ACCOUNTING FOR FRUIT SHIPPING ORGANIZATIONS. 23 



able directly against packing-house or warehouse operations); Legal; 

 Light, heat, and water; Office supplies and stationery; Postage; 

 Salaries; Telephones and telegraph; Traveling; Miscellaneous. The 

 balances appearing on these accounts at the end of the year are closed 

 into the profit and loss account. 



Packing-house expense. — The segregation of the packing-house 

 pay roll is made under the following items, for which accounts are 

 opened in the ledger: Packinghouse — salaries of clerks, foreman, etc.; 

 receiving; sorting; floorwork, floormen, and truckers ; packing ; press- 

 ing and stenciling; miscellaneous. 



Accounts are also opened under the following captions for segre- 

 gating the cost of supplies and of expenses, other than labor, per- 

 taining to packing operations: Packing house — boxes; paper; nails; 

 light and power; repairs. 



Warehouse expense accounts. — The warehouse expenses are segre- 

 gated under the following accounts : Warehouse — labeling; trucking; 

 loading of cars; salaries of foreman, car checkers, etc. 



Car bracing lumber and paper. — Under this are included all mate- 

 rials used for bracing cars, such as 2 by 4's, 1 by 6's, and car strips; 

 also paper and straw used for car linings. The account is charged 

 with the various items as they are purchased and at the end of the 

 shipping season is credited with the value of the materials on hand. 

 The balance appearing on the account, representing the cost of the 

 goods used in bracing the cars, is transferred to the warehouse 

 account. 



Reserve for depreciation. — Owing to the peculiarities of the fruit 

 business, heavy allowances should be made to cover the depreciation 

 on buildings and equipment. 



Instead of writing down the value of office equipment, packing- 

 house equipment, and warehouse equipment, to cover the ordinary 

 wear and tear or depreciation on these assets, it is a better plan to 

 set up a reserve for this purpose under the caption " Reserve for 

 depreciation on equipment." This is accomplished by charging 

 " Profit and loss" and crediting " Reserve for depreciation on equip- 

 ment" account at the close of the year. 



As in the case of equipment, the depreciation of buildings is set 

 up in a reserve account under the caption " Reserve for depreciation 

 on buildings." By itemizing the credits on the ledger account the 

 amount set aside for depreciation on the packing house and that set 

 aside to cover the depreciation on the warehouse can be ascertained 

 at any time. 1 



Reserve for bad debts. — Uncollected balances on accounts receivable 

 are often carried into the succeeding year's business at full face value 



i For further discussion of the subject "Depreciation "see TJ. S. Department of Agriculture Bull. No. 178: 

 Cooperative Organization Business Methods. 1915. 



