letter is short, wider left and right hand margins should be allowed so that the letter will occupy more vertical space, and thus avoid a stringy appearance. If letter paper is used, size 8|^ x 11 inches, the indentations for introductory address and paragraphs should be deeper than when note paper, usually about 8jx5i inches, is used. When letter paper is used, the indentations should be about three fourths inch; when using note paper, the indentations should be about one half inch. Paging If more than one page is required for a letter, each page, except the first, should be numbered in the order in which it is written. Before the letter is inclosed in the envelope the pages should be arranged in the order in which they should be read. The Paragraph A series of connected sentences treating of a single topic make what is called a paragraph. In letters, as in other forms of composition, the change from the discussion of one topic to another should be indicated by an indented line, which catches the eye of the reader and tells him that another topic is to be considered. The Postscript The postscript is an afterthought or a statement added for emphasis after the body of the letter has been finished. The postscript should be indented the same as paragraphs, and should begin on the second line beneath the signature. It should be preceded by "P. S." and followed by the initials of the writer. Study the arrangement of the following letter: — Corvallis, Oregon, July 15, 1910. The Home Real Estate Co., Forest Grove, Oregon. Gentlemen : — In accordance with our agreement of June 15th, I am sending you attached hereto my personal check, No. 68, on 136 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS the First National Bank of Corvallis, for $42.43, to be applied as follows: — $40.00 in payment of the first monthly installment due on residence lot No. 6, Block E, Wilkinson's addition to the City of Forest Grove, Oregon ; $2.42 in payment of the interest on the remaining eleven monthly installments of $40.00 each. Kindly send me credited coupon for the first installment and interest. Yours truly, Inclosure. EXERCISE 6 1. Make up and write the heading, introductory address, salutation, and complimentary close for five different letters, referring to the models, if necessary, for the correct forms. 2. Write a letter, dated at your home, ordering five dif- ferent articles of merchandise. 3. You were at your county seat several days ago and ordered your local paper. You have not yet received a copy. Write a courteous letter to the editor requesting him to inves- tigate the delay and to send the paper to your address regu- larly until notified to discontinue it. 4. In the early part of the harvest season you purchased farm implements of a hardware dealer of your city, amounting to $175.50. It is now nearing the time that you agreed to make the second payment of $75.00. Your grain yield has not been as large as you expected, and, owing to certain other obligations you must meet, you have found it necessary to ask for an extension of time on at least half of the amount. Write him a letter explaining your situation and ask for the extension of time. 5. Your hardware dealer has agreed to accept $40.00 and to grant an extension of thirty days on the balance. Write him a letter thanking him for the extension and inclose your check for $40.00. Call attention to the remittance. FOLDING THE LETTER. Paper There are two sizes of business letter paper, namely, letter size, 8^ x 11 inches, and note size, usually 8^ x 5i inches. THE BUSINESS LETTER 137 though the size of note paper varies. The larger size is gen- erally used by business houses. Folding The following is the correct method of folding letter paper : (1) Turn the lower edge up to within a half or quarter of an inch of the top, then crease- the fold, being very careful that the side edges of the paper are exactly even. The reason for not allowing the bottom and top edges of the paper to be even is to make the unfolding of the letter easier, and without loss of time. (2) With the creased edge of the letter toward you, fold over the right edge a little less than one third, being careful to keep the creased edges of the first and second folds even. (3) Fold over the left edge a little less than one third, overlapping the second fold. The second and third folds should be of equal width. The middle fold should be a little narrower than the envelope into which the letter is to be inserted, and a little wider than either the right or left hand fold. Inserting the Letter The letter is now ready to be put into the envelope. Take the envelope in the left hand with its back up and the flap opening toward the right. Take the letter in your right hand with the folded edges up. Insert first the edge folded last. In opening a book the left-hand cover is usually opened first. Through the unconscious training of years you do this without apparent thought. Why? Because it is the natural way. The letter should be folded and put into the envelope in accord- ance with the preceding instructions in order to enable the person who receives it to unfold it and begin reading without loss of time. In large business houses where hundreds of letters are received daily, the letters are usually placed on a table, back uppermost, and opened by inserting a paper knife beneath the closing fold and slitting all the way along the top edge. In folding note paper, first fold the bottom edge up a little less than one third, then fold the top edge down a little less than one third, overlapping the bottom fold. With the en- velope held in the same position as when inserting the larger 138 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS size paper, with the folded edges of the letter up, insert first the edge folded last. The Envelope Great care should be exercised in writing the directions on the envelope. In the first place, the name of the person to whom you are writing should appear in the introductory- address of the letter just as he is accustomed to spell it, then it should be written on the envelope just as it is in the introductory address, followed in the order named by the street and house number, post office, and state. Should the name be followed by more than one title, they should be separated by commas. The Return Card Every letter you mail should bear your return card in the upper left-hand corner of the envelope. If the envelope bear your name and address only, the letter should be returned to you at the end of thirty days, provided it is not called for within that time. If it is desired to have the letter return to you within a specified time, provided it is not called for, the words ''If not called for within — days, return to," followed by your name and address, will insure its return to you in case it is not called for. Should the envelope not bear your name and address, and remain uncalled for for thirty days, it will be forwarded to the dead letter office. The Stamp The stamp should be placed in the upper right-hand corner of the face of the envelope. It should be firmly attached and the edges of the stamp should be about one eighth of an inch from, and parallel to, the edges of the envelope. The following are good models : — THE BUSINESS LETTER 139 (1) Stamp Mr. Karl L. Goodall, Corvallis, Oregon. (2) Stamp Armour Packing Company, Chicago, Illinois. (3) stamp Gregg Publishing Company, 151 Wabash Avenue, Chicago, 111. ^^^ 1 Stamp Mr. Harvey H. Burnham, Cottage Grove, Oregon, c/o Imperial Hotel. 140 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS EXERCISE 7 Write the following envelope addresses, using blank slips of paper the size of a regular business envelope — 3^ x 6^ inches : — 1. Mr. R. P. Smith, Logan, Utah. 2. Mrs. Raymond H. White, 728 Seventh Street, Lewiston, Idaho. 3. Miss Gertrude Hamilton, Beaver Creek, Oregon. 4. Henry H. Lathrop, Thacker, West Virginia. The punctuation marks are omitted in the following in order to give the student practice in inserting them : — 5. Rev James R Hamilton Pastor First M. E. Church Spokane Washington. 6. Hon. J. H. Ackernan State Supt of Schools Salem Oregon 7. Prof G. H. Patterson Care Willamette University Salem Oregon 8. Mr Geo W Mathews Association Hall University of Wisconsin Madison Wisconsin 9. The Home Correspondence School Springfield Mass 10. Mr. Frederick M. Bollinger Transient St Paul Ne- braska. Note. — In writing to a person who is stopping in a city only temporarily where the free delivery system is in operation, the word "Transient" or "General Delivery" should be written in the lower left-hand corner of the envelope. CHAPTER X BUSINESS FORMS Every farmer, mechanic, and professional man should un- derstand the ordinary business forms in daily use. It is often a matter of humiliation to persons of superior ability in other lines to acknowledge that they are ignorant of the proper form of a simple business paper. The purpose of this chapter is to give models and explanations of the forms likely to be used by every business man. The Invoice An invoice is an itemized statement of goods bought or sold. It should contain detailed information regarding date, parties, quantity and description of the goods, prices, dis- ^ Marshalltownr-Jowa,... ^^^ffH/"- . . / j 190^ MERRITT GREENE & SON ^/6 i/fy ,^^^ J-^ C6- yc ^c^Z^ ^:^CL^ '-^ ^S'Z. o^ /Z.o/i//jx'/^'''^'i .%.&r A certificate of deposit is a receipt issued by a bank for a temporary deposit. It is discussed here only to emphasize the BUSINESS FORMS 147 great importance of establishing banking connections. If, for any reason, it is impracticable to open a regular bank account, as discussed on page 25, any money not needed for current use should be deposited on a certificate. If, as in the model, the deposit is allowed to remain for a definite period, interest will be allowed at the current rate. Withdrawals are usually allowed by indorsement of the amount on the certificate, but not by check. A certificate of deposit is usually issued "to the order of ," and is therefore transferable by indorse- ment. The Voucher Check rkL^^aaa TO First National Bank CORyA14«IS,OREGON. . CORVAUrl CORVALLIS ORCM^PID COMPANY l.^4.u.l»>'icafiit^ Oi// Z Pfou/,- J. /^ai/sj-erjen(e ^- j/. S^r^yc^^ /ifi^7ti>- The voucher check is an exceedingly convenient form, espe- cially in corporate business. By referring to the illustration above, it will be seen that it consists of an ordinary check on one side, with a blank for the signature of the president or some other officer authorized to approve vouchers. The bank should be instructed to refuse payment unless the check is 148 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS approved or countersigned. The back provides for the distri- bution of the payments, and from this the entries are made in the records. Space is left for indorsements on the left end of the back. The indorsement shown on the model constitutes a satisfactory receipt in most cases. When a definite invoice or other item is paid, it is well to specify the date or number, as illustrated. Never fail to number your checks consecu- tively. EXERCISE 14 Prepare three different forms of voucher checks, modified to suit your own ideas. Let one be similar to the model. PART IV USEFUL TABLES USEFUL TABLES TABLE 1 Six Per Cent. Interesl Table Time $1 $2 $3 $4 $5 $6 $10 $20 $50 $100 $1000 1 1 2 17 2 1 2 3 34 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 1 3 7 13 1.33 9 1 2 3 8 15 1.50 10 1 1 2 3 8 17 1.67 15 1 1 2 3 5 13 25 2.50 20 1 1 2 2 3 7 17 33 3.33 25 1 2 2 2 4 8 21 42 4.17 30 1 2 2 3 3 5 10 25 50 5.00 33 1 2 2 3 3 6 11 28 55 5.50 63 1 2 3 4 5 6 11 21 53 1.05 10.50 93 2 3 5 6 8 9 16 31 78 1.55 15.50 1 1 1 2 2 3 3 5 10 25 50 5.00 2 1 2 3 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 16 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 Example.— Find the interest on $340.00 at 8% for 8 months and 8 days. Solution : At 6% the interest on $300.00 for 8 mos. = 3 X $4.00 or $12.00 " 8 days = 3 X .13 or .39 40.00 " 8 mos. =; 4 X .40 or 1.60 " 8 days = 4 X .01 or .04 Total, Add K to produce 8%, Answer, $14.03 4.68 $18.71 (151) 152 USEFUL TABLES QCOCO(M(MC'=*iT-IOOlO(MaitOCOCDCO >•"£ ZC0C<1(N(N'-H7— li— I COCOSg 0(M(M(MtHtHtH cococo g"*T-ioou5(Ma5?ocococoot> og o J<<)(MTHrHTH COCOCO(M(M g^ X o fl ^iHO(M'-liHOiO'*COa5(M(M ." ^^rHi-lT-l C0COC0(M(M „; _j f— ^ A.1 _j «^ »o ir\ •--<*TH00 ^.fcl <^ fl»^TH,H COCOCO(M(M(MtH g3 <1 M 5(MOOOCO'10COOt-'=^T-IOOlLi:5 obto ^ ^^T-H COCOCO(M(M(MtHt-(Sc-S -2 &^ ^ 5 SCS lOCO'^DCOOt-'^i-IOOlOCvl i-jgo ^5*^ CO(rOCO(M(M(MT-li-iT-i c'^TS fl jjCiOOU5'*^eOCO(Mr-lrHOO l'c.2 "^ COO0CO(M(MC. 5; ^ ^ M S CLJ g C USEFUL TABLES 153 TABLE 3 Interest Table The following will be found convenient in the absence of extended interest tables. To find the interest on a given sum, for any number of days, at any rate of interest : — At 5% multiply principal by number of days, divide by 72 At 6% multiply principal by number of days, divide by 60 At 7% multiply principal by number of days, divide by 52 At S% multiply principal by number of days, divide by 45 At 9% multiply principal by number of days, divide by 40 At 10% multiply principal by number of days, divide by 36 At 12% multiply principal by number of days, divide by 30 At 15% multiply principal by number of days, divide by 24 At 20% multiply principal by number of days, divide by 18 TABLE 4 Minimum Weights of Produce The following are minimum weights of certain articles of produce according to the laws of the United States : — Lbs. per Bushel - Lbs. per Bushel Wheat 60 Dried Peaches 33 Corn, in the ear 70 Dried Apples 26 Corn, shelled 56 Clover Seed 60 Rye 56 Flax Seed 56 Buckwheat 48 Millet Seed 50 Barley 48 Hungarian Grass Seed. . . .50 Oats 32 Timothy Seed 45 Peas 60 Blue Grass Seed 44 White Beans 60 Hemp Seed 44 Castor Beans 46 Salt (see note below). White Potatoes 60 Corn Meal 48 Sweet Potatoes 55 Ground Peas 24 Onions 57 Malt 34 Turnips 55 Bran 20 SALT.— Weight per bushel as adopted by different States ranges from 50 to 80 pounds. Coarse salt in Pennsylvania is reckoned at 80 pounds, and in Illinois at 50 pounds per bushel. Fine salt in Pennsylvania is reckoned at 62 pounds, in Kentucky and Illinois at 55 pounds per bushel. 154 USEFUL TABLES TABLE 5 ot-Tl^00000000000000 i^ t> U5 M O GO O CO rH O «0 '^^ (^q O !>; lO CO o, o o o o o o o o o o o ' r-H C^ 00 oi O O rH U^' o o o o o o o o o" o o o rHTHT-Hr-jiM'^criooo(M"^cr>ooo(M'Tt< T-Hi— (tHt— It— irM(M(M a. COCriai(MlOOO(MLOOOTH'^t-OCO<£)(MOOOOOOOOOOOO ^ t>; -^^ tH C5 cr> CO tH 00 LO CO O t^ lO CV] Oi o o o o o o o o o o o o o ' 1-H (N (>d c6^ i6i6^t^ oo' oo' ai o o '^ oi 00 i> o lo" ^^h' ai oi t-h" o" ai oo' T— It— ItHt— ICOlOt^CiT— IC0LCI>-C2O(M T— I T— I T— I T— I T— I (M (M ooaiooootr-crnoio-^ooc^KMT-Hoasooicoooooooooooo S^ 1:0 CO O t>; '^ tH 00 lO (>] Oi O CO O O i?0 00 o o o o o o o o o o o o "■rHcicO"^-<*u:5oot>o6o5aJocoodi:d^*(>30o6o'*'c^ioo6o tHi— It— ICOlOC-OOtM^OOOOiT— I T— I T— I T— I 1— I 1— I T— I C^ t-lOi— l^(Mt>(MOOCOOO'^CiLOOLOr-ICOOOOOOOOOOOOO js o CO OT o (N 05 iq (^q 00 ilo th 00 u^ T-i 00 o o o o o o o o o o o o o " T-J th* (>d CO co' Tj^" 10 u5 «d t> b^ 00 C5 o CO i>^ '^* T-H 00 u5 c^ T:t< T— It— ICOlOOOOOT-HCOLOt^COO 1— I T— I T-l tH tH tH (M -j5(Mcow':£>oooiT-icooo(MooT-iooooooooo 00 o Si:r5(>]oq'^o<:£>coo5iOi-Ht>;cqoocqcooooooooooooo T— It— ICO^OOOCJt— l(M^01>-ai ioOOuOCOT-IOO':0'^(Maib-lO(MOOOlO'^000000000000 «■ 10 rH tr^ CO 00 -^ o to T-H t>- CO o Lo o o iq o o o o o o o o o o o o ' 1-i T-I (>i (>i CO ^ '^ 10 10 to o t> 00' 00* T-H 10 o l6 o 10 o l6 o Lo o LO o T-irHco'^ciDt-aiOCMcoiocrioo T— I T— I T— I T— I T— I T— I •^-^OOCMlOOSCOt'T-ILOOOCvlOO^OOt-OOOOOOOOOOOO SJ iq O O T-J O (N t^ CO 00 CO Gi ^_ O UO O t-; o o o o o o o o o o o o T-ii— icM^iot-ooaiTHc^^ioco tH T— I T— I T-H T-l £20000000000000000000000000000 SuooiooiooiooiooiooLOOLOOOooooo 000000 T— It— i(Mcouocr>t^CiOT-ico^io MOc(Mcooooooooooooo ^ ^ 0:1 CO 00 CO l> (>3 to i-H O O ^ O '^ 05 w o o o o o o o o o o o o ' th T-H (>i (N CO co" ^ '^* 10 K3 1:0 c^ c£J ci (>i ^* 1:0 06 o cvi "x? o CO o' w" '^ rHCOCO-^tDtr-OOOiOCNlCOrJi ^(MlC)tr-C5(M^tOOOrHCOliOOOOCvlUOOOOOOOOOOOOOO S ^ 00 (^l CO 1-j iq Oi CO 00 (>3 o o iq 05 CO '^ o o o o o o o o o o o o * th th c^ 06 C5 o 1-5 ^^ ■r^(MCO'Nl^lOOI^-0005T-^ClO-^C05000000000000 S CO t~ 1-H 10 05 CO O O '^^ 00 C<1 O O CO l>; CO o o o o o o o o o o o o ' th th th (>q (>i CO CO CO ^" ^' 10 10 10 t> o o o o o o o o o* o' o o THCvlcO^U^COt>00050^(M I (M CO -?f ira CO t- o g ■00050THCvlOO'=:t]OO^LCCOI>-00050TH 1(M -^ ^ USEFUL TABLES 155 TABLE 6 Goiamon M^easures Long Measure 12 inches = 1 foot. 3 feet = 1 yard. 5^ yards = 1 rod. 320 rods = 1 mile. 1 mile = 5,280 feet. The following are also used : — 1 size = ^ inch. (Used by shoemakers.) 1 hand = 4 inches. (Used in measuring the height of horses.) 1 fathom = 6 feet. (Used in measuring depths at sea.) 1 knot = 1.15 miles. (Used in measuring distances at sea.) Dry Measure 2 pints = 1 quart. 8 quarts = 1 peck. 4 pecks = 1 bushel. 1 bushel contains 2,150.42 cubic inches or approximately 1^ cubic feet. Liquid Measure 4 gills = 1 pint. 2 pints = 1 quart. 4 quarts = 1 gallon. 1 gallon contains 231 cubic inches. 1 cubic foot equals 7i gal- lons. Square Measure 144 square inches = 1 square foot. 9 square feet = 1 square yard. 30i square yards = 1 square rod. 160 square rods = 1 acre. 640 acres = 1 square mile. An acre is equal to a square whose side is 208.71 feet. Surveyors' Linear Measure 7.92 inches = 1 link. 100 links = 1 chain. 80 chains = 1 mile. Gunter's chain is the unit and is 66 feet long. Surveyors' Square Measure 10,000 square links = 1 sq. chain. 10 square chains = 1 acre. 10 chains square = 10 acres. Cubic Measure 1,728 cubic inches = 1 cubic foot. 27 cubic feet = 1 cubic yd. 128 cubic feet = 1 cord. 156 USEFUL TABLES TABLE 7 Housekeepers' Timetable *, minutes to the pound. The time given is the general average ; the time will vary slightly with the quality of the article, b, boiled ; f , fried ; bk, baked ; br, broiled ; s, stewed ; r, roasted. Hours. Min. Asparagus, b 15-30 Beans, b 1 — Beans with green corn, b 45 Beef, r *25 Beefsteak, br. or f 15 Beef, salted, b 35 Bass, fresh, br 20 Beets, young, b.. 2 — Beets, old, b 4 30 Bread, corn, bk 45 Bread, wheat, bk 1 — Cabbage, b 1 — - Cauliflower, b 30 Cake, sponge, bk 45 Carrot, orange, b 1 — Chicken, b 1 — Codfish, dry and whole, b *15 Custard (one quart), bk 1 20 Duck (tame) , r 1 30 Duck (wild) ,r 1 — Dumpling, apple, b 1 — Eggs, hard b 10 Eggs, soft b 3 Eggs, f 5 Fowls, domestic, r. or b 1 — Goose, wild, r *20 Lamb, b *20 Meat and vegetables, hashed 30 Mutton, r *25 Mutton, br 20 Onions, b 30 Oysters, s 5 Parsnips, b 1 — Pork, r *30 Pork, b *25 Potatoes, b 30 Potatoes, bk 45 Potatoes, r 45 Rice, b 20 Salmon, fresh, b 8 Sausage, f 25 USEFUL TABLES 157 Hours Min. Sausage, br 20 Soup, vegetable, b 1 — Soup, chicken, b 2 — Soup, oyster or mutton, b 3 30 Spinach, b 30 Tapioca, b 1 30 Tomatoes, fresh, b 1 — Tomatoes, canned, b 30 Trout or salmon, b. or f 30 Turkey, br. or r *20 Turnips, b 45 Veal, br 20 Venison steak, br 20 TABLE 8 Weights and Measures in Ordinary Use 3 level coffee cups sifted flour = 1 pound. 2 level coffee cups pulverized sugar = 1 pound. 1^ level coffee cups granulated sugar = 1 pound. If level coffee cups "A" sugar = 1 pound. 4 scant teacups sifted flour = 1 pound. 2 scant teacups soft butter, packed = 1 pound. 2 scant teacups granulated sugar = 1 pound. 2^ scant teacups brown sugar = 1 pound. 8 or 10 ordinary eggs ^ one pound. 4 teaspoonfuls = 1 tablespoonful, liquid. 4 tablespoonfuls = 1 wineglass or half a gill. 2 wineglasses = 1 gill or half a cup. 2 gills = 1 coffee cupful or 16 tablespoonfuls. 2 coffee cupfuls = 1 pint. 2 pints = 1 quart. 4 quarts = 1 gallon. 2 tablespoonfuls = 1 ounce, liquid. 1 tablespoonful salt = 1 ounce. 16 ounces = 1 pound or a pint of liquid. 25 drops of thin liquid = 1 common teaspoonful. 1 pint of finely chopped meat, packed solidly = 1 pound. 158 USEFUL TABLES TABLE 9 Gestation or Birth Table Date of Service. January 1 ■' 2 " 11 " 16 " 21 " 26 " 31 February ... 5 " 10 " 15 " 20 " 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 August 4 " ....!.. .14 " 19 •■ 24 " 29 September - • 3 8 " 13 " 23 " 28 October 3 " 8 " 13 " 18 " 23 •• 28 November ■ • 2 " 7 " 12 " 17 •■ 22 " 27 December ... 2 " 7 " 12 " 17 " 22 " 27 " 31 Mares. 340 Days. Date of Birth. December • • ■ 6 ■' 11 ■' 16 " 21 " 26 " 31 January 5 " 10 " 15 " 20 " 25 " 30 February ■ • • 4 " 9 " 14 " 19 " 24 March 1 " 6 " 11 •' 16 " 21 " 26 ■' 31 April 5 " 10 " 15 " 20 " 25 " 30 May 5 " 10 " 15 " 20 " 25 " 30 June 4 " 9 " 14 " 19 " 24 •' 29 July 9 '•^ 14 " 19 " 24 " 29 August 3 " 13 ■' 18 " 23 '■ 28 September ■ • 2 " 7 '• 12 '• 17 ■' 22 •• 27 October 2 " 7 •' 12 •' 17 ■■ 22 " 27 November . . 1 " 6 " 11 " 16 " 21 " 26 December • ■ • 1 Cows. 283 Days. Date of Birth. October 10 " 15 ." 20 " 25 " 30 November . • 4 " 9 " 14 " 19 " 24 " 29 December ... 4 " 9 " 14 " 19 '■ 24 " 29 January ... 3 " 8 " 13 " 18 " 23 " 28 February ... 2 " 7 " 12 " 17 " 22 '■ 27 March 4 " ■: 9 " 14 •• 19 " 24 " 29 April 3 •' 8 " 13 " 18 " 23 " 28 May 3 " 8 '■ 13 " 18 " 23 " 28 June 2 " 7 " 12 " 17 " 22 " 27 July 2 " 7 •' 12 " 17 " 22 •* 27 August 1 '^ 6 •• 11 •• 16 " 21 ■' 26 •' 31 September • . 5 " 10 " 15 ■' 20 " 25 " 30 October ■ . . • 5 " 9 Ewes. 150 Days. Date of Birth. May 30 June 4 " 9 " 14 " 19 '• 24 " 29 July 4 " 9 " 14 " 19 " 24 " 29 August 3 " 8 " 13 " 18 '■ 23 " 28 September . . 2 •• 7 •' 12 " 17 " 22 " 27 October 2 •' 7 " 12 " 17 " 22 " 27 November .. 1 " 6 •' 11 " 16 " 21 " 26 December . . 1 " 6 " 11 " 16 " 21 " 26 " 31 January .... 5 " 10 " 15 '• 20 '■ 25 " 30 February • . - 4 ■' 9 •' 14 " 19 " 24 March 1 •• 6 •' 11 " 16 • 21 ■ 26 ■■ 31 April 5 ■' 10 " 15 •• 20 " 25 " 30 May 5 " 10 " 15 " 20 " 25 " 29 Sows. 112 Days. Date of Birth. April 22 ■■ 27 May 2 " 7 ■' 12 " 17 ■* 22 " 27 June 1 " 6 " 11 " 16 " 21 " 26 July 1 " 6 " 11 " 16 " 21 " 26 " 31 August 5 10 " 15 " 20 " 25 " 30 September . • 4 " 9 " 14 " 19 ■■ 24 " 29 October 4 ■' 9 " 14 " 19 " 24 " 29 November . . 3 " 8 " 13 " 18 " 23 " 28 December -. 3 " 8 '• 13 " 18 " 23 " 28 January 2 ■' 7 " 12 " 17 ■■ 22 " 27 February ■ ■ . 1 ■• 6 " 11 " 16 ■■ 21 ■■ 26 March 3 ■• 8 '• 13 " 23 " 28 April 2 " 7 " 12 " 17 " 21 USEFUL TABLES 159 Ho-w to Find the Number of Tons in a Hay Stack. A fairly accurate rule is as follows: Subtract the width from the over (the "over" is the distance from the ground on one side over the stack to the ground on the other side), divide by two, and multiply by the width, and then by the length. We have now found the number of cubic feet in the stack. To find the number of tons, proceed as follows : For a stack twenty days old, or under, divide by 512; between twenty and sixty days old, divide by 422 ; over sixty days old, divide by 380. A more accurate rule for finding the number of cubic feet is as follows: Subtract the width from the over; divide by the height, then multiply successively by the over, the width, the length, and by .225. The tons are then found as above. INDEX Page Accounts, Value of, 37 Farm, Difficulties of, 9 Household, 56, 60, 62 Personal, 21, 22, 23 Shop, 66 Agriculture, Statistics of, 110 Articles of Incorporation, 119 Balance Sheet, 47, 48 Bank Account, Explained, 25 Illustrated, 26 Bill and Receipt File, Explained, 14 Illustrated, 16, 24 Blank Books, 2 Bookkeeping, Difficulties of Farm, 9 Importance of, 8 Breeding Record, 103 Business Forms, . 141 Business Letter, The, 123 Business Organizations, 115 By-Laws, Form of, 119 Cash Books, 19, 44 Explained, 13, 39 Illustrated, 44, 60 Certificate of Deposit, 146 Check, The, 144 Closing the Ledger, 82, 86 Commercial Accounting, 70 Copartnership, Articles, 116 Corporations, 117 Cost of Production, 91 Of Crops, 96 Of Live Stock, 92 Dairy Herd, Test of, 93 Day Book, Explained, 13 Illustrated, 10, 18 Deposit, Certificate of, 145 Depreciation, 14 Double Entry, Books Needed, 38, 70 Compared with Single, 38 Superiority of, 37 Draft, The, 144 Equipment, 39 Exchange Phase, Importance of, 8 Farming, A Paying Business, 8 Feed Record, 103, 107 File, Letter and Bill, 16, 24 Hay, How to Measure, 159 History of the Farm, 13 Household Accounts, 56, 60, 62 Home Study, 28, 161 Improvements, Introductory, Inventory, Explained, Illustrated, Continued, Investment, The, Invoice, Joint Stock Companies, Journalizing, Labor Records, Labor Report, Ledger, Original Entry, Lessons, Page 39 7 14 17, 18, 20 17, 25 109 141 117 73, 75, 76, 78 98, 102, 108 101 41, 70 87 29, 43, 58, 76, 106 (See also page 161) Closing, 20, 86 Lessons, Illustrative, 29, 43, 58, 76, 106 Live Stock, Cost of Production, 92, 97 Methods of Bookkeeping, 10, 12, 36, 69 Milk Records, 98, 102, 106 Note, The Promissory, 143 Office Methods, 100 Organizations, 115 Partnership, 115 Personal Accounts, 21, 22, 23 Phases of Farming, 8 Plot, The Farm, 99, 105, 109 Poultry Records, 98 Practice Work, 29, 43, 58, 76, 106 Posting, 74, 81, 82 Profit and Loss Statement, 47, 48 Profits, How to Determine, 15 Prosperity of the Farmer, 7 Questions, Review, 67 Rates of Depreciation, 14 Receipt, The, 142 Records, What They Should Show, 9 Repairs, 39 Sales Book, Duplicating, 104 Shop Accounts, 66 Single Entry, 13 Special Records, 98 Statement, The, 142 Financial, 18, 20, 47, 48, 84 Success, Causes of, 7 Supplies, 39 Tables, Useful, 149 Terms and Definitions, 71 Time Book, 10, 104 Trial Balance, 40, 57, 84 Voucher Check, 147 (160) INDEX TO THE HOME-STUDY COURSE The Home-Study Course in Farm Accounting and Business Methods comprises fifteen assignments as follows: — Blank Assign- Form ment Lesson No. I. 1 The Inventory ; 1* 2 The Day Book and Cash Book 1 II. 3 Personal Accounts 1 4 Statement No. 2 1 5 The Bank Account 1 III. 6 Cash Receipts, Set 1 (Also Form 14) . . 2 7 Cash Payments, Set 1 (Also Form 15) 3 8 Statement No. 3 12 IV. 9 Cash Receipts, Set 2 (Also Form 14) 2 10 Cash Payments, Set 2 (Also Form 15) 3 V. 12 Household Accounts, Set 1 (Also Forms 16 and 17) 4 and 5 13 Household Accounts, Set 2 (Also Forms 16 and 17) 4 and 5 VI. 11 Statement No. 4 12 and 13 14 Continued Inventory 1 VII. 22 Milk Record 10 23 Feed Record 9 VIII. 24 Labor Record 6 25 Farm Plot 11 IX. 16 Journalizing 1 17 Posting 20** X. 18 Trial Balance 1 19 Balance Sheet 1 20 Closing the Ledger 20 XI. 26 Partnership and Joint Stock Co., Exercises 1 and 2 27 Corporations, Exercise 3 XII. 28 Arrangement of a Business Letter, Exercises 4 and 5 129, 131 30 Addresses and Inclosures, Exercise 7 140 XIII. 29 The Business Letter, Exercise 6 136 XIV. 31 Business Forms, Exercises 8 and 9 . . . 141, 142 32 Negotiable Instruments, Exercises 10 to 14 XV. Final Review and Test. * Two or three column journal paper. ** Common ledger paper. (161) Page 29 30 31 33 34 43 43 50 51 52 58 59 54 64 1C6 107 103 109 76 81 84 84 117 122 143-147 PR 7 ^9" One copy del. to Oat. Div.