20 BULLETIN 1150, U. S. DEPARTMENT OF AGRICULTURE. 
Much time is often wasted in attempting to distribute’ returns 
to the cent. In calculating the shrinkage and expenses it is much 
more practicable to use rates figured to the nearest whole number 
or convenient fraction. Furthermore, when carloads of mixed 
grades are sold for a flat sum, it is necessary to “price the car up 
and down” according to grades when making returns to members. 
In all of the above cases the amount prorated may differ slightly 
from the actual returns. The difference is to be carried in the un- 
divided balance account. Some of the older associations have 
adopted a flat rate of expense based on past experience which is 
applied on all shipments of a given species of livestock over a con- 
siderable period. In such cases gains or losses occurring on indi- 
vidual shipments will also be entered in this account. At the end 
of the year the net balance should be closed to loss and gain or 
otherwise disposed of as decided by the board of directors. 
LOSS AND GAIN. 
Debit : Credit: 
(1) With general expense, such as postage, | (1) With deductions from proceeds from 
stationery, telephone, premium on shipments of live stock to cover 
manager’s bond, interest paid, taxes overhead expenses. 
and similar items, (2) With membership fees.® 
(2) With losses suffered in handling sup- | (3) With extra charges made for handling 
plies’ or buying live stock. stock for nonmembers. 
(3) With the balance in the undivided bal- | (4) With profits resulting from handling 
ance account at the end of the year supplies or buying live stock. 
when the overpayments exceed the | (5) With the balance in the undivided bal- 
underpayments. anee account at the end of the year 
(4) With the net gain at the end of the when the underpayments exceed the 
fiscal year when. it is distributed in overpayments. 
accordance with board action. (6) With net loss at the end of the fiscal 
year when it is transferred to the 
net worth account. 
The expenses of the ordinary shipping association fall into two 
classes, namely: Expenses incurred in preparing cars for shipment, 
which are not borne by the association but charged to the shippers 
and deducted from their returns; and, expenses which are not charge- 
able against any particular carload, that 1s, the overhead expenses, 
such as telephone, stationery and printing, advertising, interest on 
borrowed money, premium on manager’s bond, and similar items. 
All such overhead. expenses and any other items not charged to 
shippers and deducted from returns should be entered under “ gen- 
eral expense ” in the loss and gain account. The income from which 
such expenses are met will be entered under “income” in this ac- 
count. This income will usually consist. of membership dues,’ in 
some cases supplemented by a special charge against shipments for 
this purpose. At the end of the fiscal year, after the necessary ad- 
justments have been made, the loss and gain account will show either 
a net gain or a net loss, which should then be carried to the net worth 
account, or otherwise distributed as decided by the board of directors. 
6 See note on page 11. 
7If the law under which the association is incorporated regards membership fees as 
capital contributions the same as capital stock, the amounts so collected should be 
credited to the net worth account as they represent the members’ equity in the business. 
The same procedure should be followed even though the association is not incorporated, 
when more than a nominal fee is collected for the purpose of purchasing and installing 
scales, equipping yards or for other similar purposes. ? ; 
