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Farm Accounting and
Business Methods

A TEXT-BOOK FOR STUDENTS IN AGRI-
CULTURE AND A MANUAL
FOR HOME-STUDY

BY
J. A. BEXELL, A.M,

DEAN SCHOOL OF COMMERCE
OREGON AGRICULTURAL COLLEGE

The Home Correspondence School
Springfield, Mass.. U. S. A-

1911

(JOPYUIGHT 1909

By J. A. BEXELL

COFi'RIGHT 1911

By the home CORRESPONDENCE SCHOOL

Ruled Blank Books

with printed headings for use in writing out the exercises, or for practical
use on the farm, may be obtained from stationers generally or from The
Home Correspondence School, Springfield, Mass.

Page

titry 37

PART II. Cost Accounts and Special Records,

Chapter VI. Cost of Production 91

Chapter VII. Special Cost Records 98

PART III. Business Organizations, Correspondence, and Forms.

Chapter VIII. Business Organizations 115

Chapter IX. The Business Letter 123

Chapter X. Business Forms 141

PART IV. Useful Tables 149

Index 160

359975

CORRECTIONS AND SUGGESTIONS

Note to the Student : —Make all corrections and read suggestions
before beginning work.

Page 30. Under written work, after the word "illustrations," add: April 1,

Cash on hand. $170.00.
•• 34. Line 4, Surrey, should be $165.00 (not $1.30.00); Light Buggy,

$85.00 (not $50.00).
" 47 and 48. The illustrations should be dated 1910.
" 48. Total Stock, in illustration, should be $4421.77 ; Profit, $452.74.
" 50. The "Net Worth last Year" for both Statements No. 3 and 4 is

taken from the Net Worth in Statement No. 2.
" 53. March 30, strike " Personal column."

" 55. Third line. The Productive Investment is $6,265.54 (not $6,265.64).
" 59. April 17, Laundry 95 cents (not 97 cents).
" 63. March 1, Tea (not Codfish) 35 cents.
" 80. June 18, 250 (not 25) bu. Corn @ 74 cents.
" 80. June 22 10 tons Timothy @ $15.50 (not $15.00).
" 80. June 23, Collection and Exchange $3.50 (not $3.40).
" 83. Paragraph 3, third line, June 1 (not July 1).
" 85. The Corn Inventory is too large by 525 bushels, if you deduct the

sales from the purchases, but the 748 bushels should be used to get

the results given on pages 82 and 86.

The Net Gain, with the given inventories, for each partner is $29.75.
" 86. Richard (not Robert) Morris, Henry Simmons, and Western Produce

Co. should be placed in the left column, (Resources).

By J. A. BEXELL

COP^TIIGHT 1911

By the home correspondence school

l^j"

Ruled Blank Books

with printed headings for use in writing out the exercises, or for practical
use on the farm, may be obtained from stationers generally or from The
Home Correspondence School, Springfield, Mass.

TABLE OF CONTENTS

Page

Chapter I. Introductory 7

PART I. Financial Accounts.

Chapter II. First Method— Single Entry 13

Chapter III. Second Method— Modified Double Entry 37

Chapter IV. Household Accounts 56

Chapter V. Third Method— Full Double Entry 70

PART II. Cost Accounts and Special Records.

Chapter VI. Cost of Production 91

Chapter VII. Special Cost Records 98

PART III. Business Organizations, Correspondence, and Forms.

Chapter VIII. Business Organizations 115

Chapter IX. The Business Letter 123

Chapter X. Business Forms 141

PART IV. Useful Tables 149

Index 160

3599T3

PREFACE TO THE FIRST EDITION

There are a number of works on Farm Accounts now on
the market, but I have found none adapted to the class room.
An arithmetic would be useless as a text without problems for
solution; a text on Farm Records is likewise useless in the
class room without exercises for practice.

My aim has been to make the exercises as practical and
simple as possible, but no attempt has been made to limit the
illustrations to actual experience on any particular farm.
Hence, both prices and results will probably vary considerably
from actual practice, a fact which will not reduce their illus-
trative value. The forms suggested contain many new and
labor-saving features, conforming with the best modern busi-
ness practice. A resourceful teacher will be able to supple-
ment the exercises to any extent to suit the time available
and the needs of his class.

The increasing interest shown in this subject warrants the
belief that it will be introduced into the public schools in the
near future, and surely there is no subject more worthy of
attention or more sadly neglected. Suggestions and criticisms
from farmers and teachers interested in the subject will re-
ceive careful consideration in a future edition.

J. A. Bexell.

Oregon Agricultural College
October 1, 1909

PREFACE TO THE SECOND EDITION

A large number of inquiries from schools of all grades have
confirmed my conviction that there is a growing demand for
a text-book in Farm Accounts. Such a text-book must be
teachable. Without a well graded set of exercises to place
before the student it would be as useless in the class room as
an arithmetic without problems. Many new exercises have
been suggested by readers of the first edition and it is believed
that the present volume offers a fairly satisfactory course.
Ruled and printed forms have been provided for the exercises
in bookkeeping and these forms are also suitable for actual
bookkeeping on the farm. Chapters have been added on
Business Forms, Business Correspondence, and Business Or-
ganizations— subjects of the utmost importance to every
student; and it is hoped that the added chapters will make
the book more valuable as a business manual.

The fundamental principles of accounting being the same
in every business, it has been found that the exercises are
equally adapted to classes in Mechanic Arts, Domestic Econ-
omy, etc., so that the special exercises for this class of students
have been omitted.

A syllabus of instruction sheets has been prepared for stu-
dents who desire to pursue the study at home, which is also
available to schools giving correspondence courses.

I take this opportunity of thanking all who have contributed
in any way toward the improvement of this effort to help the
farmer. Special acknowledgment is due Mr. E. B. Moore
for his excellent chapter on "The Business Letter."

J. A. Bexell.

Oregon Agricultural College
October 1, 1910

FARM ACCOUNTING AND BUSINESS METHODS

CHAPTER I

INTRODUCTORY

It is a truism to say that the financial side of farming is
of the utmost importance. But the fact remains that this side
of the world's greatest industry is almost entirely neglected
by both the farmer and the schools. Professor Bailey says on
this subject: "In visiting practically every farm in one of
the counties of the state (N. Y.) we did not find one man who
knew how much it cost him to produce milk or to raise any
of his crops."

Prosperity of the Farmer

The Secretary of Agriculture, in recent Year Books, points
out the remarkable prosperity of the farmer; that the export
of farm products is vastly in excess of all other exports com-
bined; that a million agricultural debtors have been trans-
formed during the last ten years into the same number of
surplus depositors; that "contrary to his reputation, the
farmer is a great organizer, and he has achieved remarkable
and enormous successes in many lines of economic co-operation
in which the people of other occupations have either made
no beginning at all or have nearly, if not completely, failed."
He points out that most farmers live better than the average
merchant or mechanic.

Causes of Success

It is doubtless true that the farmer is becoming a factor
to be reckoned with in the business world; that the average
farmer knows vastly more about scientific farming than his
father did; he understands more thoroughly the value of
proper cultivation, of fertilization, of rotation of crops, and
of diversified farming; but it cannot be said that he owes

(7)

8 FAllM ACCOUNTINCx

his success to improved business methods. H^ has been suc-
cessful, rather in spite of his ignorance in this respect, and
because of the lavish generosity of mother nature.

Tm^o Phases of Farming

The business of farming assumes two distinct phases: the
productive phase and the exchange phase. The one aims to
extract the treasures from the soil; the other, to place them
in the hands of the consumer. It is important not only to raise
abundant crops, but also to sell the products to advantage.

Importance of the Exchani^e Phase

The importance of the exchange phase is often lost sight of.
A farm may be forced to yield to its maximum capacity, labor
may be managed properly and waste reduced to a minimum;
and yet the net result may be a loss at the end of the year.
As a general economic proposition, it might be said that large
crops often result in serious loss to society as a whole. If the
net value to the consumer is less than the labor and capital
expended on the crop, society is the loser by the difference.
Hence the importance of a thorough understanding by the
farmer, as well as by the merchant and manufacturer, of the
laws and methods of exchange or commerce.

Farming a Paying Business

That farming is a science has been emphasized so much that
the fact that it is also a business is often lost sight of. It is
a real business, and one which pays the United States close to
eight billion dollars annually. It has been demonstrated re-
peatedly that no legitimate business pays better than farming.
It may be a little more uphill work at the start, since most
farmers begin business with small capital, but it is incompar-
ably safer in the long run, and will insure a competence for old
age with greater certainty than any other occupation. But let
it ever be borne in mind that the condition for success is that
farming must be conducted on business principles.

Importance of Keeping Accounts

Accurate records and accounts are absolutely necessary in
the management of every business enterprise, great or small.

INTRODUCTORY 9

No business can be successful in the long run unless its con-
dition can be determined at any time, and no conservative
business man will fail to prepare a financial statement at the
end of his fiscal year. He must determine how he stands, not
only with others, but with himself.

One object of keeping accounts is to assist in accumulating
property. Another important object is to record a continuous
history of business transactions for future guidance. Not
only is this profitable, but it is a source of real pleasure and
satisfaction to know our standing with those with whom we
deal as well as the profits and losses in our business enter-
prises.

What the Records Should Show

A complete system of farm records should enable the farmer
to tell at any time how his business stands with himself and
others; the cost of production of staple crops and live stock,
and the periodical results of both the productive and the ex-
change phase of his operations. The records should also show
personal and household expenses, and finally a comprehensive
history of the various phases of the enterprise, including plots
of crop rotation, fertilizing, etc.

Difficulties of Farm Bookkeeping

Numerous systems of farm bookkeeping have been proposed,
but the trouble with them all is that they are either too com-
plicated or altogether unpractical. Professor Bailey says:
"The entire subject of farm accounting must be attacked in
a new way. The ordinary bookkeeping will not apply." The
reason is obvious. Farming is a much more complicated busi-
ness than most people suppose. A farmer is both a producer
and a dealer. He needs financial records as complete as those
of the average merchant and cost recortls as accurate as
the manufacturer's. But the records must be adapted to
the business in hand. The farmer is usually a very busy
man. His chief difficulty is neither ignorance nor indolence.
He has little time for fancy bookkeeping and still less for "red
tape." What he wants is a plain, simple, straightforward
history of his business, so arranged and classified as to
require the minimum effort to keep it up. It may be inter-

FARM ACCOUNTING

esting' for his children to learn the conventional use of red ink,
ruling's, closing of books, the intricacies of journalizing, etc.,
but all this is not necessary to a proper understanding of farm
bookkeeping.

Methods of Bookkeeping

In the following pages I suggest three methods of farm
bookkeeping whereby the yearly profit or loss may be
determined and compared from year to year. The first is ex-
tremely simple Single Entry; the second method is a com-
prehensive, but very simple. Modified Double Entry, by which
the financial standing, the cost of production, profits and
losses, etc., can be ascertained at any time; the third is a
system of complete Double Entry, generally used in enter-
prises doing an extensive credit business. Any farmer with
average intelligence will be able to master either method with
small expenditure of time and labor.

PART I

FINANCIAL ACCOUNTS

First Method

Being the simplest form of single entry, employing only one
book, which may be purchased anywhere. (See page 10.)

FINANCIAL ACCOUNTS

CHAPTER II

SINGLE ENTRY, THE SINGLE-BOOK SYSTEM

The Day Book

The most important record in this method of bookkeeping
is the Day Book, or what might properly be called the History
of the Farm. This should be written in the form of a diary,
without attempting a close classification of the entries. Al-
ways bear in mind, however, that it is safer to give too much
rather than too little information in the records. The Day
Book should contain any memoranda which might prove valu-
able for future reference. Conditions of the weather, time of
planting, breeding, division of fields, sales, purchases, loans,
attendance at conventions, valuable recipes, etc., are proper
subjects for entry. Though it is advisable to keep the book as
neat as possible, it is unnecessary to spend much time for that
purpose. It is more convenient to jot down items in lead pen-
cil as they come along, and then, as time allows, classify them
under their respective heads.

The Day Book and Cash Book Combined

In the form on page 19, the Day Book and Cash Book are
combined. The ruling is that of an ordinary stock Day Book.
In the left-hand column are entered all sums received and in the
right-hand column all payments.

While the combined Day Book and Cash Book has the advan-
tage of extreme simplicity, it is often more satisfactory to
devote a part of the Day Book, or a separate book, exclusively
to cash transactions. Where this plan is followed, it is un-
necessary to record all the cash items in the Day Book. The
left-hand page is used for cash receipts and the opposite p^ge
for payments.

(13)

14 FARM ACCOUNTING

Bill and Receipt File

A very important part of the farm records is the Bill and
Receipt File. A part of the Day Book can be devoted to that
purpose, but it is better to provide a separate book. In it
should be securely pasted all bills for machinery, implements,
tools, live stocky nursery stock, furniture, etc., which will be
subject to inventory, but not bills for supplies, feed, table ex-
penses, etc. ; also receipts for the payment of money, canceled
notes, certificates of pedigree, important clippings from peri-
odicals, and any other matter of interest. This will prove an
invaluable record for future guidance. (See illustration, page
24.) Many prefer the Pocket File, illustrated on page 16.

The Inventory

The inventory may be considered the foundation of the farm
records, because without it no results at all can be obtained.
It should be taken at such a time as will give the most accurate
results with the least expenditure of labor. This differs
widely in different localities. January 1st seems the most
natural beginning of the fiscal year, but the objection is that
at this time there is apt to be a large quantity of feed and
supplies on hand. April 1st would be a better date so far as
the stock on hand is concerned, but inconvenient in many
localities on account of the pressure of spring work. When-
ever it is taken, it should be accurate. No guesswork should
be tolerated. Weigh and count ; do not estimate. Then assign
the actual market value to the property, taking due account
of depreciation.

Depreciation

Neither an old wagon nor an old horse is worth as much as
new ones. The same holds true with very few exceptions of
all equipment, animals, houses, and improvements. The ques-
tion as to what rate shall be charged off annually, so as to
create a sinking fund with which to renew the depletion, has
been an open question with accountants since time immemorial.
It is particularly difficult to determine the depreciation of
live stock, work horses, and depletion of the fertility of the
soil. Without entering into a discussion of the subject, I

SINGLE ENTRY 15

give below the experience and opinion of the best authorities
on the subject. The thoughtful farmer will find no difficulty
in adjusting these rates to suit his conditions. For the pur-
pose of general estimates, the following rates on the cost or
market value are fairly accurate: —

Buildings (including insurance and repairs) .... 5 per cent.

Horses, above 5 years 10 per cent.

Milch cows (after 3d year) 8 per cent.

Machinery and tools 10 per cent.

HoMT to Determine the Profits

The all-important question at the end of each year is : Has
the work for the year been a financial success or failure? To
determine the profits or losses is, therefore, a problem to be
solved each year. As a matter of fact, it is a very simple
problem, and it becomes easier the oftener it is done.

Let us assume that heretofore you have kept no books what-
ever, but you have now decided to make a start. You have
procured a simple, substantial Day Book (may be purchased at
any stationery or drug store) and, after listing all your prop-'
erty, you are prepared to make the entries shown in the
illustration. April 1st is selected as the beginning of the
fiscal year, because on that date the supplies, grain, feed, etc.,
are usually low, and the average farmer has considerable time
to spare. Of course, this varies in different localities, and any
other date may be adopted to suit the farmer's convenience.
The proper opening entries, including the inventory, are
shown on page 18.

A Year Later

At the end of the year we are ready to determine the result
of the year's work. If we have kept only memoranda in the
Day Book, the best we can do is to take another inventory
exactly similar to the last one. It is evident that the differ-
ence between what we are worth now and our net worth last
year will be the net gain. The second financial statement and
the statement of Profit and Loss are illustrated on page 20.

FARM ACCOUNTING

Net KariiingH

The net profit shown in the illustration, page 20, includes
the interest on the investment and the wages of the members
of the family. To find the net earnings of the proprietor, the
value of the household goods, life insurance, cash, and the
cost of the dwelling should be deducted from the last year's
inventory. Then find the interest on the remainder at a fair
rate; this deducted from the profit gives the earnings of the
family. It can be apportioned in any way the proprietor sees
fit. This is illustrated further in Lesson 11. If members of
the family, engaged in productive work, receive regular pay
before the statement is made, the final result is the net profit
above wages and interest. The question might be asked : why
deduct the value of the dwelling before the interest is taken?
The reason is that the dwelling is not a productive investment.
It is apt to be more or less valuable than the average standard,
according to the taste and ability of the owner. Amounts
drawn for personal use should, of course, be added to the net
earnings.

ALPHABETICAL BILL FILE

SINGLE ENTRY

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FARM ACCOUNTING

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SECOND FINANCIAL STATEMENT

SINGLE ENTRY 21

Personal Accounts

A farmer frequently retails his products to his neighbors or
to townspeople, if he lives near town. In such cases it often
happens that he can sell to better advantage by running an
account with steady customers, collecting by the week or
month. If this phase of the business is extensive, as is the
case in truck farming, dairy, poultry, and the like, it would
pay the farmer to provide tickets or coupons and sell five or ten
dollars' worth in advance even at a small discount. But gen-
erally an account with each customer, kept either in a separate
book or in part of the Day Book, will be found satisfactory.
However, most farmers sell their products for cash, or ex-
change for merchandise, which is equivalent to cash sales.
It is, therefore, unnecessary to enter into an elaborate dis-
cussion of keeping such accounts.

Some farmers, very unwisely, attend to the personal busi-
ness of their hired help, even to the extent of buying their
smoking tobacco. There is absolutely no excuse for such a
practice. Rather pay your help in installments and let them
settle their own bills.

Accounts with persons we owe are generally unnecessary.
Most merchants furnish either a pass book in which the ac-
count is shown in detail, or an itemized bill is furnished with
each purchase. These bills should be pasted or filed in the
Bill File and checked off when paid. In the great majority of
cases this will prove more satisfactory than ledger accounts.

A special ledger can be provided, or separate pages of the
Day Book devoted to special accounts. This classification is
made either daily, weekly, or mcfnthly, as time and circum-
stances-allow.

FARM ACCOUNTING

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FARM ACCOUNTING

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See also p. 16

SINGLE ENTRY 25

Continued Inventory

The illustration on page 17 shows a very convenient form
of a continued inventory. The items are written only once
in as many years as there are money columns. Besides sav-
ing space and labor, it avoids the possibility of omitting im-
portant items, if the first list of items is correct. The prices
will also be more accurate, since they may be easily compared
from year to year. Two or three blank lines should be left
under each heading for new items which may appear in the
next inventory. The ordinary trial balance book, for sale at
any stationery store, is a good form, or additional columns
may be ruled in the Day Book or Journal.

Banking

The enormous increase in bank deposits in rural communi-
ties is the best evidence that the farmer is beginning to
appreciate the value of better system in his finances. It is
claimed that fully ninety-five per cent, of the country's busi-
ness is done by credit currency, such as checks, drafts,
money orders, notes, and the like. Many good business men
keep only their bank book, and this is far more satisfactory
than no bookkeeping at all, especially if bills and receipts are
filed for reference. The bank account may be carried entirely
independent of all other records.

Banking carries with it many advantages. Important
among them are : —

1. The depositor's credit and influence are measured
largely by the size and regularity of his bank account.

2. A tendency to economize by a desire to increase the
bank balance.

3. The banker becomes your bookkeeper and business
counselor.

4. Security against fire and robbers.

5. Indorsed checks are both records and receipts of pay-
ments.

6. A benefit to the community by keeping the money in
circulation.

7. Convenience in making change.

FARM ACCOUNTING

BANK ACCOUNT

SINGLE ENTRY 27

8. The bank will always loan to a good depositor in pref-
erence to one who is not a depositor.

There are only two operations in banking which need dis-
cussion here — depositing and checking. The banker will give
all necessary directions regarding both, except as to keeping
the individual account. This is illustrated on page 26, and
will be thoroughly understood after Lesson 5 has been
worked out. The special column Cash Book, pages 44 and 45,
is an excellent form for keeping the bank account. If all
cash is deposited and all payments made by check, the dif-
ference between the total columns represents the bank bal-
ance. As to deposits, it is preferable to deposit all cash, and
then draw out for personal use as needed.

The method of handling checks is as follows: Record the
payee, number, and amount, as illustrated under Cash Re-
ceipts, page 44. The checks are satisfactory receipts, but the
itemized bills should be pasted in the Bill File and bear the
same number as the checks. The bank will usually furnish
all necessary stationery free of charge. The bank balance is
considered a part of the cash on hand, so that no special
account except the check stubs and pass book need be kept
with the bank. The bank balance is proved each month as
follows : Arrange the checks returned numerically. List the
checks not returned; add the outstanding checks to the bal-
ance shown in the check register; the sum should agree with
the balance in the pass book. It is often convenient to keep
a special check register. Following is a convenient form,
showing the method of proving the balance at the bottom of
the page.

28 FARM ACCOUNTING

A WORD TO THE READER

The real aim of this book is to improve the business methods
on the farm which the reader owns now or expects to own in
the future. Merely reading the book will, doubtless, create a
vague conviction that the subject is important, but it adds but
little to the reader's knowledge of accounting and correct busi-
ness method. This is accomplished only by working out
problems typical of the actual experience of the average
farmer. In the process of such exercises the conviction will
become strong that the business phase is of such importance
that no farmer who aspires to success can afford to neglect
it. It is suggested that a systematic study of the Illustrative
Lessons be taken up in each family, especially where there
are boys and girls advanced far enough to profit by the study,
and that actual accounts of the home be started wherever it is
practicable. For instance, it will "be found exceedingly inter-
esting for the boys to take an actual inventory of the home-
stead after having worked out Lesson 1, and the girls will find
Lessons 12 and 13 especially helpful and interesting. It will
be found that each lesson will contain suggestions which will
prove valuable to every reader, whether he is engaged in farm-
ing or in any other occupation.

It is an excellent practice for farmers to come together
occasionally to exchange views on any subject pertaining to
their common interests. Why not organize a Farmers' Com-
mercial Club and enjoy good fellowship as well as the benefit
of each other's experience? One important number of the
permanent program could be a discussion of business methods.
A leader should be appointed to conduct a regular class for
several weeks. An outline for such a course is found on page
161. The publishers will be glad to furnish the necessary
material for working out the exercises or for practical use on the
farm.

SINGLE ENTRY 29

Illustrative Lessons

LESSON 1
THE INVENTORY

I. General Instructions.

In preparing these lessons, the student should use great
care as to neatness and form. It is not necessary to use the
printed forms provided for the purpose, but better work will
be done with good stationery. All the work should be done
with ink, if practicable. Do not pass by anything that is not
clearly understood. Ask questions. The amounts given are
totals in all the lessons, unless the word "at" precedes the
price. Hand in each lesson when completed for approval.

II. Written Work.

1. Use three-column Journal paper found in your account
book. This lesson is illustrated on page 18.

2. Write at the top of page 1 of your Day Book: Mon-
day, April 1, 1908. Then copy the following opening state-
ment. All work must be done neatly in ink.

Opening Statement

Six years ago to-day I purchased my present farm, investing
cash, $6,000. Below is an accurate inventory of all my prop-
erty, and a statement of my affairs as they stand to-day.

3. Skip one line, then arrange the following statement of
Resources and Liabilities exactly as illustrated on page 18.

Inventory, April 1, 1908

Resources : Farm, 160 A., market value, $8,000. Produce :
200 bu. Corn @ 50c. ; 150 bu, Oats @ 45c. ; 200 bu. Wheat @
85c. ; 20 tons Hay @ $6.00 ; Potatoes and Vegetables, $50.00.
Stock: 6 Horses, average $100.00; 20 Cows, average $40.00;
11 Steers, average $12.00; 5 Heifers, average $11.00; 12 Hogs,
average $6.00; 100 Sheep, average $3.00. Poultry: 150
Chickens @ 45c. ; 21 Turkeys @ 75c. Implements : 1 Binder,
$125.00; 2 Plows @ $10.00; 2 Harrows @ $12.50; 1 Mower,
$40.00; 1 Hay Rake, $15.00; 1 Grain Drill, $50.00; 2 Wagons,
together, $110.00; 2 Sets Harness, together, $90.00; 1 Buggy,
$100.00; Tools, $50.00. Supplies, $25.00. Household Goods,

30 ' FARM ACCOUNTING

$350.00. Life Insurance (paid-up value), $964.36. Cash,
$170.00.

Liabilities: Labor (unpaid), $75.00. Accounts Payable,
$125.15. Mortgage, favor Iowa Trust Co., $3,000.00.

Your work, if correct, will be exactly as shown on page 18,
except that you will fill in the omitted part of the illustration.

LESSON 2
DAY BOOK AND CASH BOOK

I. General Instructions.

Use three-column Journal paper. This lesson is illustrated
on page 19. The Day Book should contain a complete history
of the business. Here the cash account is carried in the two
money columns. It is often convenient to carry this account
on special pages.

II. Written Work.

Copy the following entries in the Day Book on the next page
after the last statement. Head the pages and columns the
same as in the illustration. f\^f. i^ Gt*^ o*^ U^t^A ,5t l70.6^^

(1) Heavy rain storm. Shod ''Cap" and "Maud" at Scow-

scroft's ; paid $3.00. Bought 2 tons of Coal @ $4.00
per ton.

(2) [Skip a line between each date.] Attended Breeders'

Convention at Portland. Program and report on
file. Paid expenses, $8.40.

(3) Paid Grocery bill at Murdock's, $11.40.

(4) Bought Milch Cow of J. C. Smith ; paid cash, $40.00.

Attended concert of the Boston Jubilee Singers,
with family; paid expenses, $2.00.

(5) Sold one Calf to P. A. Anderson for cash, $7.00.

Bought 1 pr. Gloves, $1.50.

(6) Bought at La Fount's for cash: 1 Ax, $1.00; 1 Ham-

mer, 45c. ; Nails, 50c. Went to Portland to select
farm implements; expense, $3.00.

(7) Attended church with family. Dr. E. Hamilton

preached on "Civic Honor." Collection, 25c.

SINGLE ENTRY 34

(9) Bought Shoes for Teddie, $2.00.

(10) Bought 5 bu. Tested Seed Corn @ $2.00 per bu.

(11) Rain all day. Fannie dropped calf.

(12) Sold 3-year-old Horse, "Cap," for $125.00.

(13) Bought one Studebaker Top Buggy; price, $135.00;

discount, $15.00 ; net amount paid, $120.00.

(14) Attended church with family. Our pastor preached

on the 'Trodigal Son." Collection, 25c. Paid
quarterly dues, $10.00.

(15) Mother took sick suddenly. Dr. Brown considers her

case very serious.

(16) Hired Frank Johnson for six months @ $30.00 per

month and board. Mother is better.
(17 to 28) [Student will insert at least one imaginary entry
for each date. Try to use good judgment as to what
might happen and what might be purchased and
sold during the remainder of the month. Be care-
ful not to pay more money than you have received.]

(29) Paid the following bills: Skinner Bros., Dry Goods,

$14.50; Murdock's, Groceries, as per bill on file,
$15.60. Sold Murdock's 20 doz. Eggs @ 20c.; 12
Dressed Spring Chickens @ 30c.

(30) Received Cream check. See Statement on file, $45.30.

You will now balance the cash. Add the two col-
umns; find the difference and enter it on a new
page, as shown on page 19.

LESSON 3

PERSONAL ACCOUNTS

I. General Instructions.

Use three-column Journal paper. This lesson is illustrated
on pages 22 and 23. Read carefully page 21.

IT. Written Work.

Prepare two sets of accounts, one entitled "Others Owe Us"
and the other "We Owe Others."

(a) ''Others Owe Us.''

1. Mrs. Richard King, a neighbor, has been buying
dairy and poultry products on account. Her ac-

32 FARM ACCOUNTING

count is illustrated on page 22. Prepare her
account with the following entries: —

May 1. There was a balance due from April,

$3.80 ; 1 lb. Butter, 20c.
May 3. 2 doz. Eggs @ 15c.
May 5. 1 Chicken, 30c.
May 12. 2 lbs. Butter @ 20c.
May 18. 2 qts. Strawberries @ 15c.
May 25. 1 qt. Cream, 20c.
May 31. 1 lb. Butter, 20c.; paid cash, $5.00.

[Balance the account as illustrated.]

2. In a similar manner prepare an account with the

Adams Mercantile Co., with whom we are trading
and who are buying produce from us. The entries
are as follows : —

June 4. 5 bu. Potatoes @ 75c.
June 8. 60 bunches Onions @ 40c. per doz.;
10 doz. Sweet Corn @ 20c. On the same date
we bought goods as per their bill on file, $6.50.
June 15. 8 crates of Strawberries @ $1.75; 20
doz. Eggs @ 15c. On the same date we bought
a Suit for William for $13.00. [Prepare t]iis
account; rule and balance the same as Mrs.
King's account. The balance due is $5.25.]

3. In a similar manner prepare three additional original

accounts of not less than ten entries to each.

(b) ''We Owe Others."

1, Frank Johnson, one of the farm hands, has requested
that his wages be left on account, and that he be
allowed to draw as he needs from time to time. The
following items enter into his account. [Prepare it
exactly the same as the five preceding accounts.]
April 30. Wages for April, $30.00.
May 1. Cash, $10.00.
May 5. Bought Clothing for him at Goddard's,

$7.20.
May 10. Cash, $5.00.
May 20. Cash, $3.00.

SINGLE ENTRY 33

May 31. Credit Wages for May, $30.00. [Rule
and balance as heretofore.]
2. July 1. Bought a 3-year-old Horse, "Jim,*' for
$150.00, on condition that it was to be paid for at
the rate of $25.00 per month. Four payments have
been made on the first of each month, beginning
August 1st. [Write up the account. Rule and
balance as heretofore.]

LESSON 4
STATEMENT No. 2

I. General Instructions.

We have now arrived at the end of the year and we are
ready to prepare the second financial statement. Use three-
column Journal paper. This lesson is illustrated on page 20.
Read carefully pages 15 and 16.

II. Written Work.

Step 1. Take inventories of all your property, listing and
placing a fair valuation on it, same as in Lesson 1.

Step 2. Go through your personal accounts, balance them
as illustrated in Lesson 3, and extend the amounts under the
various headings in the inventory — Grain, Stock, etc.

Step 3. If you own any notes, stock, or other valuables,
list them under Bills Receivable. Be sure not to omit any-
thing you own or owe.

The above directions merely indicate how an inventory is
taken. The following inventories are assumed and you will
prepare a statement exactly as heretofore. Compare the
values and find totals. See page 20.

Inventory, April 1, 1909

Resources: Farm, $8,620.00. Produce: 150 bu. Corn @
55c. ; 175 bu. Oats @ 43c. ; 253 bu. Wheat @ 87c. ; 20 tons
Hay @ $6.50; Potatoes and Vegetables, $40.00. Stock: 6
Horses @ $100.00; 1 3-year-old Horse, ''Jim," $150.00; 22
Cows @ $42.00; 14 Steers @ $13.00; 4 Heifers @ $11.00;
11 Hogs @ $6.00. Poultry: 165 Chickens @ 45c.; 25 Tur-
keys @ 75c.; 10 Geese @ 70c. Implements: 1 Binder,

31 FARM ACCOUNTING

$120.00; 2 Plows @ $9.00; 2 Harrows @ $11.50; 1 Mower,
$40.00; 1 Hay Rake, $13.00; 1 Grain Drill, $45.00; 2 Wagons,
$40.00 and $60.00; 1 new Wagon, $100.00; 2 Sets Harness,
$25.00 and $65.00; 1 Surrey, $130.00; 1 Light Buggy, $50.00;
Tools, $50.00. Supplies, $30.00. Household Goods, $350.00;
Piano, $300.00. Life Insurance, $1,073.40. Cash and Bank,
$126.04.

Liabilities: Labor (unpaid), $85.00. Accounts Payable,
$142.32. Mortgage, favor Iowa Trust Co., $3,000.00. Note,
favor Western Lumber Co., $200.00. Due on Piano to Smith
Bros., $200.00.

Having completed the statement of Resources and Liabili-
ties, you will now determine the profit for the year. Skip one
line and write the following statement, inserting the net worth
in Statement No. 1 and what you find above.

Statement of Profits and Losses

Net worth now $

Net worth last year (Statement No. 1) $

Net profit (or loss) $ .

Your result will agree with the illustration on page 20, if
correct. Dividing the gain with last year's net worth, we find
that you have made a gain of about nine per cent, on your
investment and labor.

LESSON 5

THE BANK ACCOUNT

I. General Instructions.

Study the remarks on banking on page 25. You are sup-
posed to have opened an account with the Citizens' National
Bank and to have performed the transactions given below.
The bank has given you a pass book in which the teller will
enter the deposits as they are made, and the checks, when
they are returned once a month. You have kept a private
account with which you check monthly.

XL Written Work.

1. Enter the following on a sheet of Journal paper, as

SINGLE ENTRY 3:8

illustrated on page 26. Extend the balance after Nos. 351,
354, 358, 368, and 371.

Deposits: April 1, $98.35; (3), $70.00; (6), $90.00; (9),
$40.50; (13), $125.00. The checks drawn, beginning with
No. 350, are as follows : April 1, Mrs. Martin Harris, $30.00 ;
Odell Seed Co., $10.00. (3), Emma Johnson, $1.50; Brown
& Pickett, $3.00. (5), Salem Implement Co., $20.00; E.
Skidmore, $65.00; Empire Lumber Co., $3.75. (6), County
Recorder, $3.00. (8), Earle & Crockett, $80.00; Farmers*
Supply Co., $15.40. (9), Frank Johnson, $10.00; Goddard
Hardware Co., $3.50; Mrs. Martin Harris, $30.00; Crown
Fertilizer Co., $6.40; 0. N. Smith, $15.80. (13), County
Treasurer, $30.40; Kimball Livery Co., $15.00; Brown &
Pickett, $2.50. (20), C. J. Ol^bn & Son, $15.00; Horning &
Bacon, $10.00; Crawford Hardware Co., $10.50. (23), Brown
& Pickett, $13.30.

2. At the end of the month add the checks and deposits and
find the difference. The resulting balance should be $29.80.

3. The bank has returned your pass book with the canceled
checks. You have arranged them numerically and find that
all are returned except Nos. 361, 366, and 369. In other
words, the bank has paid all except these checks. By adding
the outstanding checks to your balance you find that the bank
balance ought to be $58.30, which you find agrees with the
pass book. The canceled checks should be filed numerically
and kept for future reference.

Second Method

A system of modified double entry in which the special
column Journal, or Cash Book, is the basis. It is the most
satisfactory and labor-saving system in a cash business, where
personal accounts are few and where accurate results are
desired. The personal accounts are to be carried exactly as
in the first method, if such accounts are kept at all.

CHAPTER III

MODIFIED DOUBLE ENTRY, THE SPECIAL COLUMN

CASH BOOK

Not many generations ago it was considered sufficient for
the average manufacturer merely to record his cash receipts
and expenditures and to keep a tolerably accurate check on the
cash balance. In many instances the left trousers pocket
served as the debit side and the right as the credit side of the
"Ledger." Modern business methods and sharp competition
have changed these notions until to-day it is necessary to know
the cost of production in advance to the smallest detail. An-
cient business methods prevail yet, very generally, on the farm.
The wonderful progress of the American farmer is due to
marvelous natural resources, labor-saving inventions, and
natural ingenuity, rather than to wise and prudent manage-
ment.

Necessity of Careful Accounting

In certain respects, a farmer must combine the methods of
the manufacturer and the merchant. He must learn, not only
how to increase production, but also how to facilitate the prof-
itable exchange of his products. He must reduce the cost of
production to the minimum by increasing the quality and the
quantity of his products, and by getting full value out of labor.
He must manage so that his working force, farm hands, chil-
dren, horses, all, are constantly employed. This requires most
skillful management in the rotation of crops, in the division
of labor, in selecting seeds, fertilizers, and stock; and, above
all, it requires general prudence in purchasing equipment and
supplies, and in marketing products. Progressive farmers
require a variety of records to assist in the proper manage-
ment of their business. A first-class set of books is just as
indispensable to them as to the banker or to the manufacturer.

Superiority of Double Entry

A careful comparison of the results obtained in the last
chapter with the balance sheet given on page 47 will convince

(37)

38 FARM ACCOUNTING

the reader of the superiority of double entry. It will be ob-
served that the only result obtained by a comparison of inven-
tories was the net profit or loss. The source or causes of these
results cannot be obtained by this method. The method sug-
gested in Chapter II has this advantage: There is not a
farmer so busy or so ignorant that he cannot adopt it and
derive great benefit from its use. But the ambitious, progress-
ive farmer will not be satisfied with this primitive method
any more than a wide-awake merchant will be satisfied with
single entry bookkeeping. He will adopt a system which will
give him at any time reliable information as to his financial
standing, cost of production of crops, live stock and poultry,
household expenses, etc., and by which he can prove that his
work is correct.

Single and Double Entry Compared

The distinction between single and double entry is unimpor-
tant for our present purpose, but it may be a satisfaction to
the student to know that the method we are now to consider
is double entry. The important distinction between the two
methods is that in double entry accounts are kept with per-
sons, property, and allowances, while in single entry accounts
are kept with persons only. In double entry there is a corre-
sponding debit for every credit; the total debits and credits
must therefore be equal, and must balance at any time. This
becomes clear by referring to the Cash Book, page 44. In the
first entry, the amount is entered in both the Total and in the
Sundries column; and the same is true of all the succeeding
entries. Hence the sum of columns four to ten inclusive must
equal the total in column three. You will find the same to be
true of the Payments, and of the Household Accounts.

Additional Books Needed

Very important books in double as well as in single entry
are the Day Book and the Bill File. They are to be kept in
exactly the same way as suggested under single entry, except
that no cash entries are recorded in the Day Book. It is used
only as a diary. The important consideration now is to adopt
additional records that will furnish the necessary informa-

MODIFIED DOUBLE ENTRY 3^

tion in systematic and tabular form requiring the minimum
amount of labor.

The Gash Book

The Cash Book is the basis of classification. A very con-
venient form is given on pages 44 and 45. The special col-
umns take the place of a Ledger. All money columns except
the total column will be referred to as distribution columns.
They are in reality separate accounts, and this form might,
therefore, properly be called a combined Ledger and Cash
Book. The form suggested has the important advantage of
being self -balancing. A trial balance can be taken at the end
of each page, month, or year, as illustrated on page 57. The
process of preparing a financial statement becomes extremely
simple by this method. A few observations regarding equip-
ment and supplies, improvement and repairs, will be of assist-
ance in using the distribution columns.

flquipment and Supplies

In accurate accounting, the question often arises: What
shall be considered equipment, and what supplies? Supplies
are defined as expendable or consumable materials, which are
incapable of being used more than once; while equipment is
of more permanent character, articles which can be used
repeatedly. Fuel, lubricating oil, cotton waste, feed, etc., are
supplies; while machinery, furniture, and apparatus of all
kinds are equipment.

Improvements and Repairs

The distinction between improvements and repairs is not
always clearly understood. An improvement adds value to
the property, in the shape of equipment, buildings, drains,
fences, and the like, while repairs merely keep up the property.
A coat of paint on an unpainted building is an improvement ;
repainting is classed under repairs. This distinction is very
important in making an inventory. Improvements are added
to the inventory, repairs are not.

40 FARM ACCOUNTING

Gash Balance and Sundry Columns

The cash balance is found as follows : —

Total receipts $653.14

Total payments 578.80

Balance $74.34

Note that the totals of the distribution columns equal the
total of column on both sides of the Cash Book. The Sundries
column contains all entries which do not fall under the special
columns. At the end of the year the items are segregated
under various titles. The segregation for the month of April
is as follows : —

Sundry Receipts Column

Balance $126.04

Labor 10.00

Wood 22.40

Total .$158^

Sundry Payments Column

Interest $22.00

Taxes 33.40

Accounts Payable 15.80

Insurance 35.10

Total .$106.30

Improvements and Repairs Column

Improvements $80.00

Repairs 34.60

Total .$114.60

Trial Balance

In the language of the accountant, a trial balance is a test of
the equality of the debits and credits in a set of double entry
books. Our trial balance is much simpler ; it is simply a test
of equality of the total columns and the distribution columns.
In the Cash Book, merely add the distribution columns on each
side and note that their sum equals the respective total col-

MODIFIED DOUBLE ENTRY 41

umns. The Household accounts are balanced in the same
manner.

The Ledger

With a special column Cash Book, the Ledger can be dis-
pensed with in most cases. The further classification of the
Sundry columns can be done at the end of the year, as illus-
trated on page 46, and a few pages of the Day Book can be
devoted to "What We Owe Others" and "What Others Owe
Us." Where a special Ledger is found necessary, the form
shown on pages 77 or 82 can be used.

The old-style Ledger possesses some advantages over any
other form. The debit appears on the left and the credit on
the right side on the same page. It is used either in double
or single entry. The difficulty of keeping the Ledger in bal-
ance prevents the use of the double entry Ledger to a very
large extent. This is especially true if an attempt is made
to use the ordinary Journal.

Direct entries into either the double or single entry Ledger
present less difficulties, and the method is recommended where
the classification of accounts is such as to make the combined
Cash Book and Ledger unpractical. This need scarcely ever
be the case, however, because if ruled sheets cannot be ob-
tained without headings, a blank sheet may be ruled with any
number of columns and headed with titles to suit. For
example, an orchardist would head his Receipt columns
Apples, Prunes, Peaches, Small Fruits, etc.; while an exclu-
sive stock farmer would devote special columns to the different
kinds of stock.

The advantage of the Ledger method is that each account is
more condensed, while the self -proving and labor-saving fea-
tures are important in the special column Cash Book. Pre-
paring a trial balance and balance sheet, and closing the
Ledger properly, though very simple for the experienced
accountant, requires a proficiency in bookkeeping that few
farmers possess.

On page 77 is an illustration of the ordinary form of direct
entry Ledger, showing the entries for April 1st. Compare
these with the first entries on pages 44 and 45, and note the
similarity of results. In the form follow the arrows and note

42 FARM ACCOUNTING

that there is a debit for every credit, and vice versa. In the
column marked (a) is entered the Day Book page, if the
entries have been previously made in that book.

The Annual Statement

The annual statement exhibits in a condensed form the
financial operations for a given period. It shows the resources
and liabilities, the cash receipts and expenditures, the profits
and losses, the net profit or loss, and the net worth. It enables
the proprietor to analyze his business with considerable ac-
curacy and to trace the sources of profits and losses. There
are various forms of statements, but the illustration on page
47 seems best suited to the farming business. Statement
No. 3 shows the results of a month's business only. The
inventories are obtained from separate schedules and the cash
receipts and expenditures are the totals found in the Cash
Book. The profit and loss accounts are fully analyzed after
Statement No. 4.

MODIFIED DOUBLE ENTRY 43

Illustrative Lessons

LESSON 6
CASH RECEIPTS, SET 1
I. General Instructions.

Use Forms 2 and 3. This exercise is illustrated on page 44.
The result of your work will be exactly as illustrated on that
page, if correct. Do not merely copy page 44, but compare
your work with the illustration after you have done your best.
Before beginning your written work read very carefully pages
37 to 42. This should convince you that double entry is far
superior to single entry.

XL Written Work,

1. Turn to Form 2 in your Cash Book and enter the
following items in the proper columns : —

April 1, Balance forwarded, $126.04 (Total and Sundry

columns) ; 2 tons Clover @ $6.00; 80 bu. Corn @

65c.
(3) 12 Cabbages @ 10c. ; 25 lbs. Butter @ 25c.
(6) 2 Steers @ $40.00; 20 Spring Chickens @ 45c.;

Hauling Coal, 1 day, $5.00.
(9) Jersey Calf, $10.00; 2 cords Wood @ $4.00; 5 bu.

Potatoes @ $1.00.

(12) Heifer, $25.00; 10 lbs. Butter @ 28ic.

(13) 75 bu. Corn @ 65c.; Work on County Road, $5.00;

4 bu. Apples @ $1.50.
(15) 20i doz. Eggs @ 20c.; 36 lbs. Butter @ 25c.; 2 tons

Clover @ $6.00.
(17) 100 Apple Trees @ 20c.; 1 Steer, $37.00; 12 Cedar

Posts @ 20c.

(19) 6 Spring Chickens @ 40c. ; 95 bu. Corn @ 60c. ; 3 tons

Hay @ $6.00.

(20) Jersey Calf, $10.00; 50 bu. Oats @ 35c.
(23) 1 Turkey, $1.40; 1 bu. Clover Seed, $1.50.
(26) 18 lbs. Cheese @ 15c.

(29) 3 cords Wood @ $4.00; 10 bu. Barley @ 40c.; 4 tons
Timothy @ $5.50.

FARM ACCOUNTING

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CASH BOOK

46 FARM ACCOUNTING

(30) Produce for Household Use, Orchard, and Garden,
$5.25; Dairy, $6.50; Poultry, $6.30.

2. Add the columns. The correct results are as follows:
Total, $653.14; Grain, $179.25; Hay, $65.50; Orchard and
Garden, $37.45; Stock, $162.00; Dairy, $27.30; Poultry,
$23.20; Sundries, $158.44.

Note that the total of the distribution columns equals the
total column.

3. The Sundry column contains the following items: —

Balance, April 1st $126.04

Labor 10.00

Wood 22.40

Total $158.44

Verify Step 3 by setting down each item under its appro-
priate head and adding. Arrange your work as shown
above.

LESSON 7

CASH PAYMENTS, SET 1

L General Instructions.

See Lesson 6. You will fill in the items between the 15th
and 23d, omitted in the illustration. If payments are made
by check and the bills filed for reference, the items need not be
entered in the Cash Book. The payee, the amount of the
check, and the distribution are sufficient entries.

11. Written Work.

1. Enter the following expenditures for April on Form 3.
(See page 45.)

April 1, on Household Expenses, $30.00 (Total and House-
hold columns) ; 12 bu. Seed Wheat @ 83 J c.

(3) Labor in Garden, $1.50; shod "Cap" and "Maud,"
$3.00.

(5) Interest M. P. Co., $20.00; Jersey Cow, $65,00; Laths
and Shingles, $3.75.

MODIFIED DOUBLE ENTRY

Financial Statement. Year Ending .W^.?^-..*^//.... ^.19^ if

C&sh Receipts and Paymentp

Receiptb

Balance forwarded I ,

GraiD

Hay

Orchard and Garden.

Stock.

Dairy

Poultry

Sundries.

Machine and Implements

Hired Labor

pAYltraJTS.

Hou8ebold*9^/i?<'^.<?<».«/

%JfSZ$P

Trees, Seeds and FertiiL«er8 JX^

HTpkz^

jabor

General Expense

Stock

Machines and Implements.

Farm (improvements)

Repairs

Son dries: —

Life Insurance

PerRonal Expense

Accounts Payable

Interest.

Taxes

Gifts

Insurance,

fV> ^f^tnUry. &^

TJt^

R»aovirc«e aoicC LiabiUU**.

HssoimcBS.

Farm (market value) %f.0JO

Cash and Bank 2. " '

Life Insurance (Paid up value) . . /. /. _,

Stock* Jfli:

Grain* J./fl

Hay" y.^T..,..

Orchard and Garden* jifA .0*.

Dairy Products*

Poultry* / tf,0

Machines and Implements* ^'**^

Household Goods %SZ

General Supplies ^-3^

Total $/^7f.476

v.*

JTJf

Kired Labor

Bills Payable

Accounts Paymble . . .
Gifts

9....J.^ao.

.09.

Net Worth

Tot»l....

fii^B

> As per Invantory

Statement of Proftt axudi Los*.

Ket Worth (as above) , ,,^

Net Worth last year « /AjSY 4^i

Gain for the^year y, y. /fi..j

ANNUAL STATEMENT

FARM ACCOUNTING

Accounts SKowing Profit or Loss, Year Ending M I f?^.^.:.'^/...\9i^:f

(Amounts are Uib-Ji from Inventories, Cash Book, and Special Records.)

GRAIN

Coer.

Invrntory la&L year. . ,
Labor

Inter. *tan VnJuejpf/Land

er>^

47 p ^^

Retdrnb.

Net Profit

?<^'

ToUL

%/f./X

Present Inventory . .
Receipts from Sales

Fed to Stock

Fed to I'oultry

ir<?

Total %/f./Z^.<i

.0.7

0.9

STOCK.

Cost

Inventory laat year $

Labor

Grain

Hay

Interest on Inventory last yeai . .
PaGturag^ on L^^d

6A.iA..9MTf*Y

Net Profit

.yjjj[.<>.*>

Returns.

Present Inventory %./. fT'.o. S'a

Ivece: pts from Sales J.3.P.Q .99.

Receipts from Dairy /.O. fSJ.%

Labor (Cash Receipts /.■SS./J

Toul $y^r^/

Total .

)TJzy.

ORCHARD AND GARDEN

Cost.

Inventory last year $ .

Labor and Marketing

Interest on Land

Not Profit

Total.

Returns.

Present Inventory %.

Receipts

Total.

Cost.

Inventory laatyear.

Labor .-.-.

Interest on Land . . .

Net Profit

HAY

Returns
J.3.P.\P9. Present Inventory %.. .IkSx'lS.

2ff

Total %.S.3,7aJ^>

(Account)

... $

Cost.

Total.

Receipts iLO.H^.lLO

Fed to Stock /.y!^ . $.0

Total.... t.J'JlS.l^S

Returns.

$ Total.. $.

ANNUAL STATEMENT

(6
(8

(12
(13

(14
(15

(17
(19

(20

(23

(25
(26
(29
(30

Modified double entry 4d

Garden Seed, $1.60; Road Tax, $3.00.

Addition to Barn (contract), $80.00; Crates and

Bags, $15.40.
Wages to Johnson, $10.00; Steel Frame Grindstone,

$3.50.
200 ft. Lumber @ $10.00 per M. ; 1 Shovel, $1.25.
On Household Expenses, $30.00; John Smith, labor,

$2.50 ; Staples, 35c.
Taxes, $30.40.
Cash for personal use, $3.50; Rip Saw, $2.50; paid

0. N. Smith in full, $15.80.

Pruning Orchard, $2.50 ; Chicken Feed, $5.00.

Manure from Kimball Livery, $15.00; Horse Shoeing,
$2.50 ; Trip to Ames, $4.50 ; Patent Fertilizer, $6.40.

Leghorn Pullet, $2.10; Plastering and Paper Hang-
ing, $15.00; 2 Halters @ 90c.; Wages to Johnson,
$10.00.

On Household Expenses, $30.00; Trees and Shrubs,

1. N. C, $25.80 ; Alfalfa Seed, $3.20 ; 2 doz. Leghorn
Eggs, $5.80.

Interest on Binder note, $2.00; Angora Goat, $10.00;

Private Expenses, $5.00; ^ doz. Gopher Traps, $1.50.
Repairs on Horse Stalls, $13.50 ; 1 Keystone Dehorner,

$10.50.
2 Geese, $3.00; Wages to Johnson, $10.00; Apple

Boxes, $3.75.
Butter Wrappers, $1.75; Life Insurance Premium,

$35.10; Produce for Household, $18.05.

2. Add the columns. The correct results are as follows:
Total, $578.80; Household and Personal, $116.55; Seeds and
Fertilizers, $62.00; Hired Labor, $36.50; General Expenses
and Marketing, $30.90; Stock and Feed, $90.90; Machinery,
Implements, and Tools, $21.05; Repairs, $114.60; Sundries,
$106.30. Your distribution columns may not agree with the
totals given, but note that the total of the distribution columns
equals the total column.

3. By going through the Sundry column we find that it
contains the following: —

50 FARM ACCOUNTING

Interest $22.00

Taxes 33.4O

Accounts Payable , 15.80

Insurance 35.10

Total $106.30

4. Classify the Improvements and Repairs column. (See
definition of improvements and repairs, page 39.) The cor-
rect result is as follows : —

Improvements $80.00

Repairs 34.60

Total $114.60

5. Balance the cash by taking the difference between the
total receipts and the total expenditures. The correct dif-
ference is $74.34.

LESSON 8
FINANCIAL STATEMENT No. 3

I. General Instructions.

Under ordinary circumstances a financial statement should
be made out only once a year, but for additional practice you
may prepare a statement covering the first month. As will
be observed on page 47, this is a condensed statement of cash
Receipts and Expenditures as they appear in the different
columns of the Cash Book ; a statement of Resources and Lia-
bilities ; and, finally, a statement of Profits and Losses. Your
Balance Sheet will be exactly like the illustration except as'
to amounts. The new inventories are as follows: Farm,^
$8,700.00; Cash and Bank, $74.34; Stock and Feed, $2,145.00;
Grain, $105.00; Hay, $55.00; Orchard and Garden, $35.20;
Dairy Products, $26.30; Poultry, $122.80; Machinery, Imple-
ments, and Tools, $870.05 ; Household Accounts, $650.00 ; Life
Insurance, $1,136.80; General Supplies, $25.00; Hired Labor,
$85.00; Bills Payable, $3,200.00; Accounts Payable, $326.52.

MODIFIED DOUBLE ENTRY 51

II. Written Work.

1. On a statement blank (Form 12) enter the cash Receipts
and Payments under the respective titles. The Sundry col-
umns were segregated in Lessons 6 and 7.

2. Enter the Resources and Liabilities and check with the
illustration. Then find the Net Worth and Profit or Loss.
In this case there is a loss of $1.01, due to the fact that April
is naturally an unproductive month for the farmer.

3. The detailed statement of the profits or losses on Grain,
Stock, etc. (Form 13), will not be taken up until at the end of
the year (Lesson 11).

LESSON 9
CASH RECEIPTS, SET 2

I. General Instructions.

The next set is similar in principle to Set 1, and is given
for additional practice. The same forms are used. For the
purpose of completing a year's work in the next balance sheet,
we assume the amounts to be forwarded for eleven months,
March being the last month of our fiscal year.

II. Written Work.
Enter as in Lesson 6.

March 1. Forwarded: Total Receipts (to be entered
horizontally under the proper headings on Form
2), $3,644.34; Grain, $591.93; Hay, $134.95; Or-
chard and Garden, $277.95; Stock, $1,110.50;
Dairy, $997.07; Poultry, $246.14; Sundries, $285.80.
(1) 2 Pigs @ $6.25.

(3) 20 bu. Apples @ 65c.; 50 bu. Potatoes @ 45.
(7) 3 tons Clover @ $6.50; 1 Veal Calf, $9.00; 40 bu.

Oats @ 45c.
(9) 25 lbs. Dressed Chicken @ 20c.
(10) 10 doz. Eggs @ 15c.; 1 Cow, $45.00.
(12) 1 ton Clover, $6.50; sold old Wagon, $10.00.
(15) Hired out Team and Buggy, $4.00; Labor on County
Road, $5.00.

^52 FARM ACCOUNTING

(16) 50 bu. Corn @ 60c.; 95 boxes Strawberries (5) 15c.;

10 lbs. Butter @ 25c.
(19) 3 tons Timothy @ $5.75; 3 days' Labor for Johnson

& Co. @ $1.60; 14 doz. Eggs @ 15c.
(21) 2-year-old Colt, $75.00; Strawberry Plants, $4.60; 18

lbs. Butter @ 25c.; 4 qts. Cream @ 15c.; 4 Calves

@ $12.00.
(24) 50 bu. Oats @ 40c.; 10 Dressed Chickens @ 30c.
(28) 50 bu. Corn @ 65c.; 3 tons Timothy @ $5.00; sold

1 set Harness, $32.40 ; 2 tons Clover @ $5.50.

(30) 50 bu. Barley @ 40c.

(31) Produce used for Household, $13.90 (Orchard and

Garden, $2.80; Dairy, $6.45; Poultry, $4.65).
(31) From Phoenix Hotel, $7.00 for Cream.

Add all the columns and prove. The correct total is
$4,174.24.

The Sundry column is segregated as follows: —

Cash Balance forwarded $126.04

Implements, sales 60.81

Labor for others 155.15

Total $342.00

LESSON 10
CASH PAYMENTS, SET 2

I. General Instructions.

In principle same as Lesson 7.

II. Written Work.
Enter as in Lesson 7.

March 1. Forwarded: Total, $3,513.63; Household and
Personal, $1,028.90; Trees, $99.66; Hired Labor,
$386.00 ; General Expenses and Marketing, $269.49 ;
Feed and Stock, $427.85; Machinery and Tools,
$172.31; Improvements and Repairs, $513.20; Sun-
dries, $616.22.

(1) On Household Expenses, $30.00.

(3) 200 ft. Lumber @ $10.00 per M.; 20 Posts, $1.60; 1
Shovel, $1.25.

MODIFIED DOUBLE ENTRY 53^

(7) Strawberry Crates, $4.00; Assessment Farmers' Tele-
phone Co., $2.00; shod 'Trince," $1.50; 1{ bu.
Timothy Seed @ $1.10.
(9) 10 bu. Rye Seed @ 60c.; 1 Cultivator, $25.00.
(10) Setting Tire on Wagon, $3.00; half month's Wages to

Frank, $15.00.
(12) Advertising Garden Products, $1.20; Membership in
Breeders' Association, $3.00; Incubator, $20.00.

(14) On Household Expenses, $30.00; Insurance, 3 years,

$29.50.

(15) 1 set Plymouth Eggs, 50c.

(16) 2 sets Leghorn Eggs @ 50c.; Dehorning Cattle, $3.25;

100 lbs. Wire @ 3c.

(17) Labor on Ditch No. 1, $16.50; Labels for Apple Boxes,

$4.20; Garden Seeds, $3.40.
(19) Carpentry Tools, $2.50; Harness Oil, $1.00; Bran and

Shorts, $5.60; Subscription to Y. M. C. A., $5.00.
(21) 10 lbs. Nails @ 6c.; Blacksmithing as per bill, $3.00;

40 Apple Trees @ 20c.; 10 Peach Trees @ 25c.;

paid Frank on Wages, $5.00 ; 5 sacks Phosphate @

$1.70.
(24) On Household Expenses, $30.00; Labor in Orchard,

$2.00.
(26) Shovel and Hoe, $1.50; Allowance for James at col-
lege, $20.00.

(28) 1 Plowshare, $3.20.

(29) Balance Wages to Frank, $10.00; 1 bbl. Salt, $2.50;

2 Pigs @ $2.25 ; Church Subscription, $5.00 ; Shin-
gles and Nails, $1.00.

(30) Taxes, $38.60; paid George for keeping books, $5.00

(Personal column).

(31) Produce for Household, $13.90; Labor in Garden,

$1.20.

Add all the columns and prove. The correct total is
$3,902.28.

If you could go through the entire Sundry column for the
year, you would find the following items: Life Insurance,
$54.30 ; Accounts Payable, $252.32 ; Insurance, $29.50 ; Inter-

54 - FARM ACCOUNTING

est, $230.00; Taxes, $38.60; Charities, etc., $94.60. The Im-
provements and Repairs column is segregated as follows :
Improvements, $350.00; Repairs, $174.40. The Household
and Personal column would be segregated in the same manner.
Arrange the segregation as illustrated on page 50.

LESSON 11
FINANCIAL STATEMENT No. 4

I. General Instructions.

Having reached the end of our fiscal year, we are now
ready to make a complete analysis of the business. First, we
prepare the financial statement on Form 12, the same as in
Lesson 8. Then we analyze the accounts showing profit or
loss on Form 13.

II. Written Work.

Complete Form 12 by inserting the amounts in their order.
The inventories are as follows : —

RESOURCES.

Farm $9,070.00

Cash and Bank 271.96

Stock and Feed 1,948.50

Grain 380.00

Hay 168.75

Orchard and Garden 45.00

Poultry 100.55

Machinery and Implements 953.00

Household Goods . 682.40

General Expense and Marketing . 37.80

Life Insurance 1,136.80

Total Resources $14,794.76

LTAHTI.ri'IES.

Hired Labor $35.00

Bills Payable 3,200.00

Accounts Payable 90.00

Gifts 40.00

Total Liabilities 3,365.00

The Net Worth is $ (?)

The Net Profit is $ (?)

MODIFIED DOUBLE ENTRY . 55

If you deduct from last year's inventory the value of House-
hold Goods, Life Insurance, Cash, and $2,220.00 as the value
of the dwelling house, the productive investment is $6,265.64.
Deducting 6 per cent, on this investment, the proprietor's
earnings are $718.85. To this should be added the amount
drawn for personal use.

Accounts Sho-H^ing Profits or Loss

Consult illustrations, pages 47 and 48.

It is assumed that special labor and feed records (Forms
6 and 9) have been kept during the year, and we are now
ready to analyze our leading accounts showing profits or
losses. The first of these accounts is Grain. We must debit
this account with all the elements that enter into the cost of its
production, and credit it with the returns. The first item of
cost in last year's inventory (Financial Statement, No. 2;
Lesson 4) is $377.86; Labor (Horse and Man, from Labor
Record), $440.00; Interest on the value of Land devoted to
Grain (56 acres @ $55.00 per acre), 6 per cent., $184.80;
Seeds and Fertilizers (Cash Payments), $129.71. The re-
turns are : Present Inventory, $380.00 ; Cash Receipts, $712.43 ;
Fed to Stock (Feed Record assumed), $770.07; Fed to Poul-
try, $50.00. From this we obtain the net profit, $780.13.

In a similar manner we consider the Stock account and the
Hay account. The illustrations, pages 47 and 48, show the
figures supplied from each account. Complete the statement
and find the profit or loss of each account.

It should be borne in mind that this exercise in cost account-
ing is only suggestive. The principles are fundamental and
correct, but their application in practice may vary greatly.
Thus, some farmers will charge live stock a certain amount
for housing, perhaps also for the use of utensils, machinery,
and the like ; others will insist on deducting the cost and care
of the dwelling from the annual farm inventory, since this is
not capital invested in the business. For a full discussion of
this subject, see Bulletin 73, Bureau of Statistics, U. S. De-
partment of Agriculture. The interpretation and use of the
results obtained is a subject far too extensive for this treatise.

CHAPTER IV

HOUSEHOLD ACCOUNTS

It will be seen that no provision has been made in the gen-
eral Cash Book for separate items in the household accounts.
This is left for the housekeeper. The fact that her field is
somewhat limited from a business point of view is no argu-
ment in favor of loose and careless methods of accounting.

Most housekeepers prefer to receive a fixed allowance for
household expenses, whenever it is practicable. For our pres-
ent purpose we will suppose that the following agreement has
been entered into between the farmer and his wife. She is
to receive the following : —

Monthly Allowances for Household and Personal Expenses

For proprietor and wife $25.00

Board for hired help . ; 15.00

For four children 32.00

Sundries 18.00

Total $90.00

In addition to the cash allowance, vegetables, poultry, and
dairy product^ are furnished from the farm at market price.
The proprietor gives his wife an allowance of $90.00 each
month either in one or in several payments, and enters it in
his cash expenditures. His wife, in turn, enters her allowance
in her record. Bills for furniture, clothing, and utensils are
pasted or filed in a Bill and Receipt File in the same manner
as in the farm accounts.

Note that the items entered in columns one or two are also
entered in columns eight, nine, or ten, since they are purchases
from the farm. Because they are entered both as receipts and
payments, they do not affect the cash balance.

At the end of the year the proprietor enters the totals of
columns one and two in his cash receipts under the proper

(56)

HOUSEHOLD ACCOUNTS 57

headings, and at the same time they are entered as cash pay-
ments in the Household column. (See page 44, under April
30th.) Thus, the farm will receive full credit for what it
sells to the household as well as to others.

It is suggested that the housekeeper open a private bank
account and pay large items by check. (See April 13th, 29th,
and 30th.) There are numerous advantages in keeping a bank
account. (See page 25.) A bill for furniture, utensils, and
improvements should always be taken and pasted in the Bill
File. It is convenient to number the bills the same as the
checks, as suggested in column six. Since indorsement by the
payee constitutes receipt, it is generally unnecessary to require
a receipt when payment is made by check.

Page 60 shows a convenient form of a combined household
Cash Book and Ledger. A summary of the receipts and pay-
ments is prepared at the end of the year; as shown on page 62.

Trial Balance

The accuracy of the work is tested at the end of each page
or each month as follows: —

Groceries $13.05

Meat 11.80

Dairy and Poultry 12.40

Clothing 16.85

Furniture and Utensils . 22.05

Help and Laundry 11.60

Library 6.65

Light and Fuel 6.10

Gifts 2.35

Personal 1.25

Travel and Recreation 3.00

Incidental 2.65

Physician and Medicine 1.50

Telephone Rental 1.50

Total $112.75

Observe that this total agrees with the total given on
page 61,

58 FARM ACCOUNTING

Illustrative Lessons

LESSON 12
HOUSEHOLD ACCOUNTS, SET 1

I. General Instructions.

See illustration, page 60. The columns are used exactly as
in Lesson 6. Use Forms 4 and 5. Note that produce taken
from the farm is entered in both the receipts and expenditures,
since no cash is paid out. The farm will be credited with the
produce at the end of the month or year in the farm accounts.

If payments are made by check, and the bills filed, the items
need not be entered in the Cash Book. The payee, the amount
of the check, and the distribution are sufficient entries.

II. Written Work.

1. Enter the following Household Receipts and Expendi-
tures for the month of April, 1908. (See illustration, page 60. )

April 1. Balance forwarded, $15.40; on Allowance, $30.00;
Shoes for Mabel, $3.00; 2 Vests, $1.00; 10 yds.
Muslin @ 10c. ; 4 yds. Gingham @ 15c.

<3) Sugar, $1.00 ; Raisins, 25c. ; Subscription to Successful
Farming, $1.00; Subscription to Ladies' Home Jour-
nal, $1.75.

(5) Collection, 25c. ; Ladies' Aid Society, 25c. ; 2 doz. Eggs,

40c.; Medicine, 50c.; Stove Polish, 10c.

(6) Doctor, $1.00; Ella, 25c.; George, 50c.; Necktie for

Jim, 25c.; 5 bu. Potatoes @ 40c.; Skillet, 50c.

(8) 5 Cabbages, 25c.; Bread Knife, 40c.; Meat, 50c.; Par-

lor Lamp, $3.00.

(9) 3 lbs. Crackers, 25c.; Peanuts, 10c. ; Eggs, 50c.; to

boys for ball game, 50c.; Starch, 10c. ; Relief So-
ciety, 50c.

(12) Collection, 35c.

(13) Rocker, $7.00; Prunes, $1.00; on Allowance, $30.00;

Coal, $5.00 ; Vegetables, 40c.

(14) Suit for William, $6.00; Hat for George, 75c.; Con-

cert, $1.00; 2 yds. Ribbon, 40c.; 1 doz. Plates, $2.20;
i doz. Cups and Saucers, 90c.

HOUSEHOLD ACCOUNTS ^

(15) Schoolbooks and Stationery, $2.40; Kerosene, 75c.;

Ham, $1.35; Sociable, 50c.; Shoe Strings, 10c.
(17) Kitchen Cabinet, $6.50; 2 Chairs, $1.30; Laundry,

97c.; Toilet Soap, 25c.; 3 lbs. Fish, 45c.; Towel
. Rack, 25c.

(19) Collection, 25c.

(20) 6 yds. Toweling, 60c.; Tacks, 10c. ; 1 gal. Vinegar,

30c. ; Matches, 25c. ; White House Cook Book, $1.50 ;
Carbolic Acid, 10c.
(23) Telegram to M. F. & Co., 50c.; Telephone Rental,
$1.50; Mrs. Sloan for Dressmaking, $2.50; Madrid
and return, $2.00.

(25) 1 pr. Rubbers, 75c.; Stockings for Ella, 50c.; Flowers

for Mrs. Knox's funeral, $1.00; Allowance, $30.00;
Laundry, 65c.; Lamp Wicks, 10c.

(26) Collection, 25c.

(29) Meat, City Market, as per bill on file, $9.50; Groceries

at Murdock's, as per bill on file, $4.40 ; Help for the
month, $10.00.

(30) Vegetables for the month, $2.60 ; Poultry, $5.40 ; Milk,

Cream, and Butter, $6.50.

2. Add all the columns. (Use lead pencil until you have
proved your work.) If your work is correct, you will find the
following totals: Receipts. — Cash, $105.40; Produce, $5.25;
Dairy and Poultry, $12.80. Payments.— Groceries, $12.65
(see correction, page 61) ; Meat, $11.80; Dairy and Poultry,
$12.80; Clothing, $16.85; Furniture and Utensils, $22.05;
Help and Laundry, $11.60; Library, $6.65; Medicine and Phy-
sician, $1.50; Light and Fuel, $6.10; Gifts, $2.35; Personal,
$1.25; Traveling and Recreation, $3.00; Incidental, $4.15.

LESSON 13

HOUSEHOLD ACCOUNTS, SET 2
I. General Instructions.

Use Forms 4 and 5. In principle this is exactly like Les-
son 6.

FARM ACCOUNTING

HOUSEHOLD ACCOUNTS

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SUMMARY OF HOUSEHOLD ACCOUNTS

HOUSEHOLD ACCOUNTS 63

11. Written Work.

Enter as in Lesson 12 the following Household Receipts and
Expenditures : —

March 1. Amount forwarded, $21.60.

(1) Oranges, 25c.; James, 35c.; Codfish, 35c.; Allowance,
$30.00; Coffee, $1.00; Bacon, 50c.; Shoe Laces, 10c. ;
Fish, 25c. ; Veal, 10c. ; Whalebone, 10c. ; Stove Pol-
ish, 25c.

(3) Jardiniere, 25c.; Collars, 25c.; Tacks, 10c. ; Collection,
25c.; Buttons, 10c. ; Toothbrush, 25c.; Talcum
Powder, 25c. ; Stamps, 25c. ; Oranges, 25c. ; Thread,
15c.; Meat, 50c.; Crackers, 25c.

(7) Help, $1.00; Roast, 55c.; Delineator, 10c. ; Pepper,
15c.; Comb, 25c.; Oatmeal, 25c.; Meat, 40c.

(9) Collection, 25c.
(10) Gloves for Ella, 75c.; Postage, 25c.; Starch, 10c.
(12) Chops, 25c.; Beans, 25c.; Mustard, 20c.; Soap, 30c.;
Borax, 15c.; Pattern, 45c.; Muslin, 50c.; Music,
20c.; Gasoline, $1.20; Picture Frames, $3.45.

(14) Starch, 25c.; Help, $1.00; Laundry, $1.00; Allowance,

$30.00.

(15) Coffee, 35c.; Music, 25c.; Collection of Poems, $1.50.

(16) Collection, 25c.

(17) Telephone Rental, $1.50; Steak, 30c.; Rocker, $3.75;

Suit for George, $15.00; Skirt Cleaned, 75c.; Cheese,

50c.; Tongue, 25c.; Thread, 10c. ; Toothpicks, 10c. ;

Sugar, $1.00; Medicine, 50c.
(19) Lemons, 20c.; Lace, 15c.; Telegram, 60c.; Scissors

Sharpened, 10c. ; Flour, $1.20; Graham, 25c.; Rock

Candy, 10c. ; Coal, $5.00; Powdered Sugar, 25c.;

Granulated Sugar, $1.00; Piano Tuned, $5.00;

Oranges, 25c. ; Birthday Present to Mother, $5.00.
(21) Laundry, 55c.; Help, 75c.; Pens and Pencils, 10c. ;

Hat, $4.00; Hooks and Eyes, 10c. ; Collar, 35c.;

Sugar, $1.00; Crackers, 10c. ; Cheese, 25c.; Mustard,

10c.

(23) Collection, 25c.

(24) Braid, 45c.; Fish, 15c.; Coffee, 45c.; Picture of Baby,

64 FARM ACCOUNTING

$1.50; Asbestos Pad, 15c.; Roast, 45c.; Oranges,
20c. ; Allowance, $30.00.
(26) Help, $2.00; Tailoring, $1.45; Pepper, 10c. ; Needles,
10c. ; Trip to Boone, $2.00; Hats for George and
James, $3.50.

(28) Ella, $1.00 ; Shoes Repaired, $1.25 ; Flower Seed, 25c. ;

Braid, 15c. ; Thread, 10c.

(29) Help for month, $10.00; Laundry, $1.00.

(30) Collection, 35c.

(31) Butter, Milk, and Cream for month, $6.45; Poultry

for month, $4.65 ; Vegetables for month, $2.80.

Add all the columns. The results should be: Receipts. —
Cash, $111.60; Garden, $2.80; Dairy, $6.45; Sundries, $4.65.
Expenditures. — Groceries, $12.75; Meat, $3.70; Poultry and
Dairy, $11.85; Clothing, $29.00; Furniture and Utensils,
$7.60; Help and Laundry, $17.30; Books and Education, $2.05;
Physician and Medicine, 50c.; Light and Fuel, $6.20; Gifts,
$6.35; Personal, $1.35; Incidental, $13.95. Balance as before.

LESSON 14
CONTINUED INVENTORY

I. General Instructions.

Where the farmer keeps only a bank account and a detailed
inventory, it is advisable to keep the inventories in the con-
tinued form, illustrated on page 17. It is well, also, to use
the first column for memoranda of dates of purchase, births,
etc. The ordinary Trial Balance Book, which may be pur-
chased in any stationery store, at a very reasonable price, is
the best book for the purpose.

II. Written Work,

Prepare a continuous inventory from Statements Nos. 1, 2,
and 4 similar to the illustration on page 17.

SUPPLEMENTARY EXERCISES 65

Supplementary Exercises

To be assigned at the discretion of the instructor.
1. ORIGINAL FARM ACCOUNTS

In order to gain additional practice and confidence in your
work, you may now prepare an original set similar to the ones
already worked out. Study over the work already completed,
and if you have any suggestions and criticisms of the system
of accounts, talk them over with your instructor. If your
suggestions are acceptable, you may embody the changes in
this set, otherwise you will follow the preceding sets very
closely. The complete set must have at least five entries in
each column, and the totals should not be far from those in
the sets already completed. A higher grade of work is ex-
pected than heretofore.

Directions.

1. Prepare an inventory similar to the one shown on page
17. The amounts should be close to the results given in
Lesson 1.

2. Write two months* imaginary entries as close to actual
experience as possible. Students from the farm should secure
the material from home or from farmer friends.

3. Complete the year's work by taking estimates for the
remaining months.

4. Prepare a closing inventory for the end of the year.

5. Prepare a statement similar to the one given on
page 47.

6. Hand in your work with suggestions and criticisms.

2. ORIGINAL HOUSEHOLD ACCOUNTS

Prepare an original household record on the same plan as
the original farm record. The totals should conform approxi-
mately with one of the months in the household summary.

Hand in your work for approval.

3. ORIGINAL BALANCE SHEET

Prepare a balance sheet of the work done in the two pre-
ceding lessons, exactly like the one you prepared last, and hand
in for approval.

66 FARM ACCOUNTING

4. SHOP ACCOUNTS

Farm and shop bookkeeping do not differ in principle.
They differ only in titles of accounts. The books used are the
same as in the farm accounts, except special records adapted
to the needs of the shop. The labor record need not differ
at all. Taking the Cash Book furnished in your set, note that
the number of columns and the arrangement are exactly the
same as in the farm accounts. Only the titles of the columns
are different. The titles given below are self-explanatory,
except the Merchandise and the Supply column. A large num-
ber of shops and mills carry a small stock of merchandise
which is sold at retail. Where this is done, it is preferable to
keep it strictly separate from the manufacturing end of the
business. The shop should buy from the store at regular
prices, and charge it with any supplies furnished for sale.
Where it is found impracticable to keep a separate set of
books, a column is provided for receipts from merchandise sold
and one for payments for merchandise purchased. Taking
into account the inventories at the beginning and end of the
year, these columns give the result of this branch of the busi-
ness. In the Supplies column is entered only consumable
material used in the process of manufacture, such as oil, cotton
waste, sandpaper, files, and the like. The Sundries column is
used for all items which do not fall under any special column.
For instance, if interest is paid on a note, it is entered in the
Total Payments column and also in the Sundries column. It
is frequently necessary to show hospitality in closing deals
in which a shop of any consequence is interested. • Such
entertainment expenses would be entered in the Sundries
column.

Directions.

1. Head all the columns in the Cash Book as follows:
Under Receipts — Merchandise, Manufacturing. Under Pay-
ments— Hardware, Lumber, Supplies (Machinery and Tools),
Repairs, (Buildings and Improvements), Labor, (Freight and
Express), Office, (Light, Fuel, and Power), Merchandise.

2. Prepare an imaginary inventory of a planing mill,
with $10,000.00 capital, having a merchandise inventory of

SUPPLEMENTARY EXERCISES 67

$2,000.00 consisting of house fittings, light hardware, etc.
Use the form illustrated on page 18.

3. Write up an imaginary month's business of receipts and
payments, taking care that there be at least two entries illus-
trating each column. Follow the plan illustrated on pages
44 and 45.

4. From the above figures prepare a probable estimate of
the year's business.

5. Prepare a statement similar to the one shown on
page 47.

6. Hand in your work for approval and criticism.

LESSON 15
REVIEW QUESTIONS

Write the following questions and their answers on paper
8^ X 11 inches and submit to your teacher for approval: —

1. What is the object of keeping books?

2. What is the use of the Day Book? Prepare a specimen
Day Book page of at least five entries.

3. What entries are properly made in the Day Book?

4. Describe the Bill and Receipt File and explain its use.

5. How is an inventory taken? Of what does it consist?

6. What are Resources? Liabilities? Profits? Losses?

7. What are Accounts Receivable? Accounts Payable?

8. Prepare a specimen Account Receivable and also a speci-
men Account Payable.

9. What should determine the time of the year when the
farm balance sheet is taken?

10. What are the disadvantages of single entry?

11. Prepare a specimen of each of the special records sug-
gested on pages 102 to 105.

12. Which is the principal book in the second method
(modified double entry) ?

13. What is the value of the special column provided in
the Journal? Suggest columns that might be added.

14. How is each side of the Cash Book balanced?

15. How do you find the cash on hand?

68 FARM ACCOUNTING

16. If a bank account is kept, how do you find the cash on
hand ?

17. Describe how household accounts are kept.

18. What allowance for household besides cash? Why are
these allowances both debited and credited at the time they
are entered? How are these allowances entered in the gen-
eral Cash Book?

19. How is the cash on hand found in the household ac-
counts ?

20. Describe how the Sundry columns are itemized.

21. Of what three principal headings does the financial
statement consist?

22. State the steps necessary in preparing the financial
statement.

23. State some of the advantages of banking.

24. What is meant by depreciation? What are the. rates
commonly used?

25. How may land be said to depreciate in value?

26. Describe three methods of finding the profit, or loss,
from live stock. From different crops.

27. What is the principle difl'erence between farm and shop
accounts ?

28. How may a large crop prove to be a loss to the com-
munity?

29. Write a paragraph pointing out the importance of
records for the farmer.

30. Write a paragraph of general review of the system of
bookkeeping you have now finished, and point out its merits
and defects.

31. In finding the actual net gain or loss on accounts of
production, what corrections must be made?

32. Give the rule for finding the profit or loss in the balance
sheet.

33. What is the distinction between equipment and sup-
plies?

34. What is the distinction between improvements and re-
pairs ?

Third Method

A system of double entry, best adapted to a business having
a large number of personal accounts. The Ledger is the
basis of the system ; the Journal is a modification of the Day
Book, containing the original entries, the cash account, and
the classification of entries.

CHAPTER V

DOUBLE ENTRY

In a credit business, where the titles of accounts are nu-
merous and where goods are bought and sold on account, it
is necessary to use a Ledger instead of special columns in
the Cash Book. The two methods are often combined by
carrying the details of certain accounts in special columns in
the Journal and Cash Book and posting only the totals into the
Ledger. The Ledger is practically always used in commercial
bookkeeping. The only essential difference between commer-
cial and farm bookkeeping lies in the titles of accounts. The
chief sources of the farmer's profit are generally shown under
crops, live stock, dairy, etc.; that of the merchant under
merchandise; those of the banker under interest, discount,
and so on. The principles of accounting are the same in
all cases.

Books and Accounts

The double entry Journal and Ledger will be employed in
this method. Since it is designed to illustrate a variety of
titles, the expense account has been divided into freight,
interest, discount, and general expense, while the trading
account is divided into grain and feed, and produce. The
accounts are further discussed in Lesson 17.

The Joamal

The Journal is a book of record in which entries are ar-
ranged under debits and credits in a convenient form for
posting. The simplest form has two money columns, one
for debits and the other for credits, but it is often convenient
to use special additional columns for accounts having frequent
entries, such as cash, etc., as illustrated on page 78.

The Ledger

The Ledger is a book of record in which entries are classi-
fied under separate heads or titles called accounts. The left

(70)

DOUBLE ENTRY 71

side of the account shows the debits and the right side the
credits. (See page 77.) A Ledger account is balanced by
deducting the smaller side from the larger, as shown on page
82. A double entry Ledger must be in balance at all times;
that is, the debits must equal the credits.

Terms and Definitions

One object of this set is to familiarize the student with
terms frequently used in business. The following list of terms
should be learned thoroughly in connection with Lessons 16
and 17.

Account. — A collection of debits and credits under one title,
such as cash, produce, merchandise, John Jones, etc.

Accounts Receivable. — Amounts due the business from
others.

Accounts Payable. — Amounts due others from the business.

Allowances. — Amounts paid for the use of money or serv-
ices, such as interest, discount, taxes, etc.

Assets. — The property or capital of the business.

Balance Sheet. — A formal statement of the results of a
business for a given period, usually shown under resources
and liabilities, losses and gains, net worth or net insolvency.

Balance. — The difference between the debits and credits in
an account.

Bank. — A market for money and credit; an institution for
the safe keeping of money.

Bills Payable. — Signed obligations due others.

Bills Receivable. — Signed obligations due the business.

Bookkeeping. — A record of business transactions.

Business Transaction. — Exchange of values or services.

Capital. — The amount invested in a business.

Cash. — Money and negotiable papers payable at sight, used
as money, such as checks, bank drafts, money orders, etc.

Cash Book. — A record of cash receipts and payments.

Credit. — A statement of obligations by the business, of a
gain, or of goods parted with.

Debit. — A statement of obligations to the business, of a loss,
or of goods received.

Discount. — An allowance paid for the advance of money or
for payment of bills in advance of due date.

72 FARM ACCOUNTING

Double Entry. — A system of bookkeeping in which the
debits always equal the credits, and in which accounts are kept
with persons, things, and allowances.

Draft. — An order of one party on a second to pay money
to a third party.

Drawee. — The party who pays a draft.

Drawer. — The party who issues a draft.

Expenses. — Costs of conducting the business.

Good Will. — An amount which a business is assumed to be
worth above the net property assets. It depends on the earn-
ing capacity of the business.

Insolvency. — The net amount by which the liabilities exceed
the assets.

Interest, — The amount paid for the use of money.

Inventory. — A statement of the assets and liabilities of the
business.

Invoice. — An itemized statement of goods bought or sold.

Journal. — A book in which entries are arranged under
debits and credits in a convenient form for posting.

Ledger. — A book in which entries are classified under sepa-
rate heads or titles called accounts. The left side of the
account shows the debits and the right side shows the credits.

Liabilities. — Accounts and obligations due others from the
business.

Merchandise. — Goods bought and sold for profit.

Payee. — The party to whom payment is made.

Posting. — Entering debits and credits under the respective
accounts in the Ledger.

Principal Books. — Books from which or to which posting
is. done.

Present Worth. — The excess of assets above liabilities.

Resources. — Same as assets.

Single Entry. — A system of bookkeeping in which accounts
are kept with persons only.

Trial Balance. — A comparison of the debits and credits of
the Ledger in order to ascertain their equality.

Voucher. — A written statement or evidence of a business
transaction.

DOUBLE ENTRY 73

General Principles

(1) In the ordinary Journal and Ledger method of double
entry bookkeeping there are one or more debits and one or
more credits involved in every transaction, and the debits
always equal the credits. (2) In double entry accounts are
kept, not only v^ith persons, but also with property and allow-
ances.

ILLUSTRATIONS

(a) Smith buys a Jersey cow for which he pays cash,
$65.00. Here Live Stock is debited because it comes into our
possession, and Cash is credited because it goes out of our
possession. (See illustration, page 77.)

(6) Smith hands his wife $30.00 for household use. Here
Household is debited because it was the cause of an outlay,
and Cash is credited because it went out of our possession.
The $10.00 expended on crops, page 77, is treated in a similar
manner.

(c) Smith gold 80 bu. Corn for $52.00 cash. Here Cagh is
debited because it comes into our possession and Crops are
credited because corn goes out of our possession. Grain
might have been used as the title of the account instead of
Crops; Hay, Seed, Fruit, Vegetables, etc., are other titles
which might be used, according as the farmer desires minute
classification or more general accounts.

General Rules for Journalizing

Debit (always left side) Credit (always right side)

1. Things that come into 2. Things that go out of

our possession. our possession.

3. Persons who get into 4. Persons who get out of

our debt, or when we get out our debt, or when we get into

of their debt. their debt.

5. Allowances, when al- 6. Allowances, when al-
lowed to others. lowed to us.

The General L.a>v of Debit and Credit

The foregoing rules may be stated in the form of a general
law, as follows: —

74 FARM ACCOUNTING

Debit whoever or whatever causes an outlay or a decrease
in assets.

Credit whoever or whatever causes an income or an increase
in assets.

EXERCISE

Suppose we have the following transactions during the
month of April, 1909, and we decide to record them in a
Journal and Ledger: —

April 1. Bought 12 bu. Seed Wheat for cash, $10.00;
sold 2 tons Clover for cash, $12.00; paid $30.00 for
Household Expenses; sold 80 bu. Corn @ 65c. —
$52.00.

(5) Bought 1 Jersey Cow for cash, $65.00.

(6) Sold 2 Steers for cash @ $40.00.

(7) Sold 100 bu. Corn to J. N. Smith on account @ 65c.

Prepare the journal entries. Study the form on page 75
and apply the rules for journalizing.

Posting

Posting is the transferring of debits and credits from other
books into the Ledger under individual titles called accounts.
Since all the debit items are found in the left money columns
in the Journal and all the credit items in the right columns,
ft is evident that they should occupy the same columns in the
Ledger. Trace the above entries into the Ledger on page 77.

DOUBLE ENTRY

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76 FARM ACCOUNTING

Illustrative Lessons

LESSON 16

JOURNALIZING

I. General Instructions.

Journalizing is arranging debits and credits in a convenient
form for posting. Use four-column Journal paper. If this
is not furnished in your outfit of blanks, rule additional col-
umns to correspond with the illustration, page 17. Follow
the directions and rules given on page 73. Skip one line
between each entry, placing the date on this line, as illustrated
on page 78. All cash is entered in the first two money col-
umns, and all other amounts in the next two columns. Copy
the opening paragraph in the explanation column. The Day
Book part is written first and the Ledger titles immediately
below, as illustrated. Many bookkeepers post without jour-
nalizing, directly from the invoice or Day Book, but for the
beginner it is preferable to use the Journal. •

II. Written Work.

Following are extracts from your Day Book, as produce
merchants, which you will now journalize: —

June 1, 1910.
Student (write your name) and Edward Harvey have this
day formed a copartnership under the firm name of Student
& Harvey, for the purpose of conducting a feed and produce
business at Auburn, 111. Each partner invests $3,000.00 cash.
The profits and losses are shared equally. The student is to
receive $100.00 a month for his services and Mr. Harvey
$80.00 a month. The student is a skilled accountant and will
have general charge of the oflfice. (Write the opening entry
in the Journal as illustrated on page 18.)

(1) Each partner has paid his investment. (Dr. Cash;
Cr. each partner. Rules 1 and 4, page 73.) De-
posit $6,000.00 in the First National Bank. Keep
a special bank account, as illustrated on page 26.
No entry of deposits is required in the Journal.

DOUBLE ENTRY

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FARM ACCOUNTING

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DOUBLE ENTRY JOURNAL

DOUBLE ENTRY 79

Deposit all cash as it comes in and make all pay-
ments by check.

(2) Bought store and fixtures of Wm. Hayward & Co., 110

W. Green St. : Building and Lot, $2,000.00 ; Fur-
niture and Fixtures, $500. Paid (check No. 1)
$1,000.00; gave our note, due in 60 days, for the
balance. (Dr. Real Estate, and Furniture and Fix-
tures; Cr. Cash and Bills Payable. Rules 1 and
2, page 73.)

(3) Rented store room, No. 9 Canal St., for $40.00 a

month. Paid one month in advance. (Dr. Ex-
pense; Cr. Cash. The expense account is some-
times divided into Rent, Salaries, Light and Fuel,
etc., but here the expense account includes all such
items.)

(4) Bought of Willard Johnson, Ames, Iowa, on account:

20 tons Timothy Hay @ $15.00; 25 tons Prairie
Hay @ $12.00. (Dr. Grain and Feed; Cr. Willard
Johnson.) Paid freight on above, $85.00. (Dr.
Freight;- Cr. Cash.) Sold to Richard Morris, 340
W. 10th St., on account: 10 tons Timothy Hay @
$18.00. (Dr. Richard Morris; Cr. Grain and Feed.)

(5) Sold to John Rollins, 432 E. 5th St., on account: 5

tons Prairie Hay @ $15.00.

(6) Paid Willard Johnson for invoice of June 4. Bought

of Winkle Elevator Co., Bancroft, Iowa: 1 car
Wheat, 997 bu. @ 97c.; 1 car Barley, 830 bu. @
51c.; 1 car Corn, 1,073 bu. @ 69c. (Freight pre-
paid; Dr. Grain and Feed; Cr. Winkle Elevator
Co.)

(8) Received cash of Richard Morris, on account, $100.00.

(9) Sold to Star Milling Co., Detroit, Mich., on account:

500 bu. Wheat @ 99c. Received of John Rollins
his note, due in 10 days, payable at Citizens' Na-
tional Bank, in full of his account; interest, 6 per
cent.
(10) Bought of Horton, Brown & Co., Spring Valley, Iowa,
on account: 1,500 doz. Eggs @ 21c.; 500 lbs. But-
ter @ 27ic.; 100 lbs. Y. A. Cheese @ 15c. Paid

80 FARM ACCOUNTING

Freight on above, $3.50. Paid Cramer & Co. for
Office Supplies, $15.00. (Dr. Expense; Cr. Cash.)
Sold to Hotel Emery, on account, 90 doz. Eggs @
25c.

(11) Accepted Horton, Brown & Co.'s draft on us in favor

of Richard & Lytton, at 3 days' sight, payable at
Citizens' National Bank, for amount of invoice of
June 10. (Dr. Horton, Brown & Co.; Cr. Bills
Payable.) Sold to Western Produce Co., Chicago,
on account : 900 doz. Eggs @ 25c. ; 300 lbs. Butter
@ 29c.

(12) Paid Winkle Elevator Co., on account, $1,000.00.

(13) Sold to Chicago Malting Co., on account, 415 bu.

Barley @ 60c. Received remittance from Star
Milling Co., in full of invoice of June 9.

(15) Paid our acceptance of June 11, due to-day. Gave

Winkle Elevator Co. our note at 30 days, payable
at First National Bank, for balance of account.

(16) Gave Edward Harvey a check of $100.00 for his

private use. (Dr. Edward Harvey; Cr. Cash.)

(17) Sold to Empire Livery, on account, 300 bu. Corn @

75c.

(18) Sold to G. W. Gardner, for cash, 25 bu. Corn @ 74c.

(Dr. Cash; Cr. Grain and Feed.)

(19) Received cash of John Rollins for his note due to-day,

with interest at 6 per cent. (Dr. Cash; Cr. Bills
Receivable and Interest.)

(20) Sold to Henry Simmons' Sons 300 bu. Barley @ 60c.

They paid $100.00, balance on account. (Dr. Henry
Simmons' Sons, $80.00, Cash, $100.00; Cr. Grain
& Feed, $180.00.)

(22) Sold to Condon Construction Co., on their 60-day note :

10 tons Prairie Hay @ $12.25 ; 10 tons Timothy @
$15.00; 300 bu. Corn @ 75c.

(23) Student renders an itemized bill for small expense

items paid in cash as follows: Stationery, $3.25;
Collections and Exchange, $3.40; Entertainment,
$5.40; Postage, $3.00; Telegram, $1.75; total of
Check, $16.90. (Dr. Expense; Cr. Cash.)

DOUBLE ENTRY 81

(24) Paid for 6 tons Coal @ $4.00, for use in store.

(25) Sold to Hotel Emery, on account: 50 doz. Eggs @

25c. ; 105 lbs. Butter @ 30c.

(26) Bought of Iowa Produce Co., on account: 100 boxes

Gano Apples @ $2.50; 100 boxes Mo. Pippins @
$2.25 ; 50 boxes Winesaps @ $3.50 ; 25 crates Pine-
apples @ $1.75. Paid Freight on above, $11.30.

(27) Prepaid our note in favor of Wm. Hayward & Co.,

given June 2, for which they allow a discount of 6
per cent, to maturity — 35 days. (Dr. Bills Pay-
able; Cr. Cash and Discount.)

(29) Sold to H. E. Johnson, 27 Canal St., on account: 25

doz. Eggs @ 25c. ; 50 lbs. Cheese @ 17c.

(30) Credit each partner with his salary as per articles of

copartnership. (Dr. Expense; Cr. each partner.)
Paid monthly dues and expenses as follows : Tele-
phone Rental, $3.00; Commercial Club, $5.00; Pay
Rolls for June, $150.00; Water Rent, $4.00. (Dr.
Expense; Cr. Cash, four checks.)

Now add all the columns of the Journal and see if the sum
of the two debit columns equals the sum of the two credit
columns. The cash balance should be $1,938.67.

LESSON 17

POSTING
I. General Instructions.

As explained on page 72, posting consists of transferring
debits and credits from other books into the Ledger. The left
half of the Ledger page is devoted to the debits and the right
half to the credits. Every amount found in the Journal debit
columns must be found on the debit side of the Ledger (either
in individual items, or in totals) under the appropriate ac-
count; and all credit items in the Journal must be found on
the credit side of the Ledger. It is, therefore, evident that
since the Journal balances, the Ledger will also balance, if the
work is correct.

FARM ACCOUNTING

DOUBLE ENTRY LEDGER

DOUBLE ENTRY 83

II. Written Work.

1. Study very carefully page 82 and note how the titles
are written. Note that the cash items in the Journal are
not posted separately, but only the totals at the end of the
month.

2. Take three sheets of Ledger paper and number the
pages from 1 to 6. On the first page give one fifth page to
each of Student, Edward Harvey, Cash, Real Estate, and Fur-
niture and Fixtures; page 2, give equal space to Grain and
Feed, and Produce; page 3, equal space to Bills Receivable,
Bills Payable, Expense, Freight, Interest and Discount; pages
4 to 6, one fifth page to each personal account as they occur.

3. You are now ready to post. Place the Ledger to your
right and the Journal to your left. Turn to Student's account
and in the date column write July 1, 1910; in the folio column,
1 (meaning that the entry is found on page 1 in the Journal) ;
in the amount column, $3,000.00. Now write 1 to the left of
your name in the Journal, indicating that the amount is
posted on the first page of the Ledger. This is very impor-
tant. Next turn to Edward Harvey and post this item in the
same manner. In the same way proceed with all the credit
items. The last item to be posted is the total credit of cash,
$5,016.45, under June 30. The numbers in the folio columns
will be the same until new pages are turned. The number
opposite the entry in the Journal is always the page of the
Ledger on which the account appears. Add the totals of the
Ledger accounts and observe that the grand total equals
the total of the credit columns of the Journal.

4. Proceed in exactly the same manner with posting the
debit entries and prove your work the same as the credits.
If the debit and credit postings are equal, your work is prob-
ably correct, though amounts may have been posted to the
wrong account. Such errors could not be detected except by
checking.

5. Observe that several accounts balance, such as Horton,
Brown & Co., Willard Johnson, and others. Draw a red line
across the money columns under the last amount on both sides
of all accounts which balance. Accounts having a number of
entries on either or both sides should be totaled and the

84 FARM ACCOUNTING

amount written under the respective columns in very light
pencil figures. You are nov^ ready to take the trial balance.

LESSON 18
THE TRIAL BALANCE
I., General Instructions.

The trial balance is taken for the purpose of discovering
whether the Ledger is in balance or not; that is, if the debits
equal the credits. It may be taken either by using the totals
of the debits and credits of each Ledger account or by taking
the difference between the two sides. The latter method has
several advantages. Both methods should be used if there is
any difficulty in getting the balance. The only satisfactory
rule for discovering errors in the trial balance is the follow-
ing: Check all the work.

IL Written Work.

Take a sheet of Journal paper and write the page, title,
and balance of all the accounts in the Ledger, except those
which balance, as follows : —

THIAL BALA.NCK, .ll'XE ;;0, 1910

1 Student ?

1 Edv^ard Harvey ?

1 Cash ?

1 Real Estate ?

etc., etc

Total $7,913.38 $7,913.38

LESSON 19
THE BALANCE SHEET

I. General Instructions.

The balance sheet consists of two statements: one showing
the losses and gains, the other showing the resources and
liabilities. These statements consist of the items found in
the trial balance and of the inventories. Having completed
the trial balance and inventories, the books are not needed
further in preparing the balance sheet. Losses or gains are

DOUBLE ENTRY

generally found in accounts of allowances and property in
which we deal, or which show a rise or fall in value ; resources
and liabilities are generally found in accounts representing
property and persons. Resources appear on the debit side;
liabilities and gains, on the credit side.

II. Written Work.

1. The first step is to take an inventory. This consists of
property on hand, including Grain and Feed, Produce, Fur-
niture and Fixtures, and ReaJ Estate. Going through the
stock we find: —

GRAIN AND FEED

748 bu. Corn @ 69c.
115 bu. Barley @ 51c.
497 bu. Wheat @ 97c.
10 tons Prairie Hay @ $12.00

PRODUCE

435 doz. Eggs @ 21c.

95 lbs. Butter @ 27ic.

50 lbs. Cheese @ 15c.

25 crates Pineapples @ $1.75
100 boxes Ganos @ $2.50
100 boxes Pippins @ $2.25

50 boxes Winesaps @ $3.50

Real Estate and Office Fixtures at cost value. Prepare the
inventory as illustrated on page 20.

2. Going through the trial balance we find that the fol-
lowing accounts represent losses or gains (fill in the
amounts) : —

LOSSES AND GAINS

Expense . . .
Freight . . . ,
Student (1)
Harvey (1) .

Total

? Grain and Feed (2) .

? Produce (2)

? Int. and Discount . . .

Total

(1) The difference between the two sides, usually written in
red ink; (2) is found by subtracting the amount in the trial
balance from the inventory.

3. Since the loss and gain account is made up only at the
end of the balance period, it should always be closed and the
balance transferred to the proprietor's accounts.'

86 FARM ACCOUNTING

4. The resources and liabilities are as follows (insert the
figures and total) : —

RESOURCES AND LIABILITIES

Cash ? Robert Morris ..... ?

Real Estate ? Henry Simmons Co. . ?

Fur. and Fixtures . . ? Western Produce Co. ?

Grain and Feed (In- Bills Payable ?

ventory) ? Iowa Produce Co. ... ?

Produce (Inventory) ? Student ?

Bills Receivable .... ? Edward Harvey .... ?

Chicago Milling Co. . ?

Empire Livery ?

Hotel Emery ?

H.E.Johnson ?

Total $7,964.01 Total $7,964.01

LESSON 20
CLOSING THE LEDGER

I. General Instructions.

The object of closing the Ledger is to balance the loss and
gain accounts and to bring the final net gain or net loss into
the partners' accounts and thus leave only the accounts show-
ing resources and liabilities open for the next balance period.
The balance sheet furnishes a perfect guide as to the accounts
to be closed. All the accounts represented in the loss and
gain statement must be closed. Accounts showing resources
and liabilities are not closed, but any account may be balanced
if it contains a sufficient number of entries to justify it. Bal-
ancing an account consists of canceling equal amounts from
both sides of the account, ruling it, and bringing down the
balance on the proper side below the ruling.

II. Written Work.

With the balance sheet before you, turn to the Grain and
Feed account in the Ledger. Enter the inventory on the

DOUBLE ENTRY 87

credit side, as illustrated on page 82. The difference between
the diebits and credits is now $537.60, or the gain on this
branch of the business. Enter this on the smaller, or debit,
side, then rule the account as illustrated on page 82. (The
ruling may be done in red or black ink as desired.) Note that
the ruling appears on the same blue line on both sides of the
account, even if there are more entries on one side than on
the other. The single line crosses the money column only;
the double line crosses all except the explanation columns.
Next bring down the inventory on the debit side below the
ruling. The reason for this is that having entered it on the
credit side temporarily, in order to show the proper gain, it
must also be entered on the debit side in order to restore the
balance of the Ledger. Proceed in the same manner with the
remaining loss and gain accounts, except that where there is
no inventory the account is closed as it stands in the Ledger.
Next enter half of the net gain, shown in the loss and gain
statement, on the credit side of each partner's account. Close
the account as illustrated on page 82 and bring down the
present worth. This completes closing the Ledger.

Note carefully the steps leading up to closing a set of
books : —

1. The trial balance.

2. The balance sheet.

3. Closing the Ledger.

Never rule an account until the trial balance and balance
sheet are known to be correct.

LESSON 21 (Optional)
ORIGINAL ENTRY LEDGER

L General Instructions.

It was stated on page 76 that it is not necessary to jour-
nalize, but that it is very helpful in order to avoid mistakes.
Most business men prefer the Journal and Cash Book for the
original entries. The difficult thing to carry out in practice
without journalizing is to post every entry tivice, on both the
debit and the credit sides. Thus, when a sale of grain is made

88 FARM ACCOUNTING

for cash, cash is debited and grain is credited, according to
the rules of journalizing. Since the full explanation is writ-
ten in the Ledger, it is best to use the ordinary Day Book
form as illustrated on page 22 and used in Lesson 3.

IL Written Work.

On two-column Journal paper open the same accounts as in
Lesson 3 and post the transactions in Lesson 16 directly into
the accounts, as illustrated on page 22. The result will be
exactly the same as given in Lesson 17. It will, therefore, bo
unnecessary for you to prepare the statements and close the
Ledger. The trial balance must be taken, however, same as
heretofore.

PART li
COST ACCOUNTS AND SPECIAL RECORDS

COST ACCOUNTS AND SPECIAL RECORDS

CHAPTER VI

COST OF PRODUCTION

Too often a good farm is compelled to carry unprofitable
experiments and the whole business is pronounced a failure
without an adequate attempt to find a remedy. In addition to
the foregoing records (Second Method), Mr. Harris has kept
accurate cost accounts of the main branches of his business.
In cost accounting there are four principal elements to con-
sider: Cost of material, labor, interest, and depreciation.
The cost records are independent of all the rest and may be
kept of every branch of the business, if desired, or limited to
one or more phases. In this instance cost records have been
kept of live stock, grain, hay, dairy products, and improve-
ments. The Agricultural Experiment Stations are always
willing to give the farmer important advice and assistance
regarding the stock, grain, fruit, etc., best adapted for differ-
ent localities and purposes. But conditions frequently arise
where it is important for the farmer to carry on his own
experiments. Your own Experiment Station will doubtless
be glad to cooperate and suggest methods for carrying on such
experiments even to the extent of furnishing necessary blanks
and material. Important. bulletins on the subject may be had
for the asking from the Department of Agriculture, Wash-
ington, D. C.

The following announcement in the Crop Reporter for May,
1908, indicates what the government is doing in this direc-
tion : —

** Cost of Producing Farm Products"

"The Bureau of Statistics is making an investigation of the
cost of producing farm products in different parts of the
United States. Blank forms have been printed upon which

(91)

92 COST ACCOUNTS AND SPECIAL RECORDS

to make reports, and this Bureau desires to receive the names
of such farmers as have kept records of cost of producing
crops, or are well informed upon the subject of cost of crop
production in their locality, in order that blank schedules may
be sent to them to fill in. Individual reports will not be pub-
lished— only the average of many reports. Names should be
sent to the Bureau of Statistics, Department of Agriculture,
Washington, D. C."

Every farmer should avail himself of this important free
service. ''Keeping posted" is one of the characteristics of
the progressive and successful farmer. There are three ex-
ceptionally valuable bulletins on the subject which ought to
be in the library of every farmer : U. S. Department of Agri-
culture, Bureau of Statistics, Bulletin No. 48, and University
of Minnesota, Agr. Ex. Station, Bulletins Nos. 73 and 97.

Cost of Live Stock

Either of three methods may be employed in finding the cost
of live stock: —

First Method. — Ascertain exactly the total amount of grain,
hay, and roughage on hand at the beginning of the year, and
produced during the year. From this subtract the quantity
sold, including amount used by household and for seed, and
the amount on hand at the end of the year. The difference is
the quantity used for live stock. The value at market prices
is the expenditures of feed for live stock.

Find the total amount received for dairy products, including
amount used by the household. The difference between the
cost and the receipts is the gain. The disadvantages of this
method are that no account is taken of individual animals nor
of different kinds of stock. The herd as a whole may be a
paying investment and still there may be individual animals
carried at a loss. It is desirable that such records be kept, at
least occasionally, as will enable the farmer to eliminate un-
profitable animals.

Second Method. — The following actual record of a dairy
herd of twelve cows illustrates a much more satisfactory test
than the preceding. Individual record was kept of the milk
produced by each cow, but the feed was weighed for the

COST OF PRODUCTION 93

entire herd, and the average cost charged to each animal at
market prices.

Tests of Dairr Herd for March. 1909

No.
Cow.

Lbs. Milk
for Mo.

*Test.

Lbs. Fat.

Val. at 36c.

Cost of Feed.

Net Profit.

465

4.5

20.93

$7.53

$6.21

$1.32

372

5.0

18.60

6.70

6.21

.49

620

5.0

31.00

11.16

6.21

4.95

372

7.0

26.04

9.37

6.21

3.16

496

4.8

23.80

8.57

6.21

2.36

682

4.7

32.05

11.54

6.21

5.33

558

4.4

24.55

8.44

6.21

2.23

620

4.1

25.42

9.15

6.21

2.94

496

4.2

20.83

7.50

6.21

1.29

651

4.9

31.90

11.48

6.21

5.27

558

5.0

27.90

10.04

6.21

3.83

589

5.0

29.45

10.60

6.21

4.39

* These figures were obtained by the Babcock test, which is described in every modern
work on dairyinpr. It may be seen in any creamery.

Keed for the Month of March

Hay, 4,900 lbs. @ $9.00 per ton $22.05

Kale, 9,600 lbs. @ $2.50 per ton 12.00

Bran, 1,800 lbs. @ $30.00 per ton 27.00

Shorts, 900 lbs. @ $30.00 per ton 13.50

Total $74.55

$74.55 divided by 12 equals $6.21, average cost of feed.

With this average before him, a careful feeder will be able
to make mental corrections for each individual animal, accu-
rate enough for most practical purposes. The milk record has
been kept, as illustrated on page 102.

Third Method. — The difference between the second and third
methods is that in the latter accurate records are kept of indi-
vidual feed rations, while in the second method an average is
taken. The error resulting from averaging the feed between
all the animals in a large herd may be such as to unduly favor
certain animals and do injustice to others. The only abso-
lutely accurate method is to keep an account with each animal,

94 COST ACCOUNTS AND SPECIAL RECORDS

at least with such animals as show a tendency to be unprofit-
able. Page 97 shows an individual account with one of the
milch cows on the Harris farm. It is arranged on the regular
Ledger form. Opposite pages of the Day Book may also be
used. The detailed information regarding feed, milk, labor,
etc., is found in the respective records, illustrated on pages
102 and 103. Similar accounts are kept of each animal,
tested preferably during the entire lactation period. It is
only in this way that the careful farmer can determine
whether each animal is kept at a gain or a loss. The weeding
out of one or two unprofitable animals a year will pay for the
labor of keeping the cost records many times over.

Extension Bulletin No. 3, Iowa State College, says on this

subject : —

"There are a variety of diflferent methods used among suc-
cessful dairymen for securing records of their cows. When
accurate records are imperative it is necessary to weigh and
sample each cow's milk at each milking. For all practical
purposes, however, it is not necessary to weigh and sample the
milk from each cow oftener than twice a day for three days of
each month. Usually samples are taken on the first, tenth,
and twentieth of each month, thereby making six milk weights
on the record sheet and six separate samples of milk which
have been placed in a sealed jar bearing the cow's name.

''Directions.

''1. Arrange the scales, milk sheet, sample jars, and
sampler in a convenient place behind the cow stalls.

"2. Put at least one preservative tablet in each jar in-
tended for a composite sample. Be sure to place the remain-
ing tablets where children cannot get them, as they are
poisonous.

"3. Weigh the milk from each cow separately and record
the amount on the record sheet.

"4. Use a reliable sampler, or if one is not at hand use care
in mixing the milk by pouring from pail to pail before taking
out a sample with a small dipper. This is important.

COST OF PRODUCTION 95

"5. Keep the bottles where the children cannot get at them,
as the preservative is poisonous.

"After summing up the weights of milk from one cow for
the three days of the month you have the total pounds of milk
for an average three days. Divide the sum by 3 and you have
the average for one day, which multiplied by the number of
days in the month will give the monthly yield. It is not ex-
pected, nor is it essential, that these records be accurate to a
pound in ordinary dairy herds. When the milk is tested with
the Babcock machine the result is read as per cent, of butter
fat, — as 3.7 per cent, or 4.3 per cent. This indicates that there
are 3.7 pounds or 4.3 pounds of butter fat in 100 pounds of
milk. Multiplying the weight of the cow's milk for the month
by the test the result indicates the pounds of butter fat which
the cow has produced for the month. At the end of the year

96 COST ACCOUNTS AND SPECIAL RECORDS

it is a simple matter to add together the twelve monthly
records of butter fat. Multiply the sum of these weights by
the price per pound and the result indicates the value of the
product. The record for each member of the herd can be thus
worked out. A study of these records shows the comparative
value of the various cows in the herd.

"In order to know whether the cow is paying a profit or not
the owner must have a definite idea of how much feed she has
consumed in making this product. Knowing this, the actual
values of all the cows are easily determined. On dairy farms
where the hand separator is used it is safe to charge a cow for
food only while in milk. The skim milk will usually pay for
the cow's board while dry, and the calf and manure should
more than pay for the labor it takes to care for her. Why not
milk fewer cows and make more money?"

Cost of Crops

The principles laid down in respect to the cost of animal
products hold true also for the cost of farm crops. Two meth-
ods suggest themselves : Accounts with the various crops and
accounts with the different fields. Either method requires de-
tailed records of the labor, seed, fertilizer, etc., expended on
the crop and of returns not only for cash sales, but for prod-
ucts used by the household and for feed. On page 97 is
illustrated an account with the wheat crop in 1908.

COST OF PRODUCTION

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COST ACCOUNTS

CHAPTER VII

SPECIAL COST RECORDS

There are several convenient special records which ought to
be adopted besides those I have illustrated. It is not neces-
sary that expensive printed books be provided. A plain sheet
of paper may be ruled with little trouble and pasted in the
Bill File. In fact, this is in many respects preferable to
printed forms, because the forms can then be changed from
year to year to suit conditions. I illustrate only the follow-
ing:—

Labor Records

The best form of a labor record is illustrated on pages 102
and 104. In one, account is kept with the object upon which
labor is expended; in the other, with the laborer. For ordi-
nary purposes, page 102 is the most convenient, but where
several men are engaged on a project Form (a), page 104, is
preferable.

Milk Records

Two milk records are illustrated on pages 102 and 104. Each
possesses certain advantages over the other. The weekly rec-
ord need not be so large and admits of larger spaces, while the
monthly record exhibits the entire month's result on a single
page. The weekly record is more appropriate for filing, being
less liable to soiling. Whichever form is used, it should be
tacked to a board in a convenient place for the milker. A
spring scale, graduated to hundredths, should be hung near
the record, far enough from the wall for the pail to hang
freely. (See illustration, page 95.) The original records
should be filed for at least a year. If a daily time book is kept,
it may also be adapted for the milk and poultry records.

Poultry Records

Practically the same form as the milk record can be used
conveniently for the egg record, and it is not deemed necessary
to enlarge further on the subject.

(98)

SPECIAL COST RECORDS 99

The methods of improving the poultry stock, and other use-
ful information regarding the poultry business, are found in
numerous books and bulletins on the subject. ,

Duplicating Sales Book

It is often convenient to retain a duplicate of sales, orders,
receipts, etc. It will be found very helpful to the farmer and
to the dealer alike, if the farmer prepares a bill of the produce
he brings into town for sale. This will often avoid misun-
derstanding, and may save money. This is especially true if
the produce is sent in by children or by some one not connected
with the family. On page 104 is illustrated a very convenient
book which is kept in stock in most stationery stores. Where
this system is used, it is advisable that every sale be recorded,
and then listed as shown on page 103. In entering in the Cash
Book, the sale number should be inserted. All sales to mer-
chants should be considered as cash, even if the produce is
exchanged for merchandise. If sales are made on time, note
the fact on the bill, and enter it into the personal account, as
illustrated on page 22.

The Farm Plot

There is one more record which I cannot urge too strongly.
I refer to the yearly plots. This record will prove to be one
of the most valuable and interesting parts of the farm history.
A plot is easily made by first drawing a square on a blank
piece of paper and then sketching the fields. It is, of course,
unnecessary to draw this to scale. A close approximation is
all that is necessary. (See the illustration, page 105.)

A Practical Work Report

The excellent work report shown on page 101 is used on the
Beachview Farm, operated by Griffiths & Sons of Seattle. I
quote from their letter on the subject: —

''Our trouble has been to arrive at some satisfactory method
of obtaining the cost of production of the various crops and
kinds of stock. We are attempting to solve this in two
ways : —

"First, as to labor, by the weekly work report which the

100 COST ACCOUNTS AND SPECIAL RECORDS

foreman is instructed to fill out, one for each man on the
place, by quarters of a day. The bookkeeper can then appor-
tion the operating expenses, including labor, to the various
accounts.

^'Second, we have found it more difficult to apportion the
produce raised on the farm to the various stock accounts.
This can be done without much difficulty with the grain, but
with the hay, for instance, when cattle and horses are fed in
the same barn, from the same loft, but by different men, it is
a difficult matter to charge the various stock departments
with the amount used to even an approximation of correct-
ness." (See page 101.)

Office MethodH

Talk about office methods on the farm! Why not? Why
should not the average farmer enjoy at least a comfortable
desk and neatly printed stationery? Every boy loves "to do
business." Surround him with a business atmosphere on
the homestead and he will stay by you and succeed you in
your old age; continue in your slipshod methods and he will
move to town and become a cheap clerk instead of a landed pro-
prietor. Encourage your children to assist in your business;
make them feel that they are intimately associated with you.
Take them into your confidence and, as they grow older, into
your counsel, especially when you are considering your annual
balance sheet, and a greater prosperity, wider influence, and
a more contented family will be your reward.

SPECIAL COST RECORlDS

' ' '1^1

BBACHVIBW y^ R U.
WoTjt Report, Veok^ ^nJiinf.C/^P^^<^/C,l9lO.

Nanie\^X7^^<f*t^^ {^-^^^-^^^

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Account

Mon.

Tue.

W3d.

Thu.

Fri.

Sat.

Total Ranarka

Crdpa, Roots

iZMi^f

Crops, Grain

// -^

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Hogs

Horsos

Poultry

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WORK REPORT

102

Cost accounts and special records

MILK RECORD

Week

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SPECIAL RECORDS

SPECIAL COST RECORDS

103

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COST ACCOUNTS AND SPECIAL RECORDS

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SPECIAL COST RECORDS

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THE FARM PLOT

106 COST ACCOUNTS AND SPECIAL KECORDS

Illustrative Lessons

LESSON 22
MILK RECORD

I. General Instructions.

The milk record illustrated on page 102, Form 10, is kept
for the purpose of ascertaining the profitable and unprofitable
cows. As explained on page 94, it need not be a continuous
record, but should be kept for a week or a month whenever
the information is desired. It is very important, however,
that this ''weeding-out" process be performed regularly once
a year. The success or failure of the dairy farmer is likely
to depend, to a very large extent, on this practice. Let us
take for illustration a herd of fifteen cows. Form 10 is tacked
to a board and hung in a convenient place in the barn. A
spring balance, graduated to tenths of pounds, is suspended
near the record, as illustrated on page 95.

II. Written Work.

Following is the record of a mixed herd for the week ending
June 5, 1909, representing an actual Oregon herd. The fig-
ures in the first column under each day represent the morning
milking; those in the second, the evening. Record the follow-
ing data on Form 10 : —

Sun.

Mon.

Tues.

Wed.

Thur.

Fri.

Sat.

Test.

Kate,

12-10

12-11

10-13

11-13

12-11

11-12

12-12

4.5

Anthia,

13-13

13-14

12-13

14-13

14-12

13-11

5.0

Digit,

7- 8

8- 7

8- 9

8- 8

10- 8

9- 9

7.0

Lady,

12-11

10-11

10-12

10-11

11-10

12-11

11-11

4.8

Beauty,

11-11

11-10

11-13

14-12

12-11

12-12

13-11

4.7

Glenco,

12-13

11-12

10-12

10-11

11-11

12-10

4.4

Pet,

12-10

11-10

13-12

12-11

11-12

13-12

12-11

5.1

Bess,

10-11

11-11

10-12

11-10

11-12

11-10

11-12

4.6

Cynthia,

12-13

11-12

12-11

12-12

11-12

13-12

11-11

4.9

May,

9-10

10-10

10- 9

9- 9

9-11

11-10

10- 9

5.4

Gertie,

10-11

10- 9

10-12

10-10

9-10

11-12

11-10

5.8

Alta,

12-12

13-14

13-12

14-13

13-13

12-13

13-14

4.7

Ruby,

8- 9

7- 9

8- 9

7- 8

8- 8

9- 9

9-10

6.2

Pauline,

14-15

14-14

14-13

14-15

15-15

14-15

15-15

4.3

Princess,

16-17

16-16

17-18

17-17

16-17

16-18

17-17

4.4

SPECIAL COST RECORDS 107

Find from the record :—

1. The total weight of milk.

2. The total weight of butter fat.

3. The weekly income from each cow, assuming that but-
ter fat is worth 31c. per lb. and skimmed milk 25c. per cwt.,
allowing 10 per cent, for loss of weight in skimmed milk.

4. The gain per cow based on the feeding record, Lesson
23, Form 9.

5. How can the result in (3) be proved correct?

LESSON 23
FEED RECORD
I. General Instructions.

The feeding record, page 102, Form 9, is a companion to the
milk record. Lesson 22. One is not kept without the other.
Both are kept for the purpose of checking up the profits
of the dairy cows. Three methods are fully discussed on
pages 92 and 93. This and the preceding lessons have refer-
ence to the third method. Suppose that Form 9 is tacked to
a board and hung in a convenient place in the dairy barn.
Below is the feed record of the herd in the last lesson.

IL Written Work.

Enter the following results in the respective columns. Only
the last six cows were fed hay.

Kate, weight, 800 lbs. ; Sunday, grain, 4 lbs. ; soiling, 64 lbs. ;
Monday, 4-63 ; Tuesday, 3^-63 ; Wednesday, 4-65 ; Thurs-
day, 4^-64 ; Friday, 3^-62 ; Saturday, 4-64.

Anthia, 975 lbs. ; 8-80, 8-80, 8-80, 8-80, 7-80, 7-82, 7-81.

Digit, 1,460 lbs. ; 6-92 daily.

Lady, 1,120 lbs. ; 8-90 daily.

Beauty, 830 lbs. ; 4-68 daily.

Glenco, 1,440 lbs.; 6-100, 6-110, 6-110, 6-100, 6-100, 6-100,
6-110.

Pet, 950 lbs.; 7-80 Sunday, Monday, Tuesday; 7-83 Wednes-
day, Thursday, Friday, Saturday.

Bess, 1,000 lbs. ; 6-86 daily.

108 COST ACCOUNTS AND SPECIAL RECORDS

Cynthia, 1,270 lbs. ; 8-100 daily.

May, 850 lbs.; 5-65 Sunday, Monday, Tuesday, Wednesday;

4-60 Thursday, Friday, Saturday.
Gertie, 900 lbs. ; 6-70 daily.
Alta, 1,375 lbs.; 8-100 daily.
Ruby, 1,050 lbs.; 24 lbs. hay, 4| grain, 42 soiling; 25-4-43,

23-5-45, 24-4i-44, 25-4-43, 25-4^-45, 23-5-43.
Pauline, 1,300 lbs. ; 27-6-45 daily.
Princess, 1,350 lbs.; 30-7-48 daily.

Find from the record : —

1. The total feed per cow and enter the result in the
proper column.

2. The weekly cost per cow when the grain mixture is
worth 95c. per cwt., soiling $1.05 per ton, and hay $10.50
per ton.

3. What changes should be made in the herd?

LESSON 24

LABOR RECORD

I. General Instructions.

As explained on page 98, a labor record may be prepared
monthly or weekly. The monthly form, illustrated on page
102, has many advantages. In the first column may be listed
either the various accounts to which the labor is to be charged,
as in this exercise, or a sheet may be devoted to each account
and the names of the laborers listed in the first column. The
latter plan is preferable in large enterprises. Sundays fall on
May 6, 13, 20, and 27. Mark "S." above those dates and
avoid placing any figures in the Sunday columns.

II. Written Work.

1. On Form 6 prepare the following pay roll for the month
of May, 1910, as illustrated on page 102 : —

Labor on Corn, Man and Team, May 7, 8, 9, and 10, 9 hrs.
each @ 30c. per hour.

SPECIAL COST RECORDS 109

Live stock, Man and Team, 18, 4 hrs. ; 28, 8 hrs. @ 30c. per

hour.
Orchard, 3, 3 hrs. ; 14, 2 hrs. ; 23, 1 hr. @ 15c. per hour.
Improvements, 7, 4 hrs. ; 12, 4 hrs. ; 19, 3 hrs. ; 25, 2 hrs. @

15c. per hour.
Machinery and Implements, 1, 1 hr. ; 5, 2 hrs.; 15, 1 hr. ; 22,

3 hrs. @ 15c. per hour.
Wheat, 4 and 5, 9 hrs. each; 16 and 17, 9 hrs. each, Man and

Team, @ 30c. per hour.
Onions, 1 and 2, 9 hrs. each; 11, 6 hrs. @ 15c. per hour.
Potatoes, 21, 9 hrs. ; 24, 6 hrs. ; 25, 5 hrs., Man and Team, @

30c. per hour.
Hay, 11, 3 hrs.; 14, 6 hrs.; 15, 4 hrs.; 18, 3 hrs., Man and

Team, @ 30c. per hour.
Oats, 26, 29, and 30, 9 hrs. each ; 31, 7 hrs., Man and Team, @

30c. per hour.

2. Add the number of hours under each account and enter
in the hour columns.

3. Find the amount under each account, and, finally, the
total labor.

LESSON 25
THE FARM PLOT

Read the suggestions regarding the farm plot on page 99.
On Form 11 draw to scale any farm with which you are
acquainted, preferably your own farm, if you own one. Lay
out the various fields and mark the crop and the acreage, as
shown on page 105. Draw it first in lead pencil, then in ink.

Supplementary Kxercises (Optional)

1. THE INVESTMENT

The census for 1900 gives the following apportionment for
land and improvements, buildings, implements, machinery,
and live stock for every $10,000.00 invested : —

110 COST ACCOUNTS AND SPECIAL RECORDS

Division.

Total.

Land
and Impr.

Buildings.

Imp.
and Mach.

Live Stk.

Atlantic States.

.$10,000

$5,737

$2,567

$606

$1,090

Atlantic States.

. 10,000

6,661

2,720

332

1,362

Central States . .

. 10,000

6,055

825

500

2,620

Central States. .

. 10,000

4,114

1,114

373

4,356

estern States . . .
Total

. 10,000

4,463

693

593

4,251

.$50,000 $27,030

$7,919

$2,404 $13,679

Average $10,000 $5,406 $1,584 $481 $2,736

Compare the above with two or more typical farms with
which you are acquainted.

2. PRIVATE ACCOUNTS

The student will find it a valuable exercise to keep account
of his personal receipts and expenditures on a form similar to
No. 2. The columns may be headed as follows: Receipts —
Earnings, From Home; Payments — Fees (Books and Sta-
tionery), Board, Room, Clothing, Recreation. A semester's
record of the student's actual expenses will be given special
credit. Whether submitted for credit or not, all students are
urged to keep an accurate record of their personal expenses.

3. AGRICULTURAL STATISTICS

It is desired to obtain accurate data on farm management,
and you are required to write to two or more farmer friends
for certain information. Copies of a letter will be furnished
by your teacher. (A copy of the proposed letter will be fur-
nished any teacher by the author.) Tabulate the result and
prepare a report to be discussed by the class.

4. COST RECORDS OF CROPS

As illustrated on page 97, prepare a cost record, showing the
net profit or loss of two crops, from information secured from
reliable sources. Any local crop may be taken, such as pota-
toes, wheat, oats, hay, etc. Two months will be allowed for
the work.

SPECIAL COST RECORDS 111

Hand in your work with a letter of explanation of the
system.

5. COST RECORDS OF STOCK

According to either the second or third method outlined on
page 92, prepare a statement of the net profit or loss of not
less than five milch cows. Your information may be drawn
from any farm, from the college department of dairying, or
from agricultural bulletins. The records required are : Labor,
milk, feed record, and the individual Ledger account of each
animal. Two months will be allowed for this work. Use
Forms 1, 6, 9, and 10.

Hand in your work with a letter of explanation of the
system.

PART III

BUSINESS ORGANIZATIONS,
CORRESPONDENCE, AND FORMS

CHAPTER VIII

BUSINESS ORGANIZATIONS

The tendency of to-day in all important business enterprises
is toward organization and cooperation. What would be im-
possible for an individual to accomplish becomes a compara-
tively easy task when the resources of a number of persons
are combined. While no business organization should be
effected without the assistance of competent legal counsel, it
is important that the parties should understand the nature of
the organization and the necessary steps required for their
promotion and the form of contracts in common use. This is
all that will be attempted in this chapter. The legal aspects
of each organization must be studied under commercial law.
The most important among business organizations are Part-
nerships, Joint Stock Companies, and Corporations.

Partnership

Two or more individuals competent to make contracts under
the law may combine their labor and capital in any lawful
business enterprise. When this is done without any legal
formality it is called a partnership. The agreement is called
the Articles of Copartnership and should always be in writing
and prepared by a competent attorney. Any name may be
adopted which cannot be shown to cause an injury to another's
business. Each partner is personally liable for all the debts of
the partnership unless it is clearly held out before the public
that another agreement exists between the partners. This
liability extends to the personal property of each partner as
well as to the partnership assets, — one of the subjects most
often misunderstood by the layman. Nor does the liability

(115)

116 BUSINESS uiiGANIZATlONS, CORRESPONDENCE, FORMS

depend on the amount invested or the service rendered by each
partner. So long as the business is solvent, the profits or
losses are divided according to the articles of copartnership,
but if the business fails and only one partner is able to pay,
he is responsible for all the debts of the firm.

Following is a standard form of articles of copartnership : —

Articles of Copartnership

This Agreement Witnesseth, That John Doe of Auburn,
Illinois, and Edward Harvey of Auburn, Illinois, have this
day agreed to associate themselves together as a copartnership,
for the purpose of engaging in the business of buying and
selling for profit Feed and Produce, at Auburn, Sangamon
County, Illinois, under the firm name of Doe and Harvey, the
term of said copartnership to continue five years from and
after the first day of June, 1910, unless sooner dissolved.

The investment contributed by the aforesaid partners is to
be as herein set forth, to wit : John Doe contributes $3,000.00
in cash, and Edward Harvey contributes $3,000.00 in cash.

The profits or losses of said partnership business are to be
shared equally.

With respect to the time and services given, and the com-
pensation to be received, it is agreed that both parties shall
give their entire time to the business. John Doe shall be
allowed a salary of One Hundred Dollars ($100.00) per
month, and Edward Harvey Eighty Dollars ($80.00) per
month, unless otherwise agreed between the parties.

It is also agreed that aside from the profits and compensa-
tions heretofore mentioned, neither partner is to withdraw
from the business any money or other property, except with
the written consent of the partners.

It is especially agreed that neither of the parties to this
contract shall sign or indorse any bank note, draft, or com-
mercial paper, nor sign any official or other bond, nor do
any other act to create a financial liability or obligation, with-
out the written consent of his copartner.

At the expiration or sooner determination of said copartner-
ship, the business and property of said firm may be closed out
by sale; and, after all debts and liabilities are paid and dis-

BUSINESS ORGANIZATIONS 117

charged, the amount remaining shall be divided between the
partners in the ratio of their respective interests; or, if the
parties so agree, the copartnership may be continued for such
further time, and upon such terms, as the members thereof
may be able to agree upon.

Witness our hands this first day of June, 1910.

Witness- 1^- ^- BROWN, JOHN DOE,

wiiness. |g ^ Johnson, Edward R

Edward Harvey.

EXERCISE 1

Write articles of copartnership for any firm with which you
may be acquainted, using the articles on page 116 as a model.

Joiut Stock Gompauies

A joint stock company differs from a partnership in its
organization and membership only, not in the liability of the
members. Its organization is like the corporation; the lia-
bility of its members and its formation are like the partner-
ship. No legal steps are necessary to form a stock company.
The capital is usually divided into shares like the corporation,
and, in voting, a member of a stock company has but one vote
regardless of his interest in the business, while in the corpora-
tion the voting power depends on the amount of stock held.
The stock company has power of succession, but has no seal.
A suit must be conducted in the name of all the stockholders
and not in the name of the company through its officers.
The advantages of a stock company over a .corporation are :
(1) less formality in organization ; (2) less publicity; (3) not
affected by the corporation tax; (4) no public reports re-
quired.

EXERCISE 2

Write a paragraph pointing out how the Mood River Apple
Growers' Union could be changed into a joint stock company.
(See Articles on page 119.)

Corporations

Because of its adaptability to a large variety of conditions,
the corporation has become the favorite form of business
organizations. Many corporations have stockholders in all

118 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS

parts of the world, but the organization is represented in its
sphere of business and before the law by its officers and
directors. Thus a corporation may be defined as an artificial
person, created by law, either under special enactment or
under general statute, to act as one person, through its officers,
in its business capacity and before the law.

The formation of a corporation should be thoroughly under-
stood by every citizen, but it is extremely inadvisable to or-
ganize without the assistance of a competent attorney. It is
not safe to lay down many general rules governing the organi-
zation of corporations, since the laws differ materially in the
several states. Reliable information can be obtained free of
cost from the Secretary of State in each state of the Union.

The corporation differs from the partnership in several
important respects. (1) It is created by law; that is, no
corporation is recognized before the law unless it is organized
exactly as set forth in the statutes of the various states. (2)
The liability of the stockholder extends only to the amount of
his stock, unless otherwise provided in the articles of associa-
tion. (3) A corporation can sue and be sued in its own name
through properly qualified officers. (4) It has the power of
succession; that is, the organization is not affected by the
death or disability of any stockholder. (5) The interest of a
stockholder may be transferred without affecting the organi-
zation. (6) The voting power of each stockholder is propor-
tional to the amount of his stock.

From a careful study of the constitution and by-laws given
below, it will be seen that the articles of association must set
forth (1) the intention of forming a corporation; (2) the
corporate name; (3) the purpose of the organization; (4)
the place of business; (5) election of officers; (6) powers
and duties of officers; (7) amount and division of stock, etc.

The advantages of the corporate organization are many and
important. By it the cooperative spirit is fostered; in union
is strength. The small means of a large number are collected
and effective capital is secured for large enterprises ; members
may enter or withdraw without disturbing the organization;
through organization, special talents are utilized to best ad-
vantage; waste of material, labor, and capital are reduced to

BUSINESS ORGANIZATIONS 119

a minimum; the publicity required by law has a wholesome
influence against corruption and dishonesty.

It is not out of place to give a word of caution to the unin-
itiated in the subject. Schemers often promote corporations
for fraudulent purposes and hide their own designs behind
innocent stockholders. Do not rush into incorporating; a
majority of the corporations formed are failures. If you
wish control of the corporation, you should control at least
fifty-one per cent, of the capital stock.

Every stockholder should be provided with a copy of the
constitution and by-laws and also with the annual report.
See to it that the minutes of the board of directors and all
books of account are carefully kept. Every stockholder has
the right to inquire into the business methods of the corpora-
tion.

The legal aspects of stock issue, kind of stock, dividends,
surplus, etc., are subjects for commercial law.

The constitution and by-laws of the Hood River Fruit
Growers' Union is given below as a model : —

Constitution and By-Laws of the Hood River Apple Growers* Union
«

Article I

The name, place of business, capital stock, and purposes of
this corporation are set forth in the articles of incorporation,
which are referred to as part of these by-laws.

Article II
The membership of this corporation shall be confined to
actual growers of fruit of Hood River Valley and vicinity.

Article III

The board of directors shall consist of nine members, four
of whom shall hold office for more than one year. They shall
be elected annually and shall serve until their successors are
elected and qualified. They shall qualify as directors within
ten days after their election, and within ten days thereafter
they shall elect from their number a president, vice-president,
and secretary. They shall also choose a treasurer, who shall
be required to give bonds, with surety in such sums as they

120 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS

may deem ample. They may choose a bank as treasurer with-
out bonds. The annual meeting shall be held on the first
Saturday in April in each year.

Article IV

The directors shall have the power to levy and collect
assessments on the capital stock not to exceed fifty per centum
of the stock subscribed at any one time and not oftener than
every sixty days, the same to become delinquent in thirty days
from date of notice of such assessment in the local newspaper.
The directors shall sell shares of stock to actual fruit growers
only.

Article V

The directors shall employ such agents or other employees
as are necessary to do the business of the corporation, and
shall fix their remuneration; provided, that the board of
directors shall receive no salary for acting as directors. They
shall have daily account sales rendered to the members of the
union each day, as received by them or their agent, giving
a statement by whom sold, gross sales, commission, freight, or
express, and amount due members of the union; also giving
condition of fruit, if there be any complaint.

Article VI

The directors may refuse to receive for shipment, under the
brand of the union, any package of fruit not considered prime
from any cause. They shall refuse to receive for shipment
fruit from any person not holding stock.

Article VII
This organization through its board of directors shall have
the exclusive and unqualified power to market all apples grown
by any of its members. A contract between each member and
the board will be required.

Article VIII

The duties of the secretary shall be to keep a record of the
proceedings of the meetings of the stockholders and directors.
He shall keep the corporate seal of the association and shall

BUSINESS ORGANIZATIONS 121

be custodian of all deeds, articles of agreement, and other
valuable instruments of writing belonging to the association.
He shall keep all books of the issuance and transfer of stock
and shall countersign all certificates of stock and affix the
seal of the board of directors and stockholders, and shall keep,
or cause to be kept, all books of account necessary to the
transaction of the general business of the association. The
manager of the union shall be placed on a flat salary.

Article IX
The board of directors shall provide the necessary means
for carrying out the purposes for which the association is
formed by reasonable charges and commissions for the service
rendered by the association to its members and customers.

Article X
The duties of the treasurer shall be to receive all moneys due
or paid to the association and deposit the same as the direc-
tors may instruct; to pay out said funds upon the written
order or check of the president, first vice-president, or general
manager, when countersigned by the secretary.

Article XI
All notes or other evidence of indebtedness of the associa-
tion shall be signed by the president and countersigned by the
secretary of the board of directors.

Article XII

The president shall instruct the secretary to call a meeting

of the stockholders whenever in his judgment the necessities

of the union require it, by giving one week's notice through

the local newspaper and send each a notice on a postal card.

Article XIII
No union label shall be placed on a box of fruit except by
the manager of the warehouse just before shipping.

Article XIV
Each packer will be held responsible for his own work by a

122 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS

system of fines. No fruit will be received unless put up by a
packer employed by the union.

Article XV

The union will have no packing house foremen except those
employed by the union.

Article XVI
A majority of the stock subscribed, upon which all legal
calls or assessments have been paid in full, shall constitute
a quorum at any stockholders' meeting, and no vote shall be
counted which is not represented by one share of the stock
upon which all calls or assessments have been paid.

Article XVII

These by-laws may be amended by vote of the majority of
the stock upon which all calls or assessments have been paid,
at any regular or called meeting, provided that notice to
amend the by-laws shall have been given in the call for a
special meeting.

Article XVIII

Any member desiring to dissolve his connection with this
corporation may do so by surrendering his stock to the secre-
tary thereof or by transferring it to any member in good
standing on the secretary's books.

EXERCISE 3
Write a letter to your instructor describing in detail how
you would organize and incorporate a creamery. Point out
the peculiarities of the incorporation laws of your state. (You
can secure a copy of these laws free from the Secretary of
State.)'

CHAPTER IX

THE BUSINESS LETTER

In this age of complex business activity, where a large
volume of the business of the country is done by letter, it is
essential that the farmer, as well as the merchant, be able to
write a correctly-arranged, direct-to-the-point business letter.
Therefore, the purpose of this chapter is to set forth in as
clear and concise a manner as possible the customary forms
and arrangement of business letters.

Business letters include all correspondence relating to the
writer's financial, professional, or official dealings with other
people, and should clearly set forth the subject matter of
which they treat.

In order for a mechanic to do good work he must have
suitable material and good tools with which to work. In
order for the writer of letters to do good work and create a
good impression he should use a good grade of paper and pens,
and ink that flows freely.

We judge people largely by their surroundings and the
associates they choose. The writer of a letter is judged largely
by the general arrangement, wording, and neatness of his
letter, and by the quality of stationery used.

The preceding paragraph brings us to another important
matter emphasized elsewhere in this text. Every farm, no
matter how small, should have a suitable name. In fact, the
importance of selecting a name for your farm cannot be
overestimated. It not only lends value to your farm and
dignity to your community, but it is a source of satisfaction
to have neatly-printed stationery bearing the name of your
farm, the name of the proprietor, and in some instances a
sketch or small photograph indicating the products of the
farm. (See models on page 124.) It is well, however, to bear
in mind that crowding too much on a letter head detracts
from rather than adds to its value. Your post office address,
including your box or R. F. D. number, should also appear on

(123)

124 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS

STANDISH BROTIIKRS
Fri'IT Ranch

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(SJ

KnTAfAltA. OnKnON,

Mlc^ < -•..c'f

^s^

,,.•" ,j\e?--^

cj;

tx^"^

rAfVMlNta AISIO STOO KRAIS I N <S

Anft^rfinn B ®rrl|arb i^nm? Jam

(4;

O. N. AMOF«SO^

$atnt». (drrgou..

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lERRITTOREENEASON

OUSTEIN CATTLE

)SHAL.I.TOWN. lOWA.

MODEL LETTER HEADS

THE BUSINESS LETTER 125

the letter head, correctly arranged, so that in writing the
heading of the letter all that is necessary to do is to fill in
the date.

Skeleton Letter

Before taking up the discussion of the various parts of a
letter, a skeleton letter is presented herewith, with the differ-
ent parts lettered for the purpose of reference. Study the
skeleton form very closely, not only with a view to noting
how and where the heading is arranged, the uniformity of the
indentations, and the complimentary close and signature, but
also notice how balanced the letter appears in the page.

(a) ,

ib)

(d)

(e) :—

(/)

ig)

(h)

Key to skeleton letter : — '

(a) First line of the heading.

(&) Second line of the heading.

(d) Address of the person to whom you are writing. (In
some cases the address should occupy two lines. See model,
page 126.)

120 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS

J./icorrecT /o >

^^^^^^/i.''f>^iC_^a.*i>^n A- -^^:^«^ ^^<j~ z:^,^^ /:f^ --^i^^^^

G o r rec7 rorni.

(JyLc^,

THE FORM

THE BUSINESS LETTER 127

(e) Salutation, as Dear Sir, Gentlemen, My dear Mr.
Smith, etc.

(f) The beginning of the body of the letter. Strictly
speaking, the salutation is a part of the first paragraph ; how-
ever, for the sake of uniformity, it is well to begin the first
paragraph of the body of the letter as far to the right of the
left-hand margin as succeeding paragraphs. Note that all
paragraphs are uniformly indented.

(g) Complimentary close, as Yours truly, etc.

(h) The writer's signature. Note that the signature be-
gins as far to the right of the complimentary close as the
second line of the heading (h) begins to the right of the first
line (a).

The Heading

The heading of a letter includes the address of the writer
and the date. It may occupy one, two, or three lines, depend-
ing on the length of the address.

The following forms illustrate one, two, and three line
headings : —

Form 1

(a, h) Corvallis, Oregon, July 15, 1910.
(c) ,

(d)

ie) :—

(/)

Form 1 shows a one-line heading begun far enough from the
left-hand margin to fill the remaining space tp the right.
Should it be necessary to begin a heading to the left of the
center of the body of the letter, in order to get it on one line,
a two-line heading should be used. It is not good form for
the heading to extend to the left of the middle of the sheet.

Observe carefully the punctuation of the heading.

Form 2
(a) 68 Sixth Street,

{h) Portland, Ore., July 5, 1910.

(e) :—

(f)

128 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS

Form 2 shows a two-line heading, the first line begun at or
a little to the right of the middle of the page, and the second
line begun as far to the right of the first as the second line of
the introductory address (d) is begun to the right of the first
line of the introductory address (c).

Form 3
(a) Chehalis, Lewis County, Wash.,
{h) July 15, 1910.

(d)

(e) :—

(f)

Form 3 shows a two-line heading with the post office address
occupying one line and the date the other.

Form Jf.

(a) Corvallis, Ore., July 12, 1910.
{b) R. F. D. No. 2.

(d)

ie) :~

(/)

Form 4 shows a two-line heading where it is desired to give
the rural route.

Form 4 might also be arranged as follows : —

R. F. D. No. 3,

Corvallis, Oregon,

July 25, 1912.

The models on page 126 illustrate incorrect and correct
forms of a business letter. Note the arrangement of the head-
ing, lines one and two. The R. F. D. or box number or street
number should always be written in connection with the head-
ing. Also note that line three has been skipped. This is done
for the purpose of lending balance to the letter head.

Punctuation

The heading of a letter may be separated into distinct parts
for the purpose of punctuation. A comma should follow each

THE BUSINESS LETTER 129

part of the address except the last, which should be followed
by a period, as shown in the models.

EXERCISE 4

Write, punctuate, capitalize, and correctly arrange the fol-
lowing headings: —

1. Albany Oregon March 29 1888

2. Vancouver Washington may 3 1912

3. bloomington Indiana 821 Fifth street October 1 1910

4. 321 seventh Street peoria Illinois May 4, 1911.

5. 1907 Oregon agricultural College Sept 25 corvallis
Oregon

6. Write headings for four or more places with which you
are familiar.

Introductory Address and Salutation

The introductory address of a letter is made up of two
parts, (c) consisting of the full name and title of the person
addressed, (d) consisting of his street number, P. 0. box, and
post office address, or such other information as the person
to whom you are writing may designate.

The salutation is the term Dear Sir, Dear Madam, Gentle-
men, etc., and should begin on a line with the body of the
letter, that is, flush with the left-hand margin.

Custom as well as courtesy requires that some title be used
with the name. Individual titles generally used are Miss,
Mrs., Mr., Dr., Rev., Esq., Prof., and Hon., depending on the
rank or profession of the person addressed. When a part-
nership or corporation requires a title, Messrs. may be used.
A title should not be used if the name of the firm begins with
"the." Only one title should be used, and it should be placed
before or after the name, as Mr. John H. Brown, or John H.
Brown, Esq., not Mr. John H. Brown, Esq.

Models

The following are good models showing the heading, intro-
ductory address, salutation, and complimentary close, the body
of the letter being omitted. The line after the complimentary
close indicates the position of the signature.

1^0 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS

Form 1

Aurora, 111., March 10, 1912.
Montgomery, Ward & Co.,

Chicago, Illinois.
Gentlemen : —

Yours truly,

Form 2.

67 Wabash Avenue,

Chicago, June 24, 1910.
Mr. A. P. Robinson,

211 Globe Block,

Seattle, Washington.
Dear Mr. Robinson: —

Sincerely yours,

Form 3

Michigan University,

Ann Arbor, Michigan,

June 14, 1911.
Dear Frank: —

Sincerely,

To Mr. Frank Huntington,

Beloit, Wisconsin.

Form U

The Ideal Farm,

McMinnville, Oregon,

October 12, 1914.
Mr. Silas Blank,

212 Second Ave.,

Portland, Oregon.
Dear Sir: —

Yours truly,

Punctuation

Carefully observe the arrangement and punctuation of the
models. Notice that each part of the introductory address is

THE BUSINESS LETTER 131

followed by a comma, except the last, which is followed by a
period. The salutation should be followed by a colon and the
complimentary close by a comma. The writer's signature
should be followed by a period.

Capitalization

Every sentence should begin with a capital letter, and every

important word of the address should be capitalized; also

observe that all titles are capitalized and that the first and

last word and every noun in the salutation should begin with

a capital.

EXERCISE 5

Write the following headings and introductory addresses,
arranging and punctuating them according to the models
given : —

1. Wise Virginia June 15, 1910 Mr. F. B, Goshen Clint-
wood Virginia Dear Sir

2. Berkeley Calif April 11 1910 Mrs. James P. Hadley
Eugene Oregon Dear Madam

3. Raymond Washington 821 Fourteenth street July 18
1909 Mr. T B Stidham 321 Railroad Ave Doty Wash

4. 821 Second Avenue Seattle Washing May 4 1910 John
P Randolph Esq 741 I street Tacoma Washington

5. Ames Iowa, Dec 23 1908 The Pure Food Grocery Co
City gentlemen

6. Kalispell Mont Nov 8 1911 The Home Lumber Co Fargo
N Dak gentlemen

The Body of the Letter

The mechanical arrangement of the heading, introductory
address, salutation, body of the letter, and complimentary
close can be mastered in a short time by any one who is care-
ful and painstaking. However, the composing of the letter
proper is an entirely different matter, and by far the most
difficult part of letter writing, and a good style can be acquired
only by careful and painstaking effort.

It is not the purpose of this chapter to give you certain
forms of letters, worded in a specific way, for the various
subjects about which it may be necessary for you to write.
But it is rather its purpose to give you suggestions which will

132 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS

be of assistance to you in the writing of your business letters,
and that will enable you to put into your letters your own
originality in a clear, forceful, convincing manner.

Some reference should always be made to the letter which
is being answered, but in order to secure the best effect this
reference should be made incidentally. Such opening phrases
as "Your esteemed letter of the 10th inst. is received and in
reply would say" are overworked and should be avoided. They
are used by those who have fallen into a rut, or by those who
lack originality. It would serve your purpose better to open
your letter somewhat as follows : "The suggestion contained
in your letter of the 15th inst. meets with my entire approval,"
or some similar opening that would be in conformity with
the letter to which you are replying.

It is an inexcusable mistake to fail to date a letter. With-
out the date a letter is, in many cases, of no value. Especially
is this so should it be necessary to bring the letter into court
for the verification of some transaction about which the letter
may have been written. The heading, including the date,
should be written before taking up the body of the letter.

A letter should always contain the complete address of the
writer, even though you are corresponding with those who
may reasonably be expected to know your address. This
precaution often saves time and money, and preserves friend-
ship.

A business letter should be as brief as the nature of the
subject about which you are writing will permit. If you are
ordering goods by letter, you should clearly set forth the
nature of the articles you desire, the way you wish to have
them shipped, whether by express or freight, or whether they
should be sent by mail. (See model on page 133.) If you are
a regular customer of the firm, and have an account with
them, you should clearly state the terms on which you desire
to make this particular purchase. However, should it be your
first order, you should either make sufficient remittance to
cover the amount of the order or give some responsible person
as reference.

Should you be seeking information by letter, ask for that
information in much the same way as though you were talking

THE BUSINESS LETTER 133

to the person. At all times be courteous, but do not try to
overdo it. In writing to a person about a subject in which
he is not directly interested, you should inclose a self -addressed
stamped envelope for his reply.

Remittances and Orders

Remittances in the form of currency should never be sent
through the ordinary letter. This is not only unsafe, but the
sender has no evidence that the amount in question was sent
or that the person to whom it was sent received it. You
should choose as the safest and most convenient way of mak-
ing a remittance one of the following methods : Postal money
order, express money order, registered letter, check, or bank
draft. Probably the most convenient method to those who
live in rural districts would be the postal money order.

In making a remittance, no matter how small the amount,
you should state in your letter accompanying the remittance
for what it is intended, the exact amount, the nature of the
remittance, whether it is a check, money order, or otherwise.

Model Order

Sterling, Illinois, June 15, 1910.
Ginn & Company, Publishers,

2301-2311 Prairie Avenue,

Chicago, Illinois.
Gentlemen : —

I inclose herewith postal money order for $4.72, for

which please send me, by prepaid express, the following books: —

The Working Principles of Rhetoric, by John F.

Genung, 12mo, cloth, price $1.40;
Lockwood and Emerson's Composition and Rhetoric,

12mo, cloth, price $1.00;
Library of Anglo-Saxon Poetry, Vol. I. Beowulf,

12mo, cloth, price $1.12;
Allen and Greenough's New Latin Grammar, 12mo,
half leather, price $1.20.
I should like to have these books reach me not later
than the 20th inst., as I expect to use them in my summer
school work beginning on the 21st.

Yours truly,
Inclosure. Student & Company.

134 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS

Where more than one item is ordered in a letter, as in the
foregoing model, it is better to write them in a line or column,
that is, assigning to each item a separate paragraph, followed
with a complete description of the item, including the price,
number, size, color, weight, and any other information that
would insure your securing just what you wanted.

Taste and Neatness

As suggested elsewhere, the writer should throw his own
originality into his letters; but it must be steadily kept in
mind that this must not be done in a haphazard, careless
manner. One of the purposes of a letter is to get action. In
order to do this the writer must, if possible, put himself in
the place of the receiver of the letter and, having done this,
carefully consider just what it would be necessary for some one
else to do or say to get the desired action from himself. It
would be quite impossible to lay down definite rules as to just
how this should be done, but I am sure all will agree that the
letter should be free from misspelled words, ink blotches,
grammatical errors, slang, undue criticism, sweaty or dirty
finger prints, or any other similar defects that would be un-
pleasant to the eye.

A business woman writing to a stranger should never neg-
lect to prefix to her signature the title Miss or Mrs. in
parenthesis. It is embarrassing to both the writer and the
person who receives the letter, should a woman be addressed
as Mr. In case a letter is received where it is evident that the
writer is a woman, but she has merely signed "Mary Jones,"
omit the title and address her: "Mary Jones, Cedar Rapids,
Iowa, Dear Madam : — "

It is not supposed that those for whom this is intended
would have the time to go into the real science of letter
writing, as do the great majority of the large manufacturing
concerns of the country who conduct extensive advertising
campaigns, and for this reason our suggestions cover merely
those points it is thought would be of assistance to the ma-
jority of those who are pursuing this course.

The letter should be arranged artistically on the page. You
should endeavor to arrange the letter so that there will be an

THE BUSINESS LETTER 135

equal blank space at the top and at the bottom of the page.
If the letter is short, wider left and right hand margins should
be allowed so that the letter will occupy more vertical space,
and thus avoid a stringy appearance.

If letter paper is used, size Sh x 11 inches, the indentations
for introductory address and paragraphs should be deeper
than when note paper, usually about 8^x5^ inches, is used.
When letter paper is used, the indentations should be about
three fourths inch; when using note paper, the indentations
should be about one half inch.

Paging

If more than one page is required for a letter, each page,
except the first, should be numbered in the order in which it
is written. Before the letter is inclosed in the envelope the
pages should be arranged in the order in which they should
be read.

The Paragraph

A series of connected sentences treating of a single topic
make what is called a paragraph. In letters, as in other
forms of composition, the change from the discussion of one
topic to another should be indicated by an indented line, which
catches the eye of the reader and tells him that another topic
is to be considered.

The Postscript .

The postscript is an afterthought or a statement added for
emphasis after the body of the letter has been finished. The
postscript should be indented the same as paragraphs, and
should begin on the second line beneath the signature. It
should be preceded by "P. S." and followed by the initials of
the writer.

Study the arrangement of the following letter: —

Corvallis, Oregon, July 15, 1910.
The Home Beal Estate Co.,

Forest Grove, Oregon.
Gentlemen : —

In accordance with our agreement of June 15th, I am
sending you attached hereto my personal check, No. 68, on

136 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS

the First National Bank of Corvallis, for $42.43, to be applied
as follows: —

$40.00 in payment of the first monthly installment due
on residence lot No. 6, Block E, Wilkinson's addition to the
City of Forest Grove, Oregon ; $2.42 in payment of the interest
on the remaining eleven monthly installments of $40.00 each.

Kindly send me credited coupon for the first installment
and interest.

Yours truly,

Inclosure.

EXERCISE 6

1. Make up and write the heading, introductory address,
salutation, and complimentary close for five different letters,
referring to the models, if necessary, for the correct forms.

2. Write a letter, dated at your home, ordering five dif-
ferent articles of merchandise.

3. You were at your county seat several days ago and
ordered your local paper. You have not yet received a copy.
Write a courteous letter to the editor requesting him to inves-
tigate the delay and to send the paper to your address regu-
larly until notified to discontinue it.

4. In the early part of the harvest season you purchased
farm implements of a hardware dealer of your city, amounting
to $175.50. It is now nearing the time that you agreed to
make the second payment of $75.00. Your grain yield has
not been as large as you expected, and, owing to certain
other obligations you must meet, you have found it necessary
to ask for an extension of time on at least half of the amount.
Write him a letter explaining your situation and ask for the
extension of time.

5. Your hardware dealer has agreed to accept $40.00 and
to grant an extension of thirty days on the balance. Write
him a letter thanking him for the extension and inclose your
check for $40.00. Call attention to the remittance.

FOLDING THE LETTER.
Paper

There are two sizes of business letter paper, namely, letter
size, 8i X 11 inches, and note size, usually 8^ x 5i inches.

THE BUSINESS LETTER 137

though the size of note paper varies. The larger size is gen-
erally used by business houses.

Folding

The following is the correct method of folding letter paper :
(1) Turn the lower edge up to within a half or quarter of an
inch of the top, then crease the fold, being very careful that
the side edges of the paper are exactly even. The reason for
not allowing the bottom and top edges of the paper to be even
is to make the unfolding of the letter easier, and without loss
of time. (2) With the creased edge of the letter toward you,
fold over the right edge a little less than one third, being
careful to keep the creased edges of the first and second folds
even. (3) Fold over the left edge a little less than one third,
overlapping the second fold. The second and third folds
should be of equal width. The middle fold should be a little
narrower than the envelope into which the letter is to be
inserted, and a little wider than either the right or left hand
fold.

Inserting the Letter

The letter is now ready to be put into the envelope. Take
the envelope in the left hand with its back up and the flap
opening toward the right. Take the letter in your right hand
with the folded edges up. Insert first the edge folded last.

In opening a book the left-hand cover is usually opened first.
Through the unconscious training of years you do this without
apparent thought. Why? Because it is the natural way.
The letter should be folded and put into the envelope in accord-
ance with the preceding instructions in order to enable the
person who receives it to unfold it and begin reading without
loss of time.

In large business houses where hundreds of letters are
received daily, the letters are usually placed on a table, back
uppermost, and opened by inserting a paper knife beneath the
closing fold and slitting all the way along the top edge.

In folding note paper, first fold the bottom edge up a little
less than one third, then fold the top edge down a little less
than one third, overlapping the bottom fold. With the en-
velope held in the same position as when inserting the larger

138 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS

size paper, with the folded edges of the letter up, insert first
the edge folded last.

The Knvelope

Great care should be exercised in writing the directions on
the envelope. In the first place, the name of the person to
whom you are writing should appear in the introductory
address of the letter just as he is accustomed to spell it,
then it should be written on the envelope just as it is in the
introductory address, followed in the order named by the
street and house number, post office, and state. Should the
name be followed by more than one title, they should be
separated by commas.

The Return Card

Every letter you mail should bear your return card in the
upper left-hand corner of the envelope. If the envelope bear
your name and address only, the letter should be returned to
you at the end of thirty days, provided it is not called for
within that time. If it is desired to have the letter return
to you within a specified time, provided it is not called for, the
words "If not called for within — days, return to," followed
by your name and address, will insure its return to you in
case it is not called for. Should the envelope not bear your
name and address, and remain uncalled for for thirty days, it
will be forwarded to the dead letter office.

The Stamp

The stamp should be placed in the upper right-hand corner
of the face of the envelope. It should be firmly attached and
the edges of the stamp should be about one eighth of an inch
from, and parallel to, the edges of the envelope.

The following are good models : —

THE BUSINESS LETTER

139

(1)

SUmp

Mr. Karl L. Goodall,

Corvallis,

Oregon.

(2)

sump

Armour Packing Company,

Chicago, Illinois.

(3) - j

sump

Gregg Publishing Company,

151 Wabash Avenue,

Chicago, 111.

(4)

Mr. Harvey H. Burnham,

Cottage Grove,

Oregon.

c/o Imperial Hotel.

140 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS

EXERCISE 7
Write the following envelope addresses, using blank slips
of paper the size of a regular business envelope — 3^ x 6^
inches : —

1. Mr. R. P. Smith, Logan, Utah.

2. Mrs. Raymond H. White, 728 Seventh Street, Lev^iston,
Idaho.

3. Miss Gertrude Hamilton, Beaver Creek, Oregon.

4. Henry H. Lathrop, Thacker, West Virginia.

The punctuation marks are omitted in the following in order
to give the student practice in inserting them : —

5. Rev James R Hamilton Pastor First M. E. Church
Spokane Washington.

6. Hon. J. H. Ackernan State Supt of Schools Salem
Oregon

7. Prof G. H. Patterson Care Willamette University Salem
Oregon

8. Mr Geo W Mathews Association Hall University of
Wisconsin Madison Wisconsin

9. The Home Correspondence School Springfield Mass

10. Mr. Frederick M. Bollinger Transient St Paul Ne-
braska.

Note. — In writing to a person who is stopping in a city only
temporarily where the free delivery system is in operation,
the word "Transient" or "General Delivery" should be written
in the lower left-hand corner of the envelope.

CHAPTER X

BUSINESS FORMS

Every farmer, mechanic, and professional man should un-
derstand the ordinary business forms in daily use. It is often
a matter of humiliation to persons of superior ability in other
lines to acknowledge that they are ignorant of the proper
form of a simple business paper. The purpose of this chapter
is to give models and explanations of the forms likely to be
used by every business man.

The Invoice

An invoice is an itemized statement of goods bought or
sold. It should contain detailed information regarding date,
parties, quantity and description of the goods, prices, dis-

A Marshal ItownrJp

■■ /C-

MERRITT GREENE & SON

"eOGWORTH" FARM.
•'I.INN BROOK" FARM
UINN BROOK DAIRY CO

^/6

/z-

l/f-/ ^

S^^ 66-

4^z

/O ^^oZi^ ^:^CL~Y

/Z.cd

/Zc

M^S^

^.^,^

M-t^^Jif.

^22JL&±i.^

?^g<^

MODEL INVOICE

(141)

142 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS

counts or terms, how the goods are shipped, by whom packed,
etc. If paid, it should be properly receipted.

EXERCISE 8

Write invoices for all the sales in Lesson 20. Use Journal
paper, or rule the required form.

The Statement

A statement is an abstract of the debits and credits of an
account. It should contain the items as they appear in the
Ledger, arranged, so as to show at a glance the condition of
the account. The statement is often confined to the balance
due, but this form is seldom satisfactory. [See page 143.)

EXERCISE 9

Write statements of all the open accounts receivable after
closing the Ledger in Lesson 20. Use Journal paper or rule
the required form.

The Receipt •

A receipt should always be taken when a payment is made,
unless it is made by check, in which case the indorsement
constitutes receipt. It should give the name of the parties,
the amount paid, when and for what it is made. A dupli-
cating receipt book should be used when a large number of
receipts are given.

BUSINESS FORMS

143

low«^ ^^4<W^

6 190/

Marshal Itown. \^'m^.
V'^'^«'^-^-<? v' V:?^'^'^*-''^*-'^.

in account with

MERRITT GREENE & SON

"EDGWORTH" FARM,

"LINN BROOK" FARI^I

LINN BROOK DAIRY CO.

^C^ p,^^t^ .^^sC^^^^^^^^a^^^c. I 4^

W^L/f c/c-^^

MODEL STATEMENT

144 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS

EXERCISE 10

Write receipts for all the cash received in Lesson 20, using
slips 3x6 inches.

The Promissory Note

gg3^3na[vS3ia&s:-aMai>jLLajj«a5a<««^<fi

A promissory note is a written contract for the payment
of a specified amount at a given time and place, with or
without interest. When it is made to the order of the payee,
it becomes a negotiable paper. The parties to a note are
the maker (Duncan), who obligates himself to pay; the payee
(Hamilton), in whose favor the note is drawn; and the
indorsers, who transfer the note to other parties. The first
indorser is always the payee. The law relating to negotiable
instruments is very important and should be thoroughly un-
derstood by all who use them. It is too technical and exten-
sive to be discussed here. No note should be given unless its
terms are thoroughly understood by both parties.

EXERCISE 11

Draw notes for every transaction involving a note in Lesson
20. Use slips of paper 3x6 inches. Be sure to fill out the
vacant space in the amount line. When this is not done, the
amount is often raised by forgers.

The Check

A check is a form of draft by which a depositor draws
money from a bank. It has the same parties and the same
legal aspects as the draft. The increasing use of the bank
by all classes for facilitating business makes this one of the

BUSINESS FORMS

145

m^'^r<fy", ^X^y7^<^li^7yAe^^ ,^f//

most important of negotiable instruments. The law govern-
ing its use should be thoroughly understood. Checks should
be written in ink, the amount should be written in both
words and figures. All checks should be numbered. It is
sometimes desirable for the payee to require a certification
from the bank that the check is good. The form of this
certificate is given in the model. It has the same effect as
the acceptance of the draft. When a check is certified, the
bank is responsible for the amount.

EXERCISE 12
Write checks for all the payments in Lesson 20.

1, ^.(Pc^^^JPi^o.

^czZ:^-

A draft is a written o-rder by one person on another to pay
money to a third person. It is a time or sight draft, according
to the time specified for payment. If it reads, as in the illus-

146 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS

tration, ''At ten days' sight," it is payable ten days after
acceptance and is called a time draft; if it reads "At sight,"
it is payable upon presentation and is called a sight draft.
It is a bank draft if issued by one bank on another; an indi-
vidual draft when issued by a firm or individual on another
firm or individual. The parties to a draft are : The drawer
(Bliss), who orders the payment; the drawee (Eagan), who
pays; the payee (Neagle), in whose favor the draft is drawn;
and the indorsers, who transfer the draft to others. The
payee is always the first indorser. The indorsement should
be made on the back of the left end of the draft. If merely
the name is written, it is a blank indorsement and may be
paid to any one upon presentation; if the indorsement reads
"Pay to the order of John Doe," the amount can be paid only
to the party designated by Doe and is called a full indorse-
ment. The draft is a negotiable paper if payable "to the

order of " or "to bearer" and is subject to the laws of

negotiable instruments. When the drawee signifies his will-
ingness to pay a time draft, he "accepts" it as shown in the
model. The acceptance has the same force as the signing of
a note. The law of negotiable instruments should be studied
very thoroughly by every business man.

EXERCISE 13
Write the draft called for under June 11, Lesson 16.

The Certificate of Deposit

A certificate of deposit is a receipt issued by a bank for a
temporary deposit. It is discussed here only to emphasize the

BUSINESS FORMS

147

great importance of establishing banking connections. If, for
any reason, it is impracticable to open a regular bank account,
as discussed on page 25, any money not needed for current
use should be deposited on a certificate. If, as in the model,
the deposit is allowed to remain for a definite period, interest
will be allowed at the current rate. Withdrawals are usually
allowed by indorsement of the amount on the certificate, but
not by check. A certificate of deposit is usually issued *'to
the order of ," and is therefore transferable by indorse-
ment.

The Voucher Check

/. lu.i»r:<Aft:»a^ Oi// 2 P/ou/y J. /^ai/sj-i>rje»(e ■ d/. S^y^yi*,^ /f.

Ut^Yu.)

The voucher check is an exceedingly convenient form, espe-
cially in corporate business. By referring to the illustration
above, it will be seen that it consists of an ordinary check
on one side, with a blank for the signature of the president or
some other officer authorized to approve vouchers. The bank
should be instructed to refuse payment unless the check is

148 BUSINESS ORGANIZATIONS, CORRESPONDENCE, FORMS

approved or countersigned. The back provides for the distri-
bution of the payments, and from this the entries are made
in the records. Space is left for indorsements on the left end
of the back. The indorsement shown on the model constitutes
a satisfactory receipt in most cases. When a definite invoice
or other item is paid, it is well to specify the date or number,
as illustrated. Never fail to number your checks consecu-
tively.

EXERCISE 14

Prepare three different forms of voucher checks, modified
to suit your own ideas. Let one be similar to the model.

PART IV
USEFUL TABLES

USEFUL TABLES

TABLE 1

Six Per Cent. Interest Table

Time

$10

$20

$50

$100

$1000

r 1

1.00

1.17

a. 8

1.33

% 9

1.50

« 10

1.67

2.50

3.33

4.17

5.00

5.50

1.05

10.50

1.55

15.50

r 1

5.00

1.00

10.00

1.50

15.00

1.00

2.00

20.00

cc 5

1.25

2.50

25.00

g 6

1.50

3.00

30.00

§ 7

1.75

3.50

35.00

^ 8

2.00

4.00

40.00

2.25

4.50

45.00

1.00

2.50

5.00

50.00

1.10

2.75

5.50

55.00

. 12

1.20

3.00

6.00

60.00

Example. -
Solution :

-Find the interest on $340.00 at 8% for 8 months and 8 days.
At 6% the interest on

$300.00 for 8 mos.

" 8 days

40.00 " 8 mos.

" 8 days

= 3 X

= 3 X
= 4 X
= 4 X

$4.00 or
.13 or
.40 or
.01 or

$12.00

.39

1.60

.04

Total.
Add K to produce 8%,

$14.03
4.68

Answer.

$18.71

(151)

152 USEFUL TABLES

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USEFUL TABLES

153

TABLE 3

Interest Table

The following will be found convenient in the absence of
extended interest tables. To find the interest on a given sum,
for any number of days, at any rate of interest : —

5%
6%
7%

At
At
At
At
At 9%
At 10%
At 12%
At 15%
At 20%

multiply
multiply
multiply
multiply
multiply
multiply
multiply
multiply
multiply

principal
principal
principal
principal
principal
principal
principal
principal
principal

by number
by number
by number
by number
by number
by number
by number
by number
by number

of days,
of days,
of days,
of days,
of days,
of days,
of days,
of days,
of days.

divide
divide
divide
divide
divide
divide
divide
divide
divide

by 72
by 60
by 52
by 45
by 40
by 36
by 30
by 24
by 18

TABLE 4

• Minimum Weights of Produce

The following are minimum weights of certain articles of
produce according to the laws of the United States : —

Lbs. per Bushel

Wheat 60

Corn, in the ear 70

Corn, shelled 56

Rye 56

Buckwheat 48

Barley 48

Oats 32

Peas 60

White Beans 60

Castor Beans 46

White Potatoes 60

Sweet Potatoes 55

Onions 57

Turnips 55

Lbs. per Bushel

Dried Peaches 33

Dried Apples 26

Clover Seed 60

Flax Seed 56

Millet Seed 50

Hungarian Grass Seed .... 50

Timothy Seed 45

Blue Grass Seed 44

Hemp Seed 44

Salt (see note below).

Corn Meal 48

Ground Peas 24

Malt 34

Bran 20

SALT.— Weight per bushel as adopted by different States ranges from 50 to 80 pounds.
Coarse salt in Pennsylvania is reckoned at 80 pounds, and in Illinois at 50 pounds per bushel.
Fine salt in Pennsylvania is reckoned at 62 pounds, in Kentucky and Illinois at 55 pounds per
bushel.

154 USEFUL TABLES

TABLE 5

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USEFUL TABLES

155

TABLE 6

Common Measures

Long Measure

12 inches = 1 foot.

3 feet = 1 yard.
5i yards = 1 rod.

320 rods = 1 mile.
1 mile = 5,280 feet.

The following are also
used : —

1 size = i inch.

(Used by shoemakers.)

1 hand = 4 inches.

(Used in measuring the height

of horses.)

1 fathom = 6 feet.

(Used in measuring depths at

sea.)

1 knot = 1.15 miles.
(Used in measuring distances

at sea.)

Dry Measure

2 pints = 1 quart.
8 quarts = 1 peck.

4 pecks = 1 bushel.

1 bushel contains 2,150.42
cubic inches or approximately
li cubic feet.

Liquid Measure

4 gills = 1 pint.

2 pints = 1 quart.

4 quarts = 1 gallon.

1 gallon contains 231 cubic
inches.

1 cubic foot equals 7^ gal-
lons.

Square Measure

144 square inches = 1 square

foot.
9 square feet = 1 square

yard.
30i square yards = 1 square

rod.
160 square rods = 1 acre.
640 acres = 1 square mile.

An acre is equal to a square
whose side is 208.71 feet.

Surveyors' Linear Measure

7.92 inches = 1 link.
100 links = 1 chain.
80 chains = 1 mile.
Gunter's chain is the unit
and is 66 feet long.

Surveyors' Square
Measure

10,000 square links = 1 sq.

chain.
10 square chains = 1

acre.
10 chains square = 10

acres.

Cubic Measure

1,728 cubic inches = 1 cubic
foot.
27 cubic feet = 1 cubic yd.
128 cubic feet = 1 cord.

156 USEFUL TABLES

TABLE 7

Housekeepers* Timetable

*, minutes to the pound. The time given is the general average ; the time will vary slightly
with the quality of the article, b, boiled ; f, fried ; bk, baked ; br, broiled ; s, stewed ; r,
roasted.

Hours. Min.

Asparagus, b 15-30

Beans, b 1 —

Beans with green corn, b 45

Beef, r *25

Beefsteak, br. or f 15

Beef, salted, b 35

Bass, fresh, br 20

Beets, young, b 2 —

Beets, old, b 4 30

Bread, corn, bk 45

Bread, wheat, bk 1 —

Cabbage, b 1 —

Cauliflower, b 30

Cake, sponge, bk 45

Carrot, orange, b 1 —

Chicken, b 1 —

Codfish, dry and whole, b *15

Custard (one quart), bk 1 20

Duck (tame), r 1 30

Duck (wild) ,r 1 —

Dumpling, apple, b 1 —

Eggs, hard b 10

Eggs, soft b 3

Eggs, f 5

Fowls, domestic, r. or b 1 —

Goose, wild, r *20

Lamb, b *20

Meat and vegetables, hashed 30

Mutton, r *25

Mutton, br 20

Onions, b 30

Oysters, s 5

Parsnips, b 1 —

Pork, r *30

Pork, b *25

Potatoes, b 30

Potatoes, bk 45

Potatoes, r 45

Rice, b 20

Salmon, fresh, b 8

Sausage, f 25

USEFUL TABLES * 157

Hours Min.

Sausage, br 20

Soup, vegetable, b 1 —

Soup, chicken, b . . . 2 —

Soup, oyster or mutton, b 3 30

Spinach, b 30

Tapioca, b 1 30

Tomatoes, fresh, b 1 —

Tomatoes, canned, b 30

Trout or salmon, b. or f 30

Turkey, br. or r *20

Turnips, b . 45

Veal, br 20

Venison steak, br $ 20

TABLE 8

Weights and Measures iu Ordinary Use

3 level coffee cups sifted flour = 1 pound.

2 level coffee cups pulverized sugar = 1 pound.
Ih level coffee cups granulated sugar = 1 pound.
1| level coffee cups '*A" sugar = 1 pound.

4 scant teacups sifted flour = 1 pound.

2 scant teacups soft butter, packed = 1 pound.

2 scant teacups granulated sugar = 1 pound.
2i scant teacups brown sugar = 1 pound.

8 or 10 ordinary eggs = one pound.

4 teaspoonfuls = 1 tablespoonful, liquid.

4 tablespoonfuls = 1 wineglass or half a gill.

2 wineglasses = 1 gill or half a cup.

2 gills = 1 coffee cupful or 16 tablespoonfuls.

2 coffee cupfuls = 1 pint.

2 pints = 1 quart.

4 quarts == 1 gallon.

2 tablespoonfuls = 1 ounce, liquid.

1 tablespoonful salt = 1 ounce.
16 ounces = 1 pound or a pint of liquid.
25 drops of thin liquid ^= 1 common teaspoonful.

1 pint of finely chopped meat, packed solidly = 1 pound.

158

USEFUL TABLES

TABLE 9
Gestation or Birth Table

Date of
Service.

January 1

" 2

" 11

" 16

" 21

" 26

" 31

February ... 5

" .15

" ....■ ...20
" 25

March 2

" 7

" 12

" 17

" 22

" 27

April 1

" 6

" 11

" 16

" 21

" 26

May 1

•* 6

" 11

•* 16

" 21

" 26

*• 31

June 5

" 10

" 15

" 20

" 25

" 30

July 5

•' 10

" 15

" 20

" 25

" 30

August 4

" .'.'.'. '.'.'.'.U

" 19

" 24

" 29

September •• 3

" '.'.'.'. .'.'.'.13

" 23

'* 28

October 3

" 8

'* 13

*• 18

" 23

•• 28

November • . 2

" 7

*' 12

•• 17

•' 22

" 27

December ... 2

" 7

" 12

" 17

" 22

" 27

•' 31

Mares.

340 Days.

Date of Birth.

December ... 6

" 11

" 16

" 21

" 26

" 31

January 5

" 10

" 15

" 20

" 25

" 30

February ... 4

'* 9

" 14

" 19

" 24

March 1

" 6

" 11

*• 16

" 21

" 26

" 31

April 5

" 10

" 15

" 20

" 25

" 30

May 5

'* 10

" 15

" 20

" 25

" 30

June 4

" 9

" 14

" 19

" 24

" 29

July 9

'" 14

" ...?.. ..19

" 24

" 29

Aujrust 3

•' '.'.'.'. "...13

" 18

*• 23

" 28

September .. 2

" '.'.'.'.'.'.'.'.12

" 17

• 22

" 27

October 2

" 7

" 12

" 17

** 22

" 27

November .. 1

" 6

" 11

" 16

" 21

" 26

December ... 1
" 5

Cows.

283 Days.

Date of Birth,

October 10

" 15

" 20

" 25

" 30

November • . 4

" 9

" 14

" 19

" 24

*' 29

December • • . 4

" 9

" 14

" 19

" 24

" 29

Jan uary 3

" 8

" 13

" 18

" 23

" 28

February ... 2

" 7

" 12

" 17

" 22

" 27

March 4

" 9

** 14

•* 19

'* 24

" 29

April 3

" 8

" 13

" 18

" 23

" 28

May 3

" 8

" 13

" 18

" 23

" 28

June 2

" 7

" 12

" 17

" 22

" 27

July 2

" 7

" 12

" 17

•' 22

•* 27

August 1

*^ 6

" 11

" 16

" 21

" 26

" Al

September .. 5

" '.'.'.'. .'.'..15

" 20

" 25

" 30

October 5

Ewes.

150 Days.

Date of Birth.

May 30

June 4

" 9

" 14

" 19

" 24

" 29

July 4

" 9

" 14

" 19

" 24

" 29

August 3

•• '.'.'.'.'.'.'.'.13

" 18

" 23

" 28

September .. 2

" 7

" 12

" 17

'* 22

" 27

October 2

•• 7

" 12

" 17

" 22

" 27

November .. 1

'* 6

" 11

" 16

" 21

" 26

December .. 1

" 6

" 11

" 16

" 21

" 26

'• 31

January 5

" 10

" 15

" 20

" 25

" 30

February ... 4

" 9

" 14

" 19

" 24

March 1

" 6

" 11

" 16

" 21

" 26

" 31

April 5

" 10

• 15

" 20

" 25

" 30

May 5

" 10

" 15

" 20

" 25

Sows.

112 Days.

Date of Birth.

April 22

" 27

May 2

" 7

" 12

" 17

" 22

" 27

June 1

" 6

" 11

" 16

■• 21

." 26

July 1

" 6

" 11

" 16

" 21

" 26

" 31

August 5

'^ 10

" 15

" 20

" 25

" 30

September .. 4

" '.'.'.'. '.'.'.'.U

" 19

" 24

" 29

October 4

" 9

" 14

" 19

*' 24

" 29

November . . 3

'* 8

" 13

" 18

" 23

" 28

December •• 3

" 8

" 13

" 18

" 23

" 28

January 2

•' 7

" 12

" 17

" 22

" 27

February • . • 1

" 6

•• 11

'• 16

" 21

" 26

March 3

" 8

'* 13

" 23

" 28

April 2

" 7

" 12

" 17

" 21

USEFUL TABLES 159

Ho^w to Find the ^Number of Tons in a Hay Stack.

A fairly accurate rule is as follows: Subtract the width
from the over (the "over" is the distance from the ground on
one side over the stack to the ground on the other side),
divide by two, and multiply by the width, and then by the
length. We have now found the number of cubic feet in the
stack. To find the number of tons, proceed as follows: For
a stack twenty days old, or under, divide by 512; between
twenty and sixty days old, divide by 422 ; over sixty days old,
divide by 380.

A more accurate rule for finding the number of cubic feet
is as follows: Subtract the width from the over; divide by
the height, then multiply successively by the over, the width,
the length, and by .225. The tons are then found as above.

INDEX

Page

Accounts,

Value of,

Farm, Difficulties of.

Household,

56, 60, 62

Personal,

21, 22, 23

Shop,

Agriculture, Statistics of, 110

Articles of Incorporation, 119

Balance Sheet, 47, 48

Bank Account,

Explained, 25

Illustrated, 26

Bill and Receipt File,

Explained, 14

Illustrated, 16, 24

Blank Books, 2

Bookkeeping,

Difficulties of Farm, 9

Importance of, 8

Breeding Record, 103

Business Forms, 141

Business Letter, The, 123

Business Organizations, 115

By-Laws, Form of, 119

Cash Books, 19, 44

Explained, 13, 39

Illustrated, 44, 60

Certificate of Deposit, 146

Check, The, 144

Closing the Ledger, 82, 86

Commercial Accounting, 70

Copartnership, Articles, 116

Corporations, 117

Cost of Production, 91

Of Crops, 96

Of Live Stock, 92

Dairy Herd, Test of, 93

Day Book,

Explained, 13

Illustrated, 10, 18

Deposit, Certificate of, 145

Depreciation, 14

Double Entry,

Books Needed, 38, 70

Compared with Single, 38

Superiority of, 37

Draft, The, 144

Equipment, 39

Exchange Phase, Importance of, 8

Farming, A Paying Business, 8

Feed Record, 103, 107

File, Letter and Bill, 16, 24

Hay, How to Measure, 159

History of the Farm, 13

Household Accounts, 56, 60, 62

Home Study, 28, 161

Improvements,

Pa«e
39

Introductory,

Inventory,

Explained,

Illustrated,

17, 18, 20

Continued,

17,25

Investment, The,

109

Invoice,

141

Joint Stock Companies

1, 117

Journalizing,

73, 75, 76, 78

Labor Records,

98, 102, 108

Labor Report,

101

Ledger,

41,70

Original Entry,

Lessons, 29,

43, 58, 76, 106

(See also page 161)

Closing, 20, 86

Lessons, Illustrative,

29, 43, 58, 76, 106
Live Stock, Cost of Production,

92, 97
Methods of Bookkeeping,

10, 12, 36, 69
Milk Records, 98, 102, 106

Note, The Promissory, 143

Office Methods, 100

Organizations, 115

Partnership, 115

Personal Accounts, 21, 22, 23

Phases of Farming, 8

Plot, The Farm, 99, 105, 109

Poultry Records, 98

Practice Work, 29, 43, 58, 76, 106
Posting, 74, 81, 82

Profit and Loss Statement, 47, 48
Profits, How to Determine, 15

Prosperity of the Farmer, 7

Questions, Review, 67

Rates of Depreciation, 14

Receipt, The, 142

Records, What They Should

Show, 9

Repairs, 39

Sales Book, Duplicating, 104

Shop Accounts, 66

Single Entry, 13

Special Records, 98

Statement, The, 142

Financial, 18, 20, 47, 48, 84

Success, Causes of, 7

Supplies, 39

Tables, Useful, 149

Terms and Definitions, 71

Time Book, 10, 104

Trial Balance, 40, 57, 84

Voucher Check, 147

(160)

INDEX TO THE HOME-STUDY COURSE

The Home-Study Course in Farm Accounting and Business
Methods comprises fifteen assignments as follows: —

Blank

Assign- Form

ment Lesson ISo. Page

I. 1 The Inventory 1* 29

2 The Day Book and Cash Book 1 30

II. 3 Personal Accounts 1 31

4 Statement No. 2 1 33

5 The Bank Account 1 34

III. 6 Cash Receipts, Set 1 (Also Form 14) . . 2 43

7 Cash Payments, Set 1 (Also Form 15) 3 48

8 Statement No. 3 12 50

IV. 9 Cash Receipts, Set 2 (Also Form 14) 2 51
10 Cash Payments, Set 2 (Also Form 15) 3 52

V. 12 Household Accounts, Set 1 (Also

Forms 16 and 17) 4 and 5 58

13 Household Accounts, Set 2 (Also

Forms 16 and 17) 4 and 5 59

VI. 11 Statement No. 4 12 and 13 54

14 Continued Inventory 1 64

VII. 22 Milk Record 10 1C6

23 Feed Record 9 107

VIII. 24 Labor Record 6 108

25 Farm Plot : 11 109

IX. . 16 Journalizing 1 76

17 Posting 20** 81

X. 18 Trial Balance 1 84

19 Balance Sheet 1 84

20 Closing the Ledger 20 86

XI. 26 Partnership and Joint Stock Co.,

Exercises 1 and 2 117

27 Corporations, Exercise 3 122

XII. 28 Arrangement of a Business Letter,

Exercises 4 and 5 129, 131

30 Addresses and Inclosures, Exercise 7 140

XIII. 29 The Business Letter, Exercise 6 136

XIV. 31 Business Forms, Exercises 8 and 9 . . . 141, 142
32 Negotiable Instruments, Exercises

10 to 14 143-147

XV. Final Review and Test.

* Two or three column journal paper.
** Common ledger paper.

(161)

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UNIVERSITY OF CALIFORNIA LIBRARY

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