FOREST STATICS BALANCE SHEET PROFITS 117 



This public sentiment for regulation is the expression of an 

 instinctive protest against destructive lumbering as a policy, 

 for it is far more expensive and wasteful to tear down a busi- 

 ness and then rebuild it than to continue it as a going concern. 

 Whether or not forest owners can afford any other policy than 

 destructive lumbering, they should in any case use every effort 

 to do as little harm as possible to reproduction, protect cut-over 

 lands from fire, and induce the formation of a new crop of natural 

 seedlings on absolute forest soils. In proportion to the effective- 

 ness of such measures for perpetuating the productiveness of 

 forest lands in private hands, the desire on the part of the public 

 for drastic interference with private rights will lose its force. 



131. Forms for Specific Accounts in Forestry. The accounts 

 kept by the proprietors of a large business, involving the owner- 

 ship and management of many separate parcels of forest land, and 

 a more or less continuous annual income and outlay, must show 

 specifically the cash transactions and actual cost of the property. 



The capital accounts should record cost of permanent assets. 

 But to this cost may be added the annual excess of actual cash 

 expenses over annual income, incurred for the care and mainte- 

 nance of the property (57). The only alternative is to exhibit 

 a corresponding deficit in the balance sheet. The choice between 

 these methods will be based on the character of the assets. 

 For property increasing in value by natural growth of timber 

 there can be no serious objection to the process of adding actual 

 costs to the capital account. 



A depreciation fund is seldom required for such an enterprise. 

 The equipment subject to depreciation is of such small total 

 value that it will usually appear as expense. 



BALANCE SHEET 



Assets 



Capital assets: 

 Land. 

 Timber. 

 Other property 



less depreciation. 

 Current assets: 

 Cash. 

 Accounts receivable. 



Liabilities and Proprietorship 

 Capital paid in. 

 Surplus. 



Loans (liabilities). 



Current liabilities: 

 Accounts payable. 



