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BULLETIN 1150, U. S. DEPARTMENT OF AGRICULTURE. 



Much time is often wasted in attempting to distribute returns 

 to the cont. In calculating the shrinkage and expenses it is much 

 more practicable to use rates figured to the nearest whole number 

 or convenient fraction. Furthermore, when carloads of mixed 

 grades are sold for a flat sum, it is necessary to " price the car up 

 and down" according to grades when making returns to members. 

 In all of the above cases the amount prorated may differ slightly 

 from the actual returns. The difference is to be carried in the un- 

 divided balance account. Some of the older associations have 

 adopted a flat rate of expense based on past experience which is 

 applied on all shipments of a given species of livestock over a con- 

 siderable period. In such cases gains or losses occurring on indi- 

 vidual shipments will also be entered in this account. At the end 

 of the year the net balance should be closed to loss and gain or 

 otherwise disposed of as decided by the board of directors. 



LOSS AND GAIN. 



Debit: 

 (1) With general expense, such as postage, 

 stationery, telephone, premium on 

 manager's bond, interest paid, taxes 

 and similar items. 



With losses suffered in handling sup- 

 plies or buying live stock. 



With the balance in the undivided bal- 

 ance account at the end of the year 

 when the overpayments exceed the 

 underpayments. 



With the net gain at the end of the 

 fiscal year when it is distributed in 

 accordance with board action. 



(2) 

 (3) 



(4) 



Credit : 



(1) With deductions from, proceeds from 

 shipments of live stock to cover 

 overhead expenses. 



(2) With membership fees. 8 



(3) With extra charges made for handling 

 stock for nonmembers. 



(4) With profits resulting from handling 

 supplies or buying live stock. 



(5) With the balance in the undivided bal- 

 ance account at the end of the year 

 when the underpayments exceed the 

 overpayments. 



(6) With net loss at the end of the fiscal 

 year when it is transferred to the 

 net worth account. 



The expenses of the ordinary shipping association fall into two 

 classes, namely: Expenses incurred in preparing cars for shipment, 

 which are not borne by the association but charged to the shippers 

 and deducted from their returns; and, expenses which are not charge- 

 able against any particular carload, that is, the overhead expenses, 

 such as telephone, stationery and printing, advertising, interest on 

 borrowed money, premium on manager's bond, and similar items. 

 All such overhead expenses and any other items not charged to 

 shippers and deducted from returns should be entered under " gen- 

 eral expense " in the loss and gain account. The income from which 

 such expenses are met will be entered under " income " in this ac- 

 count. This income will usually consist of membership dues, 7 in 

 some cases supplemented by a special charge against shipments for 

 this purpose. At the end of the fiscal year, after the necessary ad- 

 justments have been made, the loss and gain account will show either 

 a net gain or a net loss, which should then be carried to the net worth 

 account, or otherwise distributed as decided by the board of directors. 



6 See note on page 11. 



7 If the law under which the association is incorporated regards membership fees as 

 capital contributions the same as capital stock, the amounts so collected should be 

 credited to the net worth account as they represent the members' equity in the business. 

 The same procedure should be followed even though the association is not incorporated, 

 when more than a nominal fee is collected for the purpose of purchasing and installing 

 scales, equipping yards or for other similar purposes. , 



