138 



FARM ACCOUNTING 



transferred to Loss and Gain account by debiting Swine 

 account and crediting Loss and Gain. The credit entry in 

 Loss and Gain account is not shown in Illustration L'~>. 



Some question arises as to why the $300 inventory at the 

 close of the period is credited to the Swine account, and 

 also debited. It might be considered as a sale to the next 

 fiscal year. All sales of swine are credited to the account. 

 Since it is desired to show the profit of each year separate, 

 it is considered that the swine on hand at the close of 

 the year are sold to next year's operations. This sale to 

 the succeeding year, how. -v.-r. is not made at selling price. 

 This explanation also justifies the debit to the Swine ac- 

 count below the double lines, with the value of the inven- 

 tory. It is covered by the principle that a mixed account 

 is debited with the cost of the property on hand at the be- 

 ginning of the fiscal period. The year in which the swine 

 are sold will then iv.-.-ive the profit. 



Natural Increase in Livestock. It is only through the 

 inventory entries that the natural increase in livestock is 

 recorded. It is not practical to record values for young 

 livestock born from time to time in the way a merchant 

 records values for merchandise bought. Such values are 

 reflected in the books annually at the time of recording the 

 inventory. Thus the young stork born during a given 

 year has its effect on the Loss and Gain account and upon 

 the specific livestock account in the inventory entry or in 

 the entry for sales. In Illustration 25 any pigs born dur- 

 ing the fiscal year are accounted for in one of two ways. 

 If they are sold on the market they are included in the 

 regular sale credits. If they are not sold on the market 

 they are sold to the next year's operations, so to speak, 

 and are, therefore, included in the inventory entry. 



In order to present the inventory and loss and gain en- 

 tries under other conditions, let it be assumed that cholera 

 caused the death of a considerable number of swine during 



