ACCOUNTING RECORDS FOR COUNTRY CREAMERIES. 3 



each member in the association and indicates the amount of capital 

 subscribed and paid by him to the association. Stock or member- 

 ship shares may be made redeemable at their face value by the 

 creamery at the time the member severs his connection with the 

 association. Such stock or memberships should then be reissuable 

 to active or new members. This plan will in a measure keep the 

 ownership of the stock or memberships in the hands of resident 

 members. 



OPERATING METHODS. 



The methods employed in operating country creameries vary in 

 certain particulars, necessitating also minor variations in accounting 

 forms. Classified according to the principal types, these different 

 methods of operation or forms of organization are as follows : Farmers' 

 cream stations, shipping to centralizers that are owned by either 

 private or cooperative capital; creameries operated both as butter 

 factories and as cream dispensing stations; and creameries operated 

 exclusively as butter and by-product manufactories. 



The system of accounts described herein is not intended for simple 

 cream stations, as these will require a much simpler form of account- 

 ing, consisting mainly of a cream receipts form, a cash journal, and 

 payment vouchers for the cream purchases. This system, however, 

 is applicable to the other types, and it is not material whether the 

 creamery manufactures all of its raw material or manufactures part 

 and sells the remainder. 



Creameries manufacturing by-products, such as cottage cheese, 

 condensed milk, casein, and milk sugar, on a large scale and located 

 in large centers, are not intended to be covered by the system herein 

 described. The specialized needs and complicated requirements 

 of their business should be made the subject of special study before 

 a system of accounts covering their needs is recommended. 



In creameries where cream or milk is purchased outright the 

 methods of bookkeeping are not unlike those in other manufacturing 

 concerns. The cost of the raw material is determined in advance 

 of the sale of the manufactured product. This method is reversed 

 in certain cooperative creameries. When it is the intention of the 

 organization to pay back to the producer the entire monthly net 

 income accrued from the sale of the manufactured product the cost 

 of the raw material is figured from the net amount distributable, this 

 being the difference between the gross income and gross operating 

 expense during a given period. The expenses may be computed 

 upon the basis of overrun, or as a fixed charge per hundred pounds 

 of butter, or according to various other permissible methods. The 

 gross income comprises the returns from all products manufactured 

 or sold during the given period. Under this second arrangement 



