COST ACCOUNTING 261 



pearing therein as an unexpected income a sort of rebate 

 because of poor crops or poor prices. It should not -be 

 credited to the several crop accounts to reduce their cost 

 of production. The cost of production is an element that 

 should not vary with the selling price of the commodities 

 produced. 



It is because of the fact stated in the preceding sentence 

 that share rent is treated in the way presented in the sev- 

 eral preceding paragraphs. If any other method were 

 used, it would usually result in waiting until a sale was 

 made before charging a crop account with the rent. The 

 rent so charged would vary so much from year to year, 

 that there would be no sound basis for comparison of 

 production costs in a given field, one year with another. 

 Likewise, there would be no reasonable basis for compar- 

 ing production costs on a share-rent farm with a cash-rent 

 farm, or with one operated by the owner. 



The foregoing treatment of share-rent assumes that the 

 tenant owns all equipment and livestock. It also assumes 

 that the sales of crops and livestock are made to about 

 the same extent in each fiscal year. That is, it assumes 

 that about the same proportions of the total crops and 

 total livestock are sold before calculating the loss or gain 

 of each year. 



If the latter assumption were not made the balance of 

 Rent Adjustment account would not show the difference 

 between the normal cash rent and the actual share rent 

 of the year. It would reflect largely the selling policies, 

 being influenced considerably in any year in which crops 

 were held over into the succeeding year, for better prices. 



If the landlord owns half of the livestock, half of the 

 equipment or both, only the tenant's share of such live- 

 stock and equipment is recorded in the books of the tenant. 



Under such conditions the Equipment Expense account 

 is debited at the beginning of the year with an amount to 



