, .-
Preface This guide has been designed to present the very basics in bookkeeping and cooperative financial statements. The format is designed for those that have limited bookkeeping or accounting experience. It is not meant to be all inclusive, but to provide guidance in developing the cooperative’s record keeping system and understanding

financial statements.

In most cooperatives, trained accountants will take care of the financial reports and

more difficult accounts, such as depreciation expense. However, all board members

should understand the bookkeeping functions and be able to interpret financial reports.

By understanding all components of bookkeeping and the financial documents, the

board will be better able to design an accounting system for their cooperative, maintain

accurate bookkeeping records, and make prudent business decisions based on the

financial reports.

Practice exercises are included that should be completed after the sections on the

daily journal and the general ledger and a final exercise at the end of the guideline.

June 1998

Price: domestic45.00; foreign-$5.50
~~-

Contents Introduction ..........................................................

.

The Accounting System ................................................l

FinancialReporting ....................................................

.

The Balance Sheet ....................................................

.

The Income Statement .................................................2

Statement of Cash Flows. ...............................................3

Accrual Accounting ....................................................

.

Monthly Cash Flow Statement ............................................4

Bookkeeping .........................................................

.

Collecting Data .......................................................6

TheDailyJournal ...................................................

...6

DualEntryAccounting .............................................

.

Recording Transactions in the Daily Journal ............................6

Transaction Date .................................................

.

AccountNames ..................................................

.

Account Numbers .................................................

.

Dollar Amounts - As Debits and Credits ................................8

Distinguishing Debits from Credits ....................................8

TheGeneral Ledger ..........................................

.._.......8

Posting entries in the General Ledger .................................8

Date, Description, and Dollar Amount .................................8

Reference Number ................................................8

Account Balance .....................................

.._..........8

MemberAccounts .....................................................

.

Patronageaccount ................................................

.

Cap~al ........................................................ ..g

ii
Contents RetainedEarnings ................................................ .

Per-Unit Capital Retains ........................................... .9

Member Accounts Receivable ...................................... .9

SubsidiaryLedgers ....................................................

.

Exercises .........................................................

..ll

Exercise One -The Daily Journal ...................................12

Exercise Two - The General Ledger .................................-12

FinalExercise...................................................l 2

Exercise Answers ..................................................

..17

Exercise One - The Daily Journal ...................................18

Exercise Two - The General Ledger ................................-19

FinalExercise.. ............................................... ..2 1

. . . 111
Understanding Cooperative Bookkeeping

and Financial Statements

R. Wade Binion

Agricultural Economist

Financial reports are used to evaluate past operations and are the basis for management and operating

decisions on future projects. The board of directors use

the reports for feedback on the financial status of the

cooperative, to evaluate progress and to make

informed decisions about future operations. Managers

need accurate and timely information to run the dayto-day operations. Creditors examine the financial

reports when considering loans to the cooperative and

accountants need accurate records to prepare tax documents.

Accurate and current records are also important

to members of the cooperative. Records should show

the net profit, the level of each member’s patronage

account and the amount of equity members hold in the

cooperative. This facilitates distribution of patronage

refunds and ensures that the cooperative is operating

according to cooperative principles.

THE ACCOUNTING SYSTEM

The cooperative’s accounting system is a method

of recording and reporting the financial results of its

business transactions. The bookkeeper records the

business transactions of the cooperative in a daily journal. These records are then used to generate various

financial reports that provide an historical record of

the cooperatives’s business activity.

The accounting system is discussed in two sections in this guide. The first covers the balance sheet,

income statement, and statement of cash flows. These

financial statements report the results of the cooperative’s business transactions. This section also explains

the monthly cash flow statement, a planning tool for

management. Section 2 covers the record keeping functions of the daily journal and general ledger. Section 2

also covers the member records that are needed

because of the cooperative’s unique role of providing

economic benefits distributed in proportion to each

member’s use.

FINANCIAL REPORTING

Three financial reports commonly used in business are the balance sheet, income statement, and the

statement of cash flows. They report the financial position of the cooperative, its performance over a given

time period, and its ability to meet cash obligations.

They are the basis for planning future operations. Each

report contains different, but interrelated information

that together give a complete picture of the financial

operations of the cooperative. Managers, bookkeepers

and board members should be able to understand and

interpret these reports so they can make informed

business decisions about the future of the cooperative.

Exhibit I-The COOperah? Accounting System

Financial Reporting

A. Balance Sheet

B. Income Statement

C. Statement of Cash Flows

D. Monthly Cash Flow Statement

Bookkeeping

A. Daily Journal

B. General Ledger

C. Member Records

1 Capital Investment

2. Patronage Accounts

1
THE BALANCE SHEET THE INCOME STATEMENT

The balance sheet is used to report the financial

position of the cooperative at a given point in time,

usually at the end of a month, quarter, or year. As seen

in Exhibit 2, it shows the assets owned by the cooperative balanced against its liabilities and member equity.

Assets are listed on the left-hand side of a balance

sheet while liabilities and member equity are listed on

the right-hand side. Total assets, or resources owned

by the cooperative, must always equal the total liabilities and equity, or obligations of the cooperative.

Assets = Liabilities + Equity

Assets: Resources owned by the cooperative

Liabilities: Debts owed by the cooperative

Equity: Member’s interest in the cooperative

Assets are shown as current assets and fixed

assets. Current assets include cash and those assets

that are expected to be converted into cash within one

year, such as saleable inventory and accounts receivable. Fixed assets are items the cooperative will use

during normal operations, such as buildings, machinery, and equipment.

Liabilities are shown in two categories-current

or long-term. Current liabilities are those paid within 1

year such as accounts payable, short-term operating

loans, or the current portion of long-term loans. Those

due beyond the next 12 months, such as mortgages,

are long-term liabilities.

The equity section of the balance sheet shows the

amount of capital the members have invested in the

cooperative through stock purchases, allocated

reserves, and per-unit retains.

Exhibit 2-Balance Sheet

Cooperative Balance Sheet as of December 31

Assets

Current:

Cash

Accounts Receivable

Inventory

Liabilities

Current:

Accounts Payable

Long-term: Loans

Fixed:

Buildings

Equipment

Member Equity

Stock

Retained Earnings

The income statement reports the results of all

business transactions of the cooperative that occurred

during a certain time period, such as month, quarter or

year. It shows the total dollar revenue of the cooperative, the total expenses, and the resulting net income

(or loss).

Revenue is the dollar amount earned by the

cooperative from operations. It can come from several

sources, such as selling merchandise in a supply cooperative, charging members for services or marketing

their products. In multi-functional cooperatives it is

useful to separate the revenue from each function on

the income statement.

For example, Exhibit 3 shows the cooperative’s

total bulk fertilizer sales of $60,000 on the income

statement separately from the $10,000 service revenue

from the spreading function.

Notice on the income statement that the cost of

goods sold in the amount of $35,000 is subtracted from

fertilizer sales, resulting in a gross margin amount of

$25,000.

Cost of goods sold is the amount the cooperative

paid its’ supplier for the fertilizer. The gross margin of

$25,000 is the cooperative’s profit from selling the fertilizer. Because spreading fertilizer is a service the

cooperative provides, there is no cost of goods sold to

subtract from this revenue.

The entire $10,000 service revenue from the

spreading function (Exhibit 3) is added to the $25,000

gross margin from fertilizer sales for a total gross revenue of $35,000.

Gross revenue is the total profit the cooperative

received from providing goods and services to members that can be used for business expenses.

Expenses are the costs incurred to provide services to members. They vary according to the industry,

services provided, and structure of the cooperative.

They should be categorized to determine the costs

incurred to operate each phase of the cooperative.

Exhibit 3 shows administrative, operating, interest, depreciation, and miscellaneous expense categories.

Administrative costs include the salaries of sales

staff, management, and office personnel. Others are

office supplies, insurance, accountant fees, and advertising. These expenses are not directly linked to operations, but are the support services it provides. Some

are considered fixed costs of operations because they

do not vary with the level of output.

2
Cooperative Year Ending December 31

Revenue:

Fertilizer Sales

- Cost of Goods Sold

L_

$60,000

35,000

= Gross Margins 25,000

+ Service Revenue 10,000

down the cost of machinery or equipment over the

useful life of the item and is usually included on the

income statement at the end of each fiscal year.

Subtracting total expenses from gross revenue

gives the net income (or loss) of the cooperative over

the given period of time. The year-end income statement should note the portion of net income distributed

to members as cash patronage refunds and the portion

that remains as allocated reserves.

= Net Revenue 35,000

STATEMENT OF CASH FLOWS

Expenses:

Administrative

Operating

Depreciation

Interest

Miscellaneous

8,000

11,000

3,000

1,500

2,000

Total Expenses 25,500

Income Before Taxes 9,500

Income Taxes 1,000

Net Income (Loss) $8,500

Patronage Refunds:

Cash (30%)

Allocated Reserves (70%)

2,550

5,950

For Example, the manager’s salary in exhibit 3

will be the same whether the cooperative sells 500 or

750 tons of fertilizer.

Operating expenses can be directly linked to the

delivery of service and vary with output, such as in a

cooperative that packs and sells vegetables. Operating

expenses would include vegetable boxes, wages of

packers, and machinery maintenance. These are variable costs because the total amount varies with the

level of day-to-day operations.

In a vegetable packing cooperative the cost for

boxes would increase as the cooperative’s output went

from 2 to 5 tons of vegetables, because more boxes

would be needed.

Interest expense is the cooperative’s cost of borrowing money. Depreciation represents the cost of

using high value items such as machinery and equipment. This expense allows the cooperative to write

As its name indicates, only those accounts that

result in cash flowing in or out of the cooperative during the accounting period are included on the statement of cash flows. This report shows the change that

occurred in amount of cash from the opening to the

closing of the cooperative’s balance sheets. Exhibit 4

shows three categories on the statement of cash flows:

operations, investment transactions, and financing

transactions.

Cash flow from operations gives the net cash

from providing goods and services to members and all

other cash flows not from investment or financing

transactions. This includes net income, adjustments to

net income, and changes in balance sheet items.

Adjustments to net income offset the non-cash

items included on the income statement that do not

result in an actual inflow or outflow of cash, such as

depreciation, a gain (loss) from the sale of an asset, and

deferred taxes.

Changes in balance sheet items are assets and liabilities where changes result in positive or negative

cash flows, such as accounts receivable, accounts

payable, patronage refunds payable, or other accrued

expenses.

Cash flow from investment transactions include

the purchase or sale of property and equipment, the

purchase or redemption of equity in other organizations, and payments from long-term investments.

Cash flow from financing transactions include

the acquisition or redemption of loans, the sale of capital stock, redemption of member equities or payment

of patronage refunds.

3
Exhibit b--staterTWIt Of Cash Flows

Producer’s Cooperative Statement

of Cash Flows For Year Ending December 31

Cash Flow From Operations:

Net Income (Loss) From Operations

Adjustments to Net Income (Loss):

Depreciation

Gain (Loss) on asset disposition

Deferred income taxes

Changes in Balance Sheet Items:

Accounts receivable

Accounts payable

Patronage refunds payable

Other

Net Cash Flow Provided From Operations

Cash Flow From Investment Transactions:

Capital Sales

Equity Redemption

Payments From Long-term Investments

Capital Purchases

Equity Purchases

Net Cash Provided by Investment Transactions

Cash Flow From Financing Transactions:

Capital Stock Sales

Loan Acquisition

Loan Principal Redemption

Member Equity Redemption

Patronage Dividends Payable Redemption

Net Cash Provided by Financing Activities

Net Increase (Decrease) in Cash

and Cash Equivalents:

Cash and Equivalents at Beginning of Year:

Cash and Equivalents at End of Year:

CASH AND EQUIVALENTS AT END

OF YEAR: ACCRUAL ACCOUNTING

The income statement, balance sheet, and statement of cash flows report the cooperatives’s business

transactions that occurred during specific time periods

on an accrual basis. The business transactions are

matched to the accounting period in which they

occurred, regardless of when the cash for each transaction is actually exchanged.

If a member purchases supplies on credit in

December and pays for the supplies in January, the

revenue from this sale would be included on the yearend income statement of the cooperative. The uncollected cash payment would be included in accounts

receivable on the year-end balance sheet.

Accrual basis accounting is important when analyzing the cooperative’s operations, to match the operating revenue to the resulting expenses incurred during the accounting period.

MONTHLY CASH FLOW STATEMENT

Cash basis accounting recognizes that the exchange of

cash does not always occur at the same time as the

business transaction. This can affect the liquidity of the

cooperative or its ability to meet cash obligations. The

amount of cash received by a cooperative during a

given month often does not equal the amount paid,

especially for seasonal businesses or those providing

credit sales to members.

The monthly cash flow statement is an important

management planning tool to indicate the cooperative

can meet monthly cash obligations. Exhibit 5 shows

the monthly cash flow statement used to project the

amount of cash flowing into the cooperative each

month, the amount of cash flowing out, and the projected ending cash balance.

The cash flow statement (Exhibit 5) shows the

projected monthly cash flows of a cooperative with a

seasonal operating year. Even though a positive yearend net cash balance is projected, a negative cash flow

is projected for some months.

Using the monthly cash flow statement as a planning tool, the cooperative manager can determine if an

operating loan will be needed during those months

that have projected negative cash flows, or schedule

payments on accounts payable during months with

positive cash flows.
Exhibit s--Monthly Cash Flow Statement, for Year Ending December 31

item Jan Feb. March April May June July Aug. Sept. Oct. Nov. Dec. Total

Cash Received

Member Payments

MemberDues

Total Cash Received

Cash Disbursed:

Wages

Benefits

Marketing

Insurance

Licenses

Accounting

Utilities

Supplies

TruckExpenses

VI

Total Operating

Expense

Loan Payment:

Principle

Interest

Total

Total Cash Disbursed

New Cash Flow

Beginning Cash

Loans Received

Ending Balance 4,800 2,550 550 3,250 105 1,360

0 0

2,500 0

- -

2,500 0

1,500 1,500

300 300

0 0

0 0

0 0

0 250

75 75

75 75

50 50

2,000 2,250

- -

0 0

0 0

- -

0 0

- -

2,000 2,250

500 (2,250)

- -

4,300 4,800

0 0

- -

0

0

0

1,500

300

0

0

0

0

75

75

50

2,000

0

0

0

1,500

300

100

0

0

0

75

75

50

2,100

2,500 5,500 8,000 8,500 7,000 5,000 1,500 0 38,000

0 0 0 0 0 0 0 0 2,500

2,500 5,500 8,000 8,500 7,000 5,000 1,500 0 40,500

2,300 2,300 2,300 2,300 2,300 2,300 1,500 1,500 22,800

460 460 460 460 460 460 300 300 4,566

100 150 150 150 150 150 0 0 950

1,250 0 0 0 0 0 2,500 0 2,500

250 0 0 0 0 0 0 0 250

0 0 0 0 0 0 0 0 250

125 175 200 200 200 200 200 150 1,750

150 150 150 150 150 150 150 75 1,425

350 350 350 300 300 300 300 1255 2,575

4,985 3,585 3,610 3,560 3,560 3,560 3,700 2,150 37,060

0 0 600 600 600 600 600 600 600 600 4,800

0 0 60 60 60 60 60 60 60 60 280

0

2,000

(2,050)

0

2,100

(2,100

660

5,645

(3,145)

2,550 550 3,250

0 4,800 0

660

4,245

1,255

105

0

660 660 660 660 660 660 5,280

4,270 4,220 4,220 4,220 4,360 2,820 42,340

3,370 4,280 2,780 780 (2,860) (2,810) 1,840

1,360 5,090 9,370 12,150

0 0 0 0

12,930

0

10,070

0

4,300

4,800

5,090 9,370 12,150 12,930 10,070 7,260 7,260
BOOKKEEPING

The daily business transactions of the cooperative

are recorded for later use in generating financial

reports. If the books and accounts are kept accurate

and current, the balance of each account can be transferred to the appropriate financial statement whenever

needed.

COLLECTING DATA

Some business transactions occur each day, such

as sales to members, merchandise orders, and bill payments. It is important to develop an organized method

of collecting the paperwork from these transactions,

recording it in the daily journal, and filing it for future

reference.

THE DAILY JOURNAL

The daily journal is a chronological record of

every business transaction of the cooperative. Entries

come from sales receipts, invoices, and other paperwork and should be made for every day that the cooperative conducts business to ensure that each business

transaction is recorded as it occurs.

Dual Entry Accounting

A cooperative operates by conducting several

business transactions each day. During each transaction, an exchange of resources or obligations occurs

between the cooperative and another party. Dual entry

accounting is used to record this exchange. Each transaction recorded in the daily journal shows the resource

or obligation the cooperative received and the resource

or obligation that was exchanged.

When a cooperative sells merchandise to a member, it exchanges the merchandise (a resource) for cash

(a resource). To record the transaction in the journal,

an entry is made to both merchandise sales and cash. If

the cooperative purchases supplies on credit, the transaction would be recorded with an entry to supply purchases and one to accounts payable.

Recording Transactions in the Daily Journal

Every page of the journal should be numbered

for future reference. All transactions entered should

include the following information (Exhibit 6):

1. Date of the transaction;

2. Name of each account;

3. Reference number of each account; and,

4. Dollar amount, entered as a debit or credit.

In Exhibit 6, the first business transaction recorded is a member’s cash purchase of supplies for $125.

Using the dual entry system, an entry is made to cash,

as the method of payment, and a balancing entry is

made to supply sales, as the resource the cooperative

exchanged for the cash. In the second transaction, the

cooperative sends check number 123 to Public

Electricity for the monthly electric bill. The cooperative

has purchased electricity for operations in exchange

for cash.

I

Exhibit 6-!%IYIpk Daily Journal-Recording

I

Daily Journal

6
Exhibit T-Chart Of Accounts

Producers Cooperative

Account

Number

101

102

103

104

105

106

107

Assets

Cash

Accounts Receivable-Members

Accounts Receivable-Other

Prepaid Expenses

Equipment

Buildings

Inventory

201

202

203

204

Liabilities

Accounts Payable-Members

Accounts Payable-Others

Short Term Loans

Long Term Loans

301

302

Equity

Member Capital

Allocated Reserves

401

402

403

404

Revenue

Member Sales

Member Dues

Other Sales

Other Income

501

502

503

504

505

506

507

508

Expenses

Salaries

Utilities

Supplies

Insurance

Taxes

Rent

Advertising

Repairs

In both transactions, an entry is made to the

resource the cooperative received and a balancing

entry was made to the resource the cooperative

exchanged.

Transaction Date

The date entered in the daily journal should indicate when the transaction occurred, not the date

recorded. This will ensure that the date shown coincides with the date on every piece of paper from each

transaction.

Account Names

Each type of business transaction that will likely

occur during normal operations should be given an

account name. For example, each asset such as cash,

accounts receivable, or equipment and buildings. The

account names for each balancing entry (Exhibit 6)

should be offset from each other. The resource the

cooperative acquires during the transaction is recorded

on the left and the resource the cooperative exchanges

or the obligation it incurs is offset to the right.

Account Numbers

Each account name should also have a numerical

reference. Sequential numbers are typically assigned to

similar accounts, such as numbers 100 through 199

used for all assets. Each cooperative will have unique

accounts and reference numbers, depending on the

particular business and the transactions that occur. The

most common category groups used are assets, liabilities, equity, revenue, and expenses.

A chart of accounts (Exhibit 7) should be developed for each cooperative that lists all the accounts

used and the corresponding reference numbers. Large

block of sequential numbers should be designated for

each category so that other accounts can be added as

operations expand or other needed accounts are identified.

Some accounts can be shown in even more detail

by including another digit to the account number. For

example, a cooperative may want to list the salary

expense for each phase of operations by designating

501-l for management, 501-2 for warehouse, and 501-3

for sales personnel.

Dollar Amounts-As Debits and Credits

“Debits Must Always Equal Credits”

The dollar amount of each transaction is entered

in the last two columns of the daily journal as either a

debit or credit. Because each transaction is an equal

exchange, the amount entered in the debit column

must equal the amount in the credit column.

Distinguishing Debits from Credits

When recording a business transaction in the

daily journal, the resource the cooperative acquired

during the exchange is offset to the left and the

resource the cooperative exchanged or the obligation it

incurred is offset to the right. The same is true for the

dollar value of the exchange. In Exhibit 6, the value of

the resource the cooperative acquired during both

7
transactions is entered in the left column as a debit and

the resource given up or the obligation incurred is

entered on the right as a credit.

Debits are gains to the coopera live and always

entered in the left-hand column when a business transaction is recorded. A credit amount indicates a

resource the cooperative has given up or an obligation

it has incurred and is entered in the right hand column. Each account can have both debit and credit

entries, as in the cash account (Exhibit 5). When the

cooperative sold merchandise, it acquired cash and the

dollar amount was entered as a debit to indicate a gain

to the cooperative. When the cooperative paid the electric bill, the amount was recorded in the right-hand

column as a credit to indicate a resource the cooperative gave up.

To determine if an entry should be a debit or credit, it is easiest to determine if it is a gain to the cooperative or a resource it gives up or an obligation it incurs.

Exhibit 8 indicates if an increase or decrease to various

accounts would be recorded as a debit or credit.

THE GENERAL LEDGER

The general ledger is used to combine all the

transactions from the daily journal, which are in

chronological order, into each of the cooperative

accounts. It contains the same information as the daily

journal, but is used to show the balance for each

account. The balance can then be used to generate the

financial reports of the cooperative. Transferring

entries from the daily journal to the general ledger is

called posting.

Posting Entries in the General Ledger

Each ledger sheet should be labeled with the

name of the account and the corresponding account

number from the chart of accounts. The information

transferred from the daily journal to the general ledger

during posting includes:

1. Date of the transaction;

2. Description of the transaction;

3. Reference number to the daily journal;

4. Dollar value entered as a debit or credit; and,

5. Account balance, as a net debit or net credit.

The previous sample transactions are posted to a

general ledger sheet for cash in Exhibit 9.

Exhibit 8-Results of Increases and Decreases

Account Increase Decrease

Assets Debit Credit

Expenses Debit

Liabilities Credit

Credit

Debit

Equity Credit Debit

Revenue Credit Debit

Date, Description, and Dollar Amount

The date entered in the general ledger is the same

as recorded in the daily journal, which is the day it

occurred. The description of the transaction and the

dollar amount, listed as a debit or credit, is also shown

in the general ledger as it is in the daily journal.

However, now all transactions are grouped together

into the same ledger account.

Reference Number

The number in the reference (REF) column is the

page number of the daily journal where the transaction

is recorded. The reference number can be used to

determine where the transaction was recorded in the

daily journal and on what day it occurred. This information provides an “audit trail” so the paperwork

from each transaction can be easily tracked.

Account Balance

The last two columns of the general ledger page

show the dollar balance for each account as either a net

debit or net credit. As each new transaction is posted,

the debit or credit amount transferred from the daily

journal is added to or subtracted from the balance in

the general ledger. The account balance is used to generate the cooperative’s financial reports.

The first transaction posted to the general ledger

in Exhibit 9 is the cash the cooperative received from

member sales. The $125 debit amount in the daily journal is posted to the general ledger cash account as a

$125 debit. Because this is the first item posted in the

general ledger, the account balance is also a net debit

of $125. The next transaction posted is the cash payment for electricity. The $75 credit is transferred to the

general ledger and subtracted from the $125 debit bal8
I

Exhibit +-The General Ledger-Cash

ante, for a new net debit balance of $50. If financial

reports were generated at this time, the amount of cash

shown on the balance sheet would be $50.

Although financial statements are usually generated at specific times, the general ledger should be

kept current so that the balance of some accounts, such

as accounts receivable, can be checked whenever necessary.

MEMBER ACCOUNTS

Accurate records of each member’s patronage

and their benefit from and obligation to the cooperative are important to members and other agencies to

show the cooperative is operating within cooperative

guidelines and principles.

Patronage account-Accurate records of the level of

each member’s patronage are needed to determine the

distribution of patronage refunds. Member volume is

also needed to determine the cooperative’s tax liability

because any profit not allocated to members is taxable

income for the cooperative.

CapifuZ-Cooperatives usually require some member

investment, especially for start up capital. Members

will rely on the cooperative to have accurate and current records of their investment in the cooperative.

Capital accounts will also be important to banks and

other lending institutions. Lenders usually require

members to provide some portion of the capital.

Retained Earnings-These are used by the cooperative

to finance the future operations or supplement start up

capital. They are returned to the members in accordance with the bylaws. The retained earnings account

for each member should show the amount earned each

year, the amount returned, and the current balance.

Per-Unit Capital Retains-This is another method of

member capital investment. Instead of members making a direct investment or the cooperative retaining a

portion of the year-end profits, a set amount is

retained by the cooperative for each unit of product it

markets for the members.

Member Accounts Receivable-Sales on credit to member-users should be monitored closely. High accounts

receivable can have a negative impact on the availability of operating cash and the ability of the cooperative

to pay its bills.

SUBSIDIARY LEDGERS

When preparing financial reports, the total dollar

amount of the accounts is used. For example, the total

sales revenue shown on the income statement represents sales to several members. Or, lending institution

may request the total amount member capital investment, but not each member’s account balance.

However, the cooperative must maintain accurate

and current records of each member’s use of the cooperative to properly distribute patronage refunds, maintain accounts receivable and redeem capital stock.

Each member should have their own record for all

member accounts used by the cooperative. These individual accounts are subsidiary accounts to the general

ledger. A general ledger and three subsidiary accounts

are shown in Exhibit 10.

On 5/6/Xx, member 234 bought supplies for $25

and member 567 bought $84. The amount charged by

9
each member was posted in their accounts receivable

account for that day. The combined total of these two

members, $109, is then posted to general ledger

accounts receivable for 5/6/Xx. This process is repeated for every subsidiary and general ledger account

used by the cooperative for each day’s operation. A

balance sheet for 5/13/Xx would show a net balance

of $287 in the general ledger for accounts receivable.

Exhibit lo-Subsidiary Ledger Accounts

Account Account Receivable Account Number 102 I

I

Date

516

516

516

Primary Ledger Account

Transaction

Total Members

Total Members

Total Members

Ref Debit

1 109

3 154

7 24

Credit

Balance

Debit Credit

109

263

287

Joe Jackson, Member No 234 ---T Balance 1

Date Transaction Ref Debit

516 Supplies 1 25

5/a Supplies 3 57

Credit Debit

25

82

Credit

Date

516

Tammy Thompson, Member No 567 Balance

Transaction Ref Debit Credit Debit Credit

Supplies 1 84 84

Tim Wallace. Member No. 934 I Balance I

Date Transaction Ref Debit Credit Debit Credit

518 Supplies 3 97 97

5/l 3 Supplies 7 24 121

1 0
EXERCISES

11
Exercise On-The Daily Journal

A group of local gardeners organized a cooperative to obtain bags of mulch. The cooperative bought

the mulch by the truckload for $1.00 per bag and sold

it to members for $1.50 and non-members for $1.80 per

bag. The following transactions occurred on May 6:

1.

2.

3.

Joan, member #124, paid cash for 40 bags of

mulch.

Jackson, member #243, paid cash for 70 bags.

A new filing cabinet was delivered. Invoice 4021

for $150 is due to Office Outfitters with terms of

2/10 net 30.

4. Check #221 for $500 is sent as payment for 500 bags

of mulch from Mory’s Mulch, invoice 4329, dated

5.

6.

7.

8.

9.

10.

April 15.

Placed an add in the Weekend Gardener for an

upcoming sale. Check #222 for $50 was paid with

invoice number 1794.

Joe, member ##97, paid $50 for dues, which were

charged on April 1.

Allen, a non-member, purchased 10 bags of mulch.

Supplies were purchased from Office Outfitters for

$25 cash, invoice 4105.

Thomas, member #187, purchased 120 bags of

mulch and charged them to his account.

One worker was paid for 20 hours at $5.50 per

hour, check #223. (Do not use payroll taxes for this

exercise.)

Excercises

Enter the transactions into a daily journal. (A

sample daily journal page is given on page 15). Use the

account names and numbers from the chart of

accounts in Exhibit 7.

Exercise Two-The General Ledger

Transfer the daily journal entries from Exercise 1

to the appropriate general ledger accounts. Maintain a

current debit or credit balance for each general ledger

account as each entry is posted. A sample general

ledger sheet is given on the page 16.

Use these beginning account balances in the general ledger:

Cash $650 Debit

Accounts Receivable-Members $250 Debit

Accounts Payable-Others $500 Credit

All other accounts $ 0

Final Exercise

Twenty producers started Tasty Kernels

Cooperative (TKC) to sell their sweet corn at a local

farmer’s market so they could increase sales volume

and obtain a higher price. None of the producers have

enough individual volume to rent a space at the market.

Exercises

From the transactions given for TKC’s first year of

operations:

1.

2.

3.

4.

Develop a chart of accounts.

Record business transactions in a daily journal.

Post the entries from your daily journal into the

appropriate general ledger account. Designate

appropriate subsidiary ledger accounts as needed.

Develop a year-end balance sheet and income statement. The cooperative would like to purchase a

delivery truck sometime in the future, so the board

of directors has decided to return 20% of the net

income to the members as cash, and keep 80% as

allocated reserves.

Background Information

TKC’s fiscal year starts April 1. Sweet corn is sold

during an eight-week season beginning in July and

ending in mid-September. At the beginning of the fiscal year each member signed a marketing agreement

committing acreage to the cooperative. Dues of $1.50

per acre were assessed. According to the bylaws, dues

are considered member capital investment. Quality

standards require an average production yield of 25

dozen ears per acre. The cooperative will purchase

crates, which hold 5 dozen ears, for members to pack

and transport the corn. The cost of the crates is an

operating expense for the cooperative.

Member must deliver their corn to the market

each weekend morning. They are paid by check each

Monday for all sweet corn delivered over the weekend. TKC pays members $10 per crate and sells the

corn for the following prices:

12
Unit

Crate

Dozen

Half-Dozen

Per Ear

Price ($)

12.00

3.00

2.00

50

Members volunteer weekends to coordinate

deliveries and manage sales. All sales are for cash and

all money is deposited directly into the bank at the end

of each sales day except for money kept in a petty cash

fund. This is used to purchase supplies and other

needs of the cooperative. Whenever the fund falls

below $200, it is replenished with cash from sales during the following weekend or from cash in the bank

account.

First Quarter

1.

2.

Six members join the cooperative and pay $125 each

for capital stock on March 15.

TKC incorporated April 1. A cash fee of $100 is paid

to register with the State. The incorporation fee is

shown on the income statement as a license

expense.

3. Dues were assessed to each member according to

the acreage they projected on their marketing agreement signed with the cooperative as follows:

Member Acreage Dues ($)

Adam 25 37.50

Danielle 15 22.50

Cara 10 15.00

Maribeth 20 45.00

Eli 30 30.00

Elliot 100 150.00

Total 200 300.00

4.

5.

6.

All members paid in full except Cara and Eli. Dues

for these two members were charged to their

accounts with the cooperative.

A bank account was opened with First County with

a initial deposit of $690.

A rental agreement was signed with Green’s

Farmer’s Market for sales floor and storage space.

Rent of $100 is paid each weekend of use. The electricity is prorated among all booths and charged

monthly.

TKC ordered 1,000 crates from Bob’s Containers at

the cost of $.50 each.

7. The secretary paid $37 cash for office supplies.

8. received the packing crates and was billed on

invoice 45793 with terms 2/10 net 30.

Second Quarter

9. Cara and Eli pay their dues in full.

10. Members pick up crates in the following quantities:

Member Number of Crates

Adam 125

Danielle 75

Cara 50

Maribeth 100

Eli 150

Elliot 480

Total 980

11. Check number 101 was written to Green’s for the

first week’s rent and the cooperative had the following transactions for the first weekend:

Crates Delivered Sales

Member Number Units Number Sold

Adam 20 Crates 25

Maribeth 25 Dozen 350

Elliot 75 Half-Dozen 230

12.

13.

Individual 120

The following members were paid for their weekend deliveries:

Adam: Check number 102 for $200.

Maribeth: Check number 103 for $250.

During the second weekend, check number 104

was written to Green’s for rent and the following

transactions occurred:

Crates Delivered

Member Number

Adam 40

Danielle 15

Eli 30

Elliot 55

Sales

Units Number Sold

Crates 50

Dozen 300

Half-Dozen 150

Individual 180

13
14.

15.

16.

The following payments were made to members.

Danielle: Check number 105 for $150.

Eli: Check number 106 for $300.

Elliot: Check number 107 for $1,300.

Remit payment for crates, 40 days after received

shipment, check number 108.

During the third weekend, check number 109 was

written to Green’s for rent and the following transactions occurred:

Crates Delivered Sales

Member Number Units Number Sold

Cara 20 Crates 50

Maribeth 25 Dozen 380

Eli 40 Half-Dozen 120

Elliot 55 Individual 120

17. Payments were made to these members:

Adam: Check number 110 for his balance. 26. Check number 123 for $40, was written to Green’s

Cara: Check number 111 for $200. for the remainder of the rent.

Eli: Check number 112 for $400. 27. The cooperative paid the final electric bill of $139

Elliot: Check number 113 for $550. with check number 124.

18. Paid the July electric bill of $87 with check number

114.

19.

20.

21.

Used $34 cash to buy office supplies.

Purchased cleaning supplies for the market stand

for $27 cash.

During the fourth weekend, check number 115 was

written to Green’s for rent and the following transactions occurred:

Crates Delivered Cash Sales

Member Number Units Number Sold

Elliot 140 Crates 50

22.

23.

24.

Dozen 400

Half-Dozen 90

Individual 60

Paid Elliot $1,400 with check number 116.

Maribeth was paid by check for sweet corn delivered during week three.

The following deliveries and sales were made during weeks 5 through 8. The total deliveries for each

member is given as one transaction as well as the

total sales.

Crates Delivered

Member Number

Adam 65

Danielle 60

Cara 30

Maribeth 50

Eli 80

Elliot 155

Cash Sales

Units Number Sold

Crates 200

Dozen 1,115

Half-Dozen 340

Individual 180

Also, during this time, the cooperative bought 20

crates of sweet corn from Corn Wholesalers. The corn

was bought on account, invoice #59460, for $9.50 per

crate. All were sold at the crate price.

25. Payments were made to these members:

Adam: Check number 118 for $650.

Danielle: Check number 119 for $600.

Cara: Check number 120 for $300.

Maribeth: Check number 121 for $500.

Elliot: Check number 122 for $1,550.

28. Check number 125 was mailed to Corn Wholesalers

for the full amount due.

14
DATE

DAILY JOURNAL

TRANSACTION AND EXPLANATION ACCOUNT

PAGE

DEBIT CREDIT

I I I I

15
ACCOUNT NAME ACCOUNT NUMBER

BALANCE

DATE TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

16
UNDERSTANDING BOOKKEEPING AND

FINANCIAL STATEMENTS

EXERCISES ANSWERS

17
Exercise One-The Daily Journal

Daily Journal Page 1

DATE TRANSACTION ACCOUNT DEBIT CREDIT

1 CASH 101 60.00

MEMBER SALES 401 60.00

JOAN, MEMBER 124, 40 BAGS

1

I 1 PAYMENT - MORY'S MULCH, INVOICE 4329 I I I I

I5 I ADVERTISING

CASH, CHECK NUMBER 222 101 50.00

WEEKEND GARDENER, INVOICE 1794

6 CASH 101 50.00

I I ACCOUNTS RECEIVABLE - MEMBERS I I 102 1 50.00 1

I I

DUES PAYMENT - BO, MEMBER 97 I I I I

7 CASH 101 18.00

OTHER SALES 403 18.00

8 SUPPLIES 503 25.00

I CASH I 101 I 1 25.00 1

I I OFFICE OUTFITTERS, INVOICE 4105 I I I I

9 ACCOUNTS RECEIVABLE - MEMBERS 102 180.00

MEMBER SALES 401 180.00

THOMAS, MEMBER 187, 120 BAGS

1 1 SALARIES 10

I I CASH - CHECK 223 I 101 I I 110.00 I

I

20 HOURS @ $5.50

18
Exercise Two -- The General Ledger

ACCOUNT NAME ACCOUNTS RECEIVABLE - MEMBERS ACCOUNT NUMBER 102

I BALANCE

DATE TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

L

BALANCE 250.00

6 DUES PAYMENT - JOE - MEMBER 97 1 50.00 200.00

9 MEMBER SALES - THOMAS - MEMBER 187 1 180.00 380.00

I ~~ I I I

ACCOUNT NAME EQUIPMENT ACCOUNT NUMBER 105

BALANCE

DATE TRANSACTION REl? DEBIT CREDIT DEBIT CREDIT

1

3 PURCHASE - OFFICE OUTFITTERS 1 150.00 150.00

19
I ACCOUNT NAME ACCOUNTS PAYABLE - OTHERS ACCOUNT NUMBER 202 I

BALANCE

DATE TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

/

BALANCE 500.00

I3 I PURCHASES - OFFICE OUTFITTERS I1 I 150.00 I 1 650.00 1 1

150.00 I

ACCOUNT NAME MEMBER SALES ACCOUNT NUMBER 401

BALANCE

DATE TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

1 JOAN - 40 BAGS 1 60.00 60.00

2 JACKSON - 70 BAGS 1 105.00 165.00

345.00

ACCOUNT NAME OTHER SALES ACCOUNT NUMBER 403

I I BALANCE I

DATE TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

,

7 CASH SALES 1 18.00 18.00

ACCOUNT NUMBER SALARIES ACCOUNT NUMBER 501 I

BALANCE

DATE TRANSACTION

ACCOUNT NUMBER SUPPLIES ACCOUNT NUMBER 503 I

BALANCE

DATE TRANSACTION

ACCOUNT NUMBER ADVERTISING ACCOUNT NUMBER 507

BALANCE

DATE TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

5 WEEKEND GARDENER 1 50.00 50.00

20
Final Exercise

Daily Journal Page 1

DATE TRANSACTION ACCOUNT DEBIT CREDIT

1 1 1 CASH I 101 I 750 I

MEMBER EQUITY 301 750

INITIAL CAPITAL INVESTMENT

2 LICENSE 504 100

CASH 101 100

INCORPORATION EXPENSE

3 CASH 101 255

I I I

ACCOUNTS RECEIVABLE - MEMBERS 102 45

MEMBER CAPITAL 301 300

YEARLY DUES

4 BANK ACCOUNT I

104 690

I

I=7

CASH

OPEN ACCOUNT

SUPPLIES

101 690

503 37

CASH

PURCHASE OFFICE SUPPLIES

101 37

8 SUPPLIES 503 500

F

ACCOUNTS PAYABLE - OTHER 202 500

CRATES - BOB'S CONTAINER'S - INVOICE 45793

CASH 101 45

ACCOUNTS RECEIVABLE - MEMBERS 102 45

DUES PAYMENTS

RENT 506 100

BANK - CHECK 101 104 100

GREEN'S MARKET - WEEK ONE

21
I Daily Journal Page 2 I

I DATE I TRANSACTION I ACCOUNT 1 DEBIT 1 CREDIT 1

11 PURCHASES, MEMBERS - WEEK ONE - 120 CRATES 402 1200

ACCOUNTS PAYABLE - MEMBERS 201 1200

ADAM - 20 / MARIBETH - 25 / ELLIOT - 75

1 1 CASH 11 I 101 I I 1870

SALES-MEMBER PRODUCE-WEEK ONE 401 1870

BANK - DEPOSIT - WEEK ONE SALES 104 1893

CASH 101 1893

12 ACCOUNTS PAYABLE - MEMBERS 201 450

BANK - CHECKS 102 & 103 104 450

PAID: ADAM - $200 / MARIBETH - $250

1 1 RENT 13 I 506 I I 100

BANK - CHECK 104 104 100

GREEN'S MARKET - WEEK TWO

I 13 I PURCHASES, MEMBERS - WEEK TWO - 140 CRATES I 402 I I 1400 I

I I ACCOUNTS PAYABLE - MEMBERS I 201 I I 1400 I

ADAM - 40 / DANIELLE - 15 / ELI - 30 / ELLIOT - 55

13 CASH 101 1890

I I SALES - MEMBER PRODUCE - WEEK TWO I 401 I I 1890 I

I I I I I I

22
Daily Journal Page 3

DATE TRANSACTION ACCOUNT DEBIT CREDIT

15 ACCOUNTS PAYABLE - OTHER 202 500

BANK - CHECK 108 104 500

PAID: BOB'S CONTAINER'S - INVOICE 45793

16 RENT 506 100

BANK - CHECK 109 104 100

GREEN'S MARKET - WEEK THREE

16 PURCHASES, MEMBERS - WEEK THREE - 140 CRATES 402 1400

ACCOUNTS PAYABLE - MEMBERS 201 1400

CARA - 20 / MARIBETH - 25 / ELI - 40 / ELLIOT - 55

16 CASH 101 2040

SALES - MEMBER PRODUCE - WEEK THREE 401 2040

16 BANK - DEPOSIT - WEEK THREE SALES 104 2040

CASH 101 2040

17 ACCOUNTS PAYABLE - MEMBERS 201 1550

BANK - CHECKS 110, 111, 112, 113 104 1550

I r

PAID: ADAM - $ 400 / CARA - $200 / ELI - $ 400 / ELLIOT -

$550 I I

18 ELECTRICITY 502 87

BANK - CHECK 114 - GREEN'S MARKET 104 87

19 SUPPLIES 503 34

CASH 101 34

OFFICE SUPPLIES

20 SUPPLIES 503 27

CASH 101 27

CLEANING SUPPLIES

23
ADAMS - 65 /DANIELLE - 60 /CARA - 30 ~ARIBETH - 50 /ELI -

24
I--- Dally Journal Page 5 I

25
ACCOUNT NAME CASE ACCOUNT NUMBER 101

BALANCE

I I 1 I I

DATE TBANSACTION REF DEBIT CREDIT DEBIT CBEDI

1 MEMBER EQUITY 1 750 750

I

2 INCORPORATION FEE 1 100 650

3 MEMBERSHIP DUES 1 255 905

4 OPEN BANK ACCOUNT 1 690 215

7 PURCHASE SUPPLIES 1 37 178

9 ACCOUNTS RECEIVABLE PAYMENTS 2 45 223

I . I

11 SALES - WEEK ONE 2 1870 2093

11 BANK DEPOSIT 2 1893 200

13 SALES - WEEK TWO 2 1890 2090

13 BANK DEPOSIT 2 1890 200

16 SALES - WEEK THREE 3 2040 2240

16 BANK DEPOSIT 3 2040 200

19 SUPPLIES 3 34 166

20 SUPPLIES 3 27 139

21 SALES - WEEK FOUR 4 2010 2149

26
ACCOUNT NAME ACCOUNTS RECEIVABLE - MEMBERS ACCOUNT NUMBER 102

BALANCE

DATE TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

3 MEMBERSHIP DUES 1 45 45

9 PAYMENTS 1 45 0

I

I I I

ADAM 102 - A BALANCE

DANIELLE 102 - B BALANCE

DATE TRANSACTION BEF DEBIT CREDIT DEBIT CREDIT

CARA 102 - c BALANCE

DATE TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

3 MEMBERSHIP DUES 1 15 15

I

0 I I

MARIBETH 102 - D BALANCE

DATE TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

ELI 102 - E BALANCE

DATE TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

1

3 MEMBERSHIP DUES 1 30 30

I ELLIOT 102 - F I BALANCE I

DATE TRANSACTION REP DEBIT CREDIT DEBIT CREDIT

1

27
, I

ACCOVli

DATE

4

11

11

12

12

P NAME BANK ACCOUNT ACCOUNT NUMBER 104

BALANCE

I I I I

TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

OPEN ACCOUNT 1 690 690

RENT - WEEK 1 - CHECK 101 2 100 590

DEPOSIT - WEEK 1 SALES 2 1893 2483

ADAM - CHECK 102 2 200 2283

MARIBETH - CHECK 103 2 250 2033

13 RENT - WEEK 2 - CHECK 104 2 100 1933

I . I

DEPOSIT - WEEK 2 SALES 2 1890 3823

DANIELLE - CHECK 105 2 150 3673

ELI - CHECK 106 2 300 3373

ELLIOT - CHECK 107 2 1300 2073

15 BOB'S CONTAINERS - CHECK 108 3 500 1573

I I I I

RENT - WEEK 3 - CHECK 109 3 100 1473

DEPOSIT - WEEK 3 SALES 3 2040 3513

ADAM - CHECK 110 3 400 3113

17 CARA - CHECK 111 3 200 2913

I I I I I

ELI - CHECK 112 3 400 2513

ELLIOT - CHECK 113 3 550 1963

ELECTRICITY - CHECK 114 3 87 1876

RENT - WEEK 4 - CHECK 115 4 100 1776

DEPOSIT - WEEK 4 SALES 4 1949 3725

I I I

ELLIOT - CHECK 116 4 1400 2325

MARIBETH - CHECK 117 4 250 2075

DEPOSIT - WEEKS 5 - 8 SALES 5 6755 8830

ADAM - CHECK 118 5 650 8180

25 DANIELLE - CHECK 119 5 600 7580

25 CARA - CHECK 120 5 300 7280

25 MARIBETH - CHECK 121 5 500 6780

25 ELLIOT - CHECK 122 5 1550 5230

26 RENT - WEEKS 5 - 8 - CHECK 123 5 400 4830

I I I I I

I 27

I 28

ELECTRICITY - CHECK 124 5 139 4691

CORN WHOLESALERS - CHECK 125 5 190 4501

28
ACCOUNT NAME ACCOUNTS PAYABLE - MEMBERS ACCOUNT NUMBER 201

BALANCE

DATE TRANSACTION BEF DEBIT CREDIT DEBIT CREDIT

11 PURCHASES - WEEK 1 2 1200 1200

12 PAYMENTS 2 450 750

13 PURCHASES - WEEK 2 2 1400 2150

14 PAYMENTS 2 1750 400

16 I PURCHASES - WEEK 3 I 1400 1 1 1800

17 I PAYMENTS 1 3 1 1550 i 1 I 250

21 PURCHASES - WEEK 4 4 1400 1650

22 PAYMENTS 4 1400 250

23 PAYMENTS 4 250 0

24 I PURCHASES - WEEKS 5 - 8 I 4 I I 4400 I I 4400

25 I PAYMENTS I 5 I 3600 I 1 I 800

* SEE SUBSIDIARY LEDGER SHEETS ON FOLLOWING PAGES

I ACCOUNT NAME ACCOUNTS PAYABLE - OTHER ACCOUNT NUMBER 202

BALANCE

DATE TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

I3 BOB'S CONTAINERS 1 500 500

I 15 I PAYMENT - BOB'S CONTAINERS - CHECK 108

I 24 I CORN WHOLESALERS l-4 I I I I 190 190

28 PAYMENT - CORN WHOLESALERS - CHECK 125 5 190 0

29
ACCOUNT NAME ACCOUNTS PAYABLE - ADAM ACCOUNT NUMBER 201-A

BALANCE

DATE TBANSACTION BEF DEBIT CREDIT DEBIT CREDIT

11 20 CRATES 2 200 200

12 PAYMENT - CHECK 102 2 200 0

13 40 CRATES 2 400 400

17 PAYMENT - CHECK 110 3 400 0

I I

24 65 CRATES 4 650 650

25 PAYMENT - CHECK 118 5 650 0

ACCOUNT NAME ACCOUNTS PAYABLE - DANIELLE ACCOUNT NUMBER 201 -B

BALANCE

DATE TRANSACTION

13 15 CRATES 2 150 150

I

14

24

25

ACCOUNT NAME ACCOUNTS PAYABLE - CABA ACCOUNT NUMBER 201-c

I

DATE

16

17

24

25

BALANCE

TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

20 CRATES 3 200 200

PAYMENT - CHECK 111 3 200 0

30 CRATES 4 300 300

PAYMENT - CHECK 120 5 300 0

I I I I I I

I I

30
ACCOUH

DATE

11

12

16

23

24

25

I NAME ACCOUNTS PAYABLE - MARIBETE ACCOUNT NUMBER 201-D

I BALANCE

TRANSACTION

25 CRATES

PAYMENT - CHECK 103

25 CRATES

PAYMENT - CHECK 117

50 CRATES

PAYMENT - CHECK 121

ACCOUNT NAME ACCOLINTS PAYABLE - ELI ACCOUNT NUMBER 201 -E

ACCOUNT NAME ACCOUNTS PAYABLE - ELLIOT ACCOUNT NUMBER 201-F

22 PAYMENT - CHECK 116 4 1400 0

24 155 CRATES 4 1550 1550

25 PAYMENT - CHECK 122 5 1550 0

31
32
ACCOUNT NAMB PURCHASES - NOB-?IEUBEB PBODUCE ACCOUNT NUMBER 404

(COST OF GOODS SOLD) I BALANCE

DATE TRANSACTION QEF DEBIT CREDIT DEBIT CREDIT

24 WEEKS 5 - 0 4 190 190

33
ACCOUNT NAME MEMBER CAPITAL ACCOUNT NUMBER 301

BALANCE

DATE TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

1 INITIAL CAPITAL INVESTMENT 1 750 750

1 YEARLY DUES 1 300 1050

ACCOUNT NAME UTILITIES ACCOUNT NDMBER 502

BALANCE

DATE TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

18 ELECTRICITY 3 87 87

27 ELECTRICITY 5 139 226

ACCOUNT NAME SUPPLIES ACCOUNT NUMBER 503

I BALANCE

DATE TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

7 OFFICE 1 37 37

8 CONTAINERS 1 500 537

19 OFFICE 3 34 571

. I

ACCOUNT NAME LICENSE ACCOUNT NUMBER 504

BALANCE

DATE TRANSACTION REF DEBIT CREDIT DEBIT CREDIT

/

2 INCORPORATION FEE 1 100 100

34
Chart of Accounts Balance Sheet

Account

Number

101

102

103

104

201

202

203

504

301

302

401

402

403

404

501

502

503

Assets

Cash

Accounts Receivable-Members

Accounts Receivable-Other

Bank Account

Liabilities

Accounts Payable-Members

Accounts Payable-Others

Patronage Refunds Payable

Rent

Equity

Member Capital

Allocated Reserves

Revenue

Member Sales

Member Purchases

Non-Member Sales

Non-Member Income

Expenses

Utilities

Supplies

License

Current Assets Dollars

Cash 200

Accounts Receivable-Members 0

Accounts Receivable-Others 0

Bank Account 4,501

Total Current Assets 4,701

Fixed:

Building and Equipment

Total assets

Current: Liabilities

Accounts Payable-Members

Account Payable-Others

Patronage Refunds Payable

Total Current Liabilities

Long Term Liabilities

Total Liabilities

Member Equity

Capital Investments

Allocated Reserves

Total Member Equity 3,331

Total Liability and Member Equity 4,701

0

4,701

4,701

800

0

570

1,370

0

1,370

1,050

2,281

35
Income Statement

Revenue

Sales:

Sales - Member Produce

Sales - Other Produce

$14,325

240

Gross Sales

Cost of Goods Sold:

Purchases - Member Produce

Purchases - Other Produce

14,565

!§ 9,800

190

Total Cost of Goods Sold 9,990

Gross Revenue

Expenses

Utilities

Supplies

License

Rent

Total Expenses

Net Income $2,851

Patronage Refunds

Cash (20%) $ 570

Allocated Reserves (80%)

4,575

226

598

100

800

1,724

$2,281

36
i :l_. ._ . .

waii&k#m, nc. 202s;Q-B

I&r&l &asiuess-Cooperative ;sea;Fice GE%31 provi* reeesrsh,

:*’

: ._

nwmgmn& and fslucdid a&dame fit+ coeperative84o .-

-.

rrtreng&en the economjc position of farmere *d other rural

residents. It works directly with cooperative leaderr and.

Federal and @ate agencies to improve orga&ation,

leadership, ,a& operation ef cooperativ& ad ti give guidance

to further devehqnent.

The cooperative Segment of RBS (‘1) helps tiers and othep

*

ruraEre6idenS develop eooperativ4s to o&&i6 **plies and .’

sewices at bmr cost aid ia get better price8 for prod&M-hey ..,

. . . ,_,

sell; (%I atSdsis tire&dents on developing existing

:. _.:

i-,_

resorirced, thamgh ctmperative action to enhance rural liviins

- .:

. . . I_.

(3) helps ceoperativ- improve servicea and operating

&ciency; (4) informs members, directors, employees, and the -

public on how coopera&es work &d be&& their men&&

‘_

and their conunxmities; and (5) encourages internati@al ‘.

,_ ,‘I

cooperative programs. RBS also publishes research and

i

edxtcational nmt.eri&e and issues Rw-td &qwuths magazine.

_ r-7 _ i .,2

I~ : ;_ ‘: i.;;,_*,?:‘z-c _ -: _*r - _ y,.;f, ‘L := ” ._,’ _ ,. -. i _

,. _: ,. , _ ~y.....-r

>. _- .“,.__

-_ :‘--.

. ,. ., _-

~~~.~~t~~~~e~~A~~~ : _ _

: -_

:- .:_-

._

eii~tinIn all ita pmgmnw and activities on the basic of ‘. _,._ ;

race, &-4or~. nittional &gin, genttep, re@gion$ aga, disability~ -.

--,

political beliefs, iiepual erientation, and marital or f&mily ’

6*M.mOt 41 proh&ted~~applyto all lxqr&s.) ” , -.

Fkami wit& diclabititi** require almtive Geaixs fw

_ . . ’

comW&af program itxfimi~a fbraifls, targe prim+,

-

.’ :

a&&m ik.,).sh~ conta&USDA’~.T&GEZ’ Ce&r ai . .,

czoz>~m~~andTDD), ’ _ -_

-To file a compla&t~+%&rimii&~, write USD& Bra+or,

.: _._~.-

-. “. ..-,

._ ’ _.

. .

Ia AfsMze i SW, Wr;sbilnBtoR, Eljc; 20%5&4I# &

aall CB2) ?2&964 {voice 61 TDti). USDA is an eqxal _~

,‘.

.

tqp&u&@ prsvider and einployer.

.

.:

: ::*__; :>y

__.,.,>_ - .~.,

_ .__ .;_ _‘ _ :

j*._-