ACCOUNTING FOR FRUIT SHIPPING ORGANIZATIONS. 20 
able directly against packing-house or warehouse operations); Legal; 
Light, heat, and water; Office supplies and stationery; Postage; 
Salaries; Telephones and telegraph; Traveling; Miscellaneous. The 
balances appearing on these accounts at the end of the year are closed 
into the profit and loss account. 
Packing-house expense-—The segregation of the packing-house 
pay roll is made under the following items, for which accounts are 
opened in the ledger: Packing house—salaries of clerks, foreman, etc. ; 
receiving; sorting; floorwork, floormen, and truckers; packing; press- 
ing and stenciling; miscellaneous. 
Accounts are also opened under the following captions for segre- 
gating the cost of supplies and of expenses, other than labor, per- 
taining to packing operations: Packing house—boxes; paper; nails; 
light and power; repairs. 
Warehouse expense accounts.—The warehouse expenses are segre- 
gated under the following accounts: Warehouse—labeling; trucking; 
loading of cars; salaries of foreman, car checkers, etc. 
Car bracing lumber and paper.—Under this are included all mate- 
rials used for bracing cars, such as 2 by 4’s, 1 by 6’s, and car strips; 
also paper and straw used for car linings. The account is charged 
with the various items as they are purchased and at the end of the 
shipping season is credited with the value of the materials on hand. 
The balance appearing on the account, representing the cost of the 
goods used in bracing the cars, is transferred to the warehouse 
account. 
Reserve for depreciation.—Owing to the peculiarities of the fruit 
business, heavy allowances should be made to cover the depreciation 
on buildings and equipment. 
Instead of writing down the value of office equipment, packing- 
house equipment, and warehouse equipment, to cover the ordinary 
wear and tear or depreciation on these assets, it is a better plan to 
set up a reserve for this purpose under the caption “Reserve for 
depreciation on equipment.” This is accomplished by charging 
“Profit and loss” and crediting ‘‘ Reserve for depreciation on equip- 
ment”’ account at the close of the year. 
As in the case of equipment, the depreciation of buildings is set 
up in a reserve account under the caption ‘‘ Reserve for depreciation 
on buildings.” By itemizing the credits on the ledger account the 
amount set aside for depreciation on the packing house and that set 
aside to cover the depreciation on the warehouse can be ascertained 
at any time.! ; 
Reserve for bad debts —Uncollected balances on accounts receivable 
are often carried into the succeeding year’s business at full face value 
1 For further discussion of the subject “‘ Depreciation”’ see U. S. Department of Agriculture Bull. No. 178: 
Cooperative Organization Business Methods. 1915. 
