44. Journal. As already explained, the journal should be provided with extra columns for profits on each class of shipment.
When an agent transmits an account sales without a cash remittance, the transaction must be journalized to close the shipment account. When proceeds are to be charged to his account, the entry is:
| Dr. | Cr. | Cr. | |
|---|---|---|---|
| Richard Roe, Agt. | $160.00 | ||
| To Shipment Ledger | |||
| Richard Roe Shipment No. 1 | $160.00 | ||
| Richard Roe, Shipment No. 1 | 18.00 | ||
| To Profit and Loss on Shipments | $18.00 |
If a note to cover net proceeds is received, the entry is the same except that Bills Receivable is debited instead of Richard Roe, Agt.
When a loss is incurred the entry is:
| Dr. | |||
|---|---|---|---|
| Profit and Loss on Shipments | $18.00 | ||
| To Shipment Ledger Account | |||
| Richard Roe Shipment No. 1 | $18.00 |
and postings will be made direct to all accounts affected.
TREATMENT OF ACTUAL SALES
45. The shipper may sell a portion of his produce outright, and if a large share of his business is transacted in this manner, sales can be treated exactly the same as though he was not engaged in a commission business, with separate sales book and sales ledger.
Most shippers, however, will not find it necessary to segregate sales to this extent. Sales can be charged to shipment accounts in the shipment ledger, but will of course be charged at a profit, and credited to shipment account in general ledger. Payments on these accounts will be entered in the cash book as net proceeds.