A SYSTEM OF ACCOUNTING FOR COTTON GINNERIES. 



27 



H. RESERVES. 

 Reserve fob Depreciation, Buildings (HI). 



Debit: 



1. With the cost or book value of entire 

 buildings or parts of buildings dis- 

 carded or destroyed. (Credit 

 Buildings.) 



Credit: 



1. With the amount reserved as ac- 



cumulated depreciation on build- 

 ings as shown by the balance sheet 

 at the time of opening the books. 



2. At the end of the fiscal period with 



the estimated amount of depreci- 

 ation. (Debit Depreciation of 

 plant.) 



Where an entire roof, floor, or other part of a building is renewed, the original cost 

 of the renewed part should be charged to this account, and the cost of the renewal 

 to the Buildings account. Fireproof buildings of modern construction should be 

 depreciated from 1 to 2 per cent annually and frame structure from 3 to 5 per cent. 



Reserve for Depreciation, Machinery and Equipment (H2). 



Debit: 



1. With the cost or book value of ma- 



chinery or equipment destroyed or 

 discarded. (Credit Machinery and 

 equipment.) 



2. With the difference between the cost 



value and amount realized from 

 items sold. (Credit Machinery 

 and equipment.) 



Credit: 



1. With the amount reserved as ac- 



cumulated depreciation on ma- 

 chinery and equipment as shown 

 by the balance sheet at the time of 

 opening the books. 



2. With the estimated amount of de- 



preciation at the end of the fiscal 

 period. (Debit Depreciation on 

 plant.) 



3. With any amounts realized on sales 



of machinery and equipment 

 which have previously been 

 charged to this account. 



Owing to. the conditions existing in some types of plants, because of the peculiar 

 nature of the work involved, the wear and tear of machinery and equipment is exces- 

 sive. Special consideration should be given to these plant conditions in order that 

 adequate reserves for depreciation may be provided. Further discussion will be 

 found under "Machinery and equipment." 



Reserve for Depreciation, Office Furniture, and Equipment (H3). 



Debit: 



1. With the cost or book value of items 



destroyed or discarded. (Credit Of- 

 fice furniture and equipment.) 



2. With the difference between cost and 



amount realized from items sold. 

 (Credit Office furniture and equip- 

 ment.) 



Credit: 



1. With the amount reserved as ac- 



cumulated depreciation on Furni- 

 ture and equipment as shown by 

 the balance sheet at the time of 

 opening the books. 



2. With the estimated amount of de- 



preciation at the close of the fiscal 

 period. (Debit Depreciation on 

 plant.) 



3. With any amounts realized on sales 



of items which have previously 

 been charged to this account. 



