316 FARM ACCOUNTING 



hours worked by the men whose time was charged to Labor ac- 

 count. Use the hourly rate only to the nearest cent. For ex- 

 ample, a result of 21.6 cents would be used as 22 cents. 



Using the hourly rate just determined and with the assistance 

 of the Labor Conversion Table of Illustration 75, Appendix, 

 calculate the value of labor, for each farm element. Record 

 the amounts, for convenience on the paper as described under 

 instruction 7, above. 



Note. The values calculated for the various farm elements 

 are self proving to a certain extent. After finding that the 

 value of labor spent on horses is >177..~>0 and so on, the sum of 

 all the values not in parentheses should e<|iial the total hours, 

 0480, multiplied by the hourly rate. Likewise the total of the 

 values in parentheses (work by nei'jhl)i> ) should e<|iial the 

 total hours in parentheses, 440, multiplied by the hourly rate. 



9. Make a journal entry debiting the various elements with 

 the value of labor calculated in 8 above, and credit iui: Labor 

 and KxHianire Labor accounts each with the proper amounts. 

 Post the entry. 



10. Calculate the hourly cost of horse labor. This is done by 

 dividing the net cost of keeping horses by 7155, the total hours 

 worked by the horses for which the expense was incurred. (The 

 cost of keeping horses includes the charges for rent, sundry cash 

 expenses, interest on investment, bedding, feed and labor; with a 

 deduction made for manure. It does not include the inventory 

 value of horses on hand at the beginning nor the cost of any 

 purchased during the year.) 



Using the hourly rate just determined, calculate the value of 

 horse labor for* each farm element. Record the amounts, for con- 

 venience, on the paper as described under instruction 7. above. 



11. Make a journal entry debiting the various elements with 

 the value of horse labor calculated in 10 above, and credit ing 

 Horses and Exchange Labor accounts each with the proper 

 amounts. Post the entry. 



12. Find the net charge to Equipment Expense account for 

 the year. (Supplies of axle grease, machine oil and other sup- 

 plies are too small to consider for inventory purposes.) Divide 

 this amount by 7155, the hours worked by the farm horses. This 



