COOPERATIVE ORGANIZATION BUSINESS METHODS. 17 
sufficient working capital. A very satisfactory way of accumulating 
a surplus is to levy a special charge per unit on the commodities de- 
livered by the members, this amount to be set aside as an addition to 
the capital. 
PREPARATION OF ANNUAL STATEMENTS. 
The statements usually submitted by the treasurer. to the members 
at the annual meetings are the balance sheet, the profit and loss 
statement, and the statement of expenses. These statements are for 
the purpose of showing the members the condition of the business 
at that time, the progress made during the year, and the expenses 
incurred. Therefore, they should be so prepared as to be readily 
comprehensible to the rank and file of the membership unaccus- 
tomed to reading such statements. 
THE BALANCE SHEET. 
The balance sheet (Form I) is a statement of the assets and lia- 
bilities of a business at a particular time. It is made up of the 
debit and credit balances remaining on the various accounts after 
the books have been "closed." Accountants do not agree as to the 
arrangement of the various items on the balance sheet, some start- 
ing with the most liquid and working toward the most fixed ; others 
reversing this order. Either method is good, but it should be followed 
out on both sides so as to bring the most liquid assets opposite the 
most liquid liabilities and continuing in such a way as to bring the 
most fixed assets directly opposite the capital. 1 
Form I. — The balance sheet. 
THE YORKVILLE PRODUCE EXCHANGE. 
Balance Sheet as of Dec. 31, 1914. 
assets. liabilities, 
Cash on hand $30. 00 \ Accounts payable $250. 00 
Cashinbank 1,360.00 ^ ^ , Bills payable 2,000.00 
Bills receivable 'siO.OO j Capital and surplus: 
Accounts receivable 2,000. 00 Capital-stock 8. 190. 00 
Less reserve for bad debts. GO. 00 a, im i, 1( . 
1,940.00 • surplus- 
Merchandise inventory as per schedule.. 3,000.00 \ Balance as of Dec. 31, 1913. $300.00 
Furniture and fixtures $800. 00 Net profit for year 540. 00 
Less reserve for deprecia- 840.00 
tion 40-00 
lildings 3,000.00 
Less reserve for deprecia- 
tion 150.00 
760.00 
2,850.00 : 
Land 1,000.00 
11,280.00 
1 Another class of items which should appear on the balance sheet are " deferred 
charges," representing expenses paid but not chargeable againt the period under con- 
sideration. As, for example, the stationery, office supplies, stamps, etc., on hand will be 
used during the next fiscal period and therefore are chargeable against the profits of 
that period. Other items such as "interest paid in advance," "insurance premiums 
prepaid,"' " rent paid in advance,'' etc., should all be taken into consideration. 
