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+--- Thread: Farm Accounting (/thread-farm-accounting)
Farm Accounting - maxmak - 08-19-2010
Anyone out there with a proper knowledge of accounting for farming. I need help with forming Chart of Accounts and some general accounting tips.
For starters can you explain where pesticides, fertilizers etc. will go in an Income Statement, will they be considered part of COGS or shall I put them in expenditures? Thanks
- Information Consultant - 08-19-2010
What is the nature of farming or what is the finished good of ur buisness
Pesticides and fertilizer are the part of cost of goos sold
- maxmak - 08-21-2010
I am a farmer and grow variety of crops, but no matter which crop I grow the basic structure remains the same. I always have to buy pesticides, fertilizers, compost etc. I use my tractor and the required implements related to the crops. And since I also employ people I have to maintain a payroll, but I also hire contractual labour at times when required. Although I donât usually require it but sometimes I have to pay for the storage of my harvest as well, but whether the harvested crop is kept under lock and key or out in the open, I have to hire a guard for it.
I have some basic understanding of accounting but its not enough for me to make proper chart of accounts for farm accounting. Would it be possible for you to help me in this matter. I grow Rice, Wheat, Cotton, Sugar cane etc. If you require certain kind of information I can provide that.
What I want to know is what should be my inventory & COGS be comprised of. Farming roughly consists of following steps
Step 1 Landscaping (preparation of land)
Step 2 Seed sowing/ Nursery transplanting
Step 3 Irrigation (Water from Canals, Tube wells; which use diesel or electricity)
Step 4 Fertilizers, Pesticides etc
Step 5 Harvesting
Step 6 Storage
Step 7 Supply to market (at a cost of course)
other expenses would include Salaries, Depreciation, Farming loan; interest & principal
Thanks for your response
- Information Consultant - 08-21-2010
i will understand ur requirement but the thing is that i will answer this query later in the evening just tell me one thing that are u maintainng u accounts manually or computerised bcz chart of account prepare accordingly
- maxmak - 08-22-2010
So far there is not much of accounting going on according to proper rules, it's more like addition and subtraction on paper. At the end of every quarter the final picture of the balance with some detail is entered into a computer for record sake. I have recently joined the family business and would like make our methods up to date, which also involves proper maintenance of accounts on a computer database. I am familiarising myself with Peachtree and QuickBooks but since I lack some base in accounting, I need help. Please ask around or point me in the right direction. Thank you
- Information Consultant - 08-23-2010
Step 1 Landscaping (preparation of land) (Capitalized this activity)
Debit Land
Credit Cash/Bank
Step 2 Seed sowing/ Nursery transplanting(Rawmaterail)
Debit RawMaterial
Credit Account Payable/cash/bank
Step 3 Irrigation (Water from Canals, Tube wells; which use diesel or electricity)(It is a part of Cost of goods sold)
Step 4 Fertilizers, Pesticides etc (Same as step 2)
Step 5 Harvesting (it is a part of cost of goods sold)
Step 6 Storage ( Finished Goods )
Step 7 Supply to market (at a cost of course) (Cartage part of cost of goods sold)
Following expense are administrative expense
other expenses would include Salaries, Depreciation, Farming loan; interest & principal
Bcz u r maintaing manual account use ledger books and post each entry in appropriate ledger
however send me ur email address i will send u excel file containing chart of account as per ur requirement
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- Sarfaraz Khan - 08-23-2010
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- WARDAH - 08-23-2010
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