INTERPRETATION OF COST ACCOUNTS 347 



ILLUSTRATION 62 

 TYPICAL Loss AND GAIN ACCOUNT TO BE READ OR ANALYZED 



Loss and Gain 



is charged to the farming operations by the man as a pri- 

 vate individual. Accordingly the income as a farmer, 

 $1295, is derived after the various productive elements 

 operated by the farmer have been charged with interest 

 on investment. 1 Another way of deriving the same result 

 is to add the $1400 net gain to the $200 Household expense 

 and deduct $305 interest. 



Income as a laborer: Under the method of cost account- 

 ing advocated in the preceding pages, every Loss and Gain 

 account provides $600 for the labor of the operator. This 

 is taken care of by the debit to Labor account, and credit 

 to Household. The $600 is not shown as a separate item 

 but is absorbed in the various productive accounts. Ac- 

 cordingly in reading any Loss and Gain account after such 



Considering interest on investment in this way places the "profit 

 as a farmer ' ' of the landlord operator on a basis comparable with the 

 "profit as a farmer" of the tenant farmer. In either case, the profit 

 as a farmer is the sum of the profits from each of the productive 

 elements. Each productive element in turn has been charged with 

 rent or its equivalent in interest, depreciation, repairs and so on. 



