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26 



The Florists^ Review 



April 27. 1922 



on hand at the greenhouses which had 

 been paid for and charged to Green- 

 house Expense. 



Unexpired Insurance represents the 

 equity in premium of all policies in 

 force. 



Stockholders' Accounts represents the 

 amount due the firm from stockholders. 



liiabilitles. 



Liabilities are arranged according to 

 the priority of liquidation. In other 

 words, the items falling due first should 

 head the list. 



Accounts Payable represents the 

 amount we owe creditors on open ac- 

 count. 



Bills Payable represents the amount 

 we owe the bank or other creditors which 

 has been secured by notes. 



Net Worth. 



Capital Stock represents the amount 

 of stock issued to stockholders. 



Surplus represents the undivided or 

 accumulated profits, or the amount avail- 

 able for dividends. 



Gain for the Year represents the net 

 earnings for the year after all allow- 

 ance for depreciation and all expenses 

 have been deducted. 



Dividends and Income Tax represents 

 the dividends paid to stockholders and 

 income tax paid on the net earnings for 

 the previous year. 



Net Worth represents the excess of 

 the assets over the liabilities, or the ac- 

 tual worth of the business. 



Profit and Loss Statement. 



Table No. 2 shows the form of the 

 profit and los? st.atement which we use. 



PKOFIT AND LOSS STATEMENT. 

 INCOME: 



('harge sales $86,000.00 



Cash snles 20,000.00 



Commissions (F.T.D.). 1,000.00 



Total sales and com $107,000.00 



COST OP SALES 70,000.00 



Gross profits $ 37,000.00 



DELIVERY EXPENSES: 



Trucks expenses $ 3,000.00 



Trucks depreciation... 1,250.00 



Total delivery expenses..? 4,250.00 



SELLING AND GENERAL EXPENSES: 



Store pay- 

 roll $10,000.00 



Rent 2,000.00 



Ice, heat, 

 light and 

 water . . 1,000.00 



Telephone 

 and 

 telegraph 1.000.00 



Advertisinp 2,000.00 



Commission 4,000.00 



Office sup- 

 plies POO.OO 



Store ex- 

 penses . . 250.00 



Postage . . 200.00 



Dues 100.00 



Legal ex- 

 penses . . 100.00 



Convention 



expenses. 200.00 



Banlc ex- 

 change . . 2.". 00 



Depreciation 

 fur. and 

 fixtures.. .'.00.00 



Total selUnp 

 and gcnenil $21,875.00 



Total sellinp. 

 general and 

 delivery . . $ 20,123.00 



Profits from pper.iti.n. . $10,875.00 



Deduct: 



In.suranop and tax(>s..$ 1,67.") 00 



Interest and discount. 1.400. 00 



$ 3,075.00 

 Add: 

 Bad acc'ts reccvered. 200.00 



3,875.00 



NET GAIN FOP. YEAR... $ 8,000.00 



Table No. 2. 



The gross profit earned in any business 

 is the amount by which the proceeds of 

 selling, whether realized in cash, ac- 

 counts receivable or other ^ssets, ex- 

 ceed the cost of acquiring or producing 

 the articles dealt in. 



The net profit is the amount by which 

 the gross profit exceeds all the expenses 

 incurred in producing the gross profit. 



From our total income through sales 

 and commissions we deduct the cost of 

 merchandise sold, which gives us the 

 gross profit for the year. From the gross 

 profit we deduct our overhead expenses, 

 which leave the net profit for the year. 



Cost of Goods Sold. 



To arrive at the cost of goods sold, it 

 is necessary to have the inventory at the 

 beginning of the period, to this add the 

 purchases for the year and deduct there- 

 from the inventory at the close of the 

 period. How this is done appears in Ta- 

 ble No. 3. In our purchases for the year 

 we include the stock received from the 

 farm and greenhouses at prevailing 

 wholesale prices. Then it is necessary 

 for us to take into consideration the cost 

 of production at the farm and green- 

 houses, which is arrived at by adding 

 to the inventories at the beginning of 

 the period the expense of operation and 

 the depreciation on buildings and equip- 

 ment. From this sum deduct the inven- 

 tories at the end of the period, which 

 gives the net cost of operation. This 

 sum, less stock furnished the store and 

 included in purchases, gives the deficit, 

 which is added to the cost of sales. Un- 

 der this method, had the farm and green- 

 houses showed an earning, the cost of 

 sales would have been reduced. Express, 

 freight and parcel post on merchandise 

 purchased is chargeable to the cost of 

 goods sold. 



Form of Check Used. 



While we do not claim to have any- 

 thing extraordinary in the way of an 

 accounting system, we do believe that 

 we use a cheek that is better than the 

 average. It is shown on page 27. The 

 space provided for invoices makes it 

 possible to include in the check a com- 

 plete record of the items paid. The 

 space for the name and address of the 

 payee fits a No. 10 window envelope, or 

 a No. 6% envelope when folded, which 

 saves us the time of addressing an en- 

 velope for checks that are to be sent 

 through the mail. 



We believe it is an improvement over 

 the ordinary check because it permits of 

 more information, and we use it in pref- 

 erence to the regular form of voucher 

 check because it furnishes the same in- 

 formation in a more simple and com- 

 pact form. 



Some have criticized the high coloring 

 and the use of the garland of flowers in 

 connection with the "Say It with Flow- 

 ers" slogan, but those are merely mat- 

 ters of fancy on the part of our man- 

 ager and the printer, and have nothing 

 to do with the check's v.alue as a record. 

 We have also had some quite favorable 

 comment on this check. 



In conclusion I would say that the 

 plainest and simplest system that will 

 .Tdequ.ntoly take care of all the details 

 .nnd transactions of a business is the 

 one to be sought. Too much system and 

 red tape have a tendency to reduce effi- 

 ciency and gnaw at the profits of a 

 Inisiiiess nnd are as much to be avoided 

 a? the lack of sufficient system. 



CHANCE FOB CO-OPEBATION. 



Banks are a good place to hold flower 

 shows. The notable displays frequently 

 made at bank openings have impressed 

 this fact upon many florists and some 

 bankers. It has reached the action 

 point in Indianapolis, where the Bank- 

 ers' Trust Co. has announced an ama- 

 teur flower show to be held this summer 

 in its lobby. Cash prizes and ribbons are 

 to be awarded in eight classes. Separate 

 exhibitions are to be held, the dates 

 to be announced later. No entry fee 

 is charged, and the contest is open to 

 every amateur flower grower in Marion 

 county, Ind. The bank is cooperating 

 in this fashion with the local fire pre- 

 vention bureau's "Let's Clean 'Er Up" 

 campaign. 



Early announcement is made so that 

 the amateurs of Indianapolis and vicin- 

 ity may begin their gardens early and 

 produce flowers of a prize-winning 

 character. Particulars concerning the 

 contest were given in a page of adver- 

 tising in the Indianapolis News, April 

 13. The center of the page was occupied 

 by the notice of the Bankers' Trust Co., 

 while surrounding it were the advertise- 

 ments of seed houses, nurserymen, hard- 

 ware dealers and florists, who offered 

 the wherewithal to produce prize-win- 

 ning flowers. 



The event is regarded as one which 

 will be of distinct value to the florists' 

 business in Indianapolis, and the trade 

 there will give the bank their best 

 cooperation. They realize that annual 

 events of this character would greatly 

 stimulate the interest in, and without a 

 doubt the purchase of, flowers in summer 

 and winter. 



Each florist has received a letter from 

 Howard C. Binkley, president of the 



COST OF (H)OI>S SOLD, 

 MERCHANDISE PURCHASED: 

 Merchandise Inventory 



beginning of period. $ 6,000.00 



Add purchases for vear 35,000.00 



Add receipts from farm 6,000.00 



Add receipts from 



greenhouses 14,000.00 



$60,000.00 

 Less inventory end of 



period 8,000.00 



Cost of "merchandise 



purchased" sales $ 64,000.00 



FARM PRODUCTION COST: 



Farm Inventory begin- 

 ning of period $10,000.00 



Add farm expenses... 8.000.00 



Add depreciation farm 



buildings 200.00 



Add depreciation farm 



equipment 800.00 



$18,600.00 



I.#S8 inventory end of 

 period 8,000.00 



$10,600.00 

 Ijoss mdse. furnished 

 store included in mdse. 



• purchases 6,000.00 



Farm deficit 4,500.00 



GREENHOUSE PRODUCTION COST: 

 Greenliouse inventory 



beginning of period. $10,000.00 

 Add greenhouse ex- 

 penses 20.000.00 



Add greenhouse depre- 

 ciation 3.000.00 



$33,000.00 

 Less inventory end of 

 period 11,000.00 



$22,000.00 

 Less mdse. furnished 

 store included In mdse. 

 purchases 14,000.00 



Greenhouse deficit 8.000 0") 



Express freight and 



parcel post 3,500.00 



COST OP GOODS SOLD.. $ 70.000.00 



Tabic No. 3. 



