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paid by the A B Railway Company for the entire property $98,000. In view of the manner of construction of the rent named in the lease, we are crediting the rent received from the C D Transportation Company, less the cost of maintenance of the property, against the rent paid to the X Y Steamship Company. Inasmuch as the rent paid is an income matter, I think that the rent received is also an income matter after reimbursing operating expenses. Is this correct?

Answer. It is correctly handled.

Case 281.

Query. The revised issue of rules of the Master Car Builders' Association, under rules 40 and 106, covers the charges to be made for the cost of removing advertisements tacked or pasted upon cars. Should this actual expense be charged to "Train Supplies and Expenses" or to "Freight-Train Cars-Repairs," and should the bills for performing the service be credited to "Train Supplies and Expenses" or "Freight-Train Cars-Repairs?''

Answer. Charge or credit "Train Supplies and Expenses."

Case 282.

Query. A railroad company sends out a switch engine and crew to pick up lumber lost off a freight train belonging to another company. To what account should the wages of the crew be charged and use of engine, and what accounts credited?

Answer. Should be charged to company responsible and credited to operating expense accounts originally charged. The rent of engine should be credited to account, "Hire of Equipment."

Case 283.

Query. To what operating account should be charged the proportion of joint operation of interlockers at crossings? For example, at a point on our line another company pays the entire cost of maintaining and operating an interlocker and bills on our company for a proportion of the expense. There are no yards or other facilities.

Answer. Costs of operation of interlocking plants at such railroad crossings used jointly should be handled through "Joint-facilities' account "Operating Joint Tracks and Facilities."'

See Supplement, effective on July 1, 1908, to the Classification of Operating Expenses for Steam Roads, Third Revised Issue.

Case 284.

Query. We have inaugurated between A and C in connection with another line of road, designated the second party, a through passenger-train service operated over our line of road from A to B (being intermediate between A and C), and operated over the line of the second party from B to C, our company paying all expenses, billing the second party each month for their proportion based on train mileage; crediting the account "Operating Joint Yards and Terminals-Cr." Is this correct? Answer. No; this is not a joint facility and should not be handled through the "Joint-facilities' account.

Case 285.

Query. Under an agreement between the A B Railroad Company and the Y Z Railroad Company, executed before this company began operations, this company handled traffic for the A B Company, in A B cars, between certain points on this road and the junction with the A B Railroad Company. The revenue on such traffic is entirely absorbed by the A B Company. The tracks over which this traffic is handled are owned, leased, operated, and maintained by this company. Monthly bills are rendered against the A B Railroad Company based on the cost of operation and maintenance (including taxes, etc.), as the number of cars, empty and loaded, han dled for the A B Company bears to the whole number of cars, empty and loaded, handled over the tracks as prescribed in the agreement. What accounts should be credited with the amounts of such bills?

Answer. 1. Maintenance charges should be handled through "Maintaining Joint Tracks, Yards, and Other Facilities-Cr."

2. Operating charges should be handled through "Operating Joint Tracks and

Facilities-Cr." (for tracks), and "Operating Joint Yards and Terminals-Cr.'' (for terminals).

3. Administration charges should be handled through "General Administration Joint Tracks, Yards, and Other Facilities-Cr.''

4. Charges representing interest on valuation and taxes should be handled through the appropriate rent account under "Income.''

Case 286.

Query. Passenger trains, including crews, owned by this company, operating under through schedules, run over about nine miles of tracks, owned and maintained by the A B Railroad Company. The entire expense of the crew is paid for by this company. The entire earnings of the train while on the A B Railroad tracks are absorbed by the A B Railroad Company. This company bills against the A B Railroad Company for a proportion of actual expense of the train and crew, based on the mileage while on this company's tracks, against the mileage while on the A B Railroad tracks. What accounts should be credited with the amounts of bills so rendered?

Answer. Not a joint facility; credit appropriate primary accounts under Transportation Expenses.''

Case 287.

Query. To what account should be charged a railway's proportion of expenses of an association to protect the various railroads in litigation regarding patents upon mercantile devices used in the operation of locomotives or cars, the expenses of which are borne in proportion to the gross earnings of the companies composing the associations?

Answer. "Law Expenses" under "General Expenses.

Case 288.

Query. To what account should be charged rents paid to other companies for use of their stalls for housing our locomotives?

Answer. To "Enginehouse Expenses-Yard" or "Enginehouse Expenses-Road,'' as the case may be.

Case 289.

Query. We pay the Y Z Company a specified amount per month for the use of a portion of their yards and tracks, and for another portion on the basis of the number of cars handled over such tracks. We pay all the expenses of maintaining the tracks, but they pay the taxes. Since the amount paid the Y Z Company is for rent, should not the same be debited by us to "Miscellaneous Income-Rent of Property Answer. Charge to appropriate rent account under "Income."

Case 290.

Query. We collect from the X Y Company for use of tracks at G a monthly rent. This track is used by the X Y Company for an outlet for their freight trains through our yard at G. To what account should this rent be credited?

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Answer. Should be handled through the appropriate "Joint-facilities' accounts in "Operating Expenses" and "Income." That portion of the charge which represents

interest on valuation and taxes should be credited to Rents in "Income" and that which is for maintenance and operation to the appropriate "Joint-facilities" accounts in "Operating Expenses. (See Case 272.)

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Case 291.

Query. We collect from a certain Union Station Company for rent of tracks in G from and to certain streets, same being about 600 feet in length, a monthly rent. This track is used by lines entering the Union Station at G. To what account should this rent be credited?

Answer. See Case 290.

Case 292.

Query. We collect from a Union Station Company for rent of land in G a monthly

rent, said land being covered by a part of the structure of the Union Station Ter minal at G. To what account should this rent be credited?

Answer. To the appropriate rent account under "'Income."'

Case 293.

Query. We collect from a party for rent of side track an annual rent. To what account should this rent be credited?

Answer. The inquiry implies that this side track is rented by a private individual, not a carrier, in which case the rent should be credited to Revenue Account No. 18, "Rents of Buildings and Other Property."

Case 294.

Query. We pay to the A B Railway Company for rent of G terminal tracks a monthly rent, said track being used for transferring freight to the A B Railway Company in G. To what account should this amount be charged?

Answer. Should be handled through the appropriate "Joint-facilities' accounts in "Operating Expenses" and "Income." That portion representing interest on valuation and taxes should be charged to Rents in "Income" account and that which is for maintenance and operation to the appropriate "Joint-facilities' accounts in "Operating Expenses." (See Case 272.)

Case 295.

Query. We pay to the X Y Railway Company for rent of 4 miles of main-line track at F a monthly rent, said track being used jointly by the X Y Company and our company on freight and passenger business in and out of F. The expense of maintaining said track is paid by the X Y Railway Company. should this amount be charged?

Answer. 1. Maintenence expense should be charged to Tracks, Yards, and Other Facilities-Dr.”

To what account

'Maintaining Joint

2. Operation expense should be charged to "Operating Joint Tracks and Facili ties-Dr."

3. Administration expense should be charged to "General Administration Joint Tracks, Yards, and Other Facilities-Dr."

4. Charges representing interest on valuation and taxes should be charged to Rents in "Income" account.

It is assumed in the answer that there is no yard expense in connection with the traffic in and out of F.

Case 296.

Query. At various terminals on our railroad we rent to outside parties certain lands and buildings that have no connection with the operations of the road. To what account should these be credited?

Answer. To appropriate rent account under "Income.'

Case 297.

(Answer not finally approved. See Accounting Series Circular No. 12b.)

Case 298.

Query. What account should be charged with payments made to detective agencies for special services to railroad companies?

Answer. Payments for detecting thieves are provided for under "Loss and Damage-Freight, "but all detective service is not of this nature. The nature of the service should determine the charge and its disposition should be to the account to which it is analogeus.

Case 299.

Query. Through what account should collections and refunds on account of switch keys be carried?

Answer. The classification is revised, effective on July 1, 1908, so that Switch Keys" may be charged to "Roadway Tools and Supplies," "Station Supplies and Expenses," "Yard Supplies and Expenses, ""Other Supplies for Yard Locomotives,"

ACCOUNTING BULLETIN NO. 1.

"Other Supplies for Road Locomotives," and "Train Supplies and Expenses,'' inas formerly provided for. stead of to Other Track Material,"

66

See Supplement, effective on July 1, 1908, to the Classification of Operating Expenses for Steam Roads, Third Revised Issue.

Case 300.

Query. I do not find that the Classification of Operating Expenses provides for 'Station Supplies and payments to elevator companies for transferring grain, en route, from one car to another. We have charged this expense in our accounts to Expenses, as this account, in my opinion, should include this expense. Is the disposition of the matter as suggested above proper?

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Answer. Should be charged to "Station Employees."

Case 301.

Query. The railroad companies who are members of a railway clearing house, the purpose of which is to secure the proper distribution and use of freight-car equip. ment, are charged with expenses in connection with that association. To what accounts should these payments be charged by the railroad companies? Answer. To "Weighing and Car-Service Associations.''

Case 302.

Query. This company keeps a separate or independent fund from which pensions are disbursed. A certain amount per month, making an annual total twelve times as The pension fund great, is appropriated through the income account and credited directly to an open account, which is closed annually when the amount is paid over. Whenever pensions are paid the amounts is invested in interest-bearing securities. are debited to an open account and about every quarter collected from the trustee of the fund. There are no expenses for administration or otherwise in connection therewith. Does the account "General Expenses-Pensions" apply?

Answer. Amounts paid as pensions are chargeable to General Expenses-Pensions." (See Case 208.)

Case 303.

Query. At a certain point the A B Railroad crosses the Y Z Terminal Transfer Railroad, and neither company makes joint use of the other company's tracks. The A B Company maintains and operates the interlocker and bills the other company for one-half of the expense. The Y Z Company has taken the stand on this matter and many other similar crossings that the interlocker expense was not a joint-facility item between their company and the railroad that it crosses, but that it should be treated as though each company had its own set of employees and devices for protecting the crossing. It has been considered further by the Y Z Company that their proportion of the expense of such interlockers was a joint-facility item only as between their company and its tenants. What ruling should apply?

Answer. See Case 272.

Case 304.

Query. We recently paid a personal injury claim brought on account of defective highway within the location lines of this company. The parties to whom amount of this claim was paid were not employees of this company, nor passengers; neither were they engaged in any work in connection with the railroad. To what account should be charged the amount so paid?

Answer. To Injuries to Persons,'' under "Maintenance of Way and Structures.''

Case 305.

Query. A railroad pays a municipal corporation a fixed amount per annum, which covers fire protection, which consists of the corporation laying water pipes and placing fixtures and supplying water pressure at all times. Should this be charged or not? to "Buildings, Fixtures, etc.," Answer. Should be charged to "Buildings, Fixtures, and Grounds," under " tenance of Way and Structures," if in connection with buildings alone. If for protection of other property, should be charged to appropriate maintenance accounts according to nature of property protected.

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Case 306.

Query. We rent a certain piece of land and build upon it our own depot. To what account should the rent be charged?

Answer. To appropriate rent account under "Income."

Case 307.

Query. We have leased a certain tract of land to prevent a street from crossing our track at grade, this property not being used for any purpose except a side track on same and used as a blind. To what account should the rent be charged? Answer. To appropriate rent account under "Income.'

Case 308.

Query. The A & B road is joint owner with the C & D road of a side track jointly used, and the maintenance is borne by the two companies in the ratio of ownership. Each company takes up in its primary accounts its share of the maintenance charges on the theory that in reality such proportions are respectively merely the maintenance of the property of each. The A & B road for convenience pays the full eost of maintenance, charges its primary accounts, and credits the C & D proportion when billed out to the same accounts. Is this correct?

Answer. No. Should be treated as a joint facility. The A & B road should charge its primary accounts with full cost of maintenance and should credit the proportion billed against the C & D road to "Maintaining Joint Tracks, Yards, and other Facilities-Cr." The C & D road in paying these bills should charge "Maintaining Joint Tracks, Yards and Other Facilities-Dr." The question of ownership should not bear upon the proper disposition of accounts for jointly used properties. The fact of such joint use should determine their treatment in the accounts as Joint Facilities. The road maintaining and operating should be the one to charge the full cost of such work to its primary accounts.

Case 309.

It is recommended that an account "Injuries to Persons" be provided under the Classification of Road and Equipment Accounts, which account shall include the expenses incident to the construction of a new line which may properly be classed under this account.

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See supplement, effective on July 1, 1908, to Classification of Expenditures for Road and Equipment, First Revised Issue.

Case 310.

It seems to us that if it is correct and practicable (and we think so) to charge witness fees to the various accounts covering damage to property, it is equally so in the case of personal injuries, and that witness fees in connection with personal injury suits should be charged to the various personal injury accounts, rather than to "Law Expenses."

Answer. Payments to and expenses of employees and others engaged as witnesses in personal injury cases should be charged to the "Injuries to Persons" accounts under the proper general accounts and the texts under the several "Injuries to Persons' accounts are amplified in accordance with the foregoing.

See Supplement, effective on July 1, 1908, to Classification of Operating Expenses for Steam Roads, Third Revised Issue.

Case 311.

It appears no provision has been made in the present Classification to take care of maintenance of machinery in bridges and building departments-carpenter shops. Answer. The text of "Maintenance of Equipment" account Shop Machinery and Tools" is so amplified as to provide for the maintenance of machinery in shops of the bridges and buildings department so as to include all machinery tools.

See Supplement, effective on July 1, 1908, to Classification of Operating Expenses for Steam Roads, Third Revised Issue.

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