326 FARM ACCOUNTING 



Land (170 acres legal description stated) 



Buildings 



Cash 



Mortgage Payable (6% 20 yrs. Federal) 



Mortgage Payable (6% 10 yrs. W. E. Reed) 



Not being able to finance the purchase of more than 170 

 acres, Mr. May did not buy the 100 acres of land designated 

 by him as fields Nos. 5, 5a and 6. He divided field No. 3 into 

 two parts, one of 20 acres to be reserved as a pasture and 

 called field No. 3a, and one of 40 acres to be used for crops and 

 called field No. 3b. The seller W. E. Reed has rented the other 

 100 acres to another man. 



Mar. 1. Close Field No. 3 account by journal entry, and open 

 accounts with Field No. 3a and Field No. 3b. Thi> is accom- 

 plished by transferring one-third of the deferred charge to the 

 former and two-thirds to the latter. 



Mar. 1. Charge the several farm elements with interest on 

 land and buildings, crediting Interest on Investment, as follows: 

 4% on a valuation of $110 per acre (the cost price) is to \w 

 charged to each of the several Field, Swine. Household and 

 General Expense accounts on a basis of the acreage presented 

 in problem 3, and as modified above for fields Nos. 3a and .!h. 

 Charge 4% on the value of buildings to the several elements 

 occupying them, crediting Interest on Investment, nssnniini: the 

 house valued at $1000 and all others, including the silo, at >_'i>mi. 

 (Debit Household with the $40 and Building Expense with the 

 $80. The latter will be distributed over the proper accounts 

 at the close of the year, along with other items of expen>e in 

 connection with buildings.) 



Apr. 8. Purchased 70 bushels of oats at 80c a bushel, and 

 sowed them in field No. 2. 



May 4. Planted 4 bu. of seed corn at $3.50 a bushel in field 

 No. 1. 



May 8. Planted 7 bu. of seed corn at $3.50 in field No. 4. 



July 14. Took 80 tons of clover hay from field No. 3b. 



Aug. 15. Threshed the oats from field No. 2. They measured 



