CLASSIFICATION OF LEDGER ACCOUNTS FOE CREAMERIES. 



37 



Debit. Credit. 



$1, 000 Additional Equipment Appropriation (Refrigerating 

 Plant). 



Reserve for Additional Equipment $1, 000 



(Appropriation of income for purchase of re- 

 frigerating plant.) 

 1, 000 Savings Account. 



Bank Account 1, 000 



(To set aside appropriation in special Savings 

 account.) 

 The above entries should be made periodically until the necessary amount has 

 been raised. 



Debit. Credit. 



$5, 000 Bank Account. 



Savings Account $5, 000 



(To withdraw fund from Savings account, making 

 it available for the purchase of refrigerating 

 plant.) 

 5, 000 Refrigerating plant. 



Bank Account 5, 000 



(For purchase of plant.) 

 5, 000 Reserve for Additional Equipment. 



Surplus 5, 000 



(To close Reserve account into Surplus.) 



The required Ledger accounts would be: 



Savings Account. 



Debit: 

 1. With the periodical deposits to apply 

 on the purchase of the refrigerating 

 plant. 



Credit: 



1. With the amount withdrawn for the 

 purpose of expansion. 



Any remaining balance should then be carried to the regular checking account by 

 a credit to this account and a debit to the Bank Account. 



Refrigerating Plant. 



Debit: 



Credit: 



1. With cost of new equipment at the 



1. With the total book value of any 



time of purchase. 



part of the refrigerating plant sold 





or disposed of otherwise. 



Reserve for Additional Equipment. 



Debit: 



1. With the purchase price of new 

 equipment covered by this re- 

 serve. (Credit to Surplus.) 



Credit: 



1 . With amounts periodically deposited 

 in the Savings account for the 

 purpose of expansion. 



The balance of this account should be carried to the Surplus Adjustment account. 



