To handle the sales and purchases, three categories and one account are needed. These are the same as shown in the Category & Transfer list of the FARM&HOME.QIF file in the Categories and Classes chapter. The following example is for feeder cattle.
This is an asset account. When cattle are purchased the cost of the cattle are added to this asset account. When these cattle are sold, the cost is subtracted from this account.
LS Sold:PFeeder
This is the income category to record the cash receipts for the purchased cattle sold. This is a tax-related category and the total amount is reported on line 1, Schedule F. The category name chosen should fit your situation.
Feeder LS:Cost
This is the expense category where the cost of the purchased cattle sold is recorded. This is a tax-related expense category. The amount in this category is reported on line 2, Schedule F. The category name should fit your situation best.
Marketing:Mkt LS
This is a tax-related expense category used to record marketing costs that are deducted from the gross sales amount.
Quantities and Cost
The number of animals purchased and their cost will need to be tracked in the asset account [Resale Inv]. If purchased animals are on hand at the end of the business year, the [Resale Inv] account will show the cost basis of the livestock for a balance sheet. If you buy and sell multiple groups of livestock during the year, you will need to establish a procedure to handle them such as FIFO (first in, first out) or LIFO (last in, first out) if you are not able to track each lot. If any of the purchased animals die, their cost can be deducted in the year they die.