414 AGRICULTURAL ECONOMICS 



expensive repairs have been made during the year which may 

 make the machine more valuable than it was at the beginning 

 of the year. 



Receipts and expenditures. While the inventory is an indis- 

 pensable record, it alone will not tell the whole story. The 

 farmer may have made money on the farm and spent it on his 

 automobile or other personal accounts, so that his net worth is 

 less at the end than at the beginning of the year. In order to 

 know what he has made as a result of his farming operation it is 

 necessary (in addition to the annual inventories) to keep a record 

 of farm receipts and expenditures. This is not a difficult task 

 if each evening when any expenditure has been made or any 

 money received or any transaction made where payment is to 

 be made in the future, a notation is made in any simple book, 

 which may be kept for the purpose ; the matters will be ready 

 at the close of the year, or any previous time, for comparing the 

 farm receipts with farm expenditures and the old inventory with 

 the new ; the farmer may know how much he has made farming 

 during the year, for the increase in the inventory plus the in- 

 crease of receipts over expenditures equals the farmer's income, 

 which is the return he receives for his investments and his own 

 labor and that of his family. 



Tarpleywick Farm 



Expenses and Receipts, March i, 1915-March i, 1916 



Expenses Receipts 



Livestock 



Livestock products 



Seeds and feeds 



Labor 



Miscellaneous and taxes 



Total $3409 $4552 



Balance $1143 



At first a balance of $1143 may look very good, but after 

 thinking the matter over the farmer says to himself : " I have 

 made nothing, I could have sat on the fence and drawn 5 per cent 

 on the average investment if I had invested in farm mortgages, 

 and that would have amounted to $1690. I have lost $547 by 



