Class -J±5kl_ Book.___^S_fiL"3_ Copyright N°_ COPYRIGHT DEPOSIT. ^ How to Keep Farm Accounts A practical book for the practical farmer and a text book for use in Agricultural Schools, — BY— H. L. STEINER u Xif ELL. nut friend, thou art now jvst entering the last '' month of another year. If thou art a Man of Busi- ness, and of prudent Care, belike thou wilt now settle thy Accounts, to satisfy tin/self whether thou hast gained or lost in the Year past, and how much of either, the better to reg- ulate thy future Industry or thy common Expenses." POOR RICHARD'S ALMANACK. Toledo, Ohio STEINER & CO. Publishers 1908 [library of congres? 1 we C»pl»s Receive. JAN 22 1908 C9i>yii«m tntry Too- Z*L,l4tfff | CLASS A XXc! No, Ufll ■■■;■? ! Copyright 1908 By H. L. STEINER. This book is dedicated to the every-day farmer— the "master wheel" of prosperity PREFACE GREAT deal has been said about the need of a simple A system of accounts for the Farmstead— something pos- sible on the average farm every day of the year — one relieved of useless detail, and still show its earnings and expenses — it's owner's assets and liabilities. Tak- ing the conditions which govern actual work on the farm into consideration, nothing specific has yet been published for the practical farmer, and it is for him this book is written. It is elementary because many have had no opportunity to study bookkeeping, therefore the man who knows nothing about it has been kept in sight from cover to cover. The illustration given is introduced to show the application of the fundamental principles of accounting to the every-day routine of general farming. No special sets for stock, dairy or fruit farms is thought necessary because the principles of accounts are unchange- able and only vary in their application. All the farmer, dairyman, fruit-grower or stockman really needs is to fully understand the principles when no trouble will be experienced in arranging a system of accounts to suit his wants, which will vary to a certain extent on every farm and with each individual. Bookkeeping is simply a matter of record and to do it correctly only requires that the principles of debit and credit be understood. It is necessary on many farms and useful on all. The question ought not to be, shall I keep some simple set of books, but what form is the most practical? If this book will help you, its object will have been fulfilled. Preface to Second Edition The instant appreciation of the first edition of this book upon its introduction to the Agricultural world in the fall of 1906, signi- fied two things: First. There was a field — a need — for it. Second. That How To Keep Farm Accounts filled the need. At first glance, the practical farmer may think that an account with his farm is beyond his time and patience, but many things must be explained in a book used for home-study and as a text for agri- cultural schools. The simple principles of accounts are not as diffi- cult to understand as they would seem to appear at first sight, and neither is the actual keeping of accounts. The best way to learn them is to begin an account with one's own farm, and we suggest that after reading to paragraph 47, that an inventory be taken of your live stock, products, and implements. Then make a statement of what you owe and is owing you, as ex- plained in paragraphs 33 to 40. Following this, in a suitable book, which may be bought anywhere, make the opening entries as ex- plained in paragraphs 41 to 47, and you are ready to take care of each transaction as it may occur. To set yourself right, study the index when anything comes up which you do not fully understand. If you will do this for a few weeks you will have no trouble, and any theory about which you may be in doubt will take care of itself in due time. Therefore, to learn how to keep accounts — begin to keep your own books. No transaction will come up that you can not master if you only think so. Regarding the Cost of Production, remember this book is in- tended for practical use, therefore the matter relating to this sub- ject under the head of Approximate Costs (Par. 225^) is particu- larly pertinent. Those who must be both "master and man" will find that chapter both practical and possible. Index Account — Definition of 2I Accounts — Arrangement of , Q The Household ' - The Poultry ^ Personal RcaI ...................22 Representative 2 , Usefulness of Accounts with Persons from Whom We Buy Goods 204 Rules for Debit and Credit 20 - tn 20g At the End of the Year 2I0 Accounts with Persons to Whom We Sell Produce U)7 Rules for Debit and Credit U) g to 202 At the End of the Year Illustration of P]atcs 86 and g? Advertising- b 73 Annual Statement— (Illustrated)) April Cash Account-Example of ' P]a(cs g and Q Approximate Costs t/ Arrangement of Accounts 30 August Cash Account— Example of p ]atcs 24 an( , ,. Balancing the Cash „ Banking p t 95, 21s Reasons for <>5 Uses of liank Account 21] Rides for Debit and Credit 2U to 2I , At the End of the Year 2I Illl,stration of Plates sn and 89 Hank Checks — How to Write 230, 23 1 Numbering of Same and Why g g When Cancelled g Bank Note — Form of Bills Payable Q7, 101 I0 HOW TO KEEP FARM ACCOUNTS Bills Payable Account 136 Rules for Debit and Credit 137 to 139 At the End of the Year 140 Illustration of Plates 64 and 65 Bills Receivable 7 2 Bills Receivable Account 143 Rules for Debit and Credit 144 to 149 At the End of the Year 150 Illustration of Plates 66 and 67 Bookkeeping — Definition of 13 Books of Original Entry 17 Books of Record 3 Bran 99 Building and Improvements 74 Building and Improvement Account I 29 Rules for Debit and Credit 130 to 134 At the End of the Year 135 Business Paper — Filing of 8 Remarks on 226 to 247 Capital Stock Account— Its Equivalent on the Farm 117 Cash Book, The 20, 30 At the End of the Year 105^ Definition of A 2 How to Balance 51, 66 Posting of 53 to 55 Rules for 4 2 Ruling of 43 Cash — On hand the first of the month '. 58 On hand the end of the month 51 When credited 4- When debited 42 When over S 2 When short 5-' Checks — as receipts 2 3° I low to endorse 2 35 How to write 230, 231 Numbering of same and why 96 Stopping payment of 245 When discrepancies exist 232 When you receive one not endorsed 226, 227 Classification of Accounts 30 Closing the Ledger at the Knd of the Year 104 Clover Seed I0 ° Commercial Paper — Forms of 228 to 254 HOW TO KEEP FARM ACCOUNTS Cost of Production 4 Corn— Rule to find Contents of Cribs 256 Rule for Measuring when on Cob 255 Shrinkage 257 Credit — Laws of 25 Day Book, The 9 Debit— Laws of 25 December Cash Account — Example of Plates 40 and 41 Depreciation — Of Buildings 129 Of Implements 36 Destroying Notes 14 1 Discount Account 191 Discounting Notes that have Endorsers 228 Discrepancies in Notes, Checks or Drafts 232 Double Entry Bookkeeping 15 Drafts — Time or Sight I42 When Buying 229 When discrepancies exist 22,2 When you receive one nol endorsed 226, 227 Due Bill— Form of 242 End of the Year 104, 105, 220 Errors in Trial Balance S7 Essentials of Farm Accounts 2 Essential Books of Record 16 Extra Help Employed on the Farm 50, 69 Expense Account 161 Rules for Debit and Credit 162 to 164 At the End of the Year [65 Illustration of Plates 7<> and 71 Farm Accounts — Essentials of 2 Farmstead, The, Account 117 Rules for Debit and Credit 118 to uo At the End of the Year 117 Illustration of Plates 62 and 63 Farm Help Account, The 117 Rules for Debit and Credit 1 78 to [80 At the End of the Year '. [8l Illustration of Plates 78 and 99 Farm Ledger, The 26 Index of 29 Ruling of 28 Size of 27 32 Farmer's Mutual Insurance [96 February Cash Account — Example of Plates 4S and j\<> 12 HOW TO KEEP FARM ACCOUNTS Feed Account, The 166 Rules for Debit and Credit 167 to 169 At the End of the Year 170 Illustration of Plates 72 and 73 Fertilizers 80 Filing of Business Papers 8 First Entry to Make When Books are Opened 44 First of the Year 11 Freight 84 Lost in Transit 67 Gestation Table 272 Grain — Rule for finding contents of bins 258 Shrinkage of 260 Hay — Exact measurement of 261 Rule for finding tons in windrow 262 Rule to find contents of mow 263 Rule for finding contents of stacks 264, 266, 267 Rule for finding tons in load 265 Rule for finding amount of hay or other product sold by the ton.. .. 268 Hogs 70 When taken for personal use 91 How to — Arrange or Classify Accounts in the Farm Ledger 30 to 32 Balance the Cash Account 51, 52 Close the Ledger at the End of Year 220 to 225 Enter an order received for Farm Products 48, 49 Enter an order you send for seed 59 Find amount of Hay in Load 265 Find amount of Hay in Windrow 262 Find amount of Hay in Mow 263 Find amount of Hay in Stacks 264, 266, 267 Find percentage of Loss or Gain 225 Find value of Products sold by the ton 268 Find interest at any rate for any time 271 Endorse a check 235 Make claim to R. R. Co. for shipment lost in transit 67 Make a check 230, 231 Open or Begin a Farm Ledger 37 to 46 Open or Begin a Cash Account 42, 47 Open an Account with Bank 95, 214 Open and Close the Bills Payable Account 136 to 140 Open and Close the Bills Receivable Account 143 to 150 Open and Close the Building and Improvement Account 129 to 135 Open and Close the Expense Account 161 to 165 Open and Close the Farmstead or Capital Account 117 to 120 HOW TO KEEP FARM ACCOUNTS 13 How To — Continued. Open and Close the Farm Help Account 177 to 181 Open and Close the Feed Account 166 to 170 Open and Close the Implement Account 171 to 176 Open and Close the Interest Account 186 to 190 Open and Close the Labor Account 182 to 185 Open and Close the Production Account 155 to 160 Open and Close the Proprietor's Account 106 to 116 Open and Close the Taxes and Insurance Account 193 to 195 Open and Close an Account with Property other than the Farmstead 121 to 128 Open and Close Accounts with Persons to whom you sell Pro- duce 197 to 203 Open and Close Accounts with Persons from whom you buy goods 204 to 210 Locate errors in the Trial Balance 57 Measure Corn in Crib 257 Measure Grain in Bins 259 Measure Wood 269 Post the Cash Book 53 to 55 Stop Payment of a Check 236 Take an Inventory 7. 34 to 36 Take a Trial Balance 56 Horse Shoeing 68 Household Accounts 5 Husking and Shredding 90 Implements — Depreciation of 36 Repairs on 68 When bought 63, 69 Implement Account 171 Rules of Debit and Credit 172 to 175 At the End of the Year 176 Illustration of Plate 74 and 75 Index 29 Insurance 196 Interest Tables 270, 271 Interest Account, The 186 Rules for Debit and Credit 187 to 189 At the End of the Year 190 Illustration of Plates 82 and 83 Inventory — Definition of 34 Examples of 35, 222 Importance of 7 Valuation of 36 January Cash Account — Example of Plates 44 and 45 i 4 HOW TO KEEP FARM ACCOUNTS Joint Note — Form of 253 Journal, The 19 July Cash Account — Example of Plates 20 and 21 June Cash Account — Example of Plate 16 and 17 Keeping Separate Accounts with each product 4 With each field 4 Labor 62, 69 Labor Account 182 Rules for Debit and Credit 183, 184 At the End of the Year 185 I llustration of Plates 80 and 81 Lambs 89 Land 101 Laws of Debit and Credit 25 Ledger, The 18 Index for 29 Ruling of 28 Size of 27, 32 To close at the End of Year 104 Liabilities 221, 224 Statement of 37, 39 Linseed Meal 78 Live Stock — Records 31 On hand at beginning of the year 34 Bought during the year 157 Sold during the year 155 Record of Mating and Dates of Birth 31 Locating Errors in a Trial Balance 57 Loss and Gain Account 216 Rules for Debit and Credit 217, 218 Illustration of Plates 90 and 91 Lost Shipments — How to Collect 67 Lumber 103 March Cash Account, Example of Plates 52 and 53 Mating and Date of Birth of Live Stock 31 May Cash Account, Example of Plates 12 and 13 Measures and Weights — Tables of 263 Measurement of Corn 256 to 249 Of Grain 259, 260 Of Hay 261 to 267 Of Wood 269 Men— Hired by the Year ' 62, 104, 105 Middlings 60, 166, 168 Money Taken for Personal Use 6, "6, 83 HOW TO KEEP FARM ACCOUNTS 15 Money Orders — Express 49 Post-Office 49 Mortgages 97, 101 Nails 78 Net Gain or Loss — To Find 224 Net Worth 40, 223, 224 Notes— Forms of 233, 247 to 254 Having Endorsers 228 How Debited and Credited 154 Paid, When Secured by Mortgage 141 Waiving Protest 228 When Given 136 When Paid 136, 234 When Partial Payments Have Been Made 151 When Renewed 152 When Discounted 153, 192 When Discrepancies Exist 232 When Endorsed Over to You 246 November Cash Account, Example of Plates 36 and 37 Oats V 75> 167, 168 October Cash Account, Example of Plates 32 and 33 Opening Entries When Books Are Begun 44 to 47 Orders for Farm Products, How to Enter 48, 49 Original Entry, The Books of 17 Partnership 107, 108 Percentage of Loss or Gain, to Find 225 Personal Accounts 24 Posting 53, 54 Order of 55 Potatoes 87 Taken for Personal Use • 88 Poultry Accounts 6 Present Worth 116 Principles and Definitions of Accounts 12 to 25 Private Accounts 108 .Production Account 155 Rules for Debit and Credit 156 to 159 At the End of the Year 160 Illustration of Plates 68 and 69 Products of the Farm — When Sold 155 When Taken for Personal Use 88 When Sold on Time 197 When given to help on account 1 79 Promissory Notes — Forms of 252 16 HOW TO KEEP FARM ACCOUNTS Proprietor's Account 104, 106, to 108 Rules for Debit and Credit 109 to 115 At the end of the Year 1 16 Illustration of Plates 60 and 61 Railroads — Claims Against 67 Real Accounts 22 Real Estate Accounts 121 Rules for Debit and Credit 122 to 127 At the end of the Year 128 Receipts — Forms of 248, 249 Receipts — To apply on account .248 In full of account 249 For payment on note 250 Record of Live Stock 31 Red Ink in the Ledger 10 Rent 126 Repairs of Implements 68 Representative Accounts 23 Resources 221,224 Resources — Statement of 37, 38 Rules of Debit and Credit 47 Rules Useful When Taking the Farm Inventory 246 to 259 Ruling of Cash Book 43 Of Ledger 28 Sales of Farm Products 48 Salt 60 Scales 74 Seed — Entry of When Buying 59> 81. 85 September Cash Account — Example of Plates 26 and 27 Shipments Lost in Transit 67 Shoeing 68 Shredding Fodder QO Single Entry Bookkeeping • M Sight Drafts 142 Size of Ledger -?■ 3- Statement of Resources and Liabilities 37 Stallion Services 64 Stationery 61 Stock Register 3 1 Sundry Labor 69 Tables of Weights and Measures 273 Taxes and Insurance Account l 93 Rules for Debit and Credit •' 194 At the End of the Year 1C )5 Illustration of Plates 84 and 85 HOW TO KEEP FARM ACCOUNTS 17 Threshing 77 Tile 102 Time Drafts 142 Timothy Seed 85 To find what you have made or lost 223 to 225 Transactions that occur when you are not at home 9 Transferring an Account to a new page or a new Ledger 140 Trial Balance 54. 56, 65 To locate errors in 57 Usefulness of Accounts on the Farm 1 Waiving Protest on Notes you discount that have endorsers 228 "Wear and Tear" of Implements 36 Weights and Measures ~7i What You Must Know Before You Begin or Open Your Books 40 Wheat '. 79 Shrinkage of 260 When Ought the Farmer Open His Ledger n Wood — Measurement of 269 Wool— When Sold 68, 158 Yearly Statement 223, 224 Part One "1 would not impose on a busy ((tinier the keeping of an elaborate set of books, but some simple form of accounts will be a great aid in successful farming." James Wilson, Secretary of Agriculture. FOREWORD a a 1. The farmer who works all day under a blazing sun, naturally looks upon the keeping of accounts from a differenl viewpoint than other men in business for themselves. For besides the long hours, rush of work and scarcity <>f help during the busy days from seedtime till harvest, he has the natural aversion to writing and detail common to all wlio do active physical labor. Therefore, it's not a matter of surprise when we think of the conditions under which the Amer ican farmer must labor, that, although he has over twenty billions of dollars in vested in his business, he usually leaves the accounting of it for later considera- tion, with the result that a record is seldom, if ever, attempted of his farmstead's earnings and expenses. Admitting the value of bookkeeping on the farm, the first question that comes to the mind of the practical farmer is: "What is the best way to keep my a. counts?" 2. THE ESSENTIALS OF FARM ACCOUNTS.- In farm accounting there are two essentials which should always be kepi in mind. These are ac curacy and simplicity. That all bookkeeping must be accurate goes without Saying, and that farm accounts should be simple and free from detail is apparent to any one at all familiar with actual everyday farm conditions. 'A. THE BOOKS OF RECORD. — The uses of modern commerce demand that the books of record suit the business in which they are used. In the great mercantile and industrial organizations, it is often economy of time to have many books of record, but not so on the farm. Mere, the less detail and fewer books of record the better, hence, the method described and illustrated in the following pages makes use of but one book. It's a common saying that no two men keep their books alike. I'.ut the dif ference, if any, comes from the individual, his business ami the details necessary to be shown. The matter that im>cs into the Farm Ledger will depend on the farmer himself. It will be much or little, as he may decide. However, let him beware lest his books begun in the Hood tide of enthusiasm, when work is slack and evenings long, be not too full of unimportant detail They are then almost sure to be neglected when busy days come later on It is much belter to begin a simple account and keep it accurately than to attempt too much. Think of your busiest days, not those in which you have the least to do. 24 HOW TO KEEP FARM ACCOUNTS As already stated, the books of record must suit the business. In the larger mercantile houses and industrial organizations there are many different styles of Ledgers, including bound, loose-leaf and card index, as may best suit the business, and all of them have their place in the economy of modern commercial life. But for the uses of most men on the farm, the bound book is best for two reasons: First — because lowest in price. Second — because it is universal. No high priced books of record are necessary or desirable, and the card index and loose-leaf systems can't be found as yet in the smaller stationary stores, and although boomed by their makers in season and out, they have many dis- advantages on the farm. And so, for many reasons which cannot be explained in detail here, the bound book is preferable on ninety-nine farms out of every hundred. An exception may be noted, however, as regards farms devoted to the breed- ing of pure bred stock. On these and large Dairy farms where it is desired to keep a record of individual performances, the card index or a loose-leaf sys- tem may suit the owner best, even if more costly to install. 4. THE COST OF PRODUCTION.— Notwithstanding the farmstead with its full complement of live-stock, implements and buildings can be likened to a "plant" of the manufacturer, and although the farm is a factory to all intents and purposes, it is que'stionable whether the practice of cost or departmental ac- counting is practical on the average farm. On this point there may be a dif- ference of opinion, but on the average farm one who would attempt to keep an accurate account with either fields, crops or kinds of stock will have his hands so full during the busy season, that, nine times out of ten, the accounts would be neglected and thought too troublesome to continue. For this reason, most farmers should treat their accounts with the farm as a whole — rather than to open an account with each field, or their hogs, sheep, cattle, etc. It is true that accurate cost accounting is a necessity in the factory. The manufacturer must know what it costs to make and put his products on the market, but is it so all im- portant to the farmer? In nearly every rotation there are certain crops neces- sary to keep up the farm fertility that can't be accurately set down in figures. The results from the farmstead as a whole, is eventually of the most importance. And the practical farmer, if he cares to know, can take his pencil and come as near as is necessary to figuring the cost of growing an acre of corn, or what his cattle or sheep net him. Therefore, don't draw the lines so fine in actual prac- tice that your resolve to keep accounts will have died "a bornin';" but remember, that the cost of production of farm products depends so much on the elements over which you have no control, and that the details are so many if you would have them accurate, that it is altogether best not to attempt it. It is true, you have seen every now and then in the agricultural press, articles regarding the cost of producing a pound of pork, beef or mutton, and what it costs to grow the different grains and grasses. Now, however useful the exact cost may be, the farmer or stockman who would attempt to keep such an account with each crop, and the different kinds of live-stock he would raise, will find it all but an im- HOW TO KEEP FARM ACCOUNTS 25 possible task. Manufacturers who deal only with inaminate material can easily keep exact cost accounts, but living and growing things possess an individuality which varies with the season, with the feeder, and depend on conditions which do not admit of hard and fast rules. For practical purposes, a "Production" account showing the gross sales less the items which go to make up the general expense of the farmstead as shown by the Loss and Gain account in the illustration herein (Plates 90 and 91) will be all that is needed. Much more satisfaction and real benefit will be found in a simple set of accounts accurately kept, than to attempt one burdensome with detail, and then at the end of the year find it to be of no value whatever. Far better to keep an account with the farmstead as a whole than to begin the de- tail of departmental accounting. The one is perfectly reasonable, and requires but little time. The other impractical and impossible to all but the very, very few on the average farm. (Refer also to paragraph 225 l / 2 , which deals with Ap- proximate Costs.) 5. THE HOUSEHOLD ACCOUNTS.— Xow, about the Household Ac- counts. Are there any reasons why they should be included in the farm ledger? Have you ever known a -banker, merchant or manufacturer to include them in the books of his business? Couldn't he, with as much reason for so doing, in- clude them in his books as you in yours? Some argue, that on the farm the household expenses are so closely related to the farmstead's earnings that they must be included. Very true as far as it goes, but they have no place in the farm ledger. Elaborate accounts have been shown in which the "Garden Account" was charged for all labor, seed and other expenses and credited with the dif- ferent vegetables used from time to time at the market price. But do not do this, nor allow any more detail to creep into your books of record than will be of use to you. If you think about this a little you will not want to. As for "Garden" or household accounts, remember that when you hire a man by the year for a certain sum you allow him in addition to the amount agreed on — pasture for cow and a garden or truck patch. You figure his labor worth the wages you pay him plus the pasture and use of the small plot of ground for his garden. And this is the best plan for yourself, too. The live-stock, imple- ments and buildings are a part of the farmstead's equipment. These, together with the farm, enable you to produce a profit from your labor and management. And for this the farm owes you something each year. You may never have figured on this; but if you are going to begin an account with your farm, you should open a "Personal" account and charge yourself with all money you take from its earnings for personal or household use. At the end of the year you should charge the "Labor" account for whatever amount you think you've earned, making your wages large enough to fully meet all expenses for clothing, groceries, church, education, relaxation and all other necessaries to which your family is entitled. Whatever you decide that you and your family can get along with — charge to your "Personal" account and keep the detail of household ac- counts out of the farm ledger. If you do this, the same as any other business 26 HOW TO KEEP FARM ACCOUNTS man would do, your bookkeeping will be much more simple and satisfactory in every way. 6. THE POULTRY ACCOUNT.— On most farms unless Poultry is made a specialty, the proceeds is considered the wife's, to do with as she sees fit. Some- times she trades the eggs out at the "store" for different little things needed round about the house, and sometimes she takes the cash, but, generally, whatever is derived from this source is considered hers to do with as she pleases. For that reason Poultry is not included in the inventory of the illustration given in the following pages. But if the owner of a farm decides to have an account with "Poultry" he should include it in his inventory, in which case he would have to credit the "Production" account with all proceeds from the poultry — that is treat it as he would his hogs, sheep or cattle. However, if Poultry is made a specialty, an account may be opened with it and then it should be treated as any other account, debiting for amount of Poultry on hand when books are opened and for all that is paid out during the year. It should also be credited for all sales and for the amount of the inventory when books are closed at the end of the year. It is sometimes desirable that this be done, and especially so, if Poultry is the principle product or one of them. If it is, extra columns may be ruled in the Ledger and a strict account kept of eggs laid and all necessary data which may be useful for reference. We suggest that when it is desired to know what Poultry is paying, that the feed be bought and used for the Poultry only. This will simplify the accounting. 7. THE INVENTORY.— What has been said about it being necessary to include the Poultry in the inventory, if it is decided to have an account with it represented in the ledger, brings to mind the importance of the inventory. If you have read Prof. Henry's "Feeds and Feeding" you know how much import- ance he places on the old maxim that "The eye of the master fattens his cattle." Now, in accounting, never forget the importance of the inventory. An in- ventory is the first thing to take before any books can be opened, and it is the first thing to take before they can be closed. It is one of the most important steps in accounting, but even as important as it is, so many business men neglect it, leaving it to subordinates who do not fully realize how vital it is to the suc- cess of the business, that fully 95 per cent, of the failures in business can be traced directly to this carelessness or ignorance. By all means take your inventory your- self and carefully. Get ready for it so that when the day comes you can take it without trouble or guess work. Remember that everything should be included in the Inventory that is used in the maintainance of your farmstead or to in- crease its products. And further, that the value of each implement, all live-stock, feed and products on hand at the time it is taken should be honestly set down. Make the values just what you could get in the open market for all except the implements, and on these deduct a certain percentage each year for "wear and tear" from the prices paid. Some manufacturers deduct ten per cent., but gen- erally this is too much for farm machinery that has had good care. It often hap- HOW TO KEEP FARM ACCOUNTS pens that the old you have will do as good or better work than the newer. You see it depends altogether on the "eye of the master," for "He who by the Plough would thrive Must either hold himself or drive." 8. THE FILING OF BUSINESS PAPERS.— And when you are taking your inventory, some of the prices paid for the different implements, for the harness or for some one of the many things about the farm may have been forgotten. How are you to know and get at the correct cost in such cases? Let "a place for everything and everything in place" be your rule when handling business paper and correspondence. If this is practiced you would only have to turn to your letter file and find the original cost of any implement or the price paid for all feed instantly. A transfer case with index can be bought at any stationers, at from 20 to 40 cents. In it can be filed for instant reference, all letters, receipts, expense bills (freight receipts) Bills of Lading, cancelled checks, candied notes and all other paper worth keeping for future contingencies. Begin to file all papers that pertain to the business of your farmstead. Put everything in black and white. Don't depend on memory or verbal contracts, "for verbal contracts feed the courts" and one of you may die. Keep your ledger right up to date, and if the inevitable comes, as it must come some day, your family will not be "between the devil and deep blue sea," but can take hold of your temporal accounts understandingly and conduct the farm and settle your business affairs without litigation or expense. 9. "WHAT ABOUT TRANSACTIONS THAT OCCUR WHEN I'M NOT AT HOME?" — As explained in paragraph 6 the book upon which a transaction is first recorded is the one to be produced in evidence in cases of litigation. For this reason it is good business practice to enter all transactions in the one book you keep as a Ledger. As the transactions are not many any one month, by leaving four pages for each month's Cash Account, or forty-eight pages for the year, enough space will be left for memoranda and all transactions which are necessary to enter during the absence of the owner, or whoever may take care of the books. If pages nine and ten are used for the April cash, eleven and twelve will be set aside for daily memoranda, which ought to include all events worth putting on record. By this method, if you were not at home and John Jones got a load of hay, those in charge in your absence would turn to the memoranda page for whatever month it happened to be and write, if in April, on page eleven: "John Jones, Hay 2640 lbs." On your return, you would naturally turn to the books and finding this entry, write it on the Cash Account proper for that day and month as it should be, according to whether it was a cash or time transaction. IO. RED INK IN THE LEDGER.— Books, of course, can be kept as ac- curately without the use of red ink rulings and entries to balance accounts as they can with them, and many bookkeepers claim its use should be relegated to 28 HOW TO KEEP FARM ACCOUNTS that chapter in the ancient history of accounting when all cash transactions were journalized. Hut most bookkeepers continue to use it, and the illustration given herein makes use of it. A word or two as to what these red ink entries mean will not be out of place. First turn to the Cash Account for April (plate 9). Footing up the entries in black, we find the debit side amounts to $425.00 more than the credit side, that is. we have $425.00 on hand. Being the end of the month and wishing to close the account to make it balance we write on the credit side, in red ink, "Balance $4->5.oo." (See item eg.) When we write this, we really agree to enter as soon as the account is ruled and closed, on the debit or opposite side, the amount we have on hand in black ink. Compare item eg on plate 9 with item da on plate 12 and you will see just what is meant. You will also note that this occurs every time we balance the Cash Account, whether daily, weekly or monthly. If you will now turn to the Ledger accounts you will see that the red ink entries made there to balance, carry forward or close an account at the end of the year never affect its balance because you agree when you balance, carry for- ward or close an account, that you will bring down or carry forward all red ink entries to the opposite side of the Ledger in black ink. Hence, the balance of the Ledger is not changed, the red ink simply serving to show that such an account has been balanced, carried forward or closed as we have agreed to do as indicated by the entry in red. If you refer to Plate 60 you will see we agree to credit Fox with his "Present Worth" at the time the books are closed. (See entry in black ink of $12,703.60, on Plate 61..) Therefore, all red ink entries are either brought down or carried forward to the opposite of the Ledger in black ink. 11. WHEN SHALL THE FARMER BEGIN OR OPEN HIS LEDGER? — It is customary among- merchants and manufacturers to close their books at least once a year, ami it is understood by them that the first of the year, as far as the records of the business are concerned, is at the time the books are closed. In commercial pursuits, January 1st is usually selected, but on the farm, this must be considered, whether it isn't best to select a time when the live-stock and other products are at their minimum? For instance, among farmers generally in the northern half of the United States the first of March or April finds most of them with less stock and pro- duce on hand than at any other time of the year, and the active labor of putting in the oats, barley and other spring crops barely begun. Any date will do, and the farmer must decide for himself what time of the year suits his location, rotation and system of farm management best, Part Two PRINCIPLES AND DEFINITIONS a a * 12. PRINCIPLES AND DEFINITIONS. At the beginning of every business, except farming, some system of ac- counting from which its owner can form an estimate of its development at any time, is thought absolutely necessary. In farming it is the last. And, al- though the keeping of accounts must always be incidental to the business itself, because it results from it, yet it is such an important essential in securing the greatest profit from the farm that every farmer should keep an account with his farmstead, if ambitious to obtain the most profitable returns from his management. For after all, profit is the incentive to all business activity. This is just as true on the farm as it is in any branch of commerce or manufacturing. It's the profit we think of that spurs us on to grow better grain, or fruit, or to raise finer stock than our neighbors. And then when we've sold the stock we've raised and the grain or fruit we've grown and have pocketed the proceeds, we've completed a business exchange or transaction that ought to be put on record, the recording of which is nothing more or less than bookkeeping; hence: 13. BOOKKEEPING is the art of recording business transactions dis- tinctly and systematically so as to show the money received, disposed of and on hand, the credits given, and the assets, liabilities, and general status of the business, person or firm. There are two methods of keeping books, known as Single and Double Entry. 14. IN SINGLE ENTRY there is but one debit or one credit to a transac- tion, and only personal accounts carried to the Ledger. It is therefore imperfect and incomplete and never used in modern business, because accounting that isn't accurate is worse than none at all. Single Entry affords hardly half-a-loaf at best, but 15. DOUBLE ENTRY BOOKKEEPING furnishes a complete business record in which every transaction is made to appear on the Ledger as both debtor and creditor by observance of the governing principles, that, in every in- stance the thing obtained is debtor to the thing given, and the thing given is creditor of the thing obtained, by means of which a correct Ledger balance is always at command. 32 HOW TO KEEP FARM ACCOUNTS In simple English it means that, for every debit there must be a correspond- ing credit, and vice-versa. That's the whole thing in a nutshell, and it is by using this principle for a foundation that the entire structure of accounts is built. 16. ESSENTIAL BOOKS OF RECORD.— In double-entry, the Journal, Cash Book and Ledger are the principal books, although other books known as Auxiliary books are added for convenience. Nowadays the Cash Book and Ledger are the principal books, and it is perhaps advisable to have a separate book for each on farms extensive enough to require the services of a book- keeper, but for all farmers who must keep their own books, the system shown in the pages which follow is the most simple and convenient. 17. BOOKS OF ORIGINAL ENTRY are those upon which the transac- tion is first recorded. In case of litigation the book of original entry, whatever that book may be, is the one required to be produced in evidence. 18. THE LEDGER is the book of accounts, and contains a final summing up of all the accounts. 19. THE JOURNAL OR DAY BOOK.— Formerly this book was used to enter all transactions as they occurred from day to day. Nowadays the best bookkeeping is that which tells every detail with the least minutia, and the ten- dency of the times is to reduce the number of books and entries as much as possible, hence, the Journal or Day Book is seldom used, the Cash Book answer- ing every purpose. SO. THE CASH BOOK is the book used to detail the cash transactions, and should always be a book of original entry. On the farm it should answer the purpose, and take the place of the Day Book or Journal. Then by com- bining it with the Ledger, as explained later on, the farmer will have to keep but one book of record, which will appeal to all practical men. One volume a year — the original book of entry and Ledger, one and the same. In cases of dispute or litigation, if called upon to act as Guardian or Administrator, if ever, under any circumstances, called upon to produce the book in court, every transaction is there convenient and complete. 21. ACCOUNT. — An account is a recorded statement of debits and credits, of receipts and expenditures, or of business transactions, and are of three kinds: Real, Representative and personal. 22. REAL ACCOUNTS are those which show either a resource or a lia- bility in continuous record, such as cash, notes and personal accounts. 23. REPRESENTATIVE ACCOUNTS are those which show the earning activities of a business, Mich as interest, discount, expense and property. 24. PERSONAL ACCOUNTS are those opened with persons who from time to time become indebted to us or we to them. 25. LAWS OF DEBIT AND CREDIT.— As explained in defining double entry bookkeeping, every transaction is made to appear in the Ledger as both HOW TO KEEP FARM ACCOUNTS 33 Debtor and Creditor, hence every account is affected in two ways— by debits and credits. From this you will understand every account lias two sides, the Debit and the Credit. The principles which govern them are unchangeable, and are as follows: DEBIT SIDE ACCOUNT CREDIT SIDE On this side we enter what comes || On this side we enter what goes out into the business or what costs value. || of the business or what produces value. Therefore, you should memorize the following: Always debit what we receive and II Always credit what we give and who who or what costs us value. || or what produces value. Always remember that every transaction that can possibly occur is gov crned in a bookkeeping sense by one or the other of the two principles given above. Part Three "Let us forge out a system that will meet our requirements as producers and suit our conditions." — Wilson. THE FARM LEDGER 26. A modern system of accounting is one that automatically furnishes sta- tistics of a business in such form as to be readily referred to by the owner, and furnish him a safe guide for its management along prosperous lines. On a farm the books should be so kept that all questions regarding either the finances or the farmstead or its owner can be answered without looking up data in ancient files or other books of record than the Ledger. As for the Ledger, there are nearly as many kinds nowadays as there are businesses. This results from a desire to harmonize the books with the business, and when attained, insures accuracy and a great saving of labor. The farmer should adapt his bookkeeping to suit his conditions, and the best system for him is one that differs from the usual method by dispensing with separate Day Book and Cash Book, using one book only — the Ledger — which, if rightly kept, will answer every purpose. 27. SIZE OF LEDGER.— All that is required is one large enough to admit the opening of all the accounts necessary to properly care for the rotation followed on the farmstead. It is best to use one book each year. It is much handier when wanting to refer to the records of any former year or when com- paring one year with another. 28. RULING. — It should have the regular single entry ruling, of which the following is an example: EXPLANATION COLUMN PAGE OF CASH BOOK OR LEDGER Blank books ruled like the above can be bought at most stores in every village, the cost running from seventy-five cents up, according to size, quality of paper and binding. This ruling answers all purposes on most farms, but when a record is kept of the individual performances of cows; of eggs laid. or any other data you think advisable to keep, additional columns may be ruled to suit. On a dairy farm each cow can have a page set aside for her record. A record may also be kept of pure bred stock in this manner. It is best to rule a form and decide definitely that it suits your purpose before ruling your ledger. With a little thought a ledger of this kind can be made to answer all purposes as a book of record and accounts. It can be made to tell you just what you want to know about your farmstead, and will be found infinitely better and decidedly cheaper than an elaborately ruled book that doesn't suit your rotation or individual needs. 29. INDEX. — These books are made with and without indexes; but when 4 o HOW TO KEEP FARM ACCOUNTS used as a book of record on the farm they should have the index. Then it can't be lost or mislaid and is always at hand, ready for use. 30. THE ARRANGEMENT OF ACCOUNTS.— It is always advisable in classifying the accounts for the average farm, that the first six pages be set aside for the annual inventory. Then an allowance of forty-eight pages for memor- anda and the Cash accounts for the twelve months. This allowance of forty- eight pages insures enough space to write any memoranda from day to day dur- ing the month, which may be worth noting in permanent form, that is, if pages nine and ten are used for the June Cash, pages eleven and twelve would be left blank for memoranda and the July Cash entered on pages thirteen and fourteen, and so on. Then a few pages should be set apart to record the mating and date of birth of all live-stock, and this should be indexed the same as any account in the Ledger so that it may be quickly found. While the accounts of a farm and its records are wholly distinct, yet each are essential to the most profitable farming. The accounts show the business end of your operations-*-their results in dollars and cents. Records will help you decide which is the most economical method of handling your farm. Although many farm without using either, yet the greatest success is not attainable unless both are kept. But records are of no avail unless they are used as a basis on which plans are made and carried out. Records will vary on each farm, and it isn't possible to present in a book intended for general use, forms for all data that might or could be used in different localities. For the general farm, two or more pages set aside for each month, as suggested above, will answer every need. For dairymen, a page For each cow in the herd, ruled to show weight of milk, test of butter- fat, etc., etc., will be sufficient. For the breeder of pure-bred livestock there are ready-ruled registers mentioned elsewhere (Paragraph 31) that will be found convenient and low-priced. But what we wish to particularly impress is this fact — the records may be many or few. as best suits the needs of the owner of the farm, and he can best determine their extent when he decides the end for which he is striving. Unless one thinks and plans and uses them as a basis on which to work they will not help. Merely keeping a record part of year will be of no avail. Have a well thought out plan and then keep such records as will give you statistics vital to its success. As a matter of convenience, adjustable index tags may be had at from 8 to 1 _> cents each, Placed on a page, much time is saved when posting. It is best to use a larger tag for pages containing Memoranda and Cash account. If pages and 10 are used for June Cash, place tag marked Cash on page 10, etc. Then on the first oi the month following, when your books are posted and balanced, move "Cash" and "Memoranda" tags forward to the pages set aside for these items for the month. At the end of the year, when you begin your new- ledger, the tags can he changed quickly and used from year to year. They will HOW TO KEEP FARM ACCOUNTS 41 last a lifetime. There arc several different styles and makes on the market. While they arc not indispensable, t hey are worth having because they save time and last indefinitely. 31. These few pages should be all that is necessary on most farms, unless the breeding and sale of pure-bred stock is made a specialty, when it is belter to use a record made on purpose for breeders. There are three published that are very convenient and practical. The "Breeders' Gazette," The "American Sheep Breeder," and The "American Swineherd," all of Chicago, each publish registers for this purpose that will answer every requirement. The balance of the pages in the Ledger should be divided to suit the ac- counts one has or may wish to keep, except, that not less than six pages should be left at the end of the book for a recapitulation or animal statement of the farmstead's earnings and expenses for the year. 32. Using the above for a basis the pages necessary would, on most farms, be about 100, but the size of the Ledger used must of course be governed by the size of the farm and the accounts one would wish to open. Part Four " Illustration is the basis of successful teaching." — Horace Mann. THE ILLUSTRATION 33. To better illustrate how the books are first opened or begun, let us imagine some person, say one John Fox, wishes to begin a simple set of ac- counts with his farmstead. Having decided on this, the first thing he must do is to take an inventory and an 34. INVENTORY on the farm should be an itemized list of everything used to increase its profits or maintain it. It must include all Live-stock, Feed, Implements, and all products on hand, such as Wheat, Corn, Barley, Rye, Hay, Potatoes, etc., etc., with the quantity and number of each figured at the market price the day it is taken. This Fox takes, and as he has no time for "fuss and feathers," and doesn't wish to open a separate account for each product, he includes under the head of "Pro- duction" all his live-stock and the produce grown by him. (Refer to 155.) Under Feed, he enters only that which he has bought, such as Bran, Mid- dlings, Oats, etc. Had he grown the oats he would have to enter it under "Pro- duction," but whatever he buys to feed must be inventoried as "Feed," and at the prices paid for it. The inventory having been taken we give it in full as follows: 35. Inventory of Clovermead Farm, March 31, 1901. FEED PRODUCTION Bay Team Jack and Jim $ 160.00 Bay Mare Queen 75-00 Black Mare Bess 60.00 Chestnut Mare June 175.00 Two Cows at $35.00 70.00 20 Stock Hogs at $5.00 100.00 15 Poland China Sows at $12. 180.00 1 Berkshire Boar 35-00 100 Shropshire Ewes at $4.00. 400.00 1 Shropshire Ram 50.00 I Shropshire Ram 30.00 I Shropshire Ram 20.00 913 bushels Corn at 35c 319-55 9 bushels Potatoes at 30c... 2.70 11H tons Clover Hay at $6.00 69.00 87 bushels Seed Corn at 60c. 52.20 75 lbs. Linseed Meal at $24.00.$ .90 % ton Bran at $15.00 1.87 3/4 ton Middlings at $19.00... 14.25 27 bushels Oats at 32c 8.84 $ 25.86 IMPLEMENTS One Wagon $ 60.00 One Farmers' Handy Wagon. 39.00 One Surrey 120.00 One Buggy 80.00 One Spring Tooth Harrow... 14.00 Amount up $ 313.00 $1398.45 48 HOW TO KEEP FARM ACCOUNTS Brought up $ 31300 Less 25% discount for "wear One Adjustable Harrow 12.00 and tear" of five years' use..$ 183.00 One Roller 19.00 Two Plows at $15.00 30.00 $ 549.00 One Cultivator, "Planet Jr.". . 40.00 One Binder $ 100.00 One Weeder T2.00 One Corn Harvester 100.00 One Corn Planter 27.00 One Grain Drill 75-00 $ 200.00 One Mower 40.00 Less 5% for one year's depre- One Cahoon Seeder 3.00 ciation 10.00 One Tedder 22.00 One Corn Sheller 5.00 $ 190.00 One Hay Rake 20.00 One Hay & Stock Rack . . 12.00 RECAPITULATION Two Sets Harness at $30.00.. 72.00 One Set Light Harness 20.00 Production $1398.45 Also Axes, Forks, Log Chains, Feed 25.86 Three Horse Eveners, Implements 739-00 Wheelbarrow, and other miscellaneous tools about Total $2163.31 the place 10.00 $ 732.00 36. INVENTORY VALUATION.— As we have already stated, Fox values his live-stock at what it would bring, if sold the day he takes his in- ventory, and this is also true of the produce he has grown; but the Feed he must figure at what it cost him. From his implements he deducts 25 per cent, for "wear and tear" of five years' usage. As the Binder and Corn Harvester were bought in 1900 he only deducts 5 per cent, from them — both practically being as good as new. Some manufacturers deduct 10 per cent, annually for the depreciation of their ma- chinery, but when good care is taken of farm implements there is scarcely need for such a deduction. The owner must of course decide for himself what the de- preciation amounts to. 37. STATEMENT OF RESOURCES AND LIABILITIES.— Fox now has his inventory taken. He knows what he has on his farm and that if sold today it would amount to $2,163.31. However, before he can begin his books he must know not only this; but the exact amount of everything else he owns; what he owes and also what is owing him. The easiest way to do this, is to make a statement of his Resources (what he has) and Liabilities (what he owes). To get at this, his farm, known as "Clover- mead," consisting of 120 acres, cost him $80.00 an acre. He still owes on it $2,000.00, which is in four notes of $500.00 each, payable annually with interest at 6 per cent. These notes are secured by Mortgage, and are held by a local bank — the First National. He has also $413.00 cash on hand and a note of $70.00 in his favor, which is due July 15, 1901. 38. Itemizing the above, he places under "Resources" (1) the cash value of his farm. HOW TO KEEP FARM ACCOUNTS 49 (2) Production (see inventory) which represents his live-stock and the pro- ducts of his farm on hand at this time. (3) Implements (see inventory). (4) "Feed" (see inventory), and by "Feed" he means what he has had to buy — not that which he has grown. (5) Bills Receivable (notes owing him) and (6) the Cash he has on hand. These items are all "Resources," because, if necessary, he could sell them for the amount set aside each and thus realize that much cash for them — hence, a resource. 39. Under "Liabilities," he places Bills Payable (notes he owes). To better understand this, let us set down these items and amounts under their respective heads, so that it will be perfectly clear. RESOURCES LIABILITIES (1) Clovermead Farm $ 9600 00 Bills Payable (Notes he owes) $ 2000 00 (2) Production (Inventory) 1398 45 Net Worth 10246 3i (3) Implements (Inventory) 739 00 (4) Feed (Inventory) 25 86 (5) Bill Receivable (Notes owing him) 70 00 (6) Cash (Money on hand) 413 00 $12246 3i $12246 3i 40. Now, in looking at the statement above you will see one item under "Liabilities" about which nothing has yet been said. It is Net Worth, and is simply this: Fox's total Resources amount to $12,246.31. Taking from it the total amount of his debts ($2,000.00) there remains the difference of $10,246.31, or his Net Worth. The foregoing then is what Fox must know before he can open his Ledger. It is what you must also know before you can open an account with your farm- stead intelligently. 41. Fox must next make the opening entries in his book of record, and as he is a practical farmer, he wants his accounts to be as simple as can be and yet be accurate. With this in view, he decides to have as few accounts in his Ledger as possible — to use but one book of record — setting aside the first six pages for the inventory, the next forty-eight pages for the Cash accounts and Memoranda for the year, and the balance of the book for his accounts in the Ledger proper. But before any accounts can be opened in the Ledger, the proper entries must appear on the Cash Book and the 42. CASH BOOK in its original form was simply the cash account. It was debited for the cash received and credited for all cash paid out— the dif- 50 HOW TO KEEP FARM ACCOUNTS ference between the debit and credit sides showing exact amount of cash on hand. But on the farm the Cash Book must answer for a Day Book or Journal as well, and all transactions appear in it. As explained before, in double-entry bookkeeping all accounts have two sides — a debit and a credit. The left-hand side is always the debit side, and the right hand side is always the credit side. Remember, then, that the following rules are absolute for the Cash Book: LEFT-HAND OR DEBIT SIDE. On this side enter all cash you re- ceive. RIGHT-HAND OR CREDIT SIDE. On this side enter all cash you pay out. 43. Now the sides of the blank book that you are going to use as a Farm Ledger, are ruled exactly alike, and you will see by referring to the example below that the first column is for the date. The second for the page of the Ledger to which the entry must be posted. The third space is for explana- tion, in which you should write a complete history of the transaction at the time it takes place. This should always be written out fully so that if at any time later a question arise as to the validity of an account, the details given in this column will remove all doubt as to what it was, when it took place, etc. The Dollars and Cents column at the extreme right of each page are those in which you set down the amount of the transaction. The correct ruling is shown below, which note: THIS THIS THIS THE EXPLANATION COLUMN DOLLARS CENTS FOR SPACE THE FOR . DATE LEDGER PAGE Fox is now ready to make his first entry and the 44. FIRST ENTRY is to give the owner (Fox) credit for his investment. This is always the first entry when the books are opened. We find his invest- ment as follows: The statement of his Resources and Liabilities shows his net worth to be $10,246.31, of which $413.00 is in cash (money on hand). By de- ducting his cash on hand from his Net Worth we have $9,833.31, which represents the net cash value of his Farm, Production, Feed, Implements and Bills Receiv- able. Therefore, we credit J. Fox (or the owner) by entering on the debit side of the Cash Book $9,833.31, the net cash value of his investment, and the $413.00 cash on hand. (Refer to Plate 8, item da.) Also turn to paragraph 112. 45. THE SECOND ENTRY in this illustration is to credit Bills Payable for $2,000.00, the amount of notes Fox is owing to the First National Bank. (Refer to Plate 8, item db.) Also refer to paragraph 138. No doubt you are now wondering why we credit Fox and Bills Payable, when we enter these items on the debit side of the Cash Book. The reason is this: The Cash Book is the cash account. We charge (debit) it for all cash we receive and credit it for all we pay out. When we open (begin) HOW TO KEEP FARM ACCOUNTS 5* the books, we must of course credit Fox (the owner) for the amount of money he has invested. He now has $9,833.31 in land, live-stock, implements, and $413.00 in cash, all of which he is using in his business of farming. He must open an account in the Ledger that will represent his interest in his business. Hence, he must be credited for the amount invested and the cash he is using. 46. WE NEXT DEBIT the following accounts with the amount of each as shown by the inventory. Clovermead Farm (Plate 9, item ca. and refer to 118), Production (Plate 9, item cb. and refer to 156), Implements (Plate 9, item cc. and refer to 172), Feed (Plate 9, item cd. and refer to 167), Bills Receivable (Plate 9, item ce. and refer to 144). These items are those that Fox has his money invested in. And, as we have previously learned that there must be a debit for every credit, we debit each for the amount invested, because we have already given Fox credit for them. If they have been entered correctly the Cash Book should now balance as follows: DEBIT SIDE. CREDIT SIDE. J. Fox — Investment $ 9833 3i Clovermead Farm ]$ 9600 00 J. Fox — Cash 413 00 Production (Inventory) 1398 45 Bills Payable 2000 00 Implements (Inventory) Feed (Inventory) Bills Receivable Balance 739 00 25 |86 1 70 | 00 413 00 1 $12246 3i |$I2246 | 31 47. Now that Fox has his books begun, somebody or something must be debited for everything brought on the farm, and somebody or something credited for all that is sold or taken from the farm. By doing this he will know at any time the exact amount of cash he has on hand and the true condition of every account he has in the Ledger. NOTE. — For ready reference each entry on the Debit side of all accounts in both Cash Book and Ledger is indicated by the letter "d" and follow each other in alphabetical order, thus: The entry giving Fox credit for his investment is Plate 8, item da., and that of Bills Payable is Plate 8, item db. The entries on the Credit Side are indicated by using the letter "C" to designate the credit side as Clovermead Farm: Plate 9, item ca. Production, Plate 9, item cb., etc., etc. Part Five THE CASH BOOK 5-1 HOW TO KEEP FARM U'COUNTS od+ OL;//fo/6ul ^ ;>• x da / <7 ( ■ . ;'\ . & -.j/;h:h( <7?33.3l t /uk ■ -v v W ■-(■ /?/ bd / < / ' t '' n < ,-\ >o - // /, -•- .'.> .-Vo 00 - <"<- ^ A"> ~ '/x/o-? ''' - '."• *V/ ft ltj( (k H TOlUU ■ >v 2*»~ . V &*lT,M c-„ ^ f <••/ /\\\-Y< < cY/. ,v ' .";,,•■' r'V'-n A'&St ("i «5 L'l ' / * — ■ , dd ... /.,,, A L ^ ../U ..-:,.•< < >•.' G ^i /fc /, / i ' '. . c .■•»"// »t t 'NV/i . \'( Sid ; <.'>'. m . > < .'«', \;.- \ v •• i 1 df 3 2 73 a/ TRANSACTIONS FOR APRIL. 1901 Having opened the Cash Book by entering the items shown in his statement of Resources and I iabilities in the preceding chapter (refer to items da, db, ca, cb, cc, i"il and ce), the transactions common to the rotation practiced by Fox follows APRIL 8 He received a money-order of $15.00 from Wm. George, of Troy. Ohio, for 15 bushels of Seed Corn. Freight C. H. & D. R. R. 48, li isn'1 practical to open accounts with each individual who may buy seed oi othei products from the farm, so Fox credits all sales to Production, and will open an account in the Ledger under that head. Refer to Plate 8, item dc, and note that full particulars of the transaction are given rhis entry should be made immediately after the order is received. Then when he tills and ships it, he chocks it, thus: .\ 10. as -how 11 on the plate. Note that the date the oialcr is received is in first column, and the full explanation in third column, with the amount in the dollars and cents column The figures 69 in second column is the 1 edgei page, to which the entry is posted, and in this hook, will mean the numbei oi the Plate, to whu-h refei in actual bookkeeping this second column ol the Cash Hook 1- used for the 1 edger pa.ee HOW TO KEEP FARM ACCOUNTS 55 ^ J" ^ ch /Z2,-J< M APRIL 9 J. Green, of Huntington, Ind., wants 12 bushels of Seed Corn shipped by Wabash freight and encloses a draft for $12.00 to pay for it. 49. This transaction — item del — is the same as item dc which immediately precedes it. Fox must debit Cash for all money received whether it is in cur- rency, postofnee or express money orders, drafts or checks. Always mention in what form it is recciccd when the entry is made. APRIL 25 He pays Ed Wise $15.00 for 12 days' labor at $1.25. ISO. To open an account witli each person one would have to have as extra help on the farm involves too much detail, so Fox charges "Labor" tor the amount of this transaction, because he wants to know what he pays for help during the year, and, therefore, must open an account for "Labor" in the Ledger to which all money paid for help should he charged. Refer to Plate <), item 1 I, also to paragraph 183. NOTE. — A Star * when found before an entry on either Cash Book or Ledger (see plate above item * eg) indicates that such entry should be made in red ink. For reason why refer to paragraph 10. 56 HOW TO KEEP FARM ACCOUNTS APRIL 30 He balances his cash account for April and finds $425.00 on hand. 51. It is now the end of the month and he balances his cash. Balancing the cash is simply footing the two sides of the account, when the difference be- tween them should be exactly what you have on hand. The difference for April, Fox finds is $425.00, which is the amount he has on hand. He now closes the account for April by writing in red ink: — the date, the word Balance, and the amount $425.00 on the credit side — see item eg. He then rules the closing lines in red ink and writes between them in black ink the totals $12,273.31. (See Plates 8 and 9, item df and ch.) 52. WHEN CASH IS OVER OR SHORT.— Every one makes mistakes, and should one occur, such as an error in making change or in paying an ac- count and omitting to charge it, and you cannot find it after exhausting every effort, the Cash Book can be made to balance as follows: If your cash is over — having more than you should as shown by the Cash Book, credit this difference to the Production account by writing on the debit side of the Cash Book "Pro- duction — Cash Over," which makes it balance. If short — if you have less cash than you should have according to the Cash Book, charge it to yourself, writing on the credit side of the Cash Book, "J. Fox — Cash short" for the amount of difference. In case you locate the error later, debit or credit the difference to the proper account and debit or credit yourself or Production as it may have been entered at the time you could not locate the error. 53. POSTING THE CASH BOOK.— Every entry appearing in the Cash Book must be posted or transferred to some account in the Ledger. The second column is used to enter the page of the Ledger to which the entry is transferred. On Plate 8, item da, you will note the Ledger page is 61. Turn to Plate 61, item da, and study the entry. Observe that in posting, items entered on the debit side of the Cash Book are entered on the credit side of the Ledger. The page of the Cash Book from which the entry is posted, is put in the fourth column of the Ledger. Refer to item db which is posted to Plate 65, items dc and dd are posted to Plate 69. Follow these entries from the time the transaction occurs until they are completed, i e, posted to their proper accounts in the Ledger. The entries on the credit side of the Cash Book are always posted to the debit side of the Ledger. l ; ox has opened accounts with Clovermead Farm, Production, Implements, Feed, Bills Receivable and Labor. Refer to each item and compare the entry on Cash Book with Ledger entry. You will note the entries are complete in the Cash Book. They need not be so full in the Ledger. The examples given show all that is necessary. 54. The Cash Book must be posted at the end of the month, if it has not been before, and a trial balance taken. A trial balance ought to be taken at the end of every month. You take it to see that the books are in balance — that the entries in the Cash Book have been posted correctly. HOW TO KEEP FARM ACCOUNTS 57 55. NOTE — In posting observe the following order: (i) the amount, (2) the date, (3) the page of the Cash Book from which the item is transferred. Before you begin to post your Cash Book write in the second column, the pages of the Ledger to which the entries are to be posted. Then check each item as soon as you have posted it. It's a good plan to finish posting the debit side before you begin on the credit side — you're not so liable to post the entries to the wrong side of the account. 56. TRIAL BALANCE.— Now comes the trial balance. Fox has gone through the month and still he doesn't know whether his books "balance" or not. A trial balance is taken once a month to see if all entries have been made correctly, that is if the debit side of the Ledger equals the credit. No set of books or system of accounts is worth anything to any business unless there is some check on them that will prove their correctness. That is why a trial bal- ance is necessary, and as accuracy is the first essential in accounts, Fox takes a trial balance, and this is what he finds: Dr. TRIAL BALANCE, APRIL, 1901 Cr. CB Cash $ 425 00 Plate 61 J. Fox $10246 1 31 Plate 62 66 68 72 74 80 Clovermead Bills Rec'vable Production Feed Implements Labor 9600 70 1 37 1 25 739 IS 00 00 45 86 00 00 65 Bills Payable 2000 00 $12246 3i |$ 1 2246 3i His Ledger is in balance. That is the footings of the debit and credit sides equal each other. You will note he first enters on the debit side of the trial balance the amount of Cash on hand at the close of the last day of the month. Then taking the Ledger he goes through it, entering on the debit side of the trial balance all amounts found on the debit side of the Ledger, and on the credit side of the trial balance all amounts found on the credit side of the Ledger. This is always the case unless an account has entries on both the debit and credit side, and then, you find the difference between the two sides. For instance, this montli the debit side of the Production account (Plate 68) is $1,398.45 and the total of the credit side at this time is $27.00 (Plate 69). The difference in the two sides is $1,371.45, which he sets down in the explanation column on the debit side of the Ledger in pencil. This, then, is the amount taken in the trial balance. 58 HOW TO KEEP FARM ACCOUNTS Remember, when an account has entries on both the debit and credit sides, to take the difference between the sums total, and the amount the greater exceeds the smaller is the amount carried to the trial balance. 57. TO LOCATE ERRORS IN A TRIAL BALANCE.— If the debit and credit sides of a trial balance do not exactly agree the books are not in balance and the difference, no matter how small, must be found. If they don't agree pro- ceed as follows: First — The footing of the balance should be verified. Second — From the first account in the Ledger until the last, the addition and subtraction of each account should be carefully gone over. Third — Examine each entry and see whether or not a debit has been made for every credit, and for every credit a debit for a like amount. Fourth — If any accounts have been balanced and carried forward to a new page, see if the amounts carried forward are correct. Finally, if the difference still remains, nothing can be done except to go over the entire work for the month and continue to do so until the error is found, for be it known, the trial balance is simply a copy of the accounts in the Ledger, and if the entries have been made properly the footing of the debit and credit sides will be exactly alike. Transactions for May, 1901 6o HOW TO KEEP FARM ACCOUNTS o^> M^/ /(fo/ ^X (J%6-/js da / rfaJ'asi^csy ^XS'oo / / / / / / e db / 4-2-^r oo TRANSACTIONS FOR MAY, 1901 MAY 1 Cash on hand $425.00. 58. The amount of cash on hand at the beginning of each month is en- tered in black ink as shown in Plate 12, item da. MAY 2 He sends J. M. Whiton, Wakeman, O., New York draft for $16.00 for 8 bu. White Mammonth potatoes for seed. The bank charges him 10 cents for draft. 59. Refer to Plate 13, item ca for the proper entry to make for this transaction. As to the reason for charging this to Expense, refer to the matter relating to Expense which follows plate 70. Note that he includes the cost of the draft in the entry. MAY 3 He buys 2 ton Middlings at $22.00 and a barrel of salt $1.50. 60. See Plate 13, item cb. Fox wants to know how much Feed he buys during the year, so he opens an account with it. This is also the reason he in- ventoried the Feed on hand which he had bought previous to April 1st. Read explanatory matter after Plate 72, regarding this account. MAY 5 He has one thousand each of Envelopes ($2.50) and Letter Heads ($3.75) printed. HOW TO KEEP FARM ACCOUNTS 61 loft- /3 ?%**,, // fa#£ Or- Ok ^ fyitaUU; f&<. Urfuti Ifi^huVKa^Z U^L 2° J^L lo *fe£^ <&ji o -^/(o- *£k 'a^f-p* t£- cb J 2± A-t^f ^2. ^k *>u? ^W/4i^ ^£& /M* eftU* / < -*~° £* & cc cd ce J 1& b / Y'/u4v4^ /?n Wt^4^ p^j- /?* cCuC^/&**Ct 3. if V lo_ n tTTHjLf&rnerrfj &4a AuA <&****+. A'ttA , / 4Czs~o q j^ctdu^fc^. Mfo/ 1>cM, <&/6>r ic_£_ //A 'A dd ?pf p/rcUa2ta^ fifad <£o "V cf 2*/ eg >c fo fu- ll /fu/i^Un^ yL&^ /^~EW /S7o 3 /Z So '■> o 00 3>W £Lo r £rj-%. & Z& "o 57 the account to which the sale was credited, to Production. (See Plate 17, item ca.) Second— The draft costs 10 cents, which he charges to Expense. (Plate 17, item cb.) Third— Fox is now out the Seed Corn and the expense of draft; so he charges the C, H. & D. R. R. with $15.10, the amount he is short by the transaction. Plate 17, item cc.) Fourth— In double entry there must be a debit for every credit, and having debited the C. H. & D. R. R. with $15.10, he must also credit Production for the same amount. (Plate 16, item db.) In making claims to Railroads they insist on the original Bill of Lading in total losses, and both the Bill of Lading and Expense Bill (freight receipt) where partial loss is sustained. To make claim for loss, such as described in transaction above, the following is necessary: (1) Copy of Invoice to George. (2) Original Bill of Lading. (3) attach (1) and (2) to an invoice made out in name of R. R. These should be given to the local agent. But R. R.'s move slowly in paying claims. After a reasonable length of time it is well to stir them up at intervals, and let them know you are looking after your end— are a business farmer and know what you're about. Refer to paragraphs 197 and 199. JUNE 8 He sells his wool— 726 lbs, at 16c. Pays 60c for "re-setting" two shoes on Queen, and $3.00 for repairs on Mower. 66 HOW TO KEEP FARM ACCOUNTS 68. First — Fox doesn't want accounts opened with everything he grows — too much detail. His sales are all entered to the credit of his Production ac- count, hence, the Wool sold above is entered as shown on Plate 16, item dc. See paragraph 158. Second — The inevitable Expense again. But his horses must be shod, and the Clover is coming on fast. The mower is now ready. Both charged to Ex pense. (Plate 17, item cd.) See 161 and 163. JUNE 22 He pays John Dye and Sam Petit each $6.00 for four days' labor. 69. Labor, too, is quite an item and he wants to know how much it costs him for the year. All extra help he employs he charges to Labor account. For entry see Plate 17, item ce. Refer to 183. JUNE 24. He sells 20 Hogs, averaging 230 lbs. each, at $5.40 and pays his June taxes — $32.64. 70. First — As everything Fox sells off the farm is credited to Production, the proceeds for the Hogs is credited to that account. (Plate 16, item dd.) Sec- ond — He opens an account for Taxes and Insurance. (Plate 17, item cf. Refer to 193. JUNE 28 Ed Wise draws $20.00 on account. 71. Although this item is for Labor, yet Wise is hired by the year and wants to draw his money as he needs it. This necessitates opening an account with Wise, and all money drawn by him must be charged to him. (Plate 17, item eg.) Refer to 177 and 178. JUNE 30 He balances his cash — $581.37 on hand. The cash on hand is $581.37, and as that agrees with the balance shown by the Cash Book he rules the closing lines as he did in April. (See Plates 16 and 17, items de, ch and ci.) HOW TO KEEP FARM ACCOUNTS 67 D r. TRIAL BALANCE, JUNE, 1901 Cr. CB Cash $ 58i 37 Plate 61 J. Fox $10246 3i Plate 62 66 68 70 72 74 78 80 84- 86 Clovermead Bills Rec-vable Production Expense Feed Implements Wise Labor Taxes C, H & D Ry. 9600 70 1006 66 73 754 20 27 32 15 00 00 79 05 36 00 00 00 64 10 65 Bills Payable 2000 00 1 $12246 3i ,$12246 | 3i Trial balance for June is shown above. 68 HOW TO KEEP FARM ACCOUNTS Jr Qub, wm /^- A^'~£o da / /3('lta.-n.-c-Cy ^7*/-}-) db /jr ^7 /J/f/j/ria^^ ffM7l*&. lo oo / dc /y f3 AfeW <*?t tfnrrrri 7U£r V lo ^ ^^ ^ ^/u^uu^ c^v^m^^^ c&tsz^rn', //It / th^s/i^'twrifc & — /fe^ d?for>/Cma,n ef^ T/lvH^stfytUv . /£ cb 'Vv 1° folttsnxiAs dffj-c/C^/Csi&Lt ^^icmuuJ 6s Oo 1 cc >c^7 2>l ce // ) JULY 28 He buys ioo bushels of Oats at 32c. 75. Fox doesn't grow any Oats. He buys them to feed, and so charges to Feed, as he wants to know how much he pays for it during the year. Plate 21, item cc.) Refer to 168. JULY 31 Cash balance today shows $547.21 on hand. Refer to April, May and June closing of cash accounts. (Plate 21, item cd.) Dr. TRIAL BALANCE, JULY, 1901. Cr. CB Cash $ 547 21 1 Plate 61 J. Fox $10246 31 Plate 62 Clovermead 9600 00 " 65 Bills Payable 2000 00 68 Production 1006 79 " 83 Interest 4 20 70 Expense 142 4i 72 Feed 105 36 74 Implements 754 00 78 Wise 20 00 80 Labor 27 00 84 Taxes 32 64 86 C, H. & D. Ry. 15 10 $12250 5i 1 |$I2250 51 If care is used when posting the Cash Book and footing the different ac- counts in the Ledger no great trouble need be found in taking the Trial Balance. Note the Bills Receivable account doesn't appear in this months's balance. That was paid, and as the account balanced, is now closed. 70 HOW TO KEEP FARM ACCOUNTS oUT tuUtAAjJ- /$0/ ,r dc ^ ) t //fl >t TRANSACTIONS FOR AUGUST, 1901. AUGUST 1 Cash on hand $547.21. Refer to previous months. (Plate 24, item da.) AUGUST 3 He gives Ed Wise $10.00 on account. See Plate 25, item ca. Refer to 177 and 178. AUGUST 15 The roads are good and he has time, so he puts in the coal needed for winter — 10 tons, at $5.75. 76. All money drawn for personal use should be charged to Fox. He buys the coal, now that he can put it in for winter, and charges the amount it cost to his (Fox) personal account. (Plate 25, item cb.) See no. AUGUST 23 He pays Joe Morgan $24.00 for threshing 800 bushels Wheat, at 3c. 77. Fox charges his threshing bill to Expense, because, at the end of the year, by keeping his Production account distinct, it shows at the close just what the annual sales from the farmstead amounts to. (Plate 25, item cc.) Refer to 161 and 163. AUGUST 28 He buys 100 lbs. Linseed Meal at $27.00 a ton, and a Keg of Nails, at $2.70. 78. First — He charges Linseed Meal to Feed. (Plate 25, item cd.) See 168. Second — The nails to Expense. (Plate 25, item ce.) Refer to 162. HOW TO KEEP FARM ACCOUNTS 7i (liwbr^yf /^uA Mo/ tiuL C^- , _.._.. / : ra . «-? 7* £j CUidJt &1\ Ctccxru^Ar /o oo cb /s 3^ Jbte '/TUrx/ii^xs LS ' cd if ? v *^W (AmetJT/lt/t/ /<7o/fo e: l 7°- / Bj / ce 7-/- 7° fa/UAWt 'Tttu/j CVtC^Ljt/' 2 7* / / r *cf J>/ /thi/as+v-c^-' /&, w AUGUST 30 He sells 80 bushels of Wheat at 80. 79. All products sold — no matter what — he credits to Production. (Plate 24, item db.) Refer to 158. AUGUST 31 He balances his cash — $1,091.66 on hand. Refer to April and May closing. The entry, (Plate 25, item cf.) Dr. TRIAL BALANCE, AUGUST, 1901 Cr. CB Cash $ 1091 66 Plate 61 J. Fox $10188 81 Plate 62 Clovermead 9600 00 " 65 Bills Payable 2000 00 68 Production 366 79 " 83 Interest 4 20 70 Expense 169 11 72 Feed 106 7i 74 Implements 754 00 78 Wise 30 00 80 Labor 27 00 84 Taxes 32 64 86 C. H. & D. Dy. 16 10 $12193 01 $12193 01 J2 HOW TO KEEP FARM ACCOUNTS odr (4MnMr /fa/ 6u£ (3&£rz,f da / /Stf/fUue^ /0<7/ £>C / / / / / / / / / / v db / // /o£> fe/Uttj^- ^r^Zs OH^C^JTl/AtJty^ ce ^£ ^ 2^ cf -^ ^ fomUs c^Ur0^X^^< ^6t &IJZ a. eg ^£ ^ /fa J AT^ /c?o//jj @3~ - 2-¥<7 3t ' dc ^s £>q ^W^AAjctur^ Oifcfce* /ft? 60 &*4^q 0^pLc<^a^ Oa^A^ V^^i <^Ys~*^ // (^u£ (^kt~j^ oyttifi^-^e^ (^r^rzliAu^cv?^ c/g^H^y//y g^ ff/%s ^ /<2a& /A db /J- 6$ V~— 6Jt 63 dc y&- --£ ^7>*(uj£c^ /&?o//jj &S?d # S^^czfc^ &7?i /6oo JL &^0 ^ dd 2y **- /fa/ (j&C c^A ca /S 2±. c^fetfj/ <^?* 12L t/WU+ul^ /Wca^L. /5%re>7/ <&~^Z *V So oo cc ^o jTr-^&^zrr^ &k*^£j&J /0<6u** <&, /*■<* <^2S oo QtfrfL^fcfc /a J^^ &/> /• -'• *cd A, O&^l^^t^c^^ M64- ^ ce » 3/f^ /Pt^-o S&r*. ??/-o///j- (Z^-^T if J&r (o O / c^C/7r^u <^ <£<^£ / dc f /^ (^h^&^fc^ ^faw <2a^?-j>/%s (&< flQ Ji-^S r ^<-<2-jz- / dd TO i<£e czfottji'fajjLf /v^hicccnzJ^tz A > :i /r 2£ £j±-:. d^v/Cf^t^rv /— l/Z^ZfH^-r 60 ^ ^ZZ^yi*-n' (foJ_J^^te^z<^t^.^ s <^z< ' ^U^^/^U^r /^ ^W^ (S6<~<^<^<~-^-^? ■"-^- ■ — c g >0 ff JZyy?- 77ff/o3a7cTo ch >J (00 €tO?fA 'sCiL*. 6?c J- ^To ci >3 xj o3/ &r~^ /o ■jB' ^O? 2£ 3/o-y.l^ DECEMBER 15 He gives his wife $50.00 and takes $47.00 himself for personal use. 93. Charged to his personal account (Plate 41, item cd.) Refer to no. DECEMBER 18. He buys 200 bushels of Oats, paying 30 cents. Renews his subscriptions to the Breeders' Gazette ($2.00), National Stockman ($1.00), Ohio Farmer (60c), Farm Journal (40c), Rural New Yorker ($1.00), Practical Farmer (60c), and the Amer- ican Sheep Breeder ($1.00), making a total of $6.60. He pays 12 cents for money- orders, and for postage stamps $2.00. 9-4. Oats charged to the Feed account (Plate 41, item ce). Subscriptions to farm papers he charges to Expense (Plate 41, item cf). The money-orders and stamps are also Expense, therefore, he includes it in the same entry. Refer to 161 and 168. DECEMBER 20 He begins to think he ought to have a bank account. Doesn't like the idea of having so much money in the house, therefore, he opens an account with the First National of his County Seat by depositing $2,750.00. 95. Fox charges or debits the bank for the money he deposits today (Plate 82 HOW TO KEEP FARM ACCOUNTS 41, item eg) and will open an account with the Bank in the Ledger. It is true that many take exception to keeping the bank account in the Ledger, and sonic accountants characterize it as "old fogyism," but the conditions which govern farm accounting are different than those of commerce. The farmer will find it a great source of satisfaction to have it there — ready to refer to at any time. Further, when the bank returns him his cancelled checks, he can compare those cancelled with those given out and tell at a glance if any have not been presented for payment. But more than all, a farm Ledger should show, for various reasons, every business transaction of the farmstead for the year. It's more than likely the owner himself will keep the books — or rather book, and if death should sud- denly ensue, the Ledger ought to be kept so as to furnish a guide to those of his family who take up the management of the farmstead and continue it along pros- perous lines. Refer to 212. DECEMBER 23 He gives Ed Wise check for $50.00, and also writes another for $10.00 for per- sonal use. 96. He debits Wise for check (Plate 41, item ch) and as this is the first check he has given out, he numbers it No. 1. He has now debited Wise, but as he is going to open an account with the Bank in his Ledger he must also credit the Bank for this check No. 1, which he does in Entry dd, Plate 40. In posting this entry dd to the Bank account (Refer to Plate 89, item dd) he writes in the explanation column Ck. No. 1, so that when comparing the cancelled checks returned by the Bank about the first of the month he can check over the ac- count and see just what checks have been presented for payment. On the stub of his check book he also writes the number so that he can number each check as he makes it without having to refer to the Ledger account to find the number of the last check. He also charges himself for Check No. 2, which he makes for personal use (Plate 41, item ci) and credits the Bank (Plate 40, item de for the same.) Refer to no and 178. DECEMBER 31 Cash balance shows $43.99. HOW TO KEEP FARM ACCOUNTS 8.1 Dr. TRIAL BALANCE , DECEMBER, 1901 Cr. CB 1 Cash |$ 43 99 Plate 61 J. Fox $10014 53 Plate 62 Clovermead 9600 1 00 " 65 Bills Payable 2000 00 " 70 Expense 325 74 " 69 Production 2029 30 •■ 72 Feed 364 7i " 82 Interest 4 20 " 74 Implements 754 00 " 78 Wise 138 60 " 80 Labor 83 25 •• 84 Taxes 32 64 " 86 C, H. & D. Ry. 15 10 88 First Nat. Bk. 1 2690 00 |$ 1 4048 03 |$I4048 | 03 HOW TO KEEP FARM ACCOUNTS (/m^/ /fay L^Z 0kt^^ da db /^^ ^J €£ %-tf c ?l^a* /^//A/ -o Tltrft x>nJ~ Qhsb jToo?- •Shs 9lt/~C,A stu± ^cL*^ / li^- /V dc dd de 2i> df H. fai&l ?uf /fht^/( #r*V 3o &-Q Z_2_ Q ev/v^ /e/e <^L^/( <&L*t faf St^/f ^fV :f ^7> £fd 74^/ 2^ TRANSACTIONS FOR JANUARY, 1902 JANUARY 1 Cash on hand $43.99. Plate 44, item da. JANUARY 2 He pays his note of $500.00 due today, and interest on mortgage held by his bank. 97. First— Debit Bills Payable. (Plate 45, item ca.) Refer to 137. Second — Debit Interest for amount paid on mortgage. (Plate 45, item cb.) Refer to 187. Third — Credit the Bank for check Xo. 3, covering the note due today and interest on mortgage. (Plate 44, item db.) Refer to 213. JANUARY 12 He draws $30.00 from the bank for expenses and attends the annual meeting of the State Board of Agriculture. Two Entries. Plate 45, item cc. and Plate 44, item dc. Refer to no and 213. JANUARY 22 The C, H. & D. sends him check of $15.10 for his claim made in June, 1901, for Seed Corn lost in transit. The C, H. & D. finally pay him for shipment lost the April previous, and he had opened an account with them, he now credits them. (Plate 44, item dd.) This is equivalent to "Accounts with persons to whom we sell "Produce." See 197- JANUARY 30 He pays his December, 1901 Taxes, $32.64, by check, and deposits the check for $15.10 received frpm the C, H. & D. to his credit in the Bank. 98. Taxes debited to Taxes and Insurance (Plate 45, item ed). Refer to 194. The C, H. & D. check he deposits in the Bank to be credited to his account, therefore, he debits the Bank (Plate 45, item ce) for the amount of the check, $15.10. Refer to 212. JANUARY 31 He balances his cash — $43.99 on hand. HOW TO KEEP FARM ACCOUNTS 85 *)yfa / VO cc /> cd ^ ^/ <£V <^/;> Cfr*3 Jk£> - c^V 7? 6>6zn^ _^t*y /X ^r? J> £tf /••'; J2± ?/t/&tn.'/( i 1 V in ^7 ft /V? /«T* i fc. 4T? N _z bz b^:: <£k .X'/K.'. '•(<■? #/(■■&.■ <. >///a>v ^/^ ^) ?* f A-/ c r^ &2-&+V* £~4^c*-£/ /Vty .■■r>\.t-n,{- t> ..,.<■. *^r 'I ?t>^ W / . *X . ^^t^ -•>^ i « v .', />■ ■(, ; dh Z^ ^/ /Vr,'\ KinA 20: 1 .To Mtf.2* TRANSACTIONS FOR FEBRUARY. 1902 FEBRUARY 1 Cash on hand $43-99- FEBRUARY 2 He gives Ed Wise check for $10.00. He has the shoes sharpened and reset on Jack and Jim, for which he pays $1.40 in cash. First — Wise charged with cluck (Plate 40. item ca). See 178. Second — Bank credited for this check (Plato 48, item db). Refer to 213. Third — Shoeing is Expense and paid in cash (Plate 48, item cb). Refer to 163. FEBRUARY 7 He buys a Bob Sled, $15.00, also buys a ton each of Bran, $21.00, and Middlings, $24.00, giving check for same. The Bank gives him his cancelled checks for January. 99. First — Bob Sled charged to Implements (Plate 40. item cc). Refer to T.v See. uul — Bran and Middlings charged to Feed (Plate 49, item cd). See [68 Third— Bank is credited for both cheeks \'o. 7 and No. 8 — given in pay ment For the Bob Sled and the Feed (Plate 48, items de and dd). See 213. About Cancelled Checks, see remarks after Plates 88 and 80. HOW TO KEEP FARM ACCOUNTS 87 UfotrM-tf ci&u^s /ft -y Uu£ „ ca >_ cb n^ cc 7 2£ tiT Y* iAX & rf^<-<^ <3*r*c> /& 00 ^ £&, 1^^ -^ fo fc fb £^ / r5~ On cd ^7 —7- 2> c^^^f /fr4^*^/ //5>i J-/ ^JTo ce /o s cf^T £Z 33 o < ^j^^-^Y. (Z^fx^ eg 2Q. *ch >^ ^ J200 sAj£< ^aUA 42 12900 381 409 769 148 83 US 65 1898 59 00 39 71 00 60 28 21 >l68l3 I 83 Plate 61 65 69 J. Fox Bills Payable Production $ 0984 4800 2020 53 00 30 $16813 I 83 Transactions for March, 1902 Part Six THE LEDGER 04 HOW TO KEEP FARM ACCOUNTS ^L —- ^Y JM- j!L Ma ikt U- /o rs 6^f "fad* fe. (ftMCiffr 0-?4 C^w^^^o 2.S- 2* 33 £3- 2-< 3- Sh Mo L. 22. A/7r- &( /0o> T ??UA/ 4- Or #/ 4-/ */ ^s J~3 3* , L. = 01/ / IffavidtinzsriA- ( ^un^y^, ) r / O O oo jl 3/ Tlvt^f/O^y^ 4o 2-/2 3 s 7 1 S? '/ /3>46>4 rr /Cfpl tfM / 0u, CfrjUMrJ- fVtrrfK /2-7o3 bo 1 } * DEBIT CREDIT 109. For all the capital he with- 112. For his net investment at draws from the business. the beginning of business, which is HO. For all cash he may draw found by deducting the sum total of or products he takes from time to his Liabilities from the sum total of time, for his personal use. his Resources. 111. For his net loss as shown 113. For all additional invest- by the Loss and Gain account at the ments. end of the year. 114. For salary allowed, if any. 115.* For his net gain as shown by the Loss and Gain account at the end of the year. TO CLOSE THIS ACCOUNT AT THE END OF THE YEAR 116. After all the accounts in the Ledger showing losses and gains have been closed into the Loss and Gain account — debit or credit this account for the net loss or net gain, as shown by the Loss and Gain account. Now, find the difference between the two sides. If the credit side is the larger, write on the debit side in red ink "To Balance" and the amount of the difference which will make the account balance. Then rule the closing lines with red ink and enter in black ink the total amounts between them. After which, write on the credit side just below the closing lines in black ink the date beginning the new year, and the amount of the difference between the sids of the account which is the Present Worth. o6 HOW TO KEEP FARM AC COUXTS Refer to Plates 61 and 62 and you will see that the net gain of Fox is $2,- 123.57, which we credit to him, and then, to balance the account we write in red ink on the debit side the difference between the sides, i. c., $12,703.60 and the words "To Balance." We then rule the closing lines and bring down on the credit side in black ink the date and the amount, $12,703.60 — which is his "Present Worth" at this time. o8 HOW TO KEEP FARM ACCOUNTS C?Ot CyUn^iA^KjUtJ <& £A^n/ tffarz^ J$o± ■fan^+wtfad Jvw^ictcr^ jtyL iL <76 %ott d<^ '/yja-^ ^r /4o/ %J / {Hfr&trrf 7U& dux V/S/O' J£ht6"/o -4- — 7* Oo BILLS RECEIVABLE 143. If you loan money or sell any of your farm products, taking a note for the amount, it is receivable by you, and consequently must be debited to Bills Receivable. You take notes for two reasons: In case of legal proceedings you do not have to prove the account, or if needing money you can have them dis- counted at your bank. In the beginning: DEBIT CREDIT 144. For all notes you have on 147. When any of the notes you hand payable to you. hold are paid. 145. For all notes you get from 148. For all notes you have dis- others made or accepted in your counted or sell. favor. 149. For all notes you endorse 146. For all notes made payable over to other parties. to others and transferred by them to you. AT THE END OF THE YEAR. 150. This account, like Bills Payable, is never closed in actual business unless it balances or it is necessary to forward to a new page. On the farm it is advisable to open a new Ledger each year, therefore, the account is closed at the end of the year as follows: Find the difference between the sides and write on the credit side "By Bal- ance" for this difference, which will make it balance. Then rule the closing lines and enter the total amounts between them. Next write on the debit side beneath the closing lines in black ink "To Balance" for the amount of the difference which should exactly agree with the amount of notes you have on hand. In trans- ferring this balance to a new page or a new Ledger it must always be entered on the same side — the debit. 151. If the maker of a note cannot pay it in full when due, but makes a part payment, credit "Bills Receivable" for what he pays and endorse on the back the note the amount received. 152. If he wants to renew it, simply debit "Bills Receivable" for the new note you get and credit "Bills Receivable" for the old note you surrender to him. HOW TO KEEP FARM ACCOUNTS 105 h {Ml o £ 153. When you discount a note— credit "Bills Payable" for the face of the note and charge the discount deducted by the bank to "Interest." 154. Notes are always debited or credited at face value. io6 HOW TO KEEP FARM ACCOUNTS Jfr (y^zLu^ry^ Oy dfif / ^vvtM^x^c^rr^^ 2o/V Xo PRODUCTION. 155. As simplicity in the first essential in account keeping on the farm, after accuracy, it is necessary to lessen the number of accounts opened in the Ledger as far as practicable. The merchant credits his "Merchandise" account for the amount of his sales, the manufacturer credits them to "Manufacturing." The farmer can be likened to the manufacturer because he is a producer, and either grows or finishes the products of his farm. The most comprehensive title for his sales is "Production." It isn't a simple matter to keep an account with each field. Much guessing or weighing must be done to do this, and the details soon grow irksome with no practical results at the end of the year to show for the extra work required. In the end it all goes into the Production account any- way, so there's mighty little argument to present for separate accounts with the different products and kinds of stock. But the simplicity of crediting all sales to Production is clear to every one. (See paragraph 48 for further remarks re- lating to this subject.) In beginning, all live-stock and products are charged to this account. At the end of the year it is credited with what is on hand, the difference between the HOW TO KEEP FARM ACCOUNTS 107 (/Tatrouf 6//>^s >jt *4fa/licm JjyUn^cc /3 ¥o 4 Une. AJ7^ Z3- /o X e / s,sr P Jyu s dUAtiti^ tsv 2£ ^Joo 2. dfuj^JvA*^- H 3 Go LL ^AJU^U- ^ >s£ -yo tUfruyffC^ x&ljts "M tf oo 2k*L 2s£ // 4- L& /o (fynviA, cfiL^L^/ 2g_ 23-u:;. 2q_ &e* ft? ^S'c Mt~ ->o oU4yyy<^V~^r~- cf3 ;i" 7- /£oj_j± EXPENSE. 161. No business can be conducted without some expense, and in keeping the farmstead up to the highest plane of its earning capacity there are numerous items which must be charged to this account during the year. As a general rule all items are a loss which go into general improvement or that cannot be in- ventoried at the end of the year, and should be charged to this account, there- fore, we debit and credit it as follows: HOW TO KEEP FARM ACCOUNTS in flkGlt t^filAiM C^ tfov %M 3/ /bj/cCf&ds ty/^n. tfo ^Og s 1 i 1 / ^~ / • / / / / / / / / / / 4 / ^ot if DEBIT CREDIT 162. For everything we buy to 164. For anything we sell which use on the farm and not to sell again, has been debited to this account. such as stationery, lumber, nails, fer- tilizers, seed, tile, etc., etc. 163. For all we pay out for freight, express charges, horse shoe- ing, threshing, etc., etc. AT THE END OF THE YEAR. 165. In closing this account find the difference between the sides, if any- thing has been credited, if not, write on the credit side, in red ink, "By Loss and HOW TO KEEP FARM ACCOUNTS Gain" and the amount to make the account balance. Now, rule the closing lines and enter the amount in black ink between them. Next, write on the debit side of the Loss and Gain account "To Expense" for the amount of loss. For an example refer to Plate 70 and 71 and look up the Loss and Gain account (Plates 90 and 91). 114 HOW TO KEEP FARM ACCOUNTS J* Q&fe- Z>i J&L {y%n*fs> jlfiL pr-ij lMdd/Jnji KkU^ 4- ^ M. '?Hidd/*sn^*> F72->T3spV 4i %' j£Ll ±£3_%L /4 c jfA c/a "~^ou^twLtr-7 K r~f 1 + to FEED 166. This could be included in the Expense account, but as most stockmen and farmers will want to know how much they pay out for feed it is best that an account be opened with it. DEBIT 167. For all feed on hand at the commencement as shown by the in- ventory. 168. For all that we buy during the year. CREDIT 169. For any feed we sell which had been previously charged to this account. HOW TO KEEP FARM ACCOUNTS 115 Ok 13 c&l/ & /4o> frlOA/ 3/ dfal ^nvsW^r^ n /o y ' t&i^ eA&ZU) f~^&KAs^ <%o sjj- 6/ / yS yS /^ ^y ^ / /^ ¥o ■># ~S7t-t*< .x/sr ML C. 232. *4 IMPLEMENTS 171. Implements on the farm are the same as the tools and appliances of the manufacturer. They arc a visible asset and their worth depends greatly on the care taken of them. It is customary among- manufacturers to deduct from their inventory of machinery a certain per cent, for "wear and tear.'' This, of course, depends on its condition, and also whether it is of a style and pattern not superceded by one later and much more desirable. But the per cent, de- ducted for depreciation must be decided by the farmer himself. No hard and fast rules can be laid down for that. This account is debited and credited as fol- lows: DEBIT 172. For the amount on hand as shown by the inventory at the begin- ning of business. 17i£. For all we buy during the year. CREDIT 174. For all that we sell. 175. For amount on hand as shown by inventory at the end of the year. HOW TO KEEP FARM ACCOUNTS ii7 y@fcns ^^t/JewM <*«, 13£L TKaa/ 2H dL CCui/ ^h^i^e^A^r^f dl^stf*^ £^g^ P 3- 3> 36 ,ft 7M. £ AT THE END OF THE YEAR 176. To close this account at the end of the year: Same as the Feed ac- count which immediately precedes this. See Plates 74 and 75 and compare amount carried forward to Loss and Gain, Plate 90. n8 HOW TO KEEP FARM ACCOUNTS J? (%4>A U /8*JZ. &£~?r J3 J3 /I I I >-Q ~3h- /o ^/ &/ *A /v Y' CO /o 2a ^£^ £.22. /& 3-t So& ££ ±£ FARM HELP 177. It isn't necessary to open an account with the different men employed on the farm by the day. That should be charged to the Labor Account. But if we hire a man or men by the year then a separate account should be opened for each and all money paid to them from time to time charged direct to them, and the wages allowed each credited to them at the end of the year. The ex- ample of the Wise account (Plates ;8 and 79) show how an account should be kept when we hire a man by the year. Accounts of this nature arc debited and credited as follows: DEBIT 178. For the amounts we pay him from time to time. 179. For all farm products taken in lieu of cash on account during the year. CREDIT ISO. At the end of the year for amount of wages agreed on. HOW TO KEEP FARM ACCOUNTS T19 c^7f &c^kt^ lu^ie/ /tfo> 2%*^ 3/ 2k && >£J // TTUrx^&a -O /^ns~ /oG 4o AT THE END OF THE YEAR 181. To close, find the difference between the two sides and enter on the debit side, in red ink, "To Balance" and the amount which will make the account balance. Now, rule the closing lines, enter the totals between them and bring down in black ink the amount of the difference, entering it on the credit side "By Balance" which is the amount due or to his credit at the end of the year. (See Plates 78 and 79.) HOW TO KEEP FARM ACCOUNTS *4r ^/&szn^ (^&&~ rfJtZZt- ff^O^JL O- / 1L dS&tik 5 /. jt jj> /$ AT THE END OF THE YEAR 185. To close, enter on the credit side, in red ink "By Loss and Gain" and the total amounts paid for Labor as shown by the footing of the debit side. This balances the account. We then run the closing lines — enter the amounts between them and carry the amount entered on the credit side in red ink to the debit side of the Loss and Gain account. (See Plates 8o, 8i and 90.) 122 HOW TO KEEP FARM ACCOUNTS J, ^m^u^J- ^5- fi^ /#o> >9&* Y (pTly^l^^'aJt s />o DO i/ ^^ ^^ /2.o Oo INTEREST 186. If we have interest to pay or hold notes which draw interest we must open an account with it. Then it will show us at the end of the year what we are paying for the use of money borrowed or what our loans are paying us. DEBIT CREDIT 187. For any interest we pay. 188. For any discount the bank deducts from the face of notes we have discounted. 189. For/ any interest we receive on notes we hold. HOW TO KEEP FARM ACCOUNTS 123 Cfairfj ^Tt^u^ &s /fo/ yu /s {/hHr-yt >o ¥ 2^0 Th^uv \<%d f//{lov^ fa //cT to 7 1 /3-0 AT THE END OF THE YEAR 190. To close this account we find the difference between the two sides. If the credit side is larger, we write in red ink on the debit side "To Loss and Gain," which is gain on interest. If the debit side be the larger, we write, in red ink on the credit side "By Loss and Gain," which is loss on interest. This makes the account balance. Now, rule the closing lines and enter, if there be a loss, on the debit side of the Loss and Gain account the amount lost, or if there be a gain, on the credit side of the Loss and Gain account the amount gained. (See Plates 82, 83 and 90.) 191. DISCOUNT — As discount is simply another name for interest it is useless to open a separate account for it, but call interest and discount the same and debit or credit both to the Interest account. 192. ENTRY TO MAKE OF NOTES YOU HAVE DISCOUNTED— Sometimes when in need of money we have a note discounted at the bank. If you do this, don't forget to credit "Bills Receivable" for the full face of the note and debit Interest for the discount deducted by the bank. Then, if this amount has been placed to your credit in the bank, debit the bank for the amount you receive or the proceeds of the note. 124 HOW TO KEEP FARM ACCOUNTS ^0~T O^Uf V*2h&a^iu>t^Ls » <%frct£V M ZT rTTfoztj c^Z&^^ae^r -f Jktv dfo ^5= zLt&£ 6<5~: £.. TAXES AND INSURANCE 193. It is a matter of gratification to know what our Taxes and Insurance amount to for the year. All we pay out for either should be charged to this account. DEBIT 194. For all we pay for Insurance or Taxes. CREDIT AT THE END OF THE YEAR 195. To close, write in red ink, on the credit side the date, "By Loss and Gain" and the amount necessary to make the account balance. Then rule the closing lines and enter between them in black ink the totals of each side. (See Plates 85 and 85.) Then carry the amount to the Loss and Gain account, enter- ing it on the debit side of that account as shown. (Plate 90.) HOW TO KEEP FARM ACCOUNTS 125 (fyfcfj ^^V fckl/ AUs ■yo ^Oj^/L^er7X/ 7-7&S' /o /4o> M* / eft /y^/^oc^^ /f¥(o li FIRST NATIONAL BANK 211. It isn't necessary to open an account with your Bank in the Ledger. It can be carried along in the Check Book, but taking everything in consideration it is preferable to have it in the Ledger on the farm. Each Check given should be numbered in rotation, and that number should go in the Cash Book and be posted to the Ledger (see Plate 89). Then, when' the Bank hands you your cancelled checks, compare them with what you have given out, checking each one on the Ledger. You know then, just what checks have been presented for pay- ment at the bank. DEBIT CREDIT 212. For all currency, checks, money-orders or drafts we deposit. 213. For all checks we make. 214. To balance, proceed exactly as you would with an account with a person to whom you sell on credit, as explained under "Accounts With Persons to Whom We Sell Produce," for the principles are the same in both. 215. BANKS — Banks are a convenience the business farmer can't afford to HOW TO KEEP FARM ACCOUNTS 129 (JMJ <5/C^/ f£ efb >3 > ^o /fc iW 3 ^^ i± />- ^r -^^ O? £l £L ^ t&-^%0/L*^4^ ?kA^ 3j Zl ^afJ f Jh J^L^W, ZL J 3J-&/ J? ^V^^/i^^u^v^ M- J?6 60 £? (7 / 7Xs/h> 'AtT-t- J> £L 3J~- £b£a r a LOSS AND GAIN. 216. This account is kept to show the final summing up of our losses and gains for the year and is debited and credited as follows: DEBIT 217. At the end of the year for all the accounts upon which we have lost during the year. CREDIT 218. At the end of the year for all accounts upon which we have gained during the year. AT THE END OF THE YEAR 219. To close: Find the difference between the two sides. If the credit side be the larger, the amount it exceeds the debit is the net gain for the year. If the debit side is the larger, the amount it exceeds the credit side is the net loss for the year. Referring to the example (Plates 90 and 91), the credit is the larger, so we enter the amount it exceeds the debit side, in red ink, on the debit side, the date, and "To J. Fox," after which rule the closing lines and enter be- tween them, in black ink, the total footings. The amount the credit side ex- ceeds the debit is the net gain of Fox for the year, and after this account is closed, we carry this amount of $2,123.57 to the credit side of the J. Fox account. Then to find his present worth, proceed as explained under the head of "Pro- prietor's Account" and illustrated by Plates 60 and 61. CLOSING THE BOOKS AT THE END OF THE YEAR. 220. At the end of the year, when your Ledger is in balance, and you want to close it to ascertain what you have made or lost, proceed as follows: HOW TO KEEP FARM ACCOUNTS //MTtf/ ^^^ygj^. 131 £x /£ yy ^U^ £L ■ O^^r^^rZ&^ri* . Sf ^ ~a¥J ^^d sz 4-0 First— Take an inventory of all Live-stock, Products, Implements, Feed, and Real Estate you have on hand at that time. Second— Close all accounts in the Ledger upon which losses or gains have been made, as instructed under each. Third — Having carried all accounts upon which losses or gains were made into the Loss and Gain account, we close that account as instructed. (Refer to Loss and Gain Account.) 221. It is well to remember, in this connection, that when we close the Ledger at the end of the year, nothing is left in it but those accounts showing either a Resource or a Liability, and that nothing must be carried to the Loss and Gain account but those accounts upon which we have lost or gained. To help you decide what are Losses or Gains and what are Resources or Liabilities, bear in mind that if the debit side of an account is the larger it is always either a Resource or a Loss. That when the credit side of an account is the larger it is always either a Liability or a Gain. As the Resources and Liabilities are not carried to the Loss and Gain account, we must pass them by and do nothing with them. But if the debit side be the greater, and a loss, then balance the account and carry the loss to the debit side of the Loss and Gain account. If the credit side of any account be the larger, and a gain, balance the account and carry the amount of the gain to the credit side of the Loss and Gain account. When the Ledger is closed at the end of the year, there must be no open accounts in it, except those which show a Resource or a Liability, and this is also true when the Ledger is opened. But before the Ledger can be closed, an inventory must be taken, and the on taken by Fox. March 31, 1902, to illustrate the principles of farm accounting, as shown in the example given herein follows. Note that the totals of the Pro- duction, Feed and Implements on hand are credited to each, as shown on Plates 68, 73 and 75. Full instructions follow each account as to what you are to do after the inventory has been taken 132 HOW TO KEEP FARM ACCOUNTS 232. INVENTORY OF CLOVERMEAD FARM, MARCH 31, 1902: PRODUCTION Bay Team Jack and Jim....$ 160 00 Bay Mare Queen 75 00 Black Mare Bess 60 00 Two Colts at $15.00 30 00 Chestnut Mare 175 00 Two Cows at $35.00 70 00 One Calf 5 00 15 Poland China hows at $12 180 00 1 Berkshire Boar 35 00 98 Shropshire Ewes at $5.00. 490 00 1 Ram 45 00 1 Ram 35 00 1 Ram 30 00 807 bu. Corn at 60c 848 20 40 bu. Potatoes at 50c 20 00 15 tons Clover Hay at $6.00. . 90 00 30 bu. Seed Corn at $1.00. ... 30 00 $2014 20 FEED 120 bu. Oats at 38c $ 45 60 Yi. ton Middlings at $24.00.. 12 00 Y A ton Bran at $21.00 15 75 Y 2 bbl. Salt at $1.50 75 $ 74 10 IMPLEMENTS One Wagon $ 60 00 One Farmers' Handy Wagon 39 00 One Surrey 120 00 One Buggy 30 00 One Spring Tooth Harrow.. 14 00 One Adjustable Harrow .... 12 00 One Roller 19 00 Two 'Plows at $15.00 30 00 One Cultivator 40 00 One Wedder 12 00 One Corn Planter 27 00 One Grain Drill 75 00 One Mower 40 00 Amount up $ 568 00 Brought up $ 568 00 One Cahoon Seeder 3 00 One Tedder 22 00 One Corn Sheller 5 00 One Hay Rake 20 00 One Hay and Stock Rack... 12 00 Two Sets Heavy Harness at $36.00 . . 72 00 One Set Light Harness 20 00 Also Axes, Forks, Log Chains, Three Horse Even- ers, Wheelbarrows and other Miscellaneous Tools about the place 10 00 $ 732 00 Less 30% discount for the "wear and tear" of six years' use 219 60 One Binder $ 100 00 One Corn Harvester 100 00 $ 200 00 Less 5% for one year's de- preciation 10 00 $ 190 00 One Chicago Sheep Shearing Machine $ IS 00 One Bob Sled 1500 Brought down 51240 Brought down 190 00 $ 732 40 $ 512 40 RECAPITULATION Production $2014 20 Feed 74 10 Implements 73^ 40 $2820 70 THE YEARLY STATEMENT 223. We keep an account with our farmstead, so that we can tell our actual financial condition at least once a year. After the Ledger is closed, to get the facts before us in a nutshell, we make an annual statement. To keep an ac- count for anumber of years, and compare the last with those that precede it, is a great aid to successful farming, because it shows us what branch of our HOW TO KEEP FARM ACCOUNTS *33 management needs more care and attention. The facts we are able to glean from the statement made up at the end of the year as to our progress, more than pays us for the labor required to keep the Ledger, as it must be kept, to get accurate results. To present these benefits more fully we give the statement as Fox would make it from his Ledger, illustrated in the preceding pages. The statement follows: ANNUAL STATEMENT OF CLOVERMEAD FARM, MARCH 31, 1902. RESOURCES LIABILITIES CB Cash $ 42 ! 59 6.S Bills Payable $ 4800 00 62 Clovermead 12900 00 79 E. Wise 106 40 68 Production 2014 20 61 J Fox Present Worth 12703 60 72 Feed 74 10 74 Implements 732 40 88 First Nat'l Bank 1846 71 $17610 00 $17610 00 LOSSES GAINS go Expense $ 408 39 9i Production $ 4043 50 90 Feed 334 61 90 Implements 36 60 90 Labor 958 25 90 Interest 115 80 90 Taxes and Insurance 65 28 90 J. Fox, Net Gain $ 2123 57 1$ 4043 ! 50 $ 4043 50 RESOURCES AND LIABILITIES 224. Of course, you understand, if you have studied the instructions, there are no open accounts in the Ledger at the end of the year, after the books arc closed, except those showing a Resource or a Liability. To make up the annual statement: (1) Under Resources enter the amount on hand as shown by the Cash Book at the close of the last day of the year. When Fox balanced his cash, March 3rst (Plate 53), he had $42.59 on hand. This is a Resource, and is the first item entered under that head in the statement. (2) Taking the Ledger (Plate 62), we find "Clovermead" $12,900.00. This also is a Resource, because anything is a resource of value belonging to us; and by value, we mean cash, or something we could realize the cash for if necessary. And Clovermead Farm, as it is today, would fetch this amount; it's worth that much, hence a resource. (3) The next open account is Bills Payable (Plate 65). These are notes we owe, and as everything left standing on the credit side of the Ledger is either 134 HOW TO KEEP FARM ACCOUNTS a Liability or a Gain, we must decide which of the two it is. This is easy, for we know it isn't a gain, because we owe it; therefore, it's a Liability, and so entered on the statement. (4) The next account, Production (Plate 68), is a Resource. The inventory taken today (March 31st), at market price for the Stock, Corn, Potatoes and Clover Hay Fox has on hand is $2,014.20. That is the cash value he could realize on it if sold. (5) Feed is next (Plate 72). This is also a Resource, for the same reason that the items in the Production account are. Consequently, we enter the amount we have on hand, $74.10. (6) Implements follow Feed, and are also a Resource. Inventory shows $732.40 as their value today, and they, too, are entered. (7) On Plate 79 we find Wise has $106.40 due him. A Liability is some- thing we owe. We owe Wise this balance of $106.40 for wages he left stand during the previous year, so that amount goes under Liabilities. (8) The next account showing a Resource is the First National Bank. All cash we have, whether on hand or in the bank, is a resource, and the balance Fox has to his credit, $1,846.71, should be so entered in this statement. (9) This takes all the open accounts in the Ledger except one — the Pro- prietor's account — J. Fox. After all the accounts showing the Losses and Gains were closed into the "Loss and Gain" account, and the net gain of Fox credited to his account, his account was balanced and closed, and his Present Worth (Plate 61) of $12,703.60 is what the business of the Clovermead Farmstead is owing him at this time, therefore, it is a Liability of the business, and by footing both the Resources and Liabilities we find they equal each other. The books are in balance, and a glance at this simple statement, or the statement taken from any Ledger, at the end of the year, will show the owner of the business what cash he has on hand and in bank, who is owing him, either by Bills Receivable or open account, and the amount of grain, live-stock, imple- ments, feed, or anything else he may have of value belonging to him. It also shows him what he owes, and to whom; and his actual and absolute net worth. Further, the Losses and Gains taken from the "Loss and Gain" ac- count (Plates 90 and 91) will show him the total General Expense; the amount of cash paid out for Feed; the percentage of depreciation charged to Loss and Gain on his Farm Implements; what amount he paid for Labor; how much his Interest amounted to; and the Taxes and Insurance for the year. The above are entered under "Losses," because they are non-productive ac- counts — nothing can be realized on them in cash. But under "Gains" we have Production, $4,043.50; and this amount .represents everything having a cash value that left the farm during the entire year— the total sales. Now, $4,043.50 being the total proceeds of the sales, that amount, less the sum total of the "Losses," will be the net gain of the Proprietor— Fox. The whole cost of conducting this farm for the year, including general HOW TO KEEP FARM ACCOUNTS 135 "Expenses," "Feed," "Labor," "Interest," "Taxes" and "Insurance," and the de- preciation of "Implements," was $1,919.93. By deducting this from the "Gains" (total sales), we have $2,123.57, or, the net gain of Fox for the year. The annual statement, then, is the final summing up of the year's business on the farmstead, and is a most valuable guide to every thinking farmer. 225. And now, if we want to know what percentage of net gain Fox made on his investment, add two ciphers to his net gain, as shown by the "Loss and Gain" account, and divide it by the net amount of his investment. This would be 21235700 divided by 1 024631, showing a percentage of 20.72. Part Seven COST OF PRODUCTION The value of knowing what it costs to produce the products on your farm, lies wholly in the possibility afforded by its use in comparing your system of farm management with that of others. HOW TO KEEP FARM ACCOUNTS 141 APPROXIMATE COSTS 22514. The purpose of this book is to teach a simple and easily kept system of accounts which will be usable on the farm— one that is possible on all farms, and one which may be easily modified to suit your individual needs and the needs of your crop rotation. Agriculture is a complex proposition. The different crops, live stock, and maintenance of fertility are peculiarly inter-dependent. Costs should be as- certained with due consideration of the farmstead as a whole. But with conditions as they are now and must be in actual farming, an elaborate system of cost accounts isn't possible. So let us consider, then, some- thing practical as to the cost of production and its relation to your conditions. The farmstead, and by farmstead we mean the land, buildings, and imple- ments, or equipment, are equivalent to the "plant" of the manufacturer. Therefore you will clearly see that the first cost or amount invested in the farmstead, forms the first element of productive costs. For, as already stated, good farming is a complex proposition Although, broadly speaking, agricultural science is simply the joining together of soil and seed, yet in reality, you, if truly successful, must have a wider knowledge than is required for success in any other business. Hence it is that you plan a crop rotation which will increase the fertility of the land— either adapting your crops to your live-stock, or your live-stock to your crops, as will best suit the market you are striving for. The fertility of your farm must be increased if any money is made, for there is no profit in average farming. What we wish to impress is this fact; that your farmstead with its com- plement of live-stock and its proper handling is so closely related, that all or- dinary cost systems would fail. But as the cost of production is useful in comparing different systems of farm management, how can you keep your books to determine it? In the following pages is presented a method by which this may be done without needless detail. The principal factor in finding the result of your management is the cost per acre for the year, and this you can get from your ledger in this manner. TO OBTAIN THE APPROXIMATE COST PER ACRE OF GROWING DIFFERENT CROPS The amount invested in land, buildings, implements and live-stock form the first element of cost If you figure the interest at current rate in your locality on the sum total of these as shown by your inventory on the first of the year, and add the amount of interest on investment to the total sums paid out as shown by your 142 HOW TO KEEP FARM ACCOUNTS accounts with Expenses, Taxes, Insurance and Labor for the year, plus the amount charged for depreciation cm Implements and Buildings, you will have the total amount of General Expenses of your farm for the year. This, divided by the number of acres in your farm, will give you the approximate cost per acre for the year. TO FIND THE APPROXIMATE COST PER BUSHEL OR TON OF ANY CROP To find the cost per bushel or ton of any crop, multiply the cost per acre by the number of acres used to grow it, and divide the result by the yield in bushels, or tons, the quotient will be the approximate cost of raising the crop per bushel or ton. TO LEARN WHAT IT COSTS TO GROW, MAINTAIN AND FATTEN LIVE-STOCK If, to your inventory of hay and grain, you add the amount paid out for feed, as shown by the Feed account for the year, and also the amounts harvested of hay and grain that you grow to feed during the year, and substract from this total the amount of the inventory of these crops that you have on hand when inventory is taken and books closed at the end of the year; the remainder will be approximately what you have fed to stock during the year. Then take the amount of General Expense and deduct from it the cost of growing the acres you have used in growing your crops. The remainder added to the amount fed to stock and this sum pro-rated according to the amount you have invested in different kinds of live-stock, will give you the approximate cost of growing and fattening your live-stock for the year. These amounts, aside from the General Expense of maintaining your farm, are only approximate, but they can be gotten from the Ledger and are valuable for reference in comparing your system of farm management with those of others. More than this isn't practical, and as the data required can be taken from the Ledger in a few minutes when books are closed, no detail is necessary. By using a page of your Ledger each year and writing the results under a general head, which may be termed Approximate Costs, you will have a record of your productive costs which may be referred to witli much benefit. Part Eight NUBS OF NOTES On Business Paper, Interest Tables, Rules Useful When Taking the Farm Inventory, Etc. Etc. BUSINESS PAPER 226. If you receive a check or draft made payable to the order of the party sending it to you, and he has not endorsed it, it is worthless as far as you are concerned. Return it to the sender for endorsement. 227. Should you have endorsed it before noticing the sender's failure to endorse, erase your name by drawing lines through it with a pen. 228. If you discount notes at your bank, which have endorsers, do not waive protest, as the security may be released. 229. When buying drafts always have them made payable to your own order, and then endorse them over to the person you wish to pay. 230. All checks should be made payable "To Order." They cannot then be transferred without endorsement, and constitute in themselves the best receipt you can hold for money paid. This is one of the many reasons why you should have a bank account. 231. Nowadays all checks are printed to read "Pay to the order of." If you want currency, simply write "Cash" after "Pay to order of." This is, in ef- fect, the same as making it payable to bearer. 232. If a discrepancy exists between the amount as written in the body of the check, draft or note, and amount in figures in the margin, the former is held to be the intended amount. 233. No particular form is necessary for a note, but it must contain an order to pay or promise to pay. 234. The cancelled note you receive should never be destroyed — tear the signature through the middle and destroy the torn off piece. It isn't of any value then to anybody but yourself, and there may come a time when you will need it as a voucher. 235. INDORSING CHECKS— If you wish to make a draft or check pay- able to another, write on the back, about three inches from the upper, or left- hand end, "Pay to order of," and the name of the part to whom you wish to send or give it, and then your own signature, just as it appears on the face. 236. Never fill out a check except from your own check book, if you can possibly avoid it. 237. Number and date each check properly, and make a corresponding entry on the stub of your check book. 238. Always make a check payable to the order of the person to whom it is given. If in doubt ask him if he is acquainted at the bank, and if he is not, have him endorse the check in your presence and write your own name under his. This saves him the trouble of having to get someone to identify him. 146 HOW TO KEEP FARM ACCOUNTS 239. Write the amount in the body of the check distinctly, beginning at the extreme left of the line used for that purpose. This prevents a subsequent holder from inserting a word or two before the amount and thus "raising" it. 240. Never date a check ahead or give a check for more than your bank balance, expecting to have enough in the bank by the time it is presented to meet it. 241. To write a check tor fractional parts of a dollar, as, for instance, 60 cents, write Sixty Cents, and draw your pen through the printed word Dollars. 242. Never give a check with the condition that it is not to be used until a certain time — that is dated ahead. 243. When depositing a check write on the back "For Deposit" over your signature. 244. Never make deposits without your bank book. 245. STOPPING PAYMENT ON CHECKS— If you desire to stop the payment of a check that you have given, notify your bank at once — lose no time— and give the bank full particulars. You cannot stop payment of a check that has been "Certified." 246. NOTES ENDORSED OVER TO YOU— If you receive a note made payable to another and endorsed over to you. be careful to notice whether any payments have been endorsed on it — a note is only worth its face less the pay- ments made on it. 247. FORMS OF BUSINESS PAPER— The forms oi paper used in the ordinary course of business follow. The general farmer doesn't have a great variety of business paper to handle, yet the following may be useful for reference: 248. RECEIPT TO APPLY ON ACCOUNT— $2 I0.7S Hudson, Ohio, July 12, 1900. Received of. , Two Hundred & 75" TOO. W H. Brown . . . to apply on account. \\ '. I. CHAMBERLAIN. 249. RECEIPT IN FULL ON ACCOUNT— $36.20 Chicago . III., March 3, IQOI, Recived Thirty-Six in full of ac of 20-100. . John Johnson Dollars count to date. SANDERS PUBLISHING CO. HOW TO KEEP FARM ACCOUNTS 147 250. RECEIPT FOR PAYMENT ON NOTE— $100.00 Standish, Mich., Jan. 9, ^901. Received of E. H. Mohr One Hundred Dollars, as a partial payment on his note under date Oct. 13, 1899, for Five Hundred Dollars, payable to me. JOHN LIVINGSTON. 251. DUE BILL— $12.00 Due Twelve Co umbus Grove, Ohio, June 8, 1900. .Ed Wise on demand. JOHN FOX. 252. ORDINARY PROMISSORY NOTE— $500.00 Newark, Ohio, May 16, 1901. Sixty days afer date, I promise to pay Frederick Weise or order Five Hundred Dollars, value received, with interest. Payable at First National Bank. JOHN FOX. 253. JOINT NOTE— $200.00 Osborn, Ohio, August 10, 1900. Ninety days after date, we promise to pay John M. Jamison or order Two Hundred Dollars, value received, with interest, at First National Bank. HENRY BERGH. EDWARD TAYLOR. 254. BANK NOTE- $300.00 Lima, Ohio, April 10, 1900. Ninety days after date I promise to pay W. E. Harding, cashier, or order Three Hundred Dollars, value received, with interest. Payable at Farmers' Na- tional Bank. JACOB ASH. Endorsed on back by Frederick Williams, A. H. Wells. 148 HOW TO KEEP FARM ACCOUNTS TO MEASURE CORN 255. ON COB — Two heaping bushels of corn on the cob will make one struck bushel of shelled corn. Some claim that one and one-half bushels of ear will make one bushel of shelled corn. Much will depend upon the kind of corn, shape of the ear, size of the cob, etc. 256. IN CRIB — To measure corn in a crib, multiply the length of the crib in inches by the width in inches, and that by the height of the corn in the crib in inches, and divide the product by 2,748, and the quotient will be the number of heaped bushels of ears. If the crib flares at the sides, measure the width at the top and also at the bottom, add the two sums together, and divide by 2, which will make the mean width. 257. CORN SHRINKAGE— Corn will shrink Jrom the time it is husked in the autumn, in well-protected cribs, from 20 to 30 per cent, by spring. That is, 100 bushels will shrink to 70 or 80, according to how dry it was when cribbed. GRAIN IN BINS 258. TO MEASURE GRAIN IN BINS— Multiply the length of the bin in inches by the width in inches, and that by the height in inches, and divide by 2,150 for struck bushels, and by 2,748 for heaped bushels. The quotient will be the number of bushels contained in the bin. 259. To find the amount of grain in a bin — take four-fifths of the number of cubic feet. 260. Agricultural reports estimate that new wheat shrinks 6 per cent, in six months. Hence, 94 cents in August is equal to $1.00 in February. MEASUREMENT OF HAY 261. The only exact method of measuring hay is to weigh it, but the rules given below will be found sufficiently exact when taking the inventory. 262. TO FIND THE NUMBER OF TONS OF MEADOW HAY IN WINDROWS — Multiply together the length, breadth and height, in yards, and divide the product by 25. The quotient will be the number of tons in the windrow. 263. TO FIND THE NUMBER OF TONS OF HAY IN A MOW— Multiply together the length, height and width in yards, and divide by 15 if the hay be well packed. If the mow be shallow, and the hay recently placed therein, divide by 18, and by any number from 15 to 18, according as the hay is well packed. 264. TO FIND THE NUMBER OF TONS OF HAY IN SQUARE OR LONG STACKS— Multiply the length of the base in yards by half the width in yards, and that by half the height in yards, and divide by 15. 265. TO FIND THE NUMBER OF TONS OF HAY IN A LOAD— Multiply together the length, width and height, in yards, and divide the product by 20. HOW TO KEEP FARM ACCOUNTS 149 266. TO MEASURE HAY IN STACK— The area of the base multiplied by the perpendicular height to eaves, plus one-third the perpendicular height from eaves to crest, will give the number of cubic feet in a stack, the sides of which are perpendicular to a greater or less height. If the stack slopes uniformly from base to crest, then multiply the area of the base by one-third of the per- pendicular height. To find the area of the base, divide the distance around it by 3.1416, take one-half of the result and square it, then multiply by 3.1416. The number of cubic feet necessary for a ton of good, well-settled hay is about 450. 267. ANOTHER METHOD— Measure the stack for length, width and the "over." To get the "over," throw a tape-line over the stack at an average place from ground to ground, drawing it tightly. Multiply the width by the "over," and divide the result by 4; multiply the result of the division by the length for approxi- mate cubical contents of the stack. To reduce to tons for hay that has stood in stack for less than twenty days, divide cubical contents by 512; for more than twenty days and less than sixty days, divide cubical contents by 422; for more than sixty days, divide by 380. 268. TO .FIND THE VALUE OF PRODUCTS SOLD BY THE TON AT A GIVEN PRICE — To ascertain the value of a given number of pounds of hay, straw or other commodity sold at a given price per ton, multiply the num- ber of pounds by one-half the price per ton, and point off three figures from the right. The result will be the price of the article. MEASUREMENT OF WOOD 269. A cord of wood contains 128 cubic feet. To ascertain how many cords there are in a pile of wood, multiply the length by the height, and that by the width and divide the product by 128. 150 HOW TO KEEP FARM ACCOUNTS 270. SIX PER CENT. INTEREST TABLE- Time. 1 $1 1 $2 1 $3 1 $d | $q $6 | $io $20 $50 $100 $1000 Days i o o 1 2 17 " 2 o o 1 2 3 38 it 3 1 3 5 50 " 4 o o 1 3 7 67 " 5 2 4 8 83 ct 6 2 5 10 1 00 " 7 o o 2 6 12 1 17 a 8 o i 3 7 13 1 33 1 9 o i 2 3 8 15 1 50 " 10 I i 2 3 8 17 1 67 tt 15 I i 2 3 5 13 25 2 50 " 20 I i 2 2 3 7 17 33 3 33 a 25 I 2 2 2 4 8 21 42 4 17 " 30 I 2 2 3 3 5 10 25 50 5 00 " 33 I 2 2 3 3 6 11 28 55 5 50 " 63 I 2 3 4 5 6 11 21 53 1 05 10 50 li 93 2 3 5 6 8 9 16 3i 78 1 55 15 50 Months I I I 2 2 3 3 5 10 25 50 5 00 " 2 I 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 u 7 4 7 ii 14 18 21 35 70 1 75 3 50 35 00 a 8 4 8 12 18 20 24 40 80 2 00 4 00 40 00 " 9 5 9 14 18 23 27 45 90 2 25 4 50 45 00 " IO 5 10 15 20 25 30 50 1 00 2 50 5 00 50 00 " ii 6 ii i/ 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 00 271. INTEREST TABLE— Th 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 per cent., mult At 6 per cent., mult At 7 per cent., mult At 8 per cent., mult At 10 per cent., mult At 12 per cent., mult ply the principal by the number of days and divide by 72 ply the principal by the number of days and divide by 60 ply the principal by the number of days and divide by 52 ply the principal by the number of days and divide by 45 ply the principal by the number of days and divide by 36 ply the principal by the number of days and divide by 30 GESTATION TABLE 272. A tabic showing the period of gestation, or when colts, calves, lambs and pigs may be expected, the date of service being known. Time of Service Mares 140 Days Cows 283 Days Ewes 150 Days Sows 112 Days January February ... 5 '• 10 " 15 " 20 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 " 9 " 14 " 19 " 24 " 29 September . . 3 " 13 " 23 " 28 October 3 " 8 " 13 " 18 " 23 November . . 2 " 7 " 12 " 17 " 22 " 27 December ... 2 .12 .17 .22 .27 .31 December . . 6 '• . .11 " 16 " ... , U " 2 6 " 31 Januarv . . . . 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 " , ,35 " . .30 . . 5 " 10 " 15 " . .20 " 25 " 30 June . . 4 9 " . 14 " . .19 " . .24 " . 29 July 9 14 " . ,19 " ?A " ... «9 3 . . 8 " . .13 " .18 " 23 " ?,R September . . ? " 7 " 17 " ?,?, " 27 October . . . " 7 " 12 " ,17 " ?,?, " 27 November . .. 1 " . 6 *' .11 11 ,16 " 21 " ?6 December . . 1 " ... . 5 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 s 1 .", . .18 " . .23 " . .28 ** . . 8 •* . .13 " . .18 " . .23 " . 28 . . 2 " 17 " . .12 " . .17 " n " ?,7 July . . 2 " ... . . 7 " . .12 " ... . .17 " . .22 " ... . .27 August . . . . . 1 " . . 6 " . .11 " ... . .16 " ... . .21 " . .26 *i . .31 September . . 5 " ... , 10 " . .15 " . .20 " . i!S " . .30 October . . . . 5 . . 9 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 ?: 2 7 " 12 " 17 " ??, " 27 June 1 " 6 " . ,11 " 16 " 21 " 26 July 1 •< . . 6 " 11 " 16 " 21 " 26 " 31 August . . . . . » " . .10 " 15 " ?n " ?5 «» . .30 September . . 4 " . . 9 " 14 " 19 " 24 " 29 October . .. 4 ■* . . 9 " 14 " 19 " «4 <« . .29 November . . 3 " . 8 " .13 " .18 " ,23 " ;>s December . . 3 «« S ■■ 13 " 18 .23 " 28 January . . . 2 " 18 " 17 «< 22 •• 27 February . . 1 . 6 •• 11 " 16 " ?A " 26 March .... 3 " S " 13 " 23 " ?S April 2 •' '1 " 1" " 17 " 21 The first column gives date of service. ferent columns headed Mares, Cows, etc., is expected from such service. On the same line, under the dif- given the date the progeny may be 273. WEIGHTS AND MEASURES— Avoirdupois or Commercial Weight 16 drams =i ounce 16 ounces ^i pound 25 pounds =1 quarter 4 quarters or 100 pounds =1 hundredweight 20 hundredweight or 2000 lbs =1 ton Troy or Jewelers' Weight 24 grains =1 pennyweight 20 pennyweights =1 ounce 12 ounces =I pound Apothecaries' Weight 20 grains =1 scruple -3 scruples =I dram 8 drams =1 ounce 12 ounces =1 pound Dry Measure 2 pints =I quart 8 quarts =I pec k 4 pecks =I bushel 8 bushels (480 pounds) =1 quarter 36 bushels =I chaldron Liquid Measure 4 gills =1 pint 2 pints =1 quart 4 quarts =j gallon 31V2 gallons =1 barrel 2 barrels, or 63 gallons =1 hogshead Apothecaries' Fluid Measure 60 miliums =j fluid dram 8 fluid drams =I fluid ounce 16 fluid ounces =1 pint 8 Pints =I gallon Line or Linear Measure 1 2 inches =1 foot 3 feet =1 yard S l A yards or \6V 2 feet =1 rod or pole 40 rods — x furlong 8 furlongs = T mile (statute mile) 3 miles =I league Surveyors' or Chain Measure 7.92 inches =1 link 25 links =1 rod or pole 4 rods or 66 feet =1 chain 80 chains =1 mile Square or Surface Measure 144 square inches =1 square foot 9 square feet =1 square yard 30 Y A square yards. =1 square rod or perch 160 square rods =1 acre 640 acres =1 square mile or section Surveyors' Square Measure 625 square links =1 square rod or pole 16 poles =1 square chain to square chains =i acre 640 acres =1 square mile or section 36 square miles (6 miles square) =1 township Solid or Cubic Measure 1 728 cubic inches =1 cubic foot 27 cubic feet =1 cubic yard 16 cubic feet =I C ord foot 8 cord feet or 128 cubic feet =1 cord of wood 2434 cubic feet =1 perch LIBRARY OF CONGRESS 0D0E7?fi^77fl