at kes BULLETIN .865, U. S.. DEPARTMENT. OF. AGRICULTURR. 
RESERVE FOR DEpREcIATION oN Moeror VEHICLES (H 2). 
Desir: CreEpIr: 
1. With the book value of any item 1. With the amount of reserve as ee 
discarded or replaced by new by the Balance Sheet at the time 
equipment. of opening the books. 
2. At the close of the period with the 
proportion of annual loss resulting 
from weary, tear, or obsolescence. 
3. With the amount received from the 
-sale of scrapped or discarded 
equipment. 
It is suggested that a rate of not less than 25 per cent be charged off annually. 
RESERVE FOR DEPRECIATION ON PLANT (H 3). 
DeEsIr: CREDIT: 
1. With the book value of any item 1. With the amount of reserve as shown 
discarded or replaced by new by the Balance Sheet at the time 
equipment. of opening the books. 
2. At the close of the period with the 
proportion of annual loss due to 
wear, tear, and obsolescence. © 
3. With the amount received from the 
sale of any disacrded or scrapped 
material. 
Owing to the conditions existing in some types of plants and tothe peculiar nature 
of the work involved, the wear and tear on equipment is excessive. Special consid- 
eration should be given to these plant conditions in order that adequate reserves for 
depreciation may be provided. 
In an organization where a more detailed segregation of accounting data is desired, 
this account should be replaced by a separate account showing reserves for deprecia- 
tion on buildings, machinery, equipment, etc. 
RESERVE FoR DivipENDS PAYABLE (H 4). 
Desir: CREDIT: 
1. At the time of payment with the 1. At the close of the period with the 
total of checks paid to the stock- proportion of the annual dividend 
holders as dividends. to the stockholders. 
(Debit Dividend Appiopuatens 
It can be readily understood that those stockholders who have loaned their money 
to the organization, taking certificates of stock as security thereon, are entitled to be 
reimbursed for the use of their money, and in many instances this reimbursement is 
authorized by the by-laws. However, only those stockholders whose subscriptions 
have been fully paid should receive any share of the dividend payment. <A periodical 
entry should be made as follows: 
DEBIT. CREDIT. 
$00. Dividend Appropriation. wey = 
Dividendsbayablets s- see eee $90. 
(To set aside an amount to be used 
in paying dividends at the close ‘ 
of the fiscal year.) 
