.'{ M 



FARM ACCOUNTING 



ILLUSTRATION 61 



TABLE VI VARIATION IN PROFITS OF LANDLORDS ON 247 TENANT 

 FARMS IN INDIANA, ILLINOIS, AND IOWA 



The figures presented in the quotations above indicate 

 that accounts may be u^-d for finding aggregate results 

 of labor income. Labor income, however, differs with the 

 methods of accounting. In Illustrations 58 and .">!) tin- 

 amounts showing labor income are greater by *(>00 than 

 they would be if the operator's labor harmed as an 



expms,. before finding the farm income. In Illustration 

 ">'' for example, the average expenses would have been 

 *1W-'. $1575, *i:lf>5 and $1340 respect ively; and the aver- 

 age tenant's labor income ^ U, and .^J70 re- 

 spectively had $600 been charged in the accounts for oper- 

 ator's labor before finding the average farm income. In 

 this case, however, th . si 1H and ?:270 would not 

 be labor income, but would be known as wages of man- 

 agement. The $(>(K) is the amount charged to the various 

 farm elements because of the operator's physical labor for 

 the year. The $155 is the amount of income for the year, 

 representing the part of the total income due the operator 

 for his risk and ability in managing the farm for the year. 



Meaning of Cost. One of the main functions of keeping 

 accounts on a farm should be to show the cost of producing 

 the various productive elements. It is essential that the 



