SYSTEM OF ACCOUNTING FOR COOPERATIVE ASSOCIATIONS. 23 



The balance of $1,000 is then credited to the Surplus account. All 

 closing entries should be made through the journal and not arbi- 

 trarily on the face of the ledger. It will be found advisable to list 

 all items of profit and loss on the Profit and Loss account instead of 

 showing these in total according to the journal entry. This will 

 preclude the necessity of turning back to the journal each time it is 

 desired to know the details of the items appearing in the Profit and 

 Loss account. 



After all closing entries have been made, a post-closing trial balance 

 should be taken to test the accuracy of the work. This schedule 

 will be found valuable in preparing the balance sheet. A full expla- 

 nation of the preparation of the annual statement will be found in 

 U. S. Department of Agriculture Bulletin No. 178, "Cooperative 

 Organization Business Methods." 



SECOND METHOD. 



It will be seen that the method first given does not provide for any 

 growers' accounts except for the sale of supplies. The second method 

 contemplates the opening of ledger accounts for all growers. These 

 present a complete record of the transactions with each individual 

 grower. This method should be used in organizations where the 

 supply business has been fully developed, and charges should be 

 made at frequent intervals throughout the year to the growers' 

 accounts. 



After the remittance covering the shipment has been received and 

 credited on the cash book and it is desired to make payment to the 

 growers, the distribution of the proceeds is made on the manifest as 

 in the previous method shown. The account sales are written up, 

 and a journal entry is made as follows: 



Fruit $600. 00 



To growers $536. 75 



commission 28. 25 



broker 10.00 



icing 25.00 



If each car is made up of the combined shipments of but two or 

 three growers, the name of each grower should be shown in the above 

 entry with the amount of the credit opposite. If, however, the cars 

 are made up of the shipments of many growers, the total credited 

 to the growers' accounts should be shown in the journal entry, and 

 the posting of the individual items should be made from the account 

 sales to the ledger accounts. Should it be necessary to look up the 

 details of this entry, the car number will give the reference to the 

 information desired. Duplicate copies of the account sales are filed 

 in folders under the growers' names, as explained under the first 

 method. 



