SYSTEM OF ACCOUNTS FOE FARMERS* COOPERATIVE ELEVATORS. 15 



made of the check showing "Cash debit $15.00," and "B. & M. 

 Railroad credit $15.00." This leaves a credit of $25 to the account 

 for loss and recovery on grain leakage in transit, and a debit to the 

 railroad of $10. 



Considering that the transaction has been definitely settled, and 

 that no further recovery can be made, the following journal entry 

 should be passed: 



Debit Loss and recovery on grain leakage in transit 10. 00 



Credit Claims B. & M. Railroad 10. 00 



This simply closes the railroad account, and leaves a balance in the 

 loss and recovery on grain leakage in transit representing the true 

 amount of recovery. 



THE COST ANALYSIS. 



The cost analysis (Form No. 15; see p. 30) has been provided 

 to furnish information affecting the unit and relative cost of hand- 

 ling grain and merchandise. The method of operation is as follows: 



Opposite "Bushels of grain handled" should be set down, first, 

 the total of all grain taken into the elevator, this amount being ex- 

 tended under the different kinds of grain as shown by the footings 

 of the record of grain receipts, the total grain taken in being 100 per 

 cent. The relative percentage of each kind of grain is then set down 

 opposite the per cent mark under the column designated. On the 

 same line should be added the value of coal and merchandise sales. 



After taking out an amount which would seem to be sufficient for 

 the selling of merchandise, the different kinds of expense applying 

 generally to all kinds of grain and merchandise, such as salary, in- 

 surance, interest, power, and repairs, are then prorated according to 

 the grain percentages. This amount will be, necessarily, more or 

 less of an estimate, but a manager, by keeping account of the time 

 spent on coal and merchandise sales in the space of a month, can 

 arrive at a fair basis for the division of salaries. Insurance, interest, 

 repairs, and miscellaneous, relating to merchandise, are contained 

 in a few items and can be easily ascertained. 



Such items as "Power operating" apply only to grain. "Corn 

 shelling — direct labor" includes only that labor which has been pro- 

 cured especially for corn shelling, and would not include the mana- 

 ger's or assistant manager's time, as their wages are prorated under 

 "Salaries." Car cooperage should be distributed according to the 

 amounts of grain received, except in cases where an account has been 

 kept in the ledger showing the exact amount of cooperage against 

 each kind of grain. 



After having prorated the different expense items, the addition of 

 these gives the gross expense. Returns from storage and returns 

 from dockage sold are then set down under the kinds of grain which 

 have furnished these returns, and subtracted. Any returns from 



