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A.'S CAPITAL ACCOUNT.
To Realization Account for his share of loss.. $10,003.07 By amount to credit at date of expiration of

partnership as per account.
Balance due him to be contributed towards

settling of creditors' claims.

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$10,003.07

$10,003.07 To Balance Due.

$418.78

B.'S CAPITAL ACCOUNT.
To Realization Account for his share of loss.. $9,420.64 By amount to credit at date of expiration of

partnership as per account.

$9,026.23
Balance due him to be contributed towards
settling of creditors' claims.

394.41

$9,420.64

$9,420.64 To Balance Due.

$394-41

C.'S CAPITAL ACCOUNT.
To Realization Account for his share of loss... $9,818.80 By amount credited at date of expiration of

partnership as per account.
Balance due him to be contributed towards

settling of creditors' claims.

$9,407.72

411.08

$9,818.80

$9,818.80 To Balance Due.

$411.08

D.'S CAPITAL ACCOUNT.
To Realization Account for his share of loss.... $16,857.49 By amount to credit at date of expiration of

partnership as per account.

$16,151.76
Balance due him to be contributed towards
settling of creditors' claims.

705.73

$16,857-49

$705-73

$16,857.49

To Balance Duc.

This state of affairs, showing a sudden shrinkage, is, of course, rather strained, but for the purpose of illustrating the adjustment of Partners' Accounts under such conditions it is permissible. We will then adjust this shrinkage in proportion to the last balance on each partner's account.

The total capital, as per balance sheet, was $44,170.00, while the total deficiency was $46,100.00, hence the loss per cent. is 104. 3609.

The respective Capital Accounts will accordingly appear as given on the preceding pages, showing the amount each partner is to contribute to make up the total insolvency of $1,930.00.

This treatise may not be exhaustive enough to enable an accountant to find in it material covering every detail that may arise in adjusting partnership accounts; yet the writer will have attained his end if it serves the practitioner as a general guide for this class of accounts in the cases that are of more frequent occurrence.

BIBLIOGRAPHY. Partnership Accounts, by Child. Bookkeeping Exercises, by DICKSEE. Accountant's Compendium, by Dawson. Philosophy of Accounts, by SPRAGUE. Accounting and Banking, by Nixon. Accountant's and Bookkeeper's Vade-Mecum, by WHATLEY. Partnership, by HARDCASTLE. English Statutes. American Statutes. New York Statutes. Partnership and Companies, by LINDLEY. Partnership Law, by PARSONS. Corporation Accounting and Auditing, by KEISTER. Accounting in Theory and Practice, by LISLE. Advanced Accounting, by DICKSEE. Auditing (American Edition), by DICKSEE. Various C. P. A. Problems. The Accountant's Journal (English). The Journal of Accountancy. The Accountant's Manual (English). The Accountant's Manual (American).

The New Classification of Electrical Railway

Expenses. By WILLARD HUBBARD Lawton, C. P. A. (Penna.). Late in February several hundred electrical railway accountants were thrown into a state of exasperation and dismay on the receipt of Circular No. 20 from the Statistician of the Interstate Commerce Commission. This circular contained for their expert consideration a new classification of operating expenses anrl capital expenditures based on the classification already in use by the Commission for steam railroads. All the experience of twenty years of electrical operation of railways was calmly ignored, and, so far from any attempt to conceal the fact that it was the steam road classification which the Commission wished to force upon the electric roads, the officers of the latter were somewhat humorously (whether intentional or not) invited to send for a copy of the steam classification if they were not familiar with it! Briefly the circular proposed the (1) divisions of all the electric railway companies into two classes based on the amount of annual revenue, $50,000 being the suggested line of demarcation: (2) for all companies below the limit a simple classification divided into five General and twenty-two Subgeneral accounts: and (3) for all above the limit the same General and Subgeneral accounts with the latter further sub-divided into 116 Primary accounts. For all companies, large and small, the same capital accounts were proposed, sixty-two in all. For the benefit of those accountants who may not be familiar with the present Standard Classification used by the electrical railway companies, and to explain why the circular caused such an uproar, I will state that there is but one classification for all companies alike, consisting of thirty-nine operating accounts (increased to fifty at the last annual convention to provide for interurban needs), and but fifteen capital, or construction, accounts.

The response to the circular was prompt and most vigorous. Moved by the unanimous protest of nearly three hundred electric railway accountants, Professor Adams, in charge of the Division of Statistics and Accounts, held another conference in May with

representatives of the American Street and Interurban Railway Accountants' Association and of the Public Service Commissions of New York State, at which the tentative classification originally proposed was considerably modified and made to conform more nearly with electrical railway experience.

While our brethren in charge of the accounting of electrical railway companies are most vitally affected by this circular, there are probably many public accountants, and will in the future be very many more, to whom a brief review and criticism of this famous circular will be of interest. There is not, to be sure, a very large practice among electric railways for the C. P. A. fraternity at present, most companies preferring to have their own auditors on salary, but the tendency of the times is toward independent audits by public accountants, and the time will undoubtedly come when the public will not be satisfied with anything short of statements verified by certified public accountants.

It is impossible in an article of this kind to go into an exhaustive analysis of the Commission's proposed classification and system, but there are a few salient points that will engage the attention of the student.

(1) The modified Classification proposes the division of all electric railway companies into three classes, viz.:

Class A. Annual Gross Revenues—$1,000,000 and over. Class B. Annual Gross Revenues—$250,000 to $1,000,000. Class C. Annual Gross Revenues—under $250,000.

For all companies there are provided five General Accounts, which are sub-divided into Primary Accounts ranging from thirtysix in Class C to eighty-eight in Class A, as follows: General Accounts.

Primary Accounts.

A. B. C.

Nos. Nos. Nos. I. Maintenance, Way and Structures 1-28

I-7 II. Maintenance, Equipment

29-44 13-21 8-15 III. Traffic

45-47

16 IV. Conducting Transportation....... 48-72 23-43 17-27

V. General and Miscellaneous....... 73-88 44-58 29-36

A statement of the accounts provided for Class C will give a general idea of the scope of the classification.

I-I2

22

I. MAINTENANCE, WAY AND STRUCTURES.
1. Superintendence of Way and Structures.
2. Maintenance of Way.
3. Maintenance of Electric Lines.
4. Maintenance of Buildings and Structures.
5. Other Operations-Debit.
6. Other Operations—Credit.
7. Depreciation of Way and Structures.

}

II. MAINTENANCE, EQUIPMENT.
8. Superintendence of Equipment.
9. Maintenance of Power Equipment.

Maintenance of Cars and Locomotives.
II. Maintenance of Electrical Equipment of Cars and Loco-

motives. 12. Miscellaneous Equipment Expenses. 13. Other Operations-Debit. 14. Other Operations-Credit. 15. Depreciation of Equipment.

III. TRAFFIC. 16. Traffic Expenses.

IV. CONDUCTING TRANSPORTATION. 17. Superintendence of Transportation. 18. Power Plant Employees. 19. Substation Employees. 20. Fuel for Power. 21. Other Power Supplies and Expenses. 22. Power Purchased. 23. Power Exchanged-Balance. 24. Other Operations-Debit. 25. Other Operations—Credit. 26. Conductors, Motormen and Trainmen. 27. Miscellaneous Transportation Expenses.

V. GENERAL AND MISCELLANEOUS. 28. General Expenses. 29. Other Operations-Debit. 30. Other Operations-Credit. 31. Injuries and Damages.

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