FARM MANAGEMENT 



339 



Depreciation is the difference between the value of any 

 property at the beginning and at the end of the period dur- 

 ing which an account is kept of it. For example, if, at the 

 beginning of a year, one has ten cows worth $400, and at 

 the close of the year they are worth less or he has lost or 

 sold some, so that the total value of cows on hand is but 

 $350, there will have been a depreciation in value of $50, 



Figure 149. — A fine bunch of hogs. The questions one should be able to answer 

 after producing a lot of hogs are: How much did they cost per pound? How 

 many pounds of corn or other feed did it take per pound of pork, etc. 



which must be accounted for in the charges against 

 the stock. Likewise there may be a gain in the value of the 

 stock for a given period. If so, it must be credited to the 

 enterprise. This loss or gain is most easily accounted for 

 by taking an inventory at the beginning of the year — that 

 is, making an estimate of the value of the stock on hand 

 and charging the enterprise with this amount, then credit- 

 ing the enterprise with the inventory value at the close of 

 the year. 



Interest on the investments must also be charged against 

 an enterprise, if an accurate knowledge of loss or gain is to 

 be had; because, if the money invested in stock were loaned, 

 it would earn a certain rate of interest. One would not care 



