COST ACCOUNTING 



287 



afford a better comparison with Fay's results under the General 

 Accounting System as in problems 3 and 4 of Chapter VII. 



1. Mr. L. E. Fay, who has been farming' for several years as 

 a tenant, decides to keep accounts of his transactions under a 

 cost system. Accordingly, he arranges to use a cash journal 

 and ledger and monthly labor, horse labor and feed records, be- 

 ginning with his new lease, on Jan. 1, 1916, using the following 

 columns in the cash journal in the order named: Debit: Labor, 

 Roy Wade, Household, Cash, Sundry. Credit: Sundry, Cash, 

 Household, Roy Wade, Poultry and Cattle. 



He valued his possessions and prepared a Statement of Re- 

 sources and Liabilities, as follows: 



STATEMENT OF RESOURCES AND LIABILITIES 

 JAN. 1, 1916. L. E. FAY 



Liabilities 

 WattHdw. Co.... 

 Mortgage Payable . 

 L. E. Fay, Cap.... 



$150 

 2,000 

 3,430 



Equipment 1,000 



$5,580 



$5,580 



In order to reduce the details of the problem, the inventory 

 record of Mr. Fay is not to be used. 



