38 BULLETIN 985, U. S. DEPARTMENT OF AGRICULTURE. 
(7) 
000 Loss and gain. 
Salaries and labor expense 22 93.40 a4.- he eee eee 000 
‘Power €x penises (As)! 2k. Se ee a gee eee eee 000 
Repairsc 24g fs £3 Tee Sle EP ED eae 900 
Depreciation ss 44-32 5a42. be se ee Sas a ee ee 000 
Operating supplies expense.:.-+-..2...--.--2.2-5-+-22- 000 
Insurance: .* 2222) 2b 5 os Le See OS ee Oe te eee 000 
Office siipplies 0. 28k A bss sea NEN SOR ee eee 000 
Telegraph, telephone, and postage........-....-.....-- 000 
Went, paid 328 Ped ne eevee eae 000 
Tames: 721 te Se is ee Sir RNS “Bible TASER SE Sait hans ee 000 
Loss{frony bad! accounts! 22 e A6 Be eee eee 000 
Miscellaneous: ex pense! 522... 4.2 2 eo ee 000 
Seed-cotton purchases 2.543 oc e  oee e 000 
Cottonseed “purchases: =>. fe. 4c. so eee ae 000 
Cotton purchases)... 6.22222. 2 be ee | ee 000 
Bagging and ties purchases... 4: jac. p4Sgen8 te 000 
To close the expense accounts and transfer the expenses to the Loss and 
gain account. 
(8) 
000 Guinning purchased seed cotton. 
Hogs and! aaa! SCS SS Se ee OR a ig ee a eae 000 
To charge the former account with the cost of ginning. 
PREPARING THE REPORTS. 
The above journal entries when posted to the ledger will balance 
all Income and expense accounts and leave only the Asset and la- 
bility accounts open. At this point all the balanced accounts 
should be ruled with a double red line beneath the footings. 
A credit balance on the Loss and gain account represents the net 
profit for the year, a debit balance represents a loss. 
A trial balance (‘‘after closing’’) should now be taken to prove 
that the equality of the debits and credits of the ledger accounts has 
been. maintained, after which the preparation of the balance sheet 
. and Income and expense statement may proceed. | 
In compiling the balance sheet it is necessary only to refer to the 
ledger accounts and draw off the balances shown in the Asset and 
lability accounts, entering them as indicated on the form of balance 
sheet provided herein. The preparation of the Income and expense ~ i 
statement is described on page 5. 
It will be noted that while the reserves for depreciation and bad 
accounts are shown on the ledger as a liability they appear on the 
balance sheet as a deduction from the assets. 7 
