EXERCISE 95 



MAKING A FARM INVENTORY 



Statement. A farm inventory is a detailed list of farm property and debts with values assigned. 

 Its purpose is to determine the actual worth of the farm business and what progress has been made in 

 accumulating property. The values should be conservative and are usually about what the property 

 would bring at a forced sale. The resources consist of all property belonging to the farmer. The 

 liabilities are his debts. The difference between his resources and liabilities is the net worth of the farm, 

 or what he would have if all of his property were sold at the values given and his debts paid. 



Object. To ascertain the net worth of the farm business and to determine the gain or loss from year 

 to year. 



Materials. Access to a farm, from which a statement of all resources and liabilities may be obtained. 



Directions. On the home farm or on a farm in the neighborhood, with the owner's consent, take an 

 inventory of the property at the beginning and at the end of the year. The winter is the best time in 

 which to make an inventory, as the work is not so urgent at that time and the crops are harvested so 

 that their quantity can be more accurately determined. 



The resources are classified as : real estate, which consists of the farm with all buildings, fences, and 

 other improvements ; live stock, including horses, cattle, hogs, poultry, and any other live stock ; ma- 

 chinery and tools, including wagons, harness, conveyances, all farm machinery, and all small tools ; 

 feeds and supplies, including all hay, feeds, and grains on hand, and all supplies such as posts, lumber, 

 cement, and twine ; growing crops, or all crops planted and not yet harvested ; accounts receivable, or 

 all debts of others to the farmer; and cash on hand. 



The liabilities should include all the farmer owes to others. 



Note that an inventory shows only the gain or loss for the year, with no consideration of the labor 

 or capital involved. It does not show which crops made profit and which ones were produced at a loss, 

 nor the reason for the results obtained. To obtain these facts a detailed, day-to-day accounting of the 

 business is required. If the time permits, a detailed account should be kept for the year on the home 

 farm and a summary compiled from this account. 



Questions. Explain the meaning of an inventory. How often should an inventory be made? In 

 addition to the inventory what accounts should be kept on the farm ? The inventory shows how much 

 the farmer has made. What shows how he made it? 



References. Waters, H. J. Essentials of Agriculture, pp. 442-447. Ginn and Company. Warren, G. F. 

 Farm Management, pp. 428-494. The Macmillan Company. Kyle and Ellis. Fundamentals of Farming 

 and Farm Life, pp. 432-436. Charles Scribner's Sons. 



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