16 BULLETIN 225, U. S. DEPARTMENT OP AGRICULTURE. 



account is debited with the amount of subscriptions for capital stock 

 sold on the installment plan and is credited with all amounts received 

 as partial payment on such subscriptions. The debit balance appear- 

 ing on the account represents the amount due and unpaid on sub- 

 scriptions for stock sold in this way. In making the first entry, the 

 Stock Subscription account is debited for the amount of stock sub- 

 scribed to be paid on the installment plan, and the Subscribed Stock 

 account is credited for this amount. The credit balance appearing 

 on this account represents the total amount of stock subscribed but 

 not fully paid for. As fast as the subscriptions are fully paid up, 

 entries are made debiting the Subscribed Stock account and crediting 

 the Capital Stock account. 



This information is here inserted merely to show the correct method 

 of recording the sale of stock to be paid for in installments, and not as 

 a plan of financing the organization. This method of procedure and 

 also that of charging the amount of the stock to the growers' accounts 

 to be deducted from the net proceeds obtained for fruit shipped, 

 may work ,well in some instances, but is usually productive of dis- 

 satisfaction on the part of those who have met their obligations faith- 

 fully because those who have contributed but a portion of the amount 

 subscribed claim and enjoy full rights and benefits. 



All future entries are records of actual transactions, and the proper 

 accounts are opened in the ledger as required. 



In changing from a set of single-entry books to a double-entry, or 

 reopening a set of double-entry books preparatory to installing this 

 system, the financial position of the exchange should be determined 

 by making up a statement of assets and liabilities, showing on one 

 side the assets and on the other side the liabilities and capital invested. 

 This statement should be made up in the following form : 



ASSETS. 



Cash in bank $1, 000. 00 



Cash on hand 500. 00 



$1, 500. 00 



Bills receivable 500.00 



Accounts receivable 500. 00 



Merchandise inventory 1, 950. 00 



Office furniture and fixtures 800. 00 



Buildings 5,000.00 



Real estate 2,000.00 



LIABILITIES AND CAPITAL. 



Accounts payable $1, 500. 00 



Billspayable 2, 000. 00 



Capitalstock -8, 500. 00 



Balance (profit) 250. 00 



12, 250. 00 12, 250. 00 



