ACCOUNTING FOE FRUIT SHIPPING ORGANIZATIONS. 19 



growers' fruit ledger. It includes also the limited number of accounts 

 payable which it will be necessary to open with creditors. In order 

 to make the general ledger complete in itself and to include all the 

 elements necessary to effect a trial balance, controlling accounts 

 for the mercantile and the fruit ledgers are opened in the general 

 ledger. Further explanation of this very important principle in 

 modern accounting is given in the description of the controlling 

 accounts for the mercantile and fruit ledgers. 



EXPLANATION OF GENERAL LEDGER ACCOUNTS. 



Capital stock. — All sales of capital stock are credited to this account 

 and the credit balance measures the amount of capital fully paid 

 up, for which certificates of stock are issued and outstanding. 



In cooperative organizations having no capital stock a member- 

 ship fee is usually required from members for the purpose of providing 

 a working capital. From an accounting standpoint this represents 

 capital invested in the business and its value should be maintained. 

 The treatment of such contributions of capital is practically the 

 same as under the stock plan. 



In organizations where a membership fee is paid each year by 

 the members at the time they contract with the organization for 

 the handling of their fruit these fees are looked upon as revenue, and 

 are used to defray operating expenses. 



Land, buildings, and spur track. — The cost of the land, packing- 

 house, and warehouse should be set up in accounts under those 

 captions. 



In many instances it has been found necessary for the shipping 

 organizations to pay for the grading, construction, and the ties for 

 the spur track leading from the main line of the railroad to the 

 warehouse. The cost of these items is charged to spur track account. 1 



Equipment accounts. — AH items of furniture and equipment used 

 in the office are charged to office equipment account. The cost of 

 the equipment of the packing house is shown in the packing-house 

 equipment account and that of the warehouse in the warehouse 

 equipment account. Repairs and renewals should be charged to 

 expense. 



Cash. — The excess of the total of the "cash" column on the left- 

 hand side of the cash journal, representing the receipts of cash, over 

 the footing of the "cash" column on the right-hand side of the cash 

 journal, representing the amount deposited in the bank and disbursed 

 as petty cash, demonstrates the amount of cash on hand. In order 

 to avoid the necessity of referring to the cash journal for the amount 

 of cash on hand when taking a trial balance, an account under the 



i Several large shipping organizations have written off the entire investment in spur tracks over a period 

 of three to five years. 



