BOOKKEEPING NEEDED.

Hauraki Plains Gazette, Volume XXXIII, Issue 4367, 18 January 1922, Page 2

BOOKKEEPING NEEDED.

FARMERS- AND FINANCE. How many farmers are .able tp tell at short notice how they stand flnann cially ? The question is suggested by an interesting pamphlet which has; been issued by the United States Dei partment of Agriculture, and in which is outlined a method of analysing the farm business witlh a'view to. determine the investment expenses, and profits. The analysis is based on preliminary accounts tabulating labour and other records of cost incurred in feeding live stock. The entire system is finally brought down to a table called the farm summary, which groups totals of detailed accounts under the heads of investments -farm income, value of operators’ labour, percentage return on investment and value of items for family use. The first three headings'are again subdivided into three, as follow : (1) Investment, including, real estate, live stock, machinery and equipment, food and supplies, and cash to run farm; (2) farm receipts, comprising live-stock increases, other sources and increase in food and supplies ; (3) farm expenses, comprising current costs, unpaid family labour, depreciation, and decrease in food supplies. To arrive at the ihvest-i ment result the average of the investments at the beginning and at the end of the farm year may be taken, or merely the investment at the beginning of the year, which ever represents more nearly the true capital invested in the year’s business. The choice is governed by conditions on individual farms. If real estate improvements are made, additional equipment purchased or additional live stock added early in the years business, the average of the investment at the beginning and the end of the farm year should be used. Should such changes in Investment have, oc-i curred late in the year ,the amount at the beginning of thei year willi probably represent more nearly the capital from that year’s business, The total under the five subordinate heads already mentioned will give the entire farm investment on which interest should be charged. Under receipts the sum of the four subordinate groups will represent the total df the receipts of the farm), and in like manner the items which fall under the general heading of expenses will show the position for total outgoings. Farm income is arrived at by subtracting the total expenses from the total receipts, the result giving the total money receipt for the use of capital and workmen’s wages.