16 BULLETIN 225, U. S. DEPARTMENT OF AGRICULTURE. 
account is debited with the amount of subscriptions for capital stock 
sold on the installment plan and is credited with all amounts received 
as partial payment on such subscriptions. The debit balance appear- 
ing on the account represents the amount due and unpaid on sub- 
scriptions for stock sold in this way. In making the first entry, the 
Stock Subscription account is debited for the amount of stock sub- 
scribed to be paid on the installment plan, and the Subscribed Stock 
account is credited for this amount. The credit balance appearing 
on this account represents the total amount of stock subscribed but 
not fully paid for. As fast as the subscriptions are fully paid up, 
entries are made debiting the Subscribed Stock account and crediting 
the Capital Stock account. 
This information is here inserted merely to show the correct method 
of recording the sale of stock to be paid for in installments, and not as 
a plan of financing the organization. This method of procedure and 
also that of charging the amount of the stock to the growers' accounts 
to be deducted from the net proceeds obtained for fruit shipped, 
may work well in some instances, but is usually productive of dis- 
satisfaction on the part of those who have met their obligations faith- 
fully because those who have contributed but a portion of the amount 
subscribed claim and enjoy full rights and benefits. 
All future entries are records of actual transactions, and the proper 
accounts are opened in the ledger as required. 
In changing from a set of single-entry books to a double-entry, or 
reopening a set of double-entry books preparatory to installing this 
system, the financial position of the exchange should be determined 
by making up a statement of assets and liabilities, showing on one 
side the assets and on the other side the liabilities and capital invested. 
This statement should be made up in the following form: 
ASSETS. 
Cash in bank $1, 000. 00 
Cash on hand 500. 00 
$1, 500. 00 
Bills receivable 500. 00 
Accounts receivable 500. 00 
Merchandise inventory 1, 050. 00 
Office furniture and fixtures 800. 00 
Buildings 5,000.00 
Heal estate 2,000.00 
LIABILITIES AND CAPITAL. 
Accounts payable $1> 500. 00 
Billspayable 2, 000. 00 
Capital stock 8, 500. 00 
Balance (profit) -^-^ 250. 00 
12,250.00 12.250.00 
