BOOKKEEPING FOR GRAIN ELEVATORS. 
Reserve for Doubtful Accounts (R-4). 
23 
Debit: 
1. With the amount of outstanding 
accounts found to be uncollect- 
ible. (Credit Accounts Receiv- 
able.) 
Credit: 
With the amount reserved at the 
time of opening the books as shown 
by the balance sheet. 
With an amount estimated to cover 
the probable losses due to uncol- 
lectible accounts during the fiscal 
period. (Debit Loss from Bad 
Accounts.) 
Any collections made on accounts which have previously been charged off as worth- 
less should be credited to this account. 
Reserve for Sinking Fund (H-5). 
Debit: 
Credit: 
1. When funds are disbursed for the 
1. With the amount reserved at the 
purpose for which the reserve has 
time of opening the books as shown 
been created. (Credit Surplus.) 
bv the balance sheet. 
2. With the amount reserved during 
the fiscal period for any specific 
purpose. (Debit Surplus.) 
In some States, notably South Dakota, where the cooperative law is in operation, 
statutory regulations requires that an amount equal to a certain percentage of the 
capital invested be set aside each year in a sinking fund, so that the company will be 
in a position to retire its capital stock at the end of a given period. Companies opera- 
ting under such conditions should set up a reserve for sinking fund in accordance with 
the requirements of their State law. 
A sinking fund may be established for expansion purposes or to pay off mortgages 
at their maturity. Amounts so reserved should be deposited in a special account and 
not used as working capital. 
I. NET W T ORTH. 
Capital Stock (1-1). 
Debit: 
Credit: 
1. With the par value of shares of stock 
1. With the par value of shares of stock 
retired. 
outstanding at the time of opening 
the books as shown by the balance 
sheet. 
2. With the par value of shares of stock 
issued subsequent^. 
The balance of this account should represent the value at par of all outstanding 
shares of stock. In case shares are retired at a cost above or below par, the difference 
will be debited or credited, as the case may be, to Surplus. 
