METHODS OF STUDYING AGRICULTURAL QUESTIONS 415 



operating the farm, and I doubt whether the game is worth 

 the candle." 



But at this point his attention is called to the large increase in 

 the number and value of the cattle on the farm, and the sugges- 

 tion comes that after all he may have made some money farming. 

 Before drawing any conclusions from the purchases and sales 

 account the inventory should be taken and compared with 

 that for the beginning of the year. 



It will be noted that the inventory shows an increase of 

 $2145.47 which must be added to the $1143 balance of receipts 

 over expenditures. By combining these accounts we have a 

 statement showing the gains resulting from the operation of the 

 farm as follows : 



Annual Statement, March i 



1915 1916 



$32,735-42 $34,880.89 



3,409.00 



Total farm property 



Expense of operation 



Receipts of operation 



Interest on investment, at 5 per cent 



Net return for farmer and family for operation 



4,552.00 



$37,834-83 $39,432.89 

 $ 1,598.06 



This $1598.06 represents what the farmer gained by farming, 

 but does not show whether he has got ahead or fallen behind 

 during the year. The farmer and his family may have spent 

 more than they received, both as interest and profits, or they 

 may have made a substantial saving. 



To find how much he has got ahead the bills receivable and the 

 bills payable must be taken into account along with the inven- 

 tory. This may be shown as follows : 



1915 



Farm property, March i, 1915 $32,735.42 



Bills receivable 150.00 



Total Assets $32,885.42 



Bills payable 12,423.00 



Net Worth $20,462.42 



Gain in Net Worth $ 1,202.47 



March i, 1916 



1916 



$34,880.89 



150.00 



$35,030.89 



13,366.00 



$21,664.89 



Thus, while the indebtedness increased, the property increased 

 still more, so that after the family expenses were paid, which 



