﻿LIVE-STOCK SHIPPING ASSOCIATIONS. 17 



holders, who have a prior claim. The farm business in this case 

 might be thrown into bankruptcy by the creditors. On the other 

 hand, if the property was valued at $00,000, the other items remain- 

 ing the same, there would be $40,000 left after paying off the note 

 holders. In this case, each dollar of the owner's investment would 

 be worth 133 J cents, and the financial condition of the farm would 

 be considered very favorable. 



A similar procedure is followed in determining whether or not 

 any other kind of business concern is worth 100 cents on the dollar. 

 An illustrative statement representing the affairs of an imaginary 

 shipping association is presented below. 



Statement of Resources and Liabilities of the Bbookridge Cooperative 

 Shipping Association, November 1, 1921. 



Resources. 



Cash $576. 02 



Yard and office equipment 1,000.00 



$1, 576. 02 



Liabilities. 



Notes payable $300.00 



Federation dues 55.00 



Insurance fund 799. 51 



Undivided balance 3. 51 



1, 158. 02 



Net worth. 



Capital stock 400. 00 



Surplus (undivided profits) 18.00 



418. 00 1, 576. 02 



It will be noted that the resources consist of cash and equipment 

 amounting to $1,576.02; the liabilities amount to $1,158.02, consist- 

 ing of outstanding notes, dues owed to a State association, the re- 

 serve for insurance and the undivided balance. The resources 

 exceed the liabilities by $418, which amount represents the net worth 

 of the association. As only $400 was put into the business originally, 

 the difference of $18 represents surplus profits left in the business. 



It will also be noted from this statement that the investment in 

 the business came from stockholders, rather than from an individual 

 owner, as in the case of the farm business. An association which is 

 not incorporated is regarded as a partnership, in which case all of 

 the members would be joint owners. 



Each of the subdivisions in the statement shown above represents 

 a separate account in the cash journal; in fact, it is from the accounts 

 in this book that the information for such statements is obtained. 



The accounts which a particular association needs depend upon 

 the character of the business, if any, which it combines with live- 

 stock shipping. Ordinarily all shipping associations need the follow- 

 ing accounts : 



1. Bank. 



2. Live stock. 



3. Manager's commission. 



4. Insurance fund. 



5. Local car expense. 



6. Undivided balance. 



7. Loss and gain. 



8. Net worth. 



Other accounts which are frequently needed are : 



9. Federation dues (State or district 



federation). 

 10. Yard and office equipment. 



33703°— 23 3 



11. Indebtedness (or notes payable). 



12. Merchandise. 



