Livestock Working Account
What is a Livestock Working Account?
A livestock working account shows details of where livestock came from—what happened to them—and how much profit the farm made from them in a period.
![lw 1](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-1.jpg)
How it Works
The farm will start the accounting period with a certain amount of livestock.
![lw 2.1](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-2.1.jpg)
During the period, they may buy more livestock.
![lw 3](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-3.jpg)
On top of this, there will be natural increase.
![lw 4](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-4.jpg)
Some will die.
![lw 5](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-5.jpg)
Some will be used for rations—or food for the farm owners or employees.
![lw 6](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-6.jpg)
Finally, some will be sold during the period.
![lw 7](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-7.jpg)
This will leave the farm with a closing stock, as at the end of the accounting period.
![lw 8](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-8.jpg)
To calculate the profitability of each livestock class, farm management rely upon livestock working accounts.
![lw 9](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-9.jpg)
Livestock working accounts are a different to other accounts.
![lw 11](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-11.jpg)
They have a column for livestock numbers as well as one for livestock value.
![lw 11](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-11.jpg)
Besides this, the livestock working account works the opposite way around to other accounts.
![lw 12](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-12.jpg)
The debit side shows where the livestock came from.
![lw 13](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-13.jpg)
The credit side shows what happened to that livestock.
![lw 14](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-14.jpg)
Some of the information for the account comes from the farm’s accounting records.
![lw 15](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-15.jpg)
While the remaining information comes from the farm’s livestock records.
![lw 16](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-16.jpg)
Stock On Hand At Start
When preparing the working account, you begin by transferring the value for stock on hand to the account.
![lw 17](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-17.jpg)
You obtain the number of stock on hand from the farm’s records.
![lw 18.5](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-18.5.jpg)
Once updated, the account shows stock on hand at the beginning of the period.
![lw 19](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-19.jpg)
Purchases
Next, you transfer the value of purchases to the account.
![lw 20](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-20.jpg)
This shows how much livestock was purchased during the period.
![lw 21](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-21.jpg)
Natural Increase
Finally, the working account also needs to show natural increases.
![lw 22](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-22.jpg)
However, as new born cost nothing to acquire, you don’t assign a value for them.
![lw 23](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-23.jpg)
Instead, you simply record the number of livestock born, obtainable from the farm’s records.
![lw 24](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-24.jpg)
Deaths
As with natural increase, you don’t assign a value to livestock deaths either.
![lw 25](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-25.jpg)
You simply record the number of deaths, once again obtainable from farm records.
![lw 26](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-26.jpg)
By crediting the working account, you show the reduction in stock numbers due to deaths
![lw 27](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-27.jpg)
Rations
Livestock killed for rations also reduces stock numbers.
![lw 28](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-28.jpg)
As rations reduce the total value of livestock on the farm, it is considered an expense
![lw 29](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-29.jpg)
To show this expense, you credit the working account.
![lw 30](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-30.jpg)
In this case, you assign a value, typically the average cost as at the last period.
![lw 31](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-31.jpg)
Then you also debit the rations expense account with this amount.
![lw 32](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-32.jpg)
Sales
The working account also needs to show how many livestock were sold during the period.
![lw 33](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-33.jpg)
For this, you transfer the sales value from the sales account to the working account.
![lw 34](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-34.jpg)
Stock On Hand At Close
Finally, the working account needs to show stock at close.
![lw 35](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-35.jpg)
Here, you find closing stock from the farm’s records and credit the working account with its value.
![lw 36](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-36.jpg)
At the same time, you debit the stock account..
![lw 37](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-37.jpg)
Net Profit
Now all remains to be done is to find the working account’s balance.
![lw 38](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-38.jpg)
This will show net profit for the period.
![lw 39](https://seeaccountingnow.online/wp-content/uploads/2021/08/lw-39.jpg)