146 FARM ACCOUNTING 



It is to be observed from the pro forma entry above Unit 

 only those amounts are esti <II in ihe '"valuation for ac- 

 counts" column of the inventory sheet that are to be 1r 

 f erred to accounts in the ledger. For example, the title 

 " calves " appears in the inventory, but their value is not 

 shown as a separate item in the column called "valuation 

 for accounts" because there is no ledger account with 

 calves. The transactions with calves are recorded in the 

 Cattle account. In the inventory record, therefore, the 

 calves are included with the total cattle in the "valuation 

 for accounts" column. For a similar reason each of the 

 farm product items is extended into the valuation column. 



The inventories of K<|iiipment and Dairy Equipment are 

 shown separately, but both of the totals are carried to the 

 Equipment account. Showing them separate in the inven- 

 tory record enables one to calculate depreciation on the 

 two classes of Equipment separately, if occasion demands 



The Equipment and Da ipment items are detailed 



in the inventory sheet only for the purpose of listing the 

 great variity of items for future referent >. nml to show 

 the quantities. The value of the eq> items is not 



shown, either in detail or in total, cscrpt at the time of 

 opening the account books. Th< mvt ntonj mine of Equip- 

 ment at the close of a year is obtained by dlui-ting a given 

 percentage of depreciation, such depr> < tut inn and inven- 

 tory values being recorded in the account without I 

 shown first on the inventory record. This is discussed un- 

 der "Depreciation," below. 



The inventory sheet is not totaled, as the totals are not 

 used for any purpose. After depreciating the equipment 

 and entering the several items of the valuation column in 

 their respective ledger accounts, closing and bringing down 

 the balances, the total value of possessions can be found 

 easily from the trial balance after closing or from the 

 Statement of Resources and Liabilities. 



