RULES FOR CLOSING ACCOUNTS 



93 



3. Charge and credit the proper accounts with 

 everything not yet recorded. Thus, credit Auto Truck 

 and charge Personal (at an estimated rate per hour) 

 for the approximated personal use of the machine by 

 the owner and his family. 



4. Calculate the net cost of man labor from the 

 labor account. Determine the average rate per man 

 hour, using the totals of the work report, including 

 routine work. Credit Labor and charge each account 

 with the total number of man hours spent upon it mul- 

 tiplied by the rate per hour just found. 



(Example: From the work report we find a total 

 of 2,432 man hours expended on Carnations. From 

 the labor account w^e calculate a rate of 39.2c. per man 

 hour. Consequently, we credit Labor and charge Car- 

 nations with the product, or $96L34.) 



5. Enter the horse inventory under Horses (on the 

 credit side). Credit Interest and charge Horses with 

 6 per cent of the average of the two inventories. 



6. Distribute the cost of horse labor in the same way 

 that man labor was distributed. Note: If horse labor 

 constitutes an important part of the yearly work, a more 

 detailed record of such work should be kept, similar 

 to that of man labor. 



7. Credit each account with its inventory at the 

 end of the fiscal year at a fair market value. (In many 

 accounts there will be no inventory to record at this 

 time.) Charge each account with 6 per cent of the 

 average amount of money invested during the year, 

 crediting Interest in each case. 



8^ Credit Real Estate and charge all other accounts 

 with a nominal rent for the use of hmd, buildings, etc. 

 Base these charges upon a study of the real estate ac- 



