920 THE farmers' handbook. 



Though the operations of the year 1921 show a small loss, it must be noted 

 that £100 has been expended on housekeeping, the capital has been increased 

 by =£40 by the addition of interest charged upon the year's profits, and 

 provision has been made for the payment of the amount of rent owing. 



SOME FURTHER CONSIDERATIONS. 



The system described herein furnishes the actual profit or loss on the 

 whole of the farming operations for the year, and it will probably be best 

 for the beginner to become thoroughly accustomed to this before attempting 

 the more difficult process of analysing the gains or losses from the various 

 branches. 



This involves a careful dissection of — 



1. The proportion of rent to be charged to each. 



2. A strict appropriation of the labour, both of the farmer and his 



family, and of the wages men. 



3. A close estimate, first of the cost of the upkeep of the horses, and 



then of the amount to charge per hour to the crops for teams, 

 implements, &c. 



4. An approximation of the value of the feed of the horses, stock, &c, 



to be credited to the Crop Account, and debited to the various 

 Live Stock Accounts. 



This involves such an amount of calculation, and so many transfers and 

 adjustments, that it is likely to deter the beginner from continuing with his 

 books, but to the man thoroughly interested in his work they present no 

 difficulty. The principle is the same throughout, the object aimed at being 

 to charge each branch of the business, for which an account is kept, with 

 the whole of the direct and indirect expenses which it involves, or from 

 which it benefits, and to credit it with its due proportion of the receipts, 

 in order to ascertain the real profit or loss on that particular branch. 



Valuations of Stock. 



There is a decided difference of opinion as to whether the ordinary five 

 stock on the farm should be valued in accordance with the fluctuations of 

 the market or at a uniform figure consistent with age and quality. The 

 former method shows the value that would be realised if the stock were sold; 

 but even in a time of inflated prices they cannot be disposed of, as they are 

 required for carrying on the farm operations. In such cases, the method 

 may show profits which are not actually secured, while during a period of 

 low prices, it may indicate losses that are not really sustained. Valuation 

 at a regular, conservative price per head is on this account to be preferred, 

 and on definite disposal the true loss or gain can be ascertained. 



