260 FARM ACCOUNTING 



an entry is made crediting Rent Adjustment account and 

 debiting the fields, livestock, household and other accounts 

 in the same manner as for cash rent. The amount to 

 charge to each is determined according to a fair cash 

 rental basis for the same farm. 



As crops or livestock are disposed of the appropriate 

 crop or livestock account is credited for the total sale, 

 the Rent Adjustment account being debited with the land- 

 lord 's share (if he takes the cash direct from the sale or 

 if it is deposited in the bank to his credit), and cash being 

 debited for the tenant 's share of the sale. If the cash for 

 the entire sale remains in the hands of the tenant tem- 

 porarily, he debits cash for the entire amount received, at 

 the same time debiting Rent Adjustment and crediting the 

 landlord for the letter's share. Later, he credits Cash 

 and debits the landlord as payment is made to the lat- 

 ter, thus leaving both the Cash and Landlord's account in 

 the same condition as if the landlord had taken the cash 

 at the time of sale. 



This process of charging the Rent Adjustment account 

 is repeated as often as sales occur during the year, thus 

 decreasing the credit balance of R< -nt Adjustment account 

 from time to time. In a good year, the credit balance 

 would probably be reduced to Zero, and a debit balance 

 accumulated as a result of sales. This would mean that 

 the amount of the rent was in excess of what the fair aver- 

 age cash rent would have been in that year. At the close 

 of the year, any debit balance of this nature remaining in 

 the account would be closed into Loss and Gain account. 

 It is an undistributed loss to be set against all the income 

 from the year. It should not be considered as increasing 

 the cost of production of any crop or class of livestock. 



Similarly, if crops are poor, so that the Rent Adjustment 

 account has a credit balance at the close of the year, such 

 credit should be closed into Loss and Gain account, ap- 



