RECORDS AND ACCOUNTS 413 



horse account. The difference is the total use cost of the machinery for 

 the year. 



24. In order to distribute this cost, it may be assumed that for every 

 hour horses were worked machinery was also used. Then each account will 

 have charged against it the same number of machinery hours as horse hours. 

 To find the rate of cost per machinery hour, the horse hours already charged 

 to machinery should be first subtracted from the total hours of horse labor 

 and the total cost of machinery use divided by this difference. Now the 

 use of machinery for the year should be charged in "the same way that the 

 use of horses was charged, except the charge against machinery. When 

 this is complete, the machinery account should balance within a few dollars. 

 The difference may be treated as explained in paragraph 16. 



25. Any other accounts of convenience, such as those for fertilizer or 

 manure, if kept, should be distributed. 



26. All the remaining items should be entered in the inventories. The 

 inventory values for the beginning of the year should be entered on the 

 left-hand page of the separate accounts as a charge. The final inventory 

 for the year is likewise distributed to the separate accounts, but the items 

 are entered on their respective right-hand pages. 



27. The interest, based on the average inventories against all accounts 

 not already charged, should be charged and the interest account credited 

 with the total, using the same rate as that used in charging interest against 

 the horse and machinery accounts. 



28. The proper charge for the use of the land should be entered. The 

 rate should be high enough so that, with the use of buildings as charged in 

 paragraph n, it will cover interest on the investment in land and buildings, 

 taxes on real estate, and repairs to buildings and fences, for these items 

 were charged to the real estate account. Each crop should be charged for 

 the land it occupied and the real estate account credited. 



29. Both sides of the accounts not yet closed should be footed up. The 

 lesser total should be subtracted from the greater in each account. If the 

 charge side is greater the difference represents a loss, and if the credit side 

 be greater, a gain. The sample potato account given in Table II (p. 407) 

 will illustrate a completed crop account. 



30. A list of the losses and gains should be made and the total of each 

 found in order to show the net gain or loss on the whole business. 



31. Each account and the business as a whole should be studied in order 

 to learn how to improve it. 



