3IO 



Journal of Agriculture. 



[lo May, 1909. 



The stocks on hand entered in the Cr. columns at the end of the 

 period are brought down in the corresponding Dr. columns as the stocks 

 on hand at the commencement of the new jjcriod. 



Capital Income and Outlay {waggons, implements, land and improve- 

 ments). — Capital Outlay ma\ be taken to mean expenditure on the items 

 used for the purposes of working the farm and not bought for the purpose 

 of selling at a profit and Capital Incotnc as income from such items if they 

 should at any time be sold. These columns, Nos. 10 and 11 and 22 and 

 23, after the extensions and the closing entries (including depreciation) 

 have been made are simply balanced by inserting the difference between 

 the corresponding Dr. and Cr., the balances brought down in the 

 proper columns on the opposite side being the book value of these items. 



The capital account columns are balanced in the same way by inserting 

 the difference and the balance brought down in the capital account column 

 on the opposite side. 



New Balance-SI/cct. — Having ascertained the net profit and balanced 

 all the columns for both the revenue and capital items, the new balance- 

 sheet (c) can be prepared from the figures brought down. 



Having obtained his balance-sheet, the farmer knows exactly how he 

 stands and the result of his transactions for the year. He has also the 

 particulars at hand for making up his income tax returns. 



General. 



Period means the time between one balance and the next. The balanc- 

 ing and preparation of the balance-sheet should be done at regular inter- 

 vals. The most suitable interval for a farmer would be a year, probably 

 from the beginning to the end of the calenrlar year. The period covered in 

 the example is one month. 



Withdrawal of Capital from the Business. — It will be noticed that the 

 payments for private expenses are extended to the Dr. of capital account 

 column. This is done to reduce the capital, as any expenditure for pri- 

 vate purposes is a withdrawal of capital from the business. The same 

 principle applies to the consumption of produce from the farm, which 

 produce if not consumed would remain in tlie business or be sold. 



Expenditure for Crown Rents and 1 m provements. — This item has been 

 treated as part purchase and consequently extended to the land and im- 

 provements account column to increase tlie amount. The same principle 

 applies to expenditure for permanent improvements. (Note. — Repairs 



