CLASSIFICATION" OF LEDGER ACCOUNTS FOR CREAMERIES. 



B. SECURITIES. 



Sinking Fund (Bl). 



Debit: 



Credit: 



1. With all amounts withdrawn from 



1. With any amount expended for the 



the general funds of the business 



purpose for which the special fund 



and deposited in a special fund for 



was created. 



the specific purpose of meeting 





some fixed obligation at a future 





time. 





2. With any income derived from the 





money in this fund. (Credit 





Sinking Fund Reserve.) 





A sinking fund h an amount of money periodically withdrawn from the business 

 and invested in securities or deposited in a separate bank account for the purpose of 

 meeting a fixed liability at some future time. For the purpose of determining the 

 amount to be set aside each period, reference may be made to any of the published 

 bond tables. 



Further discussion of this subject will be found under Sinking Fund Reserve, 

 page 19. 



C. FIXED ASSETS. 



Land (Cl). 



Debit: 



Credit: 



1. With the original purchase price of 



1 . With the total book value of any land 



land as shown by the Balance 



sold. 



Sheet at the time of opening the 





books. 





2. With all costs pertaining to the origi- 





nal purchase. 





3. With the cost of any permanent im- 





provement made subsequent to 





the purchase. 





Land should be carried on the books at actual costs and should not be increased or 

 decreased because of a change in value. The difference between the selling price 

 and the original cost of any real estate should be debited or credited, as the case may 

 be, to Surplus Adjustment account. 



Buildings (C2). 



Debit: 



Credit: 



1. With the original purchase price of 



1. 



At the time of sale or destruction 



the buildings as shown by the Bal- 





with the total book value of any 



ance Sheet at the time of opening 





building sold or destroyed. 



the books. 







2. With costs of all new construction. 







3. With the cost of all additions or alter- 







ations when such costs increase the 







usefulness of the plant. 







4. With the excess of the cost of the re- 







placement over the original cost of 







the part replaced. 







180208°— 20— Bull. 86E 



