28 
BULLETIN 811, U. S. DEPARTMENT OE AGRICULTURE. 
old piece should be charged to reserve for depreciation and the new one charged to 
Machinery and Equipment. Buildings, or Office Furniture and Equipment, as x- 
plained under those accounts. 
Depreciation — Plant I 314). 
Debit: 
Crec 
it: 
1. With the amounts reserved out of 
1. 
With the debit balance at the close 
the profits of each fiscal period to 
of the fiscal period. ^Debit Loss 
cover loss from wear., tear, and 
and Gain.) 
obsolescence of office furniture 
and equipment, machinery and 
equipment, and buildings. 
(Credit the corresponding reserve 
accounts.) 
Extraor dinan- losses caused by lightning, fire, or explosion may exceed the amount 
reserved for depreciation. Only the portion of the reserve applicable to the damaged 
property should be charged to the reserve account. The remaining portion of the 
loss should be debited to an account appropriately captioned, i. e.. Fire Loss. This 
account must be charged off to Loss and Gain during the ensuing years. This 
method of apportioning the loss over a number of years is justifiable since the business 
of the current year was not responsible for the extraordinary loss. In case insurance 
is collected on account of a loss the amount should be credited to the proper reserve 
accounts. 
Leakage in Transit (Mo). 
Debit: 
Credit: 
1. With uncollectible claims. 
(Credit 
1. With the debit balance at the close 
Railroad Claims.) 
• 
of the fiscal period. (Debit Loss 
and Gain.) 
This method of handling losses due to leakage in transit not only gives the proper 
grain account credit for the grain actually shipped, but it reveals the facts relative 
to a source of loss which is often neglected entirely or given only minor consideration. 
Shrinkage and Scale Loss (316). 
Debit: 
Credit: 
1. With any shortage in the physical 
1. With any excess of the physical over 
inventories of grain and merchan- 
the book inventory. (Debit the 
dise at the end of the fiscal period. 
grain and merchandise accounts 
(Credit the grain and merchandise 
concerned.) 
accounts concerned.) 
2. With the debit balance of the ac- 
count at the end of the fiscal 
period. (This is the net loss due 
to shrinkage and scale loss.) 
(Debit Loss and Gain.) 
The desirability of having the books show the facts relative to all sources of cost 
necessitates the opening of an account to which may be carried discrepancies between 
