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team are charged with the following: Plowing 34 hours; dragging 1 hour; seeding 1 hour; cutting 14 hours; stacking 1 hours, and threshing 16 hours? One-half hour man labor is also charged for shocking.

2. Men and teams must be allowed approximately of the year for producing a crop on wheat farms, although they actually work only about one-half of this time. The acre cost of wheat for man and horse labor is $3.30. The cost of maintaining a horse is $90.00 a year, and man labor is worth $480.00 a year. How many acres should the man and team raise each year?

3. The cost of harvesting 115 acres of corn silage was as follows: Cutting with corn binder $76.40; twine $68.03; hauling from the field $300.99; loading, feeding, and packing, $186.46; coal $57.69; rent of power machinery, $188.00, and depreciation on ensilage cutter, $30.00. What was the cost an acre and the cost a ton for harvesting if the silage yielded 10 tons an acre? 4. An investigation shows that fertilized potato land produced 161 bushels an acre and unfertilized land 126 bushels. The total cost of producing and marketing the potatoes on unfertilized land was $26.37 an acre, and on the fertilized $37.72, including $6.50 for fertilizer. If potatoes sold for 50¢ a bushel, what was the profit on the fertilized over the unfertilized land? What was the per cent profit on the cost of production in each case?

5. The average cost of keeping a cow was as follows: feed, $43.07; horse and tractor labor, $2.37; depreciation, $15.70; interest, $7.68; 191 hours of man labor at 171⁄2¢ an hour; and miscellaneous cash cost of $1.79. If the cow produced $7.72 worth of skim milk and 170 pounds of butter fat, what was the cost per pound of butter fat, allowing no credit for manure? 6. If the butter fat in the above problem sold for 48 cents a pound, what did the cow pay the farmer for each hour that he spent on her?

7. A farmer produced within a calendar year, 13,274 pounds of pork on his farm. The costs were as follows: feed, $326.93; labor, $81.38; interest, $25.08; and other costs, $52.17. The average sale price was $6.80 per cwt. What was the cost and profit for each 100 pounds produced and what was the total profit on the hog enterprise?

8. The cost of keeping a farm horse was as follows:

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The horse worked 963 hours. What was the cost of horse labor per hour?

9. It requires 238 hours of labor with a two-horse team to raise 11 acres of corn. The corn yields 42 bushels an acre. At the price found in example 8, what is the cost an acre for horse labor? What is the cost per bushel for horse labor?

10. A corn binder was purchased in 1905 for $115.00. It was inventoried in successive years as follows: 1906, $105.00; 1907, $100.00; 1908, $92.00; 1909, $75.00; 1910, $60.00; 1911, $40.00; 1912, $25.00. What was the average rate of depreciation?

11. A dairy cow was valued in 1905 at $70.00. She was sold for meat in 1912 for $35.00. What was the rate of depreciation?

12. On Jan. 1, 1908, a farmer inventoried 7 horses at $1150. On Jan. 1, 1911, the same horses were inventoried at $985. What was the average annual depreciation? What was the percentage rate of depreciation?

13. The charges against a seventy-acre field of wheat were as follows: Land rent, $224.00; plowing, $105.00; harrowing, $28.00; seed, $87.50; seeding, $21.00; stacking, $31.50; harvesting, $48.00; threshing, $112.00; machinery depreciation, $23.80. The land produced 1,280 bushels of wheat. What was the cost of production per acre? What was the cost per bushel?

14. The wheat sold at 76 cents per bushel. What was the profit on an acre of wheat? What was the profit per bushel?

REFERENCES

Cost of Producing Minnesota Farm Products.-Bulletin No. 48, Bureau of Statistics, United States Department of Agriculture.

Cost of Producing Farm Products.—Bulletin No. 73, Bureau of Statistics, United States Department of Agriculture.

Cost of Producing Minnesota Dairy Products.-Bulletin No. 88, Bureau of Statistics, United States Department of Agriculture.

Methods of Conducting Cost of Production and Farm Organization Studies.-Bulletin No. 994, United States Department of Agriculture.

Report of Committee appointed by the Secretary of Agriculture to consider Plan of Organization, Scope of Work, and Projects for the Office of Farm Management, and Methods of Procedure in Making Cost of Production Studies.-Circular No. 132, Office of the Secretary, United States Department of Agriculture.

CHAPTER XV

FARM RECORDS*

133. Farmers are often criticized because they do not "keep books." In the criticism they are compared with the merchant and it is pointed out that the business man keeps books and knows just where he stands. The fact is that the merchant keeps accounts with a large number of people who buy goods from him. He also keeps accounts with the people from whom he buys goods. All of the transactions are in exact terms of cash. Such accounts can be classified and systematized so that the account with each one can be balanced at any time and a statement made showing in whose favor the balance stands. The customers who do not pay their bills may be dropped from the list. No merchant could long stay in business without some system of accounting to show his debits. and credits.

134. Farm Records Desirable. Farm records are just as desirable for the farmer as business accounts are for the merchant. Farm records, however, are more complex and difficult to keep because they often deal with estimated, instead of cash values. The farmer's accounts are with crops and live stock as well as with people. In keeping accounts with the crops and stock, cash values are not always given. Estimates of cost or value must be made. Often the corn, hay, oats or other produce is fed to the live stock. A portion of the live stock or live stock products is consumed by the family, further complicating the records. This renders it difficult to detemine whether a certain crop or class of live stock has been profitably produced or handled. Yet, it is important for the farmer to know with reasonable accuracy what lines of production are yielding the best returns. On an unprofitable line or

*See note at end of Chapter, Page 204.

enterprise he should change his methods of production to lessen the costs or, if an enterprise cannot be made profitable under his conditions of farming, it should be dropped out just as a merchant drops a customer who does not pay his bills. To determine accurately which enterprises pay best, it is essential that the farmer become expert in estimating costs and in recording transactions relating to the farm business. Record keeping, rather than book accounting, as the term is commonly known, is the matter in which the farmer should be interested.

His

135. Farm Records Must be Simple. The nature of a farmer's work prevents him from becoming sufficiently expert to handle successfully a complicated system of accounts. work in the fields and with the live stock occupies his time during the day and he is too tired at night to undertake an extended system of bookkeeping. The farmer's business is usually not large enough to warrant the employment of some one trained as an accountant. The system of records should therefore, be simple enough that the farmer himself or some member of his family, may keep them without too great an expenditure of time.

136. Records to Keep. So far as the business of the farm is concerned, there is no need of a double entry system of bookkeeping. It must be admitted that such a system is most accurate and admits of a close analysis of the farm business, but the skill required and the labor of keeping a double entry system are greater than the farmer can afford. For most farms the following records will be sufficient for a complete account of the farm business:

1. Inventory,

2. Classified receipts record,
3. Classified expense record,
4. Bills I owe others,
5. Bills others owe me,

6. Feed records,

7. Labor records for men and
horses,

8. Production records,
9. A receipt file.

These records should enable the farmer to determine what his total profit or loss has been and whether the gain is in the form of cash or increased inventory. It is a matter of vital importance to know what enterprises, crops, or products have been produced at a profit, or at a loss. He should also know how he stands with other people, in a financial way.

137. The Inventory. Of all the different records that may be kept, none are more important than the inventory. An inventory carefully taken at the beginning of the year and another one taken at the close of the year with a cash receipts and expense record will show, if complete, how much has been made or lost during the year. This makes it possible to tell whether the farm, as a whole, has paid. It does not tell which crop or class of stock has returned the greatest profit. A comparison of the inventories with a net worth statement from year to year, will show whether the farmer is growing richer or poorer. Often the inventories will show that capital is accumulating even though cash may be scarce. The increase may be in feed or supplies. Machinery and other equipment added to the farm are counted as profit just as legitimately as though the increase were in cash. Young stock increases in value and adds to the inventory also. If the inventory is classified when taken it will help to show where the greatest increase in value has been made The forms shown on pages 180 to 183 will be very convenient in taking inventories over a period of years. It is not unlike other inventories, except that provision is made for a greater number of years. This enables one to avoid rewriting the items of the inventory each year. The old items are simply checked over and new ones added in the space which should be left between the different classes of animals or equipment inventoried. Other forms may be followed if desired, but this one is offered with the belief that it is as convenient as any. 138. Taking the Inventory. The first inventory may be taken at any time convenient. It is best to take it when the stock and supplies are at the lowest. On diversified farms

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