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Author: 
 
 Burton, Francis G 
 
 Title: 
 
 Engineers' & shipbuilders' 
 accounts 
 
 Place: 
 
 London 
 
 Date: 
 
 1902 
 
MASTER NEGATIVE « 
 
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 Ao27 Burton, Francis G. 
 
 v,14 ••• Engineers' & shipbuilders' accounts, by Francis Q-. 
 Burton ... London, Gee & co., 1902. 
 
 V, [li p., 1 1., 108 p. 22"". ("The Accountants' library," vol. xiv) 
 
 On verso of t.-p.: "The Accountants' library." (Ed. by the editor of 
 The Accountant") 
 
 ttt 
 
 4»-Accouiiting. 2. Engineering — Accounting. 3. Ship-building — Ac- 
 counting. 
 
 Library of Congress 
 
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 CdtmAta lHn(ben(itp ^ 
 
 tntfieCitpof^tD$ork 
 
 LIBRARY 
 
 of 
 
 flccmtntamp 
 
••THE HeeeUNTANTS* LIBRARY." 
 
 Edited by the Bditor of "The Accountant." 
 
 (FIRST SERIES) 
 
 Vol 
 
 II 
 
 «i 
 
 •I 
 
 «i 
 
 «i 
 
 *i 
 
 I. —Bank Bookkeeping and 
 Accounts, by John A. 
 Meelboom. A.C.A.* [2nd Ed] 
 
 II.— Auctioneers' Accounts, by 
 
 Lawrence R. Dicksee, 
 M.Com., F.C.A. [2nd Ed.] 
 
 III.— Builders' Accounts, by J. A. 
 
 Walbank, A.C.A. [2nd Ed.] 
 
 IV.— Agricultural Accounts, 
 
 by T. Wheeler Meats 
 A.S.A.A.* 
 
 v.— Theatre Accounts, by W.H. 
 Chantrey, F.C.A. 
 
 VI.— Co-operative Societies' 
 Accounts, by F. H. 
 
 SUGDEN.* 
 
 VII.— Qas Accounts, by the 
 
 Editor.* [2nd Ed.] 
 
 VIII.— Mineral Water Manufac- 
 turers' Accounts, by J. 
 
 Lund, A.S.A.A., and G. H. 
 Richardson, A.S.A.A. 
 
 IX.— Stockbrokers' Accounts, 
 
 by W.D. Callaway. [2nd Ed] 
 
 X.— Bookkeeping and Accounts 
 for Grain, Flour, Hay, 
 Seed, and Allied Trades, 
 
 by George Johnson. 
 
 >> 
 
 >i 
 
 Vol. XL— Polytechnic Accounts, by 
 
 H. Calder Marshall, 
 F.C.A. 
 
 XII. — Solicitors' Accounts, by 
 
 Lawrence R. Dicksee, 
 M.Com.. F.C.A. [2nd Ed.] 
 
 XIII.— Pawnbrokers' Accounts, 
 
 by Fred. Thornton and J. 
 Henry May, A.S.A.A. 
 
 XIV.— Engineers' and Ship- 
 builders' Accounts, by 
 
 Francis G. Burton. 
 F.S.A.A. [2nd Ed J 
 
 XV.— Tramway Accounts, by 
 
 Donald McColl. f 
 
 XVI.— Australian Mining Com- 
 panies' Accounts, by 
 
 Godden & Robertson. 
 
 XVII.— Printers' Accounts, b> 
 
 H. Lakin-Smith, F.C.A. 
 
 „ XVIIL— Medical Practitioners' 
 Accounts, by J. H. May, 
 A.S.A.A. 
 
 XIX.— Water Companies' Ac- 
 counts, by Frank Key, 
 
 A. 9. A. A. 
 
 XX.— Fishing Industry Ac- 
 counts, by Charles 
 Williamson, M.A., C.A. 
 
 i> 
 
 i» 
 
 It 
 
 * Double Numbers. 
 
 t Triple Number. 
 
"THE aeeOUNTHNTS' LIBRHRY." 
 
 (SECOND SERIES) 
 
 Edited by the Editor of "The Accountant.*' 
 
 Vol. XXI. 
 „ XXII.- 
 
 „ XXIII.- 
 „ XXIV.- 
 
 „ XXV.— 
 
 „ XXVI.— 
 
 „ XXVII.- 
 „ XXVIII. 
 
 ,. XXIX — 
 
 „ XXX.- 
 
 „ XXXI.- 
 
 „ XXXII — 
 
 „XXXIII. 
 „ XXXIV.- 
 „ XXXV.- 
 
 Municipal Accounts, by 
 J. Allcock, F.S.A.A. t 
 
 Underwriters' Ac- 
 counts, by Spicer & 
 Pegler, F.C.A.* [2nd Ed] 
 
 Jewellers' Accounts, by 
 Allen Edwards, F.C.A.* 
 
 Multiple-Shop Ac- 
 counts, by J. Hazelip, 
 F.C.I.S. 
 
 Building Societies' Ac- 
 counts, by W. Colin 
 Grant -Smith, LL.B., 
 A.C.A. 
 
 Depreciation, Reserves, 
 and Reserve Funds, 
 by Lawrence R. Dicksee, 
 M.Com., F.C.A. [2nd Eo] 
 
 Quarry Accounts, by 
 J. G. P. Ibotson, A.C.A. 
 
 -Friendly Societies* Ac- 
 counts, by E. Furnival 
 Jones, A.S.A.A.* 
 
 Electric Lighting Ac- 
 counts, by Geo. 
 Johnson, F.S.S., F.C.I.S.* 
 
 Fraud in Accounts, by 
 The Editor. [2nd Ed.] 
 
 Drapers', Dressmakers', 
 and Milliners' Ac- 
 counts, by George H. 
 Richardson, A.S.A.A., 
 F.C.I.S.* [2nd Ed.] 
 
 Wine and Spirit Mer- 
 chants' Accounts, by 
 A. Sabin.*. 
 
 -Dairy Accounts, by 
 F. Rowland, A.C.A. 
 
 Brickmakers' Accounts, 
 by W. H. Fox. 
 
 Timber Merchants' 
 Accounts, by E. E. 
 
 Smith, A.C 
 „ XXXVI.— Insurance 
 Accounts, 
 
 A. 
 F.C 
 
 A. 
 Companies' 
 
 by Edgar 
 Tyler, F.S.A.A., 
 I.S..F.S.S. t 
 
 Vol. XXXVII. 
 
 „ XXXVIII.- 
 „ XXXIX.- 
 
 II 
 
 »» 
 
 XL- 
 
 XLI 
 
 „ XLII. 
 
 ., XLIII. 
 .. XLIV. 
 
 „ XLV.- 
 
 ,. XLVI. 
 „ XLVII. 
 „ XLVIII. 
 
 L.- 
 LL- 
 
 - Hotel Accounts, by 
 
 Lawrence R. Dicksee, 
 M.Com., F.C.A. 
 
 Laundry Accounts, by 
 
 F. J. LiVESEY, F.C.A. 
 
 -Cotton Spinners' Ac- 
 counts, by Wm. Moss, 
 F.C.A.* 
 
 -Shipping Accounts, by 
 
 R. R. Daly, F.C.A. 
 
 -The Accounts of 
 Trustees, Liquidators, 
 and Receivers, by 
 
 Sidney Stanley Dawson, 
 F.C.A., F.C.I.S.. F.S.S. 
 
 -Multiple Cost Accounts, 
 
 by H. Stanley Garry, 
 A.C.A. 
 
 -Woollen and other 
 Warehousemen's Ac- 
 counts, by John Mackie. 
 
 -Brewers' and Bottlers' 
 Accounts, by Herbert 
 Lanham, A.C.A.f 
 
 Urban District Councils' 
 Accounts, by F. S. 
 
 Eckersley.* 
 
 -Terminal Cost Ac- 
 counts, by Andrew Gow 
 
 NiSBET, C.A. 
 
 -Single Cost Accounts, 
 
 by Geo. A. Mitchell, 
 
 A.S.A.A., F.C.I.S.* 
 -Tramway Bookkeeping 
 
 & Accounts Simplified, 
 
 by Donald McColl. 
 -Process Cost Accounts, 
 
 by H. Stanley Garry, 
 
 A.C.A.* 
 -Bakers' Accounts, by 
 
 F. Meggison, C.A.* 
 
 -Colliery Accounts, by 
 
 John Mann, Jun., M.A., 
 C.A., and Harold G. 
 Judd, C.A.* 
 
 Double Numbers. 
 
 t Triple Numbers. 
 
 "THE ACCOUNTANTS' LIBRARY. 
 
 VOL. XIV. 
 
 »r 
 
 Engineers' & Shipbuilders' 
 
 Accounts 
 
 BY 
 
 FRANCIS G. BURTON. F.S A.A. 
 
 (Formerly Secretary and General Manager of "The Milford Haven Shipbuilding and 
 
 Engineering Company, Limited " ; Author of " Engineering Estimates and Cost 
 
 Accounts," " The Naval Engineer and the Command of the Sea,', " The Commercial 
 
 Management of Engineering Works, &c. &c. &c.) 
 
 ^ 
 ^ 
 
 SECOND EDITION. 
 
 LONDON 
 
 Gee & Co., Printers and Publishers, 34 Moorgate Street, E.G. 
 
 1911. 
 

 II' 
 
 il> 
 
 EDITOR'S PREFACE. 
 
 THE object of this series of handbooks published under 
 the heading of The Accountants' Library, is to 
 provide, at a reasonable price, detailed information as to 
 the most approved methods of keeping accounts in relation 
 to all the leading classes of industry whose books call for 
 more or less specialised treatment. No such series has hitherto 
 been attempted ; but there exist, of course, numerous separate 
 works dealing with the accounts of one particular class 
 of undertaking. These separate works are, however, for 
 the most part either too expensive, or too superficial to 
 answer the purpose that is particularly aimed at by The 
 Accountants' Library, which is intended to supply the 
 student with that specialised information which he may require, 
 while at the same time affording to the trader, banker, or manu- 
 facturer who is not in a position to secure the fullest 
 information for his purpose, knowledge which can hardly fail 
 to be of the very greatest assistance to him in the correct 
 keeping of his accounts, upon a system specially adapted to his 
 
VI. 
 
 EDITOR S PREFACE. 
 
 EDITOR S PREFACE. 
 
 Vll. 
 
 requirements, and therefore involving a minimum expenditure 
 of labour. It is expected that the series will also be found of 
 material assistance to bookkeepers of all classes. 
 
 Without aiming at giving an exhaustive account of the 
 manner in which each separate business is conducted, the 
 technical points in connection witli each industry receive 
 as much attention as is necessary in order fully to elucidate 
 the system of accounts advocated, while each volume is the 
 work of one who has made that particular class of accounts 
 more or less a speciality. It is obvious, however, that to 
 enable the necessary ground to be covered in the space avail- 
 able, it is incumbent to assume upon the part of the reader a 
 certain knowledge of general bookkeeping. The extent of the 
 knowledge assumed will vary according to the nature of the 
 class of accounts considered. For example, in the volumes on 
 "Bank Accounts" and "Shipping Accounts," a thorough 
 acquaintance with ordinary double-entry bookkeeping is not 
 unnaturally assumed; but in the case, for instance, of 
 '* Auctioneers' Accounts," and other similar volumes, such 
 explanations are included as will enal)le the ordinarily intelligent 
 reader fully to grasp the methods described even although his 
 knowledge of bookkeeping may be of an elementary descrip- 
 tion. These explanations are, doubtless, superfluous as far as 
 accountants are concerned, but are necessary to make the volumes 
 of value to the majority of those specially engaged in these 
 particular industries. 
 
 The series comprises fifty -one volumes, and forms a most 
 valuable library, dealing, at the hands of specialists, with pra<^- 
 tically every class of accounts, and illustrating the application 
 of the theory of double-entry as described in general works on 
 bookkeeping. Particulars of the subjects dealt with will l)e 
 found on pp. i and ii. 
 
 
 (a 
 
AUTHOR'S PREFACE TO SECOND EDITION. 
 
 ''FHE Books and Forms given in the first six chapters 
 uf this book have been found, in the author's practice, 
 suitable for Engineering and Allied Trades up to the present 
 time. In many cases they may have to be modified or altered, 
 but such modification will arise from local conditions, and 
 cannot be anticipated in a text-book. The Accountant who 
 deals with these complex trades must always be prepared to 
 meet with exceptional difficulties, and to so deal with them as 
 to obtain true results. This is one of the wavs in which the 
 ^•aried experience of the Public Accountant serves his Clients, 
 and assists them in the commercial management of their works. 
 
 Cost Accounts are becoming more important each year, and 
 in Electrical Engineering very minute details are demanded by 
 some managers. The threefold character of these accounts 
 seems as desirable as ever, but where numerous subdivisions are 
 required, cards may be employed with advantage. The Forms 
 given in ("hai)ter VII may be altered in detail to adapt them 
 to a card system. 
 
 Particular attention is drawn to the paper by Mr. David 
 Cowan, referred to in Chapter VII. The author has recently 
 been investigating a case where charging by machines produced 
 the most erratic and delusive results, and it would appear that 
 these errors cannot be avoided without keeping a Machine Time 
 Book or Ledger. E\en then the matter requires, as Mr. Cowan 
 points out, careful consideration, and many of the factors are 
 outside the scope of accounting. The author, therefore, still 
 doubts whether, in the majority of cases, charging by machines 
 is either practicable or useful. 
 
 F. G. B. 
 
 Manchester, 
 
 I Sth February 1 9 1 1 . 
 
I!' 
 
 CONTENTS. 
 
 Editor's Preface 
 
 Author's Preface to Second Edition . . 
 
 Chapter I. — Introductory 
 
 II. — Materials and Stores 
 
 III. — Salaries and Wages 
 
 IV. — Manufactured Goods and Contracts 
 
 u 
 
 t> 
 
 »l 
 
 If 
 
 If 
 
 l} 
 
 V. — Cash Book, Depreciation, Establishment 
 Charges, &c. 
 
 VI. — Ledger, Trade Account, Balance Sheet 
 and Audit ... 
 
 VII. — Cost Accounts 
 
 Index ... 
 
 PAGE 
 V. 
 
 ix. 
 I 
 
 7 
 
 27 
 
 34 
 
 42 
 
 48 
 
 84 
 
 105 
 
 4 
 
 4 
 
 r 
 
11 
 
 III: 
 
 ENGINEERS* AND SHIPBUILDERS' 
 
 ACCOUNTS. 
 
 CHAPTER I. 
 
 INTRODUCTORY. 
 
 One of the first considerations with the accountant in pre- 
 paring a new set of books is to arrange them so that they may not 
 only record the transactions of the business, but may also assist 
 the proprietor or manager in conducting it. This is more par- 
 ticularly the case when involved transactions — such as arise in 
 manufacturing concerns — have to be recorded, because t-ach 
 purchase, or payment, will usually pass through a sequence of 
 transfers, and not be charged immediately to the Trading 
 Account. Professor Dicksee, in his " Bookkeeping for Accoun- 
 tant Students," says two objects have to be arrived at : — 
 
 " (i) That the record be so explicit that, at any subsequent 
 time, the exact nature of the transaction may be readily 
 perceived without the aid of the memory. 
 
 " (2) That the transactions should be so classified that at any 
 time the total result of such transactions during any given 
 period may be readily ascertained." 
 
 The business of a Shipbuilder or Engineer presents peculiar 
 difficulties in this respect. Within the same yard there are 
 
li 
 
 2 engineers' and shipbuilders' accounts. 
 
 numerous different trades-shipwrights, millwrights, black- 
 smiths, moulders, machinists, platers and rivetters, fitters, 
 joiners, pattern makers, painters, &c. The cost and value of 
 the work of each of these trades must, in some way or other, 
 be ascertained, whilst at the same time a record must be kept 
 of the cost of each contract, and sometimes of sectional portions 
 of contracts. It will readily be perceived that such conditions 
 demand modification of the nominal accounts in the financial 
 books, and the provision of special statistical, or memorandum, 
 books In well regulated Engineering firms elaborate Cost 
 ;Vccounts are kept ; in nearly all some attempt is made to 
 ascertain the prime cost of work executed; but, alike m the 
 more elaborate and the less pretentious cost bookkeeping, mis- 
 leading errors freciuently arise through an imperfect system 
 an.l an improper aHcx:ation of establishment charges being pur- 
 sued This is partirularlv unfortunate, because of the many 
 purposes for which such accounts are used. Although it may 
 appear paradoxical to the shareholder or the auditor, it is, 
 nevertheless, perfectlv true that the superintending Engineer 
 makes far more use in the management of his l>usiness of such 
 Cost Accounts as he may possess than he does of his Nominal 
 Ledger, or other linancial books. The reason is not far to seek 
 Whilst a textile manufacturer or textile merchant is guided, and 
 limited in his transactions, by his immediate market (which 
 market is a definite price for a definite article), the Engineer 
 has to consider a number of complex factors extending over a 
 lon.^ period, which, at best, are only partially represented m 
 hisVrading Account-a fluctuating market for materials; the 
 existence of patterns, or the cost of making them ; the prospect 
 of labour troubles ; the extent of purchases of finished materials 
 which will have to be made; and the time and machinery which 
 will be occupied in the constructions. Some of the tenders he 
 is asked for have to be rendered within a very limited time, and 
 if he can readilv consult the records of previous similar (or 
 
 ENGINEERS AND SHIPBUILDERS ACCOUNTS. 3 
 
 analog(Dus) structures, the task of fixing his tender price will be 
 considerably lightened. Again, after the contract is signed, it 
 is desirable to compare the progress of actual co.st with the 
 detailed estimate, so that expenditure which is progressing on 
 certain portions at an undue rate may be curtailed, or a more 
 liberal interpretation given to other portions of the si)e('inration 
 on which profits are accruing greater than those anticipated. 
 In some constructions, like that of a large ocean steamship, 
 there is generally a margin on such items as cabin fittings, 
 stores, and spare gear; whilst the alteration of any portion of 
 the specification (a frequent incident in shipbuilding) invariably 
 affcjrds ()pi)ortunity for a little extra profit. To Shii)l)uilders 
 and I'jigineers, in these competitive days. Cost Accounts are 
 indeed not a luxury, but a necessity. 
 
 In order to prepare these subsidiary, but most important, 
 accounts, it is necessary to have a record of stores consumed, 
 as well as of wages paid, and of the exact work on which they 
 are expended. This cannot easily be done without keeping special 
 books for stores re("ei\ed and issued, and also Wages Sheets 
 which show the \'arious jobs upon which the men are employed, 
 as well as the money earned. l)y them. In arranging these books 
 and sheets care must be taken that they satisfy the second of 
 Professor Di(^ksee's requirements ; they must be so classified that 
 the result of the transactions may be readily ascertained at any 
 time. But in fixing this classification the bookkeeper must be 
 careful that it is one which will answer the purposes of the 
 Engineer, as well as that of the Journal entries suital)le for a 
 double-entry set of books. The reason of this will be more 
 a])parent when Cost Accounts are specifically considered; but 
 there is one incidental advantage in keeping a Stores Ledger 
 which will commend it to the auditor or the careful manager. 
 A deficiency in Stores at stocktaking can be located by an 
 examination of the detailed Stores Ledger, and the honesty and 
 
 i 
 
II 
 
 ii' 
 
 4 FNGINEERS' AND SHIPBUILDERS' ACCOUNTS. 
 
 carefulness of the men employed in the department thus 
 tested. When the great value of some of the articles of 
 copper, brass, or gun-metal kept in stock in an Engineer's 
 factory is l)orne in mind, and the facilities such articles afford 
 for dishonest removal, the advantage of this check on the 
 storekeeper and his assistants will be apparent. 
 
 [•Elasticity of arrangement, as well as accuracy of record, is 
 needful for the successful working of Shipbuilders' or 
 Engineers' Cost Accounts. The information required \aries at 
 different periods, and under different conditions of work. 
 W hen a new construction is in progress, or an important altera- 
 tion being made in an existing machine, the manager requires 
 the most m unite division of costs, so that he may know in what 
 sections of work, or in which tlepartments, he must seek to 
 economise. But at other times, when the works are producing 
 machines of standard patterns only, or executing reproductions 
 of pre\i()us orders, such sub-divisions are not so necessary ; it is 
 then usually suliticient to ascertain the total expenditure on 
 each ma("hine or structure, so as to ensure that it does not 
 exceed a normal amount. Again, when alterations are being 
 made or iontemplated in the mode of operating the factory, 
 when a change in moti\e power is intended, or new forms of 
 machine tools proposed for adoption, the Engineer requires 
 running cost as distinct from cost of work produred. Hy taking 
 careful obser\ations of time occupied, of oil, grease, and waste 
 used, by assumptions of a percentage of wear and tear, he 
 arrives at conclusions which, so far as they go, are scientifically 
 accurate, but he frequently misses the incidence of establish- 
 ment charges, and overlooks the effect of appreciation of the 
 Capital Account. His office records should supply him with 
 the factors which, in his own time measurements, are often 
 overlooked, but which are essential for a just balance to be 
 struck between the old stvle and the new. For these several 
 
 engineers' and shipbuilders' accounts. 
 
 
 reasons it is desirable that Cost Accounts should be based on an 
 elastic system, and that whilst they are built on the same 
 foundation, and in general result must agree with the financial 
 books of the firm, they should not be interlocked w ith them. 
 
 The subject of accounts ma\- be considered from two points 
 of view — Analytically, by resohing the Balance Sheet and 
 Trading Account into their original records; or Synthetically, 
 by Imilding up from the original bo<3ks of record — from Invoice 
 Book, Day Book, Cash Book, &c. — a final and classified 
 summary of the transactions. In the present treatise the 
 synthetical method will be the more convenient, but the student 
 wdll lind a reversal of the process to be of great utilitv. As 
 Mr. Herl)ert Spencer has exemplified in many of his writings, 
 the most cogent method of proving a conclusion is to analvse it. 
 
 The books of account needful for an Engineering business, 
 and whi( li are referred to in the following pages, are as under : — 
 
 In\oice Book. 
 
 Debits to Works Book. 
 
 Stores Receixed Book. 
 
 Stores Issued Book. 
 
 Stores Ledger. 
 
 W ages Book. 
 
 Day Book. 
 
 (.'redits to Customers Book. 
 
 Cash Book. 
 
 Ledgers, Personal. 
 
 Nominal. 
 
 Private. 
 Journal' for Transfer Entries. 
 Cost Books A, B, and C. 
 
 >) 
 
 »» 
 
 A 
 
 1 
 
 i3ll 
 
6 ENGINEERS AND SHIPBUILDERS ACCOUNTS. 
 
 In addition to these the usual Shareholders' Ledger and sub- 
 sidiary books have to be kept for a limited liability company; 
 but these, being common to all such companies, hardly come 
 within our purview. A considerable number of statistical 
 and technical records are also kept by progressive and skilful 
 managers, somr of them being prepared in the general office, 
 and others in the drawing or other technical office ; but however 
 valuable these records and diagrams may be in conducting the 
 business, and in checking or elucidating the results of it, they 
 are not, properly, accounting, and must be considered to be 
 independent of the financial books, which must be complete in 
 themselves. 
 
 CHAPTER 11. 
 
 MATERIALS AND STORES. 
 
 The business-s we are considering are those in actual work ; 
 the h)uildings ha\e been erected, the staff appointed, maf'hinerv 
 placed in position, and orders obtained which will immediately 
 employ the factory. It is unnecessary to deal with the 
 accounts of either capital subscribed or capital expended until 
 the Balance Sheet is arrived at. In the meantime, the first 
 work of the executi\e is to obtain a supply of material upon 
 which labour and power can be employed. As it is essential 
 for economical working that no goods should be purchased 
 which will not be required for use in the near future, and that 
 the quality and dimensions of them should be clearlv defined, 
 it is desirable that the inception of all orders should be a 
 " Requisition for Stores and Materials," to be submitted to and 
 approved by the directors; or to specify goods which, being 
 urgently wanted, have been ordered with the sanction of a 
 properly-authorised officer in the intervals between the board 
 meetings. These requisitions will be prepared either by the chief 
 draughtsman or the storekeeper : the former dealing with 
 plates, angles, or bars required to special measurements ; the 
 latter with tin-tarks, tenpenny nails, and the hundred and one 
 articles which constitute his daily issue. The same form may 
 be used by both officers, and the following will be found suitable 
 for the purpose : — 
 
 B 2 
 
 I 
 
 ■1^ 
 
 i 
 
 # 
 
II 
 
 8 
 
 engineers' and shipbuilders' accounts. 
 
 li 
 
 Specimen Xo. I. — 
 
 ■ THE TENNANT VALE ENGINEERING COMPANY. LIM. 
 
 191 1. 
 
 The sanction of the Directors is requested to the ordering of the 
 following supplies : — 
 
 Date 
 
 1911 
 
 Description 
 
 The following have already 
 been orclere<l by authority of 
 the Manager : — 
 
 Quantity 
 
 1 : 
 
 Estimated Estimated 
 
 Wanted 
 
 Price Cost 
 
 
 £ s d 
 
 £ s 'I 
 
 Proposed to be 
 ordered from 
 
 .General Manager. 
 
 It will l>e seen that it is in no sense an •' account " within the 
 
 true meaning of the word, but it affords the directors a very 
 
 useful estimate of the immediate commitments they are asked 
 
 •to undertake for materials. The orders can lie prepared from 
 
 this list after it has been sanctioned. 
 
 The Order Books may be of different forms, but they should 
 contain the m<3st explicit directions, not only to prevent errors 
 in delivery, but also to facilitate future reference and check- 
 ing. In a Shipbuilder's establishment the drawing office 
 orders are generally prepared by the draughtsmen on loose 
 sheets, so as to ensure accuracy of measurements of plates and 
 angles, and sketches of any special forms required, and these 
 are copied in a Press Copy Book. For the storekeeper's and 
 general orders, counterfoil books can be employed ; and for a 
 general mechanical Engineer's office, counterfoil books will 
 usuallv l>e found suitable. Whatever forms are employed, how- 
 ever, it is necessary diat the in\oices should be marked off to 
 
 engineers' and shipbuilders' accounts. 
 
 the Order Books as they are received. To ensure this, and 
 methodical examination of the invoices, it is well to mark theni 
 with a rubber stamp, the following being suitable for the works 
 untler consideration : — 
 
 1% 
 
 Specimen No. 2.- 
 
 Goods Received by 
 
 Goods passed by 
 
 Marked off Order Book by . 
 
 Prices Checked by 
 
 Calculations Checked by. . . 
 i'assed for Payment by 
 
 (Fo. ) 
 
 . Manager. 
 
 , Director, 
 
 1 
 
 To facilitate the keeping of the Stores Books, as hereafter 
 explained, it is better to correct in red ink any errors in the 
 invoices, and to deduct from them trade discounts and packages 
 to be returned, instead of making these corrections by debit 
 note. The total of the corrected invoice will be the amount 
 brought to account in the financial books. 
 
 The invoices, after examination, are ready for the Invoice 
 Guard Book, or the In\'oice Register, both of which serve the 
 same purpose, so far as bookkeeping is concerned. The 
 analysis on the right-hand side of the book must l)e carefully 
 considered, and adapted to the use of each individual factory. 
 The model form marked Specimen No. 3 is suitable for an 
 or< Unary machine or engine-building shop, and the column 
 " Sundries " is introduced for the purpose of economising 
 space. The entries of this column must be analysed at the end 
 
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 engineers' and shipbuilders' accounts. 
 
 
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 engineers' and shipbuilders' accounts. 
 
 II 
 
 of the month into the several accounts involved, but to employ 
 separate columns for each of them would render the book 
 impossibly cumbersome. 
 
 In this and some of the following exami)les shillings and 
 pence are omitted. 
 
 This Invoice B(x>k serves all the purposes of a Journal for 
 the purcliases of the firm, and at the present time it is not usual 
 in actual practice to journalise such transactions. The postings 
 are made direct from the Guard Book or Register, as indicated 
 by the ("olumn Ledger Folio. The amounts in the left-hand 
 column of the book are posted to the credit of the several 
 vendors, and the totals of the perpendicular columns are posted 
 each month to the debits of the \arious accounts written at the 
 head. Thus ;^97 will be placed to the credit of Lloyd & 
 Llp\(l in the Ledger for tubes purchased from that firm, but 
 this only forms one of many lots of goods bought during the 
 month, the details of which it is unnecessary to record in the 
 Nominal Account, and the Ledger entry to the debit of Stores 
 Account will therefore be — 
 
 To Sundries 
 
 ;£i'i29 
 
 In s(jme establishments, where complete Stores Books are 
 kept, all purchases of materials are passed through them ; but 
 in others, it is usual to charge special purchases, as in Specimen 
 No. 3, direct from the Invoice Book to the account for which 
 they are bought. In this example the monthly totals, ^"1,129 
 for Stores and j£io^ for Timber, will be debited to the store- 
 keeper, who will — through his Stores Issued Book, as herehi- 
 after explained — account for the consumption of the materials 
 by the various departments, or on various jobs of work. On 
 the other hand. Engine Coal and Smithy Coal will be debited 
 direct to those accounts ; and purchases made of new 
 machinerv, or for immediate use on certain specific items of 
 
(' 
 
 12 
 
 engineers' and shipbuilders' accounts. 
 
 engineers' and shipbuilders' accounts. 
 
 13 
 
 work then under manufacture, will be debited (by monthly 
 totals) to New Machinery or the Manufacturing Accounts 
 resi)e«:tivdy. A column has been inserted for Building l<ei)airs, 
 but this is of doubtful expediency, as in many instances the 
 materials are already in the store, and issued from there; and 
 in this account (as in all others) nothing should be charged 
 direct to it through the Invoice Book, unless it is intended for 
 immediate consumption, and is free from the danger of being 
 accidentally used for some other purpose. The other columns 
 —such as Stationery, Rent, Rates and Taxes, Insurances, 
 &c.— are to proxide for charges which will not in any case pass 
 through the storekeeper's books. 
 
 For Engineers employed on construction of the larger class of 
 machinery — such as high-power stationary engines, pumping 
 machinery, marine engines, and steamships — it is con\enient to 
 record through the financial books the cost of each contract. 
 This is especially the case with Shipbuilders, as the number of 
 ships in progress at any one time is very limited— seldom ranging 
 above half-a-dozen in a large yar(J — and a \ery large proportion 
 of the materials, angles for frames, forgings, and plates, are 
 ordered from the draughtsmen's measurements for the particular 
 purpose for which they are required. Instead, therefore, of 
 charguig all such materials, either in the Invoice Book or throu'di 
 the Stores Issued Book, to ^[anufacturing Account, accounts 
 must be opened in the Ledger, and the corresponding entries 
 made in the subsidiary books for — 
 
 Contract (or Ship) No 
 
 Contract ,, No 
 
 Small Contracts. 
 Ship Repairs. 
 
 which is ocrcasionally taken in hand in order to keep the 
 machinery or workmen fully employed. 
 
 A large marine engine, or a large ship, is not a single con- 
 struction, but an aggregation of constructions, each of which 
 may (for cost purposes) be regarded as a separate and inde- 
 pendent contract. The highest development of this grouping 
 of structures to form one complete structure is seen in a naval 
 ship. H.M.S. Vulcan, for instance, contains no less than 128 
 separate engines, with 284 cylinders, in addition to cabin 
 fixtures, and numerous other fittings. It would be difficult to 
 open two hundred or more distinct accounts in the ordinary 
 Ledger for such a vessel, and it is in order to escape doing so 
 that Engineers and Shipbuilders employ detailed, or prime 
 Cost Accounts. 
 
 To follow the goods in the iirst and fourth analytical columns 
 of the Invoice Book, we have in the Stores Received Book an 
 exactly corresponding entry in amount, but with the individu.d 
 items of the several invoices recorded so that they may be 
 posted to their respectixe accounts in the Stores Ledger. The 
 invoices are usually rendered monthly, but the goods entered 
 on them may be delivered on many days, or even on every day. 
 of the month, and a record must be taken of them as they 
 are received. This may be done in the Received Book, the 
 amounts of money being entered when the invoices are 
 rendered, or they may be first entered in a rough book, and 
 transferred to the finished record at the month end. The former 
 method is generally preferable, as all the particulars necessary 
 for the postings to the Stores Ledger are readily available, l)ut 
 the result, from a bookkeeping point of view, is the same, and 
 the form marked Specimen No. 4 is suitable for either method. 
 
 The account for small contracts is convenient in a Ship-yard for 
 work like river barges, .small boats, and minor girder work, 
 
14 
 
 engineers' AND SHIPBUILDERS' ACCOUNTS. 
 
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 Liversedge Iron Co. . 
 Milne, Smith & Co. . 
 Noble & Ogden, Lim. . 
 Baxendale & Allen 
 Sandow & Nesbitt 
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 engineers' AND SHIPBUILDERS ACCOUNTS. 1 5 
 
 The total amount of the Stores Received Hook must agree 
 monthly with the Store.s column of the Invoice B(X)k, or with the 
 Stores and Timber columns of such b(3ok- Where little timber 
 is used, and when it can be kept under tlie immediate sui)er- 
 vLsion of the .storekeeper, it can he passed through the Stores 
 Received and Issued Hooks, .separate accounts being opened 
 in the Stores Ledger for each description of wood. In Ship- 
 yards, however, and in many of the large Engineering works, 
 the purchase and consumption of timber is on a large scale, and 
 it is necessary to take special precautions to prevent wastt- or 
 misuse. Frequently an assistant storekeeper is placed in charge 
 of it. In all cases where the timber dealings are extensive it 
 is desirable to keep .separate Timber Hooks on the same model 
 as the Stores Books, standards and culncal measurements being 
 substituted for the Number and Weight columns of the latter. 
 
 Articles are issued from the stores on the presentation of 
 written requisition.^, signed by the foremen of the departments 
 demanding them. The form \aries in different works, and 
 should h)e as simple as possil)le. Messrs. ( larcke and Fells, in 
 their excellent work on '' Factory Accounts," give a form in 
 which is inserted Weight, Rate, and Amount. These [)articu- 
 lars must necessarily appear in the Stores Issued Book, but 
 are certainly not required in the requisition, which i^ only a 
 temporary voucher. It is, however, es.sential that the particulars 
 iriven of the materials shall be sufficient! v explicit to ensure the 
 storekeeper issuing just what is required, and that the purpose 
 for which it is required (order number, and detail, or i)rocess) 
 be properly inserted. From these temporary requisitions the 
 storekeeper will enter up his Stores Issued Hook in the manner 
 given in Specimen No. 5. 
 
 
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 engineers' and shipbuilders' accounts. 
 
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 ENGINEERS AND SHIPBUILDERS ACCOUNTS. 
 
 17 
 
 No profit or loss should be made in the Stores Books beyond 
 the loss which is inseparable from the issue of goods in sm.dl 
 quantities. The issues given in Exam])le Xo. 5 are for com- 
 parativelv large lots, but numerous articles — such as nails, 
 washers, small bolts, screws, and white and red lead — are often 
 issued in lots of a pound or less at a time, and there is always 
 a certain wastage — the "turn of the scale'' in weighing out 
 such issues. The (juantity entered in the Stores Issued Hook 
 will, of course, be the actual quantity weighed (ti* counted out by 
 the storekeeper. The price must be the c<3st price. In a 
 treatise on Cost Accounts it has l)een <lehned that " the cost of 
 an article is the invoice price of it, pl?/s the amount which has 
 to be paid for delivery at the works." and when very accurate 
 detailed costs iire retjuired tlie freight should undoubtedly be 
 debited to the Stores Account and added to the invoice (X)st. in 
 order to arrive at the issue price of the goo* Is. So long, how- 
 ever, as our coinage continues on its present basis it will be 
 difficult to obtain workable price fractions if freight is included, 
 and the more usual practice, therefore, is to charge Railway and 
 Canal Carriage and Cartage to a Freight .\ccount, for which 
 a column is set apart in the Invoice Book. There is, however, 
 one point to remember in connection with these Stores Issues ; 
 Markets are always in a state of '' unsta')le e(]uilibrium." or 
 approaching such a state, and this condition affects the cost of 
 purchases bv the firm, and sometimes to a very considerable 
 extent. It is imprudent to keep adjusting prices, by an 
 average, each time a new purchase is made, and as th- con- 
 sumption of stores will generally follow the same order as their 
 receipt, the issue price should be the same as the buying pri( e 
 of the oldest lot on hand until that is exhausted, and then of 
 the next lot, and so on until sta'ktaking. wh«'n a re-\aluation 
 can be made if desiral)le. This difficulty <loes not arise in the 
 case of articles s[ie(4ally ordered for a particular contract, as 
 
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 II 
 
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1 8 
 
 ENGINEER.^ AND SHIPBUILDERS' ACCOUNTS. 
 
 ENGINEERS AND SHIPBUILDERS ACCOUNTS. 
 
 19 
 
 they are charged through the Invoice Book to that contract, or 
 to Manufacturing Account, at the exact invoice cost. 
 
 In shipyards and bridge building works most of the heavy 
 material — such as phites and angles — is ordered to exact sizes, 
 obtaine<l by the draughtsmen from the working drawings or 
 models, or from measurements taken from the mould loft floor, 
 and therefore only the miscellaneous material — which, however, 
 is almost innumerable in variety — will pass through the Stores 
 Books. 
 
 Two other subsidiary liooks are needful in the stores office. 
 First, a Credit to Departments for Articles returned into Stores 
 from the various shops and for scrap, &c. ; and. second, a Debit 
 to Manufacturers for Defective Goods returned to them from 
 the Works (Sp^vimens 6 and 7). These books will correspond 
 with the Stores Received and Stores Issued Books, of which, 
 indeed, they are only divisions, separated from the general 
 receipts and issues for the convenience of reference and of 
 further entries in the accounts. The books for Credit to depart- 
 ments will, in most large Engineering Works, and more 
 especially in Shipyards, contain a great number of entries, for 
 it is essential that no g(X)ds issued from the Stores, or charged 
 direct to any job from the Invoice Book, should be used for 
 any other purpose than that for which they were originally 
 issued or charged : if iron, paint, nails, or any other articles 
 are demanded, as of necessity they always will l)e demanded, in 
 any excess (however slight) of the requirements for the job then 
 in progress, they must Ix* returned to the storekeeper's charge, 
 and re-issued by him for any like purpose ui^on whieh they 
 can be used. Of course, it is not actually necessarv to cart a 
 lump of iron from thr lioiler shop to the Stores and back again 
 (this, however, is a matter of management and not of bookkeep- 
 ing) ; but it is absolutely necessary that the transaction should 
 be recorded in tht- books exactly as if the carting to and fro 
 
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 20 
 
 engineers' and shipbuilders' accounts. 
 
 /tad taken plare. It is impossible to kt^ej) (orrect accounts in an 
 establishment where similar goo<ls are used for many different 
 purposes, laihss there is absolute insistence on the use of the 
 goods bein^ limited to the purpose for ichich they are issued. 
 
 The b(X)kkeeper has no difficulty in agreeing the del)it to 
 Stores Account in his Ledger with the total of Stores Reeei\ed 
 Book, and in like manner the Stores Issued Hook must agree 
 with the credit in the Ledger Ae(^ount. It will, however, be 
 inconvenient in practice to remove this book from the ])osses- 
 sion of the storekeeper, and it is better for him to prepare a 
 Return of Stores Issued, either weekly or monthly, for the use 
 of the (leneral Office. An example of this form is given in 
 Specimen Xo. 8. The total must agrct- with tlie total of the 
 
 Specimen No. 8.- 
 
 rf:turn of stores 
 
 issaed for month ending 31st January, igii. 
 
 Date 
 
 Department 
 
 191 X Fitters 
 
 Turners 
 
 On What Account 
 
 Repairs, Machinery 
 
 i s d 
 
 Foundry 
 Fitters 
 
 Contract 57 
 
 Cleaning Machinery 
 
 Contract No. 63 .. 
 
 Other issues in detail, say 
 
 220 
 
 066 
 
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 15 
 
 
 
 
 
 
 
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 engineers' and shipbuilders' accounts. 
 
 21 
 
 Issue Book for the week, or month, and the Return itself may 
 be posted in a Guard Book and used as a Journal, or Hie 
 transfers may be made in the ordinary Journal. 
 
 The two Stores Books described would l>e of little practical 
 value unless tlie resuUs could be brought into some summary 
 wliieh will disclose the (quantities and kinds of the various goods 
 re(^eived. and the manner in whieh each of such goods is dis- 
 posed of. In any moderate-sized i^ngineering Works it is a 
 useless waste of time to search back through an ordinary Day 
 Book for i)articulars of ])rice or cjuantity of goods received 
 some considerable time l»efore, and it is impossible for the 
 manager to ascertain in sueh a way what goods are at the 
 moment in stock, or what the character and rate of consumption 
 has been. To remedv this defect, the Stores Ledger is intro- 
 duced, an exanii)le of which is given in Specimen Xo. 9. This 
 Ledger should l)e ke[)t in the Store's Office, and should 1)0 
 posted u[) daily. It will be seen that, instead of names of 
 persons or accounts, liie pages are headed with names of par- 
 ticular sorts of goods. These goods should be divided into 
 sizes — as, for instance : Rivets, (*ountersunk, i", ij", ij", 
 2f", 2^", 2j" ; and Rivets, snapheaded, ij", iV', 2", 2j", 
 3", 3J", each of which sizes should occupy a separate place 
 in the Ledger. Of course, it is sometimes possible to group 
 several sizes of the same article, or, in paints, several colours 
 of the same class together ; but this is a matter of yard 
 management rather than of accounts. The general principle 
 is that sizes, as well as destTiptions, of goods must be ke[)t 
 distinct. The money debits to the Ledger are the same as thcjse 
 in the Stores Recei\ed Book, and the money credits are the 
 same as those in the Stores Issued Book. If, therefore, at stock- 
 taking the balances of the Stores Ledger are taken out in 
 money, the total will agree with the balance of the Stores 
 Account in the Office Ledger of the firm, and with the difference 
 
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 22 
 
 engineers' and SHIPBUILDERJ5' ACCOUiMS. 
 
 
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 engineers and shipbuilders accounts. 
 
 25 
 
 (if it were so extracted) between the storekeeper's own Received 
 and Issued Books. The greatest value of this Ledger probably 
 arises in connection with yard management, as it enables the 
 manager to so arrange the ordering of goods for contracts in 
 progress that there may be no delay through waiting for 
 material ; but it will also l)e perceived that it constitutes a 
 valuable check upon the honesty of the Stores Department. If 
 at stocktaking there is any deficiency in values taken at invoice 
 price, the comparison of the Stcx^k Sheets and Stores Ledger 
 will show in what goods the deficiency arises, and what 
 quantities are missing. Further than this, it will prevent the 
 storekeeper from hiding a deficiency in one class of goods by 
 an excess in some other goods. 
 
 ft 
 
 ) 
 
 Thert^ is considerable difficulty in describing i)arts of 
 machines l)v words and figures whicli will sufficiently identify 
 them, and various devices have been adopted by Engineers for 
 sh(3rtening the descriptions without detracting from their 
 technical use. Perhaps one of the best methods is that of 
 the Ferracute Machine C'o., Bridgeton, N.J., a very complete 
 description of which is reprinted in the first edition of Messrs. 
 (larcke and Fells' " Factory Accounts." The idea is to give to 
 each machine a symbol of thrt-e letters, the first two being 
 indicative of the character of the machine, and the third of its 
 size, thus : — F.P.A. is the symbol for a force pump of the 
 smallest size made. This, however, only symbolises the com- 
 plete machine, but a machine consists of numerous parts, and 
 therefore a number is connected w ith the symbol ; thus, 
 T.P.L.-i means the frame of a No. 3 treadle press. The con- 
 venience and brevity of this method can be perceived from one 
 example — namely, a 6" x 4' engine lathe spindle head is 
 represented by K.L.A.-4. These symbols are selected by the 
 designer of the machine, and a Symbol Book is kept in the 
 Drawing Office. Particulars are furnished to the bookkeepers 
 
 '^if 
 
! 
 
 26 
 
 engineers' and shipbuilders' accounts. 
 
 
 I 
 
 for the purposes of their accounts,, ami also to the various 
 technical officers of the yard. 
 
 In a Ship yard, the divisions into details are more numerous, 
 and in some cases more minute, than in a Machine making 
 Engineer's Factory. The ship is the unit, so far as the contract 
 price is concerned ; but, on the other hand, it is the accumula- 
 tion of many structures, extensive in l)ulk and vastly expensive, 
 the separate cost of which it is necessary to compute. On 
 looking ovt-r a spec ifi elation for an ordinary merchant ^l^ip. it 
 Avill be found that there are clauses delining the size and 
 description of keel, stem, and stern-post, frames, plating and 
 rivetting. the watertight bulkheads, main deck, spar deck, ceiling, 
 and bulwarks, which are the mere frame of the ship, in addition 
 to clausfs relating to engines, boilers, cabins, saloons, lights, 
 iKxats. anchors, and outfit generally ; and it is essential for the 
 purposes of Cost Accounts that the charges against these 
 various details should be specified in the Stores Books and in 
 the Wages Sheets. No complete system of symbols has been 
 adopted l)v Shipbuilders similar to that of the Ferracute Com- 
 pany, but in general the charges are made against (e.g.) 
 *' Contract Xo. — saloon." These details in subsidiary books 
 do not pass into the financial books of the firm, l)ut are 
 necessarv for the Cost Accounts hereinafter described. 
 
 CHAPTER III. 
 
 SALARIES AND WAGES. 
 
 In Ship-yards more especially, but also in some Tool-making 
 or Engine-making Shops, a large proportion of the wages is 
 paid at agreed piece rates, and the Wages Sheets are therefore 
 not made up on the actual time worked ; but in order to 
 ensure uniformity of i)ractice in the yard, and to avoid any 
 laxitv on the part of subordinate officers, it is desirable that all 
 time actually worked in the yard should be recorded. This is 
 usuallv done by means of a Time Book kept at the gate, which 
 is compiled from the men's tickets as they pass in or out of the 
 yard, or from a self-acting time recorder, which serves the same 
 purpose. The Wages Sheets, however, cannot be i)repared from 
 this book, so far as money is concerned ; but it will be used 
 to insert, or to check, the time which lias l)een worked. 
 
 The authoritv for the commencement of any work in the 
 shoi)s is a document generally issued from the Drawing Office, 
 and which is technically termed a " Shop Order." It gives the 
 consecutive number of the order, as received by tlie firm, th(3 
 particulars of the machine, particulars of the drawings, the 
 parts to be supplied from Stores or other makers, and tlie 
 patterns which are required. From this authority the foreman 
 of any department will set such men as are necessary to work 
 on various ])ortions of the order, marking on their time tickets 
 the numl)er of the order and the symbol number, as already 
 described, thus: , •y**'^„. There is alwavs a quantity of work 
 done for the general purposes of the firm, which does not usually 
 
 I 
 
 
 I 
 
I 
 
 in 
 
 k 
 
 28 
 
 ENGINEERS AND SHIPBUILDERS' ACCOUNTS. 
 
 ^'» 
 
 • . 
 
 i 
 
 1 
 
 brar Miiy order mini!)er — such as small ivi)airs of buildings, 
 or minor repairs of machinery, cleaning of yard, assistance to 
 siortkeei)er. and lalxnir of this kind. The particulars of this 
 must he set out on the workmen's tickets in such a manner as 
 to distinguish its character and the particular building upon 
 whi« h it is done. 
 
 In Shi])l)uilding Yards, where repair work is done, it is 
 desirable to detail, when possible, the particular portions of 
 work upon which each man is engaged, thus : — 
 
 Drilling out rivets. 
 
 Removing old plates. 
 
 Cutting new plates. 
 
 Drilling new ])lates. 
 
 Rivetting up new plates. 
 
 Caulking. 
 
 Painting. 
 
 This, however, is not always practicable, as much of this 
 work is done under great pressure, working late into the night, 
 .and with imperfect supervision from the foreman; but it is 
 absolutely necessary that the name of the ship under repair 
 shoultl be spei'ilied on each man's ticket. 
 
 The day rates paid to the men are rec(jr<led in a book usually 
 kept in the office of the works manager, and are advised by 
 him 10 the timekeeper. These rates must be checked with the 
 Wages Book, so that no alteration may be made in the amounts 
 paid, without proper authority. A similar Ixiok is kept for 
 piece-work rates, which are agreed upon between the works 
 manager and the men before the job is commenced, except in 
 the numerous cases where similar work has been done l)efore 
 in the shop, when the same rates are usually adopted. A form 
 of Wages Book is given in Specimen Xos. 10 and 1 1. 
 
 ENGINEERS AND SUIPIUULDERS ACCOUNTS. 
 
 29 
 
 
 
 Total Wages 
 per Man 
 
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 13 000 
 
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 V 
 
 John Jones 
 
 Third Wkkk. 
 John Jones 
 
 Piece Work Contract £6 5 .s 
 Paid on Account .. 400 
 
 
 
 
 ■i 
 
 ... ¥-4 
 
 
 
 I 
 
 
 4 
 
 f 
 I 
 
 ii 
 
30 
 
 engineers' and shipbuilders* accounts. 
 
 i 
 
 The first column is for thf iuiml)er given to the man on t-nter- 
 ing the yard, and rorrespon<ls with the number on his time 
 tieket ; these numbers are arranged so that each trade shall be 
 together, a sufficiency of s})ar(- numbers being left between each 
 description of workmen; as, for instance, between moulders 
 and machine men ; and, again, between machine men and 
 fitters. The second column is for the names of the men ; the 
 third column is headed " Process." By " Prcxx-ss '* is meant 
 the sub-divisions of a contract or job, as distinguished from the 
 total contract or jol). As we ha\e already explained, whilst 
 T.P.L. is a ireadle or foot press, T.P.L.-i is a frame of such 
 press, and the latter symbol, as w'ell as the word '^ frame," 
 indicates what is meant by process. This sub-division into 
 pnx't'sses is clntfly necessary for the purposes of detailed Cost 
 Accounts. Next comes the time worked, wdth columns for each 
 day, and a column for the total of the week. After that, the 
 rate and wages per jjrocess to each man. The last column 
 shows the amount [)a\able to each man in one sum, although it 
 may frequently hap]K'n that he is employed on two or three 
 different jobs in the course of the week. Specimen No. ii 
 shows the maniirr in which piece work is dealt with through 
 thr Wag<'s Book. John Jones has had a piece of work let to 
 him to compU'tf lor the price of ;£6 5s. 8d., and he is three 
 wt-eks in <loing it. During the llrst week he has been at work 
 six days, and his total time is entered, and no rate placed 
 against it; but on tlie next line is \\ritten, "On account of 
 piece-work, jQ2," which he has to be pai<l. The second week 
 there will be a similar entry; the third week he has hni-shed 
 the work, and, as a memorandum under his name shows, he is 
 entitled to ^^6 5s. 8d., less ^^4 paid on account, therefore 
 j£2 5s. 8d. is txtended for payment to him. In many Ship- 
 yarils, where cargo boat work is under construction, and where, 
 to reduce cost, it is desirable to stimulate the men to increased 
 exertion, a large portion of the work is frequently taken by a 
 leading plater or rivetter on })iece-work terms, he providing his 
 mates, and dividing the earnings with them on terms which they 
 themselves agree to. In su( h cases it is expedient to open an 
 
 engineers and shipbuilders accounts. 
 
 31 
 
 account in the Ledger with th.i sub contractor, and t(* debit 
 this account with the vaiious weekly payn;ents made to him 
 and to his mates. When the contract is completed thi> Le<lger 
 Account will be credited with the amount thereof, less any 
 deductions for inferior or incomplete work; an<I tinally 
 balanced by the amount paid him through the Cash ]^(X)k or 
 Wages Book. 
 
 Unpaid Wages — that is to say, wages not applied tor by the 
 men at pay time — should be picked oft' the boards l»y the 
 cashier, and the men's numbers and amounts entered in a 
 small memorandum book. Most of these amounts will be 
 api)lied for the following day, but if from any caust^ they are 
 not applied for up to the annual stocktaking, then they should 
 be brought to debit in the Cash Account as " Cash received 
 from unpaid wages," and credited to the account to which they 
 had originally been charged, .say, in an ordinary Engineering 
 Works, to Manufacturing Account; in a Ship-yard to Contract 
 No. — , or No. — , or to Repairs of steamship Conundrum. 
 
 It will be generally found conxenient to make a separate 
 total in the Wages Book for each department therein, and at 
 the end a summary of the whole of the departments, ihe total 
 of wdiich must agree with the wages paid for the week by the 
 cashier, including, of course, the amounts which he has picked 
 u\) as unapplied for. But in the nominal accounts of the tirm, 
 as will be seen later, the wages are not ])osted to accoinits 
 headed for particular workmen or particular departments, but 
 are transferred from a Wages Account (which is delated with 
 the total wages for the week) to \arious I^xpenses Accounts, 
 which correspond to some extent with the Invoice Book — such 
 as New Machinery, Building Repairs. Manufacturing Account, 
 or Contract No. — . An abstract in the Wages Book has there- 
 fore to be made, and this is most con\eniently prepared on 
 large sheets of paper ruled with [ter])en(licular lines, as in 
 Specimen No. 12. The space marked ** A "" is for the order 
 
 Ml 
 
 I 
 
 Ii 
 
'W 
 
 3^ 
 
 ENGINEERS AND SHIPBUILDERS ACCOUNTS 
 
 ENGINEERS AND SHIPBUILDERS ACCOUNTS. 
 
 33 
 
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 41 
 
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 «* 
 
 
 numbers, or, in a Ship-yard, for the number or total lA the 
 contract; that marked '' B " is for the symbol, name, or other 
 designation of the process. In Shipbuilding these abstra<ts 
 will at times become somewhat voluminous, as at (vrtain stages 
 in the progress of a ship — that is, just l)efore her laun«li. and 
 generally l)efore her trial tri]3 — men are employ e<l on a con- 
 siderable number of different details at the same time. This 
 complexity is, however, reduced when the abstract is made — as 
 it should l)e made — each week. The abstract must i)e v(m\\- 
 piled by trades. .Each man's pay, as it appears in the Wages 
 per Process column, must be entered se]jarately in the abstract, 
 an addition l)eing made at the foot of each department. The 
 totals of the various columns will agree with the total [)ayment 
 to the class of workman which appears in the Wages Book. ;uid 
 the total of all the sheets of the abstract for the week will 
 agree with the weekly total of the \Vages Book ; to ensure 
 accuracy, it is desirable to have this al)stract checked, so that 
 a charge may not go against a wrong j(jb of work. 
 
 The otifice staff, draughtsmen, foremen, storekeeper, works 
 manager, and other officers of the company are usually paid 
 monthly salaries, anil the totals of such salaries will appear in 
 the Cash Book, and l)e j^osted to the debit of '' Salary 
 Account " in the Ledger. For Co.st Account purjjoses, how- 
 ever, it is necessary, in a Shipbuilding Yard, to keej) a record 
 of the special work on which foremen are employed. Possil)ly, 
 there may be three or four foremen of shipwrights in such an 
 establishment, to each of whom will be assigned the suj)er\ ision 
 of a particular ship then in construction, and in general it is 
 necessary to (^harge his salary to that particular ship, and not 
 to management expenses. In the Tra<le Account of the firm, 
 however, it is not desirable to make such a division, as, for 
 purposes of comparison between one period and another, it is 
 better to lea\e the perrrianent staff undistributed. 
 
 i 
 
CHAPTER IV. 
 
 MANUFACTURID GOODS AND CONTRACTS. 
 
 I 
 
 II 
 
 The ("onsumniation of the unity of materials and labour is 
 finishec] product. This must be considered in three aspects, 
 namely : — 
 
 Large contracts. 
 
 Smaller orders and repairs. 
 
 ^lachiner) . c^c., for stock purposes. 
 
 We will take the consideration of them in this order. 
 
 The best exami)le for account purposes of a large contract 
 is an oct^an-going siiip. as such vessels are usually paid for by 
 insrahntiits on the completion of certain stipulated work, and 
 perhaps a war shi]) is even more instructive than an ordinary 
 merchant ship. The following are the conditions upon which 
 the British Admiralty contracted to pay for a composite gun 
 vessel built for the Royal Xavy. She was built with steel 
 frames and reverse frames, planked with teak, and had decks 
 laid witii crown deals. 
 
 First instalment : Payable when two-thirds of the frames and 
 
 the rt'\(*rse frames are in place. 
 
 Second : When the whole of the frames are in place, and half 
 of the bottom planking is on the builder's premises. . 
 
 Third : When the l»eams are in place, and three-quarters of 
 the deck stringers and sheer strakes worked, and deck deals on 
 the premises. 
 
 engineers' and shipbuilders' accounts. 
 
 35 
 
 Fourth : When the whole of the deck stringers and sheer 
 strakes are worked, and all teak and other planking on the 
 premises. 
 
 Fifth : When the whole inside of bottom planking is worked 
 and a half of the outer thickness of planking also worked. 
 
 Sixth : When the whole of the outside planking is worked 
 and caulked, three-quarters of the deck laid, three-quarters of 
 the inside lining fitted, and the principal forgings one-half 
 completed. 
 
 Seventh : When all the decks are laid, and the vessel in a fit 
 state to receive engines and be launched. 
 
 iMghth : When engines are on board, the decks shut in and 
 caulked, and half the cabin framing in place. 
 
 Ninth and final instalment : Payable when the ship had com- 
 pleted her trial trip, and been accepted by the Admiralty as 
 satisfactory. 
 
 A separate contract was made with another firm for the 
 engines, the payment for which was likewise divided into nine 
 instalments. 
 
 These agreements are constantly altering in details, l)Ut this 
 may be safely taken as a general example. 
 
 In this particular instance special ditficulties arose, partly 
 fiom obtaining some of the material, and partly in consequence 
 of alterations made in the plans by the Admiralty constructors 
 after the ship was in progress, and she was therefore about two 
 years in building, and the instalments were earned somewhat 
 irregularly ; but no similar ship would be constructed under 
 the most favourable circumstances in less than ten or twelve 
 months, whilst fifteen to eighteen months would not be an 
 unreasonable time. It is therefore evident that such ships will 
 usually extend over more than one period of account, and the 
 contract price cannot be credited to Trade Account in one sum. 
 
 I 
 
i'lt 
 
 36 
 
 ENGINEERS AND SHIPBUILDERS ACCOUNTS 
 
 engineers' and shipbuilders' accounts. 
 
 37 
 
 iVK 
 
 |M 
 
 f«' 
 
 Where the terms of payment are so prec^isely laid down as in 
 this case, and the progress of the work can be so delinitelv 
 determined, it is best to l)ring to credit each instalment as it is 
 earned. This leaves the estimate for work in progress at stock- 
 takitig miirh smaller, and in every respec^t less difficult, than 
 if the whole of the contract were estimated as " work in 
 progress '' ; and it may he remrnihered that there is no more 
 fruitful source of error in a Shipbuilding or large J'^ngineering 
 \\"orks than tiie estimate of the value of the work in progress. 
 
 Ill other cases, where the work is of a comparati\elv simple 
 <lescrii)tion and easily measured, the payment will be made bv 
 instalments during progress on certilicates of work executed, and 
 these certificates should be credited to Trade At'count in the 
 siime manner as the defined instalments of the ship. This is 
 particularly appli<-al)le to caisson work in a Ship-yard, and to 
 bridge antl heavy crane work in a (ieneral l^ngineering 
 establishment. As, however, in such measurement certilicates 
 tlie same weight of metal passes through two or three degrees 
 of payment, such as 
 
 Plates and angles on the premises. 
 
 Plates and angles drilled and ere<:ted, 
 
 Plates and angles rivetted in place. 
 
 great care must be taken that it is not included twice at stock- 
 taking time in any estimate which is made of work in progress. 
 
 In Shii)-yar(ls and in I^ngineering establishments where only 
 large contract work is executed, the ordinarv Journal mav be 
 the most convenient form for these entries, but in General 
 Engineering establishments, as referred to in the next para- 
 graphs, a Day Book, or a l)ook analogous to a Day Book, must 
 be employed. 
 
 Smaller orders, for such things as gas engines, lathes, 
 spinning- jennies, looms, dynamos, steam hammers, &c. &:c., are 
 usually given upon a fixed and agreed price. The construction 
 of these machines does not, however, extend over a very long 
 period, and the payments for them are usually made on, or 
 after, delivery, and not by instalments, as for ships or marine 
 engines, excepting under special circumstances, generally con- 
 ditional on the stability of either the manufacturer or pur- 
 chasing firm. They will, therefore, be debited to the purchaser 
 and credited to Trade Account on delivery, and, as such trans- 
 actions are numerous in establishments producing work of this 
 character, a Day Book is the most convenient form for the 
 
 Specimen No. 13.- 
 
 DAY BOOK. 
 
 The Norman ton Engineering Company, 
 Limited : — 
 
 Horizontal Surface Condensing Engine 
 
 to Specification . . 
 Extra Wheel for Rope driving . . 
 
 £ s d 
 
 1,995 o o 
 
 Silkstone Colliery Company, Limited :- 
 Repairs to Pumping Engine 
 Repairs to Winding Machinery . . 
 
 Wheatstone Spinning Company, Limited : — 
 Supplying and Fitting overhead Shafting 
 
 for Wheatstone Mill 
 Extra Pulleys 
 
 874 o o 
 172 o o 
 
 1 ,046 o o 
 
 396 o o 
 50 o o 
 
 446 o o 
 
 purpose. Somew^hat similar in character is the repair work done 
 to stationary engines and machinery, the price of which work 
 is very frequently fixed before it is undertaken, but the pay- 
 ment for which is not made before the completion of the job. 
 These debits also pass through the Day Book. The estimate of 
 value of work in progress at stocktaking is less difficult for these 
 
 li 
 

 ijtift!: 
 
 >l|. 
 
 P* 
 
 !'l 
 
 
 i ' 
 
 r 
 
 38 
 
 engineers' and shipbuilders' accounts. 
 
 small orders and repairs than it is for large and complicated 
 ocean-going steamers ; but the difficulty is only less when each 
 item of work is separately estimated, and not when a lump sum 
 is taken for all the work which may be in progress in the yard. 
 
 The technical particulars given in an Engineering invoice are 
 numerous, and an invoice for repairs especially in a lengthy and 
 highly technical document. It will therefore save time to take 
 press copies in a Letter Book of the invoices actually rendered, 
 and in the Day Book to enter only the name of the customer, 
 the page of the Letter Book, the amount, and any particulars 
 which may be needful for posting or for identifying the entry. 
 The Day Book totals will, of course, be credited to a Sales 
 Account in the Nominal Ledger. 
 
 When a merchant business is done by any manufacturing 
 firm, and when goods are made in the factory to be stocked 
 and afterwards sold from Stock, it is needful to open a Ware- 
 house Account for them, and for the warehouseman to keep a 
 set of books in the same manner as the storekeeper does for 
 his goods. Specimens 14, 15, and 16 give examples of 
 " Warehouse Received Book," ■• Warehouse Issued Book," and 
 Warehouse Ledger. 
 
 Specimen No. 14. — 
 
 WAREHOUSE RECEIVED BOOK. 
 
 Date 
 
 Description of Goods 
 
 Catalogue 
 No. 
 
 Marks 
 
 I'il 
 
 engineers' and shipbuilders' accounts. 
 
 39 
 
 specimen No. 15. — 
 
 WAREHOUSE ISSUED BOOK. 
 
 Date 
 
 Description of 
 Goods 
 
 Catalof^ue 
 No. 
 
 Particulars 
 of Packing 
 
 Specimen No. 16. — 
 
 WAREHOUSE LEDGER. 
 Description. — Screw Cutting Lathes. — Catalogue No. 47. Marks. 
 
 Date 
 Received 
 
 1.2 
 Number i--Q 
 
 o(^ 
 
 DeUvSed '^° ^^""^ Delivered 
 
 1 
 1 
 
 a 
 
 Con- 
 signee's 
 Marks 
 
 
 
 
 191 1 
 
 
 
 1 
 
 
 
 
 It will be observed that no money columns are mserted in 
 the.se warehouse books. There is a reason for this, which, 
 though it may not be universally applicable, it is certainly 
 desirable to remember in the case of .small firms employing, 
 say, two or three hundred men only. If the articles are debited 
 to the warehouseman at, or near, the actual cost of manu- 
 facture, he will ascertain the approximate amount of Gross 
 Profit made on each of them — knowledge which it is most 
 
 I 
 
 i 
 
 I 
 
 D 2 
 
40 
 
 ENGINEERS AND SHIPBUILDERS ACCOUNTS. 
 
 I 
 
 III 
 
 tilt! 
 
 "•I 
 
 desirable should be unknown to subordinate officers of smaller 
 firms. Tf, on the other hand, the goods are debited to him at 
 the selling price, there is grave danger of an o\er-valuation of 
 the Stock in the warehouse at the time of stocktaking. It is, 
 therefore, better to make the money transfers in the General 
 Office Hooks only. In these books the sequence of the entries 
 will be a charge in the Day Book to Warehouse Account for 
 goods delivered to the warehouseman ready for immediate sale, 
 which will be posted in the Ledger to the debit of Warehouse 
 Account, and be incluvled in the total credited to Sales Account 
 exactly the same as if they had been delivered to a customer, 
 butj of course, at a lower price than would be charged to the 
 customer. In the General Office a Warehouse Day Book 
 (Spefnm'^n Xo. 17) must be kept, and the various entries therein 
 I)ostfd to the debit of the several (^ustomers, and the total to 
 the crt'flit of Warehouse Account. 
 
 Specimen No. 17. — 
 
 WAREHOUSE DAY BOOK. 
 
 The i)rice at which goods shall be transferred from the 
 Maiuifarturing De[>artment to the Warehouse or Retailing 
 De{>arimt-nt is rather a matter of linancial management than of 
 acccunt. and will he found discussed in the author's work on 
 " Tlir Commercial Management of Engineering Works," page 
 262, &c. 
 
 II 
 
 engineers' AND SHIPBUILDERS ACCOUNTS. 
 
 41 
 
 Just in the same way as the Manufacturing Engineer returns 
 to previous manufactunMs lm])ertVet or unsuitable gcx)ds. so he 
 will have returned to him by his (uistomers machines and other 
 articles which in somc^ way or otlier do not correspond with his 
 re|)resHntations or sptcilication ; and these returned goods have 
 to be recorded in the books. The st- books will be similar both 
 for goods returne<l into \\ai\ lioiist^ stork (haxing originally 
 come from such slock), an<1 For goods n-turned into stores from 
 contracts or re])airs, which liaxe not passed through the ware- 
 house in the first instance. S])ecimen Xo. 18 will show the 
 
 Specimen No. 18.- 
 
 CRKDITS TO CUSTOMERS BOOK. 
 
 Dennison, Barlow & Co. — 
 
 Two Wrought Iron Clutches returned as 
 
 defective from Dynamo No 
 
 Allowance agreed to for defective Winding 
 
 { s d 
 
 60 
 30 
 
 £ s d 
 
 Debit Manufacturing Account . . 
 
 • • 
 
 ■ ■ 
 
 ^go 
 
 Balfour, Winton & Jones — 
 
 One Slotting Machine, No returned 
 
 — delivered late for shipment 
 
 £120 
 
 Debit Warehouse Account 
 
 
 method of keeping ihrst^ books. The monthly totals will be 
 entered in the (leneral Ledger to the del>its of Stores Account 
 and Wart house A(\"ounts res[^ectivt*ly, and individual items will 
 be posted to the dtbit of tht- several accounts affected by them 
 in the Stores and Warehouse Books in exactly the same manner 
 as if tliev had Ik en rccvived from some outside manufacturer. 
 
 w 
 
 I 
 
 H 
 
 II 
 
 I 
 
CHAPTER V. 
 
 CASH BOOK, DEPRECIATION, ESTABLISHMENT 
 CHARGES, AND SUNDRY NOMINAL ACCOUNTS. 
 
 I 
 
 I lit 
 
 The (\ish Book should be of the ordinary simple descrip- 
 tion ; any columnar form will probably be troublesome, and 
 lead to complications in an Engineering establishment. There 
 arc. h()\\r\tr, numerous payments which will have to be posted 
 dire< r to Kx»)enditure Accounts, and not to the debit of any 
 l)ers()n. as no corresponding credits will be raised through the 
 ln\()i(\' Hook. Of this character are payments for travelling 
 exiHMisrs. for certain office expenses, for directors' fees, and for 
 petty cash expenditure. The Cash Book should be relieved of 
 details of the latter expenditure by means of the Petty Cash 
 Book, but this must he analysed and brought into the Cash 
 Book eacli month. A note of the character of these direct pay- 
 ments must l>e made in the Cash Book, so that there may be no 
 difficulty in posting them to the proper accounts, nor any sub- 
 sequtiit trouble in extending them without turning up the 
 vouchers. For instance, a payment of ^'30 is made to John 
 Jont's for conmiission on an order obtained by him, but instead 
 of simply entering the name John Jones, ^"30, the entry should 
 be, John Jones, Commission, Order number 3,421, j£^o. The 
 same ai»plies to tra\elling expenses, but as such expenses are 
 differently treated in the Cost Accounts when they are under- 
 taken on behalf of a specific contract, and when they are on the 
 general an<l undefined business of the company, a short note 
 of the s. r\ice should be entered in the Cash Book. In the 
 example given no banking account is introduced, but it is better 
 in i^ractice to use a third column for this purpose. 
 
 ENGINEERS AND SHIPBUILDERS ACCOUNTS. 
 
 43 
 
 
 c 
 
 c 
 
 pq 
 
 m 
 u 
 
 I 
 
 e 
 
 B 
 
 B 
 
 T3 O O O O O O 
 
 w lo m o o o o 
 
 00000000 
 
 000^00'<l-00 
 
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44 
 
 engineers' and shipbuilders' accounts. 
 
 I 
 
 i 
 
 III 
 
 h 
 
 Depreciation is one of the most difficult problems of 
 Engineering Accounts, and materially affects the ultimate result 
 of the Profit and Loss Account. There are two methods in 
 vogue : the first, and most usual one, is that of writing off a 
 fixed percentage from a decreasing ^•alue for buildings, fixed 
 machinery, and loose plant; and the other is reducing the 
 cost of these items by a fixed yearly sum. which will, in a 
 determined number of years, extinguish them. The determina- 
 tion of the method to be adopted rests with the directors and 
 other technical advisers, as it involves questions much wider 
 than those of mere account, and which (^an only be jnoperly 
 appreciated by Engineers i)ra(^ti(\illy acquainted witli the 
 machines, and constantly watching the improvements made 
 both in the particular machinery and in other allied <lei)art- 
 ments of Engineering. The author is of opinion that in the 
 present condition of Phigineering, and the restless actix ity which 
 impels Engineers to constan.t and rapid impro\ements of 
 machinery, and the introduction of labour-saving tlevices. it is 
 better to fix the life of each machine, and to ralculatt- the depre- 
 ciation on such by an f(]ual annual amount whidi will 
 extinguish the cost at the end of the estimated pt-riod. The 
 question has been fully discussed in the treatise on " Com- 
 mercial Management." previously rt-ferred to. Where the per- 
 centage method is adopted it is certainly ad\isal»le to divide 
 the buildings and machinery into several classes, and tu \arv the 
 rate of depreciation according to the character of thts-- classes. 
 One firm, whose managing director has a most extensive 
 acquaintance with workshop finance, divides its plant into six 
 classes, the depreciation on which ranges from 5 per cent, to 
 22 i>er cent, per annum. There is, however, one objection to 
 this arrangement from an accountant's point of view, which can 
 be more readily obviated when the Depreciation is calculated 
 for each machine .sei)arately. If it is made up of classes, a 
 double classification will be needful in order that the Cost 
 
 engineers' and shipbuilders' accounts. 
 
 45 
 
 Accounts may be debited with the Depreciation of each depart- 
 ment. First, a classification will have to be made by shops or 
 departments; and, secondly, by classes within those shops, and 
 the anticipated saving in trouble will thus be reduced to a 
 minimum. When a machine is removed from one ])lace to 
 another, a fresh calculation will be necessary to adjust the 
 balance in both departments, and if two or three such removals 
 are made in any one year the alterations will probably prove 
 perplexing. 
 
 Whatever method is adopted for depreciating the buildings 
 and plant, a schedule of the machines in each building, and in 
 charge of each flepartment therein, should certainly be kept, 
 l)iit this schedule should, in order to be of real \alue, be pre- 
 pared by the technical officers of the (^ompany, and it is undesir- 
 able therefore to give any form for it. 
 
 The question of Depreciation becomes a particularly involved 
 one when loose tools are concerned, and this is more especially 
 the case in Ship yards, Ijecause close su])ervision is more 
 difficult in such establishments than in closely-confined and 
 self-contained factories. In future, this question is likely to 
 become even more serious than at the present time, since small 
 electricallv-driven tools, which can be readily moved from ])lace 
 to place, are being largely introduced. In the first instance, 
 the majoritv of these articles are purchased and delivered into 
 stores, and are issued by the storekeeper on the requisitions of 
 the various foremen as they may be from time to time required. 
 They are subject to attrition, to loss through carelessness, and 
 also to loss through larceny, and certainly no such rate as 5 per 
 cent., or even 10 per cent., ])er annum will be sufficient to cover 
 the wastage. It is, however, quite impossible to keep an indi- 
 vidual record of these articles, and there is no alternative but 
 to adopt an average rate or rates. The issues may be divided 
 into classes, the character of these classes and the percentage 
 
 Mi 
 
i<i 
 
 i 
 
 I 
 
 46 
 
 engineers' and shipbuilders' accounts. 
 
 for t-ac^Ii being determined by the technical officers. The 
 bahince at stocktaking will never be the exact balance of Loose 
 Tools Account, but, if there is any considerable discrepancy, it 
 should be carefully enquired into. If it arises through an 
 improper percentage having been written off, this should be 
 corrected in future accounts ; but if from careless or destructi^•e 
 usage, the technical officers should probe the matter to the 
 bottom, so that it may be remedied. It is convenient to keep 
 a record of loose tools in greater detail than can be done in 
 the Ledger of the firm, and probably the form given in Specimen 
 Xo 20 will be suitable for most Engineeiing Works. The 
 author has adopted it from the establishment of an Electrical 
 Engineer, but introduced some features which will, he thinks, 
 mnke it an improvement on the original. 
 
 k 
 
 n 
 
 engineers' and shipbuilders' accounts. 
 
 47 
 
 Specimen No. 20. — 
 
 SCHEDULE OF LOOSE TOOLS IX CHAR(;E OF FITTERS. 
 
 DErARTMKNT. — ClASS A. 
 
 Date No. 
 
 Jaiiiiiuy ; 
 
 Feliruarv 
 
 Particulars 
 
 Balance and Issues (to be detailed) 
 Less Depreciation 2% 
 
 Issnes (to be detailed) . . 
 Less Depreciation 2% 
 
 (AikI so on.) 
 
 Price Amount 
 
 c 
 
 s 
 
 (1 
 
 150 
 
 6 
 
 4 
 
 
 
 
 3 
 
 147 
 
 6 
 
 I 
 
 20 
 
 6 
 
 B 
 
 167 
 
 12 
 
 9 
 
 3 
 
 4 
 
 3 
 
 164 8 6 
 
 Depart:mknt. — <"lass B. 
 
 Date No. 
 
 191 1 
 
 January 
 
 February 
 
 Particukri 
 
 detailed) 
 
 Price 
 
 Amount 
 
 Balance and Issues (to be 
 Less Depreciation 1% 
 
 
 £ s d 
 
 200 
 
 200 
 
 
 
 
 
 Issue"? (to be detailed) . . 
 
 198 
 37 10 
 
 
 
 
 • • 
 
 Less Depreciation 1% 
 
 235 10 
 2 7 I 
 
 on.) 
 
 
 (And so 
 
 233 2 II 
 
 i 
 
 I 
 
 i 
 
( HAPTER VJ, 
 
 LEDGER, TRADE ACCOUNT, BALANCE SHEET, 
 
 AND AUDIT. 
 
 mil 
 
 . 
 
 The various details given in the Ixtoks previously considtTed 
 have to be collected into a summary IV)rm con\enient for refer- 
 ence. This is done by uR-ans of the Ledger, which is really a 
 svntht-tical index to thesf* subsidiary hooks, and which, in 
 balancing, proves the correct summarising of the numerous 
 debits and credits \\hi<^h they contain. It must, howe^•er, be 
 remembered that balancing only i)roves correct summarising ; it 
 affords no guarantiee of the ])ropriety of the original enlrirs, 
 nor any assurance that they ha\e been posted to the proper 
 Nominal or Personal Accounts. Err«,rs in Personal Accounts 
 are usually detected and rectified when payments are made: 
 but in the busin. >.st s of the Mechanical Engineer ';)r Shipbuilder, 
 'he Nominal Accounts ar - more frequently referred to, and used 
 more generally for finan(^ial purposes than they are in a purely 
 merchant business, or tvcn in. the textil-^ trades, and any 
 errors in them may pnnr vt-ry misleading in the managj^m nt of 
 the works. 
 
 In a General Engineer's f.ictory separate accounts sliould 
 always be o])ened for 
 Land ; 
 Buildings ; 
 
 Engines. Boileis, and Economisers : 
 Fixed >Lachinery ; 
 Shafting ; 
 
 Loose Plant and Tools; 
 Patterns. 
 
 II 
 
 engineers' and shipbuilders' ACCOUNTS, 
 
 49 
 
 This is necessary in order that the expenditure under these 
 several heads may be known, and also in order that Deprecia- 
 tion may be properly adjusted. In Ship-yards it is also 
 desirable to open accounts in addition for 
 
 Piling under Launchways, 
 
 Blocks and Timber for Launching. 
 
 The timber actually consumed in the launch of any ship can be 
 approximately ascertained when the launch is over, and should 
 be charged tc the cost of that individual contract. 
 
 Electricity is being largely substituted for steam and gas 
 engines as a motive power, and this substitution will be in 
 jirogress for many years to come. In works where this transi- 
 tion is taking pLuv it is desirable to open Ledger Accounts for 
 
 Electric Dvnamos, 
 Electric Wiring, 
 Electric Motors. 
 
 Depreciation of this form of power transmission is certainly 
 more rapid than in the older forms, but so little is yet accurately 
 known of the actual wear and tear, or of the methods of miti- 
 gating it, that no reliable percentage can be fixed upon. It 
 would, however, be most misleading to class electrical 
 machinery with other machinery, at all events in the permanent 
 records of the firm, even if it is grouped together in the 
 pul)lished Balance Sheet. 
 
 The following examples (Specimen No. 21) will explain the 
 compilation of the ordinary Nominal Ledger Accounts, and the 
 Trade Account and Balance Sheet (Specimens Nos. 22 and 23) 
 their final consummation. The Journal (Specimen No. 24) is 
 in most modern establishments wisely restricted to final transfer 
 entries, and for such adjustments as do not arise in any of the 
 subsidiary books. The examples given are only of this nature. 
 
 
 If II 
 
 ■ 
 
 \ 
 
 'i 
 
 I 
 
ENGINEERS AND SHIPBUILDERS ACCOUNTS. 
 
 ENGINEERS AND SHIPBUILDERS' ACCOUNTS. 
 
 51 
 
 1 
 
 lif 
 
 I 
 
 li 
 
 Specimen No. 21.- 
 
 Dr. 
 
 Dr. 
 
 Dr. 
 
 Dr. 
 
 1910 
 Jan. I 
 
 1911 
 Jan. 2 
 
 LEDGER 
 
 SHARE 
 
 RESERVE 
 
 FREEHOLD 
 
 To Freehold Land for Works pur- 
 chased as per Agreement for 
 Incorporation of Company 
 
 I s d 
 
 / 
 
 s 
 
 d 
 
 2,000 
 
 
 
 
 
 ;^2,000 
 
 
 
 
 
 FREEHOLD 
 
 To Balance bnnight forward, being 
 value of liuildings at date ... 
 
 To Balance 
 
 i s d £ s d 
 1,500 o o 
 
 ;^I,5CO o o 
 
 1,425 o o 
 
 ACCOUNTS. 
 
 CAPITAL. 
 
 FUND. 
 
 LAND. 
 
 By 1,500 Ordinary Shares of ^10 
 
 each fully paid 
 
 „ 1,000 Preferred 5 per cent. 
 Shares of £\o each fully paid 
 
 By Amount transferred from Profit 
 and Loss Account 
 
 1909 
 
 Dec. 31 
 
 1910 
 
 Dec. 31 
 
 Do. 
 
 do. 
 
 BUILDINGS. 
 
 1910 
 Dec. 31 
 
 }• 
 
 By Profit and Loss Account for 
 
 Depreciation at 5 per cent. ... 
 
 „ Balance 
 
 Cr. 
 
 I s d 
 
 i s d 
 15,000 o o 
 10,000 o o 
 
 £\ 25,000 o o 
 
 Cr. 
 
 ;^ s d I I s d 
 1,500 o o 
 1 ,500 o o 
 
 ;^3.oco o O 
 
 Cr. 
 
 Cr. 
 
 I s d 
 
 • •• 
 
 • •• 
 
 75 
 1,425 
 
 
 ;^i,50o 
 
 
 
 ■1 
 
 
 . 
 
 I 
 
1^ 
 
 I .f I 
 
 .!t. 
 
 1 
 
 m 
 
 52 engineers' and shipbuilders' accounts. 
 
 Dr. 
 
 I9I0 
 Jan. I 
 
 Dec. 31 
 
 MACHINERY 
 
 To Balance bronght forward, being 
 value ol Machinery and Plant 
 at date 
 „ Additions per Invoice Book 
 
 lOII 
 
 Jan. I I To Balance 
 
 £ s 
 
 d 
 
 £ 
 
 s 
 
 d 
 
 « • ■ 
 
 
 11,721 
 
 
 
 
 
 •«• 
 
 / 
 
 279 
 
 
 
 
 
 
 12,000 
 
 
 
 
 
 «•* 
 
 11,400 
 
 
 
 
 
 Dr. 
 
 PATTERN S 
 
 1910 
 Jan. I 
 
 Dec. 31 
 
 To Balance brought forward, being 
 value of Patterns at date 
 ,, Pattern - making Account for 
 additions 
 
 ;^ s d ;^ s d 
 
 1,400 o o 
 
 100 o o 
 
 IQII 
 
 Jan. I To Balance 
 
 ;^I,500 o o 
 
 1,350 o o 
 
 Dr. 
 
 RENT, RATES 
 
 I9I0 
 
 
 
 £ ^ 
 
 d 
 
 £ 
 
 s 
 
 d 
 
 Jan. 
 
 ^i 
 
 To Sundries, per Invoice Book 
 
 
 
 
 44 
 
 
 
 
 
 Mar. 
 
 ^^ 
 
 ,, Do. do. 
 
 
 
 
 £71 
 
 
 
 
 
 June 
 
 w 
 
 ,, Do. do. 
 
 
 
 
 44 
 
 
 
 
 
 Dec 
 
 SI 
 
 ,, Do, • do. 
 
 
 
 
 162 
 
 I 
 
 6 
 
 
 
 ,, Evan Daniel, Cash 
 
 
 
 
 41 
 
 I 
 
 10 
 
 
 ;^462 
 
 3 
 
 4 
 
 
 
 
 ■^B 
 
 Dr. 
 
 1910 
 
 GAS AND 
 
 June 30 
 Dec. 31 
 
 
 
 
 
 
 £ s 
 
 d 
 
 £ 
 
 s 
 
 d 
 
 Sundries, 
 
 per 
 
 Invoice 
 
 Book 
 
 • • « 
 
 • •« 
 
 
 27 
 
 
 
 
 
 Do. 
 
 
 do. 
 
 
 • • • 
 
 ■ • • 
 
 
 85 
 
 6 
 
 
 
 Do. 
 
 
 do. 
 
 
 *'• • 
 
 • ■• 
 
 
 85 
 
 
 
 
 
 
 ;ri97 
 
 6 
 
 
 
 
 
 engineers' and shipbuilders' accounts. 
 
 53 
 
 AND PLANT. 
 
 Cr. 
 
 1910 
 Dec. 31 
 
 By Profit and Loss Account for 
 
 Depreciation at 5 per cent. 
 ,, Balance 
 
 r 
 
 £ s 
 
 d 
 
 £ 
 
 s 
 
 d 
 
 • 
 
 » • • 
 
 
 600 
 
 
 
 
 
 • 
 
 • • • 
 
 £ 
 
 11,400 
 
 
 
 
 
 
 12,000 
 
 
 
 
 
 
 
 
 
 ACCOUNT. 
 
 Cr. 
 
 1910 
 Dec. 31 
 
 By Profit and Loss Account for 
 Depreciation at 10 per cent. ... 
 
 )3 xJcLiariCC ••« >•> •■• ••• 
 
 £ s 
 
 • • ■ 
 > • • 
 
 d / s d 
 
 1 150 
 1,350 
 
 ;^I,500 
 
 AND TAXES. 
 
 Cr. 
 
 1910 
 Dec, 31 
 
 By Transfer to Trade Account 
 
 WATER, 
 
 Cr. 
 
 £ s d 
 
 £ fi d 
 197 6 o 
 
 /197 6 o 
 
 5- I 
 
n 
 
 f 
 
 I 
 
 H 
 
 t 
 
 vM 
 
 54 
 
 ENGINEERS AND SHIPBUILDERS ACCOUNTS. 
 
 nr. 
 
 
 
 
 - 
 
 
 
 INSURANCE 
 
 I9I0 
 
 
 
 
 
 / s d i 
 
 s d 
 
 Jan. 
 
 31 
 
 To Sundries, per 
 
 Invoice Book 
 
 15 
 
 
 
 Dec. 
 
 31 
 
 !>J 
 
 Do. 
 
 
 do. 
 
 • • • 
 
 55 
 
 
 
 
 ;f7o 
 
 
 
 Dr. 
 
 ) 
 
 
 
 
 DISCOUNT 
 
 191C 
 
 
 
 
 i s d 
 
 I 
 
 s d 
 
 Jan. 
 
 ^i 
 
 To 
 
 Discounts All 
 
 owed... 
 
 
 23 
 
 2 7 
 
 Feb. 
 
 28 
 
 
 
 Do. 
 
 
 
 
 41 
 
 4 4 
 
 Mar. 
 
 31 
 
 
 
 Do. 
 
 
 
 
 17 
 
 2 I 
 
 April 
 
 30 
 
 
 
 Do. 
 
 
 
 
 39 
 
 I 2 
 
 May 
 
 31 
 
 
 
 Do. 
 
 
 
 
 52 
 
 3 t> 
 
 June 
 
 30 
 
 
 
 Do. 
 
 
 
 
 74 
 
 5 I 
 
 July 
 
 31 
 
 
 
 Do. 
 
 
 
 1 
 
 18 
 
 2 4 
 
 Aug. 
 
 31 
 
 
 
 Do. 
 
 
 
 i '6 
 
 3 4 
 
 Sept. 
 
 31 
 
 
 
 Do. 
 
 
 
 
 20 
 
 5 6 
 
 Oct. 
 
 31 
 
 
 
 Do. 
 
 
 
 
 57 
 
 b 4 
 
 Nov. 
 
 30 
 
 
 
 Do. 
 
 
 . .* 
 
 
 43 
 
 7 2 
 
 Dec. 
 
 31 
 
 i 
 
 
 Do. 
 
 ••• •■» •■• 
 
 
 60 
 
 4 I 
 
 
 
 
 
 ;^462 
 
 7 6 
 
 /)r. 
 
 MANAC.EMENT 
 
 I9I0 
 
 Jan. 
 
 31 
 
 Feb. 
 
 28 
 
 Mar. 
 
 31 
 
 April 
 
 30 
 
 May 
 
 31 
 
 June 
 
 30 
 
 July 
 
 31 
 
 Aug. 
 
 31 
 
 Sept. 
 
 30 
 
 Oct. 
 
 31 
 
 Nov. 
 
 30 
 
 Dec. 
 
 31 
 
 To Cash — Sundries 
 „ Do. do. 
 
 I s d 
 
 »j 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 I 
 
 s 
 
 d 
 
 100 
 
 
 
 
 
 100 
 
 
 
 
 
 100 
 
 
 
 
 
 100 
 
 
 
 
 
 100 
 
 
 
 
 
 100 
 
 
 
 
 
 100 
 
 
 
 
 
 100 
 
 
 
 
 
 100 
 
 
 
 
 
 100 
 
 
 
 
 
 100 
 
 
 
 
 
 100 
 
 
 
 
 
 ;^I,200 
 
 
 
 
 
 engineers' and shipbuilders' accounts. 
 
 55 
 
 ACCOUNT. 
 
 Cr. 
 
 I9I0 
 
 Dec. 31 Hy Transfer to Trade Account 
 
 It 
 
 • • 
 
 s 
 
 • 
 
 d 
 
 i s d 
 70 
 
 1 
 
 1 
 
 /70 
 
 j 
 
 
 ACCOUNT. 
 
 Cr. 
 
 1910 
 
 fan. 31 1 
 
 Feb. 28 
 
 Mar, 31 
 
 April 30 
 
 May 31 
 
 June 30 
 
 July 31 
 
 Aug. 31 
 
 Sept. 30 
 
 Oct. 31 
 
 Nov. 30 
 
 Dec. 31 
 
 y Discounts Received. 
 Do. 
 Do. 
 Do. 
 Do. 
 Do. 
 Do. 
 Do. 
 Do. 
 Do. 
 Do. 
 Do. 
 Transfer to Trade Account 
 
 i s d 
 
 WAC.P:S (or SALARIES). 
 
 1910 
 Dec. 31 I }Jy Transfer to Trade Account 
 
 I 
 
 £ 
 
 s 
 
 d 
 
 21 
 
 I 
 
 4 
 
 5 
 
 6 
 
 7 
 
 16 
 
 5 
 
 2 
 
 27 
 
 
 
 9 
 
 46 
 
 I 
 
 10 
 
 54 
 
 
 
 I 
 
 j8 
 
 3 
 
 8 
 
 16 
 
 4 
 
 7 
 
 20 
 
 I 
 
 2 
 
 40 
 
 18 
 
 6 
 
 41 
 
 17 
 
 4 
 
 35 
 
 1 8 
 
 8 
 
 119 
 
 17 
 
 10 
 
 ;^462 7 6 
 
 Cr. 
 
 £ s d 
 
 I,200 O O 
 
 £\ 1,200 o o 
 
 I 
 
 I 
 
 1 
 
 ! 
 
 t 
 
 E 2 
 
 III 
 
 I 
 

 ENCINKKKS AND SHIPBUILDERS .\CCCUNTS. 
 
 />r. 
 
 I9T0 
 
 
 Jan. 
 
 31 
 
 To 
 
 Feb. 
 
 28 
 
 
 Mar. 
 
 31 
 
 
 April 
 
 .^0 
 
 
 May 
 
 31 
 
 
 June 
 
 30 
 
 
 July 
 
 31 
 
 
 Aug. 
 
 31 
 
 
 Sept 
 
 30 
 
 
 Oct. 
 
 31 
 
 
 Nov. 
 
 30 
 
 
 Dec. 
 
 31 
 
 
 } Cash — Sundiics 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 DRAWIXCi OFFICE 
 
 s d £ 
 
 s 
 
 d 
 
 50 
 
 
 
 
 
 .50 
 
 
 
 
 
 50 
 
 
 
 
 
 50 
 
 
 
 
 
 50 
 
 
 
 
 
 50 
 
 
 
 
 
 50 
 
 
 
 
 
 50 
 
 
 
 
 
 50 
 
 
 
 
 
 50 
 
 
 
 
 
 5^^ 
 
 
 
 
 
 50 
 
 
 
 
 
 £600 
 
 
 
 
 
 !fi 
 
 /v. 
 
 I9I0 
 
 
 
 
 Mar. 
 
 31 
 
 To 
 
 Cash 
 
 -James Bates 
 
 June 
 
 ^0 
 
 !>' 
 
 Do. 
 
 John Jones 
 
 
 i« 
 
 J5 
 
 D( . 
 
 James Hates 
 
 Sept. 
 
 30 
 
 J> 
 
 Do. 
 
 ]ames Bates 
 
 Dec. 
 
 31 
 
 »1 
 
 Do. 
 
 John Jones 
 
 
 »i 
 
 )5 
 
 Do. 
 
 James Bates 
 
 TRAVELLING 
 
 £ s d 
 
 • • • 
 
 542 
 307 
 
 • • • 
 
 676 
 2 12 4 
 
 £ s d 
 5 9 10 
 
 849 
 14 16 I 
 
 8 19 10 
 
 ;^37 10 6 
 
 III 
 
 1 i 
 
 lilt 
 
 Dr. 
 
 1910 
 
 Jan. 31 To Sundries, per Invoice Book 
 
 Oct. 31 „ Do. do. 
 
 Dtc. 31 „ Do. do. 
 
 STATIONERY 
 
 £ s d 
 
 II o o 
 19 o o 
 2100 
 
 £51 
 
 o o 
 
 ENGINEERS AND SHIPBUILDERS' ACC( UNTS. 
 
 3i 
 
 WAC.KS. 
 
 Cr. 
 
 1910 
 Dec. 31 ' Uy 'JYansfer to Trade A* rount 
 
 £ s d 
 
 £ s d 
 
 600 o o 
 
 ;^60O o o 
 
 « J 
 
 KXPKXSHS. 
 
 Cr. 
 
 IQIO 
 
 Dec. 31 I5y Transfer to Trade Account 
 
 £ 
 
 £ s d 
 
 37 10 6 
 
 £i7 10 6 
 
 ACCOUNT. 
 
 L r. 
 
 I9IO 
 
 Dec. 31 IW Transfer to Trade Account 
 
 £ « d 
 
 £ s d 
 
 31 o o 
 
 /51 o o 
 
engineers' and shipbuilders' accounts. 
 
 Ill 
 
 i! 
 
 n 
 
 if 
 
 It 
 
 58 
 
 Dr. 
 
 I9I0 
 
 Jan. 31 To Sundries, per Invoice Book 
 
 Do. do. 
 
 Do. do. 
 
 Do. do. 
 
 Do. do. 
 
 Do. do. 
 
 Do. do. 
 
 April 
 
 0* 
 30 
 
 May 
 
 31 ! 
 
 July 
 
 31 
 
 Oct. 
 
 31 
 
 Dec. 
 
 32 
 
 
 
 Dr. 
 
 I9K 
 
 Tan. 
 
 3 
 
 31 
 
 
 • 1 
 
 Feb. 
 
 28 
 
 
 »i 
 
 Mar, 
 
 31 
 
 
 »' 
 
 April 
 
 30 
 
 
 f • 
 
 May 
 
 31 
 
 
 t» 
 
 June 
 
 30 
 
 
 •> 
 
 July 
 
 31 
 
 
 »t 
 
 Aug. 
 
 31 
 
 
 i> 
 
 Sept. 
 
 30 
 
 
 >i 
 
 Oct. 
 
 31 
 
 
 1 1 
 
 Nov. 
 
 30 
 
 
 If 
 
 Dec. 
 
 31 
 
 
 >i 
 
 To Wages Account 
 
 Stores 
 
 Wages 
 Stores 
 
 Wages 
 
 Stores 
 
 Wages 
 Stores 
 
 Wages 
 Stores 
 
 Wages 
 
 Stores 
 
 Wages 
 Stores 
 
 \\ ages 
 
 Stores 
 
 Wages 
 Stores 
 
 Wages 
 
 Stores 
 
 Wages 
 Stores 
 
 Wages 
 
 Stores 
 
 >j 
 
 ENGINE 
 
 £ 
 
 i 
 
 s 
 
 d 
 
 121 
 
 
 
 
 
 50 
 
 
 
 
 
 20 
 
 
 
 
 
 48 
 
 
 
 
 
 70 
 
 10 
 
 
 
 71 
 
 
 
 
 
 20 
 
 
 
 
 
 /4«o 
 
 10 
 
 
 
 
 
 
 RUNNING 
 
 i s d 
 28 o o 
 
 9 7 4 
 
 28 
 
 
 
 
 
 8 
 
 17 
 
 I 
 
 15 
 
 
 
 
 
 12 
 
 I 
 
 6 
 
 18 
 
 
 
 
 
 7 
 
 3 
 
 2 
 
 38 
 
 
 
 
 
 8 
 
 10 
 
 
 
 35 
 
 
 
 
 
 15 
 
 II 
 
 6 
 
 28 
 
 
 
 
 
 9 
 
 7 
 
 4 
 
 28 
 
 
 
 
 
 8 
 
 13 
 
 6 
 
 35 
 
 
 
 
 
 6 
 
 I 
 
 10 
 
 38 
 
 
 
 
 
 10 
 
 7 
 
 9 
 
 28 
 
 
 
 
 
 14 
 
 6 
 
 
 
 35 
 
 
 
 
 
 5 
 
 13 
 
 
 
 1 
 
 
 
 i s d 
 
 37 7 4 
 
 36 17 I 
 
 47 I 6 
 
 35 3 2 
 46 10 o 
 
 50 II 6 
 
 37 7 4 
 
 36 13 6 
 
 41 I 10 
 
 48 7 9 
 
 42 6 o 
 40 13 o 
 
 /500 o o 
 
 engineers' and shipbuilders' accounts. 
 
 59 
 
 COAL. 
 
 I9I0 
 
 Dec. 31 i By Transfer to Trade Account 
 
 i s d 
 
 Ct. 
 
 £ s d 
 
 400 10 c 
 
 /"400 10 o 
 
 MACHINERY. 
 
 1910 
 Dec. 31 
 
 Cr. 
 
 It 
 
 { 
 
 :;i4 r 
 
6o 
 
 Dr. 
 
 engineers' and shipbuilders' accounts. 
 
 I9I0 
 
 
 Jan. 31 
 
 To Sundries, per Invoice liook 
 
 Feb. 28 
 
 . „ Do. do. 
 
 May 31 
 
 Do. do. 
 
 July 31 
 
 Do. do. 
 
 Aug. 31 
 
 „ Do. do. 
 
 Oct. 31 
 
 „ Do. do. 
 
 Nov. 30 
 
 „ Do. do. 
 
 I 
 
 SMITHY 
 
 I 
 
 s 
 
 d 
 
 53 
 
 
 
 
 
 47 
 
 
 
 
 
 56 
 
 10 
 
 
 
 32 
 
 
 
 
 
 40 
 
 10 
 
 
 
 28 
 
 
 
 
 
 43 
 
 
 
 
 
 ;^300 o o 
 
 engineers' and shipbuilders' accounts. 
 
 61 
 
 COAL. 
 
 igio 
 Dec. 31 
 
 liy Transfer to Trade Account 
 
 i s d 
 
 Cr. 
 
 i s d 
 300 o o 
 
 iioo o o 
 
 II 
 
 Dr. 
 
 CARTIXG 
 
 ACCOUNT. 
 
 Cr. 
 
 - ' 
 
 - k 
 
 To Sundries, per Invoice liook 
 
 i s d 
 
 i s d 
 54 6 9 
 
 1910 
 Dec. 31 
 
 Bv Transfer to Trade Account 
 
 i s d 
 
 54 6 9 
 
 4 . 
 
 1! 
 
 Dr. 
 
 1910 
 Jan. 31 
 Feb. 28 
 Mar. 31 
 
 It 
 April 30 
 May 31 
 June 30 
 
 July 31 
 
 Aug. 31 
 
 Sept. 30 
 
 Oct. 31 
 
 Nov. 30 
 
 Dec. 31 
 
 To 
 j» 
 
 J- 
 
 )j 
 j> 
 jj 
 J) 
 
 .1) 
 
 >> 
 
 }} 
 J" 
 
 Sundries, per Invoice Book 
 
 Do. do. 
 
 Do. do. 
 
 Cash — Sutton tV Co. 
 Sundries, per Invoice Book 
 
 Do. do. 
 
 Do. do. 
 
 Do. do. 
 
 Cash — Sutton & Co. 
 Sundries, per Invoice Book 
 
 Do. do. 
 
 Do. do. 
 
 Do. do. 
 
 Dj. do. 
 
 
 RAILWAY 
 
 £ s d 
 
 £ 
 
 s d 
 
 • • ■ 
 
 42 
 
 
 
 • •• 
 
 21 
 
 I 4 
 
 ... 
 
 8 
 
 7 6 
 
 ■ • • 
 
 
 
 18 10 
 
 ... 
 
 • « • 
 • • • 
 
 23 
 16 
 
 25 
 
 4 8 
 
 4 7 
 2 6 
 
 i 
 
 4 
 
 I 2 
 
 • • • 
 
 
 
 41 
 6 
 
 ^7 4 
 6 4 
 
 I 
 
 • ■ • 
 
 • • • 
 
 7 
 I 
 
 3 9 
 
 16 I 
 
 « • • 
 
 15 
 
 8 3 
 
 ;^2i3 
 
 13 4 
 
 CARRIAGE. 
 
 1910 
 Dec. 31 By Transfer to Trade Account 
 
 £ s d 
 
 Cr. 
 
 .-f s d 
 213 13 4 
 
 ;^2i3 13 4 
 
w 
 
 i^^ 
 
 62 
 
 engineers' and shipbuilders' accounts. 
 
 Dr. 
 
 MACHINERY 
 
 I9I0 
 
 
 £ s d 
 
 £ s d 
 
 Jan. 31 
 
 To Sundries, per Invoice Book 
 
 
 58 
 
 it 
 
 „ Stores Account 
 
 
 16 7 6 
 
 >» 
 
 „ Wages „ 
 
 
 43 I 6 
 
 Feb. 28 
 
 „ Stores ,, 
 
 
 52 9 6 
 
 « 1 
 
 „ Wages „ 
 
 
 116 9 4 
 
 Mar. 31 
 
 „ Stores ,, 
 
 
 143 
 
 ? 1 
 
 „ Wages „ 
 
 1 
 
 
 23 I 
 
 
 /310 12 2 
 
 
 
 Dr. 
 
 BUILDING 
 
 II 
 
 1910 
 Jan. 31 
 
 June 
 Nov. 
 
 30 
 30 
 
 To Sundries, per Invoice Book 
 Stores Account 
 Wages 
 Stores 
 
 Wages 
 
 >5 
 
 JJ 
 
 J) 
 
 Sundries, per Invoice Book 
 Stores Account 
 
 Wages 
 
 £ s d 
 
 £ s d 
 
 31 o o 
 
 17 6 
 74 9 10 
 
 1 3 4 
 
 37 
 
 3 
 
 2 
 
 43 
 
 2 8 
 6 o 
 I 6 
 
 3 9 
 
 /193 4 7 
 
 IUi!l 
 
 engineers' and shipbuilders' accounts. 
 
 6s 
 
 REPAIRS. 
 
 Cr, 
 
 1910 
 Dec. 31 
 
 }iy Transfer to Trade Account 
 
 £ s d 
 310 12 2 
 
 /310 12 2 
 
 REPAIRS. 
 
 Cr. 
 
 1910 
 Dec. 31 By Transfer to Trade Account 
 
 £ s d 
 
 ;^ S d 
 
 193 4 7 
 
 ;^i93 4 7 
 
 > 
 
 9 
 
I 
 
 D 
 
 lOT :;> 
 
 I 
 
 - I 
 
 ii 
 
 ^4 
 
 engineers' and shipbuilders' accounts. 
 
 Dr, 
 
 19 
 
 ro 
 
 
 
 
 Jau. 
 
 31 
 
 To 
 
 Timber 
 
 Ai-ec 
 
 
 If 
 
 »» 
 
 Wages 
 
 J J 
 
 Feb. 
 
 28 
 
 5> 
 
 Tinijer 
 
 5J 
 
 
 t • 
 
 »1 
 
 Wages 
 
 >> 
 
 
 » 1 
 
 >> 
 
 Stores 
 
 J> 
 
 Mar. 
 
 31 
 
 )» 
 
 Stores 
 
 iH 
 
 
 » » 
 
 »» 
 
 Timber 
 
 )> 
 
 
 » » 
 
 51 
 
 Wages 
 
 >J 
 
 April 
 
 30 
 
 »» 
 
 Timber 
 
 J? 
 
 
 • 1 
 
 J> 
 
 Wages 
 
 J J 
 
 May 
 
 31 
 
 it 
 
 Timber 
 
 J> 
 
 
 • < 
 
 J> 
 
 Stores 
 
 u 
 
 
 • t 
 
 55 
 
 Wages 
 
 )5 
 
 June 
 
 30 
 
 5> 
 
 Timber 
 
 5» 
 
 
 1 f 
 
 • 1 
 
 St;;res 
 
 51 
 
 
 1 1 
 
 5- 
 
 Wages 
 
 55 
 
 July 
 
 31 
 
 »1 
 
 Timber 
 
 55 
 
 
 »t 
 
 J» 
 
 Wages 
 
 55 
 
 Aug. 
 
 31 
 
 ?1 
 
 Wages 
 
 55 
 
 Sept. 
 
 30 
 
 J> 
 
 Timber 
 
 55 
 
 
 »» 
 
 J1 
 
 Stores 
 
 5 5 
 
 
 ? • 
 
 5' 
 
 Wages 
 
 55 
 
 Oct. 
 
 3t 
 
 »» 
 
 Wages 
 
 55 
 
 Nov. 
 
 30 
 
 J) 
 
 Stores 
 
 55 
 
 
 1 • 
 
 * 1 
 
 Timber 
 
 5» 
 
 
 I • 
 
 JJ 
 
 Wages 
 
 5: 
 
 Dec. 
 
 31 
 
 J> 
 
 Wages 
 
 55 
 
 PATTERN MAKIX(; 
 
 £ s 
 
 d 
 
 17 
 
 6 
 
 37 10 
 
 
 
 I 4 
 
 
 
 43 
 
 
 
 3 
 
 6 
 
 18 o 
 
 1 10 o 
 43 o o 
 
 I 10 o 
 43 o o 
 
 2 ID O 
 
 I 3 6 
 
 43 o o 
 
 200 
 
 o 18 6 
 
 45 o o 
 
 2 10 o 
 34 o o 
 
 100 
 
 200 
 
 27 o o 
 
 187 
 
 I 10 o 
 54 10 o 
 
 £ s d 
 
 38 7 6 
 
 44 7 6 
 
 45 ^"i o 
 44 10 o 
 
 4f') 13 6 
 
 47 1 8 6 
 
 36 10 o 
 
 27 o o 
 
 30 o o 
 23 o o 
 
 57 8 7 
 40 o o 
 
 /4«i 3 7 
 
 engineers' and shipbuilders accounts 
 
 65 
 
 ACCOUNT. 
 
 Cr. 
 
 \ 
 
 1910 
 Dec. 31 
 
 By Transfer to Patterns Account for 
 Estimated Value of additions 
 
 to Patterns 
 
 .. Transfer to Trade Account 
 
 £ 
 
 £ s d 
 
 100 o o 
 381 3 7 
 
 /481 3 7 
 
11 
 
 . ■»>; 
 
 I \, 
 
 ilfi 
 
 {IF: 
 
 66 
 
 Dr. 
 
 f 1910 
 Jan. 31 
 
 . »» 
 
 •> 
 
 Feb. 28 
 ti 
 
 Mar. 31 
 
 April 30 
 »» 
 
 May 31 
 
 U. 
 
 June 30 
 
 July 31 
 
 Aug. 31 
 
 ■• 
 
 Sept. 30 
 >i 
 
 Oct. 31 
 
 Nov. 30 
 It 
 
 Dec. 31 
 
 engineers' and shipbuilders' accounts. 
 
 To Stores Account 
 „ Wages 
 
 >j 
 
 >> 
 
 »» 
 
 »» 
 
 5) 
 
 >» 
 »1 
 
 >J 
 
 »» 
 J> 
 
 JJ 
 »» 
 J) 
 
 JJ 
 
 >» 
 J> 
 
 )> 
 
 Sundries, per Invoice Kook 
 
 Stores Account 
 
 Wages „ 
 
 Stores 
 Wages 
 
 Stores 
 Wages 
 
 Stores 
 Wages 
 
 Stores 
 Wages 
 
 Stores 
 Wasres 
 
 
 
 
 
 
 Stores 
 Wages 
 Sundries, per Invoice Book 
 
 
 Stores Account 
 Waares 
 
 Stores 
 Wages 
 
 Stores 
 W'ages 
 
 ,, Stores 
 „ Wages 
 
 SI 
 
 3» 
 JJ 
 
 93 
 
 J3 
 
 JJ 
 St 
 
 MAxrFA< "nkixc; 
 
 / s d 
 
 1.472 13 7 
 
 1,412 4 o 
 
 92 o o 
 
 £ s d 
 
 1,424 9 6 
 1,413 2 o 
 
 1,316 10 I 
 1.415 3 o 
 
 i.5^J2 7 4 
 1,420 6 o 
 
 I 517 3 10 
 1.418 7 6 
 
 1,320 2 9 
 1,301 6 o 
 
 1. 721 3 7 
 1. 501 2 o 
 
 1,476 8 6 
 
 1,419 5 o 
 
 400 o o 
 
 I 500 3 5 
 1,418 6 o 
 
 1,397 10 I 
 1,413 4 o 
 
 1,796 3 2 
 1.423 5 o 
 
 1,416 o I 
 1,002 o o 
 
 - 2.976 
 
 I 
 
 ■■ 2.837 
 
 2.731 
 
 2.9S2 
 2.935 
 2,621 
 
 a 222 
 
 3.295 
 2,«,*l8 
 2,SlO 
 
 3.219 
 
 2.4lt> 
 
 17 7 
 
 II 6 
 
 13 I 
 
 13 4 
 
 II 4 
 
 8 9 
 5 7 
 
 13 6 
 
 9 5 
 
 14 I 
 
 8 2 
 
 o I 
 
 / 34.970 6 5 
 
 engineers' and shipbuilders' accounts. 
 
 67 
 
 ACCOUNT. 
 
 Cr. 
 
 I9I0 
 Dec. 31 By Transfer to Trade Account 
 
 / 
 
 i s d 
 
 34i970 6 5 
 
 /34.970 6 5 
 
 ( 
 
 I 
 
» 
 
 f 
 
 I 
 
 I 
 
 I 
 
 Ml 
 
 68 
 
 engineers' and shipbuilders' accounts. 
 
 Dr. 
 
 SALES 
 
 I9I0 
 Dec. 31 
 
 To Transfer to Trade Account 
 
 / s d / s d 
 
 35,553 II 2 
 
 I 35.553 II 2 
 
 Dr 
 
 STORES 
 
 1910 
 Jan. I 
 M 31 
 
 Feb. 28 
 Mar. 31 
 April 30 
 May 31 
 June 30 
 July 31 
 Aug. 31 
 Sept. 30 
 Oct. 31 
 Nov. 30 
 Dec. 31 
 
 To Stock on hand brought forward. 
 ,, Purchases, per In- ( Stores 
 
 voice Book ] Timber . 
 
 Do. 
 
 do 
 
 Do. 
 
 do 
 
 Do. 
 
 do 
 
 Do. 
 
 do 
 
 Do. 
 
 do 
 
 Do. * 
 
 do 
 
 Do. 
 
 do 
 
 Do. 
 
 do 
 
 Do. 
 
 do 
 
 Do. 
 
 do 
 
 Do. 
 
 do 
 
 I9II 
 Jan. I 
 
 To Stock on hand brought forward. 
 
 I 
 
 s 
 
 d 
 
 I 
 
 s d 
 
 • • • 
 
 
 6,929 
 
 
 
 1,129 
 
 
 
 
 
 103 
 
 
 
 
 
 
 
 1.234 
 
 
 
 
 
 
 1.574 
 
 6 
 
 
 ■ • 
 
 
 1.897 
 
 3 10 
 
 
 
 
 2,536 
 
 2 I 
 
 
 
 
 1,051 
 
 7 6 
 
 
 
 
 896 
 
 3 7 
 
 
 
 
 1.437 
 
 6 5 
 
 
 
 
 1.243 
 
 7 f> 
 
 
 
 
 1.473 
 
 2 5 
 
 
 
 
 1.852 
 
 3 4 
 
 
 
 
 1,000 
 
 5 I 
 
 
 
 i 
 
 326 
 
 10 
 
 
 23.450 
 
 3 I 
 
 • • • 
 
 5.318 
 
 
 
 ExNGixeers' and shipbuilders' accounts. 
 
 69 
 
 ACCOUNT. 
 
 Cr. 
 
 191 
 
 Jan. 
 
 Feb. 
 Mar. 
 April 
 May 
 June 
 
 July 
 
 Aug. 
 
 Sept. 
 
 Oct. 
 
 Nov. 
 
 Pec. 
 
 o 
 
 31 
 
 28 
 
 31 
 
 30 
 31 
 
 3" 
 31 
 31 
 30 
 31 
 30 
 31 
 
 By 
 
 )J 
 »J 
 ?> 
 )> 
 »> 
 JJ 
 >) 
 JJ 
 J. 
 JJ 
 
 
 
 / s d £ s d 
 
 Sales and 
 
 Contracts, per Day 
 
 
 
 Book 
 
 ..• ••■ ••• • 
 
 
 
 2,417 6 
 
 Do. 
 
 do. 
 
 
 
 
 2,318 10 
 
 Do. 
 
 do. 
 
 
 
 
 3,900 15 6 
 
 Do. 
 
 do. 
 
 
 
 
 3.807 4 6 
 
 Do. 
 
 do. 
 
 
 
 
 3,164 
 
 Do. 
 
 do. 
 
 
 
 
 3,007 15 
 
 Do. 
 
 do. 
 
 
 
 
 2,870 16 2 
 
 Do. 
 
 do. 
 
 
 
 
 4,000 19 
 
 Do. 
 
 do. 
 
 
 
 
 3.110 4 
 
 Do. 
 
 do. 
 
 
 
 
 1.937 10 
 
 Do. 
 
 do. 
 
 
 
 
 3,502 2 
 
 Do. 
 
 do. 
 
 
 / 
 
 1,516 9 
 
 
 
 35.553 II 2 
 
 
 
 
 
 
 
 ACCOUNT. 
 
 Cr. 
 
 I9I0 
 
 Jan. 
 
 31 
 
 Feb. 
 
 28 
 
 Mar. 
 
 31 
 
 April 
 
 30 
 
 May 
 
 31 
 
 una 
 
 30 
 
 uly 
 
 31 
 
 Aug. 
 
 31 
 
 Sept. 
 
 30 
 
 Oct. 
 
 .31 
 
 Nov. 
 
 30 
 
 Dec. 
 
 31 
 
 By Sundries — Issues 
 
 JJ 
 JJ 
 
 Do. 
 Do. 
 Do. 
 Do. 
 Do. 
 Do. 
 Do. 
 Do. 
 Do. 
 Do. 
 Do. 
 
 do. 
 do. 
 do. 
 do. 
 do. 
 do. 
 do. 
 do. 
 do. 
 do. 
 do. 
 
 Balance carried forward, being 
 Stock on hand ... 
 
 / 
 
 i 
 
 s 
 
 d 
 
 1,500 
 
 3 
 
 5 
 
 1,487 
 
 3 
 
 7 
 
 1.332 
 
 3 
 
 10 
 
 I.57I 
 
 
 
 6 
 
 1.529 
 
 7 
 
 4 
 
 1.339 
 
 16 
 
 I 
 
 1.733 
 
 
 
 II 
 
 1.485 
 
 2 
 
 
 
 1.509 
 
 5 
 
 3 
 
 1,407 
 
 17 
 
 10 
 
 1,815 
 
 9 
 
 3 
 
 I.42I 
 
 13 
 
 I 
 
 5.318 
 
 
 
 
 
 23,450 
 
 3 
 
 I 
 
 I 
 
 4 
 
 I 
 
:l 
 
 •.r 
 
 u :i 
 
 
 
 ' V 
 
 I » ■ 
 
 70 
 
 engineers' and shipbuilders' accounts. 
 
 Dr, 
 
 I9I0 
 
 Jan. 31 
 
 Feb. 28 
 
 Mar. 31 
 
 April 30 
 
 May 31 
 
 June 30 
 
 July 31 
 
 Aug. 31 
 
 Sept. 30 
 
 Oct. 31 
 
 Nov. 30 
 
 Dec. 31 
 
 To Cash, per Cash Book 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 , Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 , Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 Do. 
 
 do. 
 
 , Do. 
 
 do. 
 
 s d 
 
 WAGES 
 
 £ 
 
 s 
 
 d 
 
 1.595 
 1,600 
 
 5 
 II 
 
 4 
 4 
 
 1,516 
 
 3 
 
 I 
 
 1,491 
 
 6 
 
 
 
 1.499 
 1,418 
 
 7 
 8 
 
 6 
 
 8 
 
 1*563 
 
 2 
 
 
 
 1.474 
 1,480 
 
 5 
 6 
 
 
 
 
 i»474 
 1,548 
 
 4 
 18 
 
 
 9 
 
 1,077 
 
 
 
 
 
 £\ 17.738 17 8 
 
 ii 
 
 engineers' and shipbuilders' accounts. 
 
 71 
 
 ACCOUNT. 
 
 I9I0 
 
 Jan. 31 
 
 Feb. 28 
 
 Mar. 31 
 
 April 30 
 
 May 31 
 
 June 30 
 
 July 31 
 
 Aug. 31 
 
 Sept. 30 
 
 Oct. 31 
 
 Nov. 30 
 
 Dec. 31 
 
 Cr 
 
 1,516 
 
 3 
 
 I 
 
 1,491 
 
 6 
 
 
 
 1.499 
 
 7 
 
 6 
 
 1,418 
 
 8 
 
 8 
 
 1,563 
 
 2 
 
 
 
 1,474 
 
 5 
 
 
 
 1,480 
 
 6 
 
 
 
 1,474 
 
 4 
 
 
 
 1.54S 
 
 18 
 
 9 
 
 1,077 
 
 
 
 
 
 £\ 1,7738 17 8 
 
 ll 
 
 1 
 1 
 
 « 
 
 1 
 
 F 2 
 
1 
 
 engineers' and shipbuilders' accounts. 
 
 
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 M 
 
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 M 
 
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 ENGINEERS 
 
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 ACCO 
 
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 ENGINEERS* AND SHIPBUILDERS' ACCOUNTS. 
 
 engineers' and shipbuilders' account: 
 
 75 
 
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 JOURNAL. 
 
 Jan. 
 
 
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 Feb. 28 
 
 Sundries, Dr. to Stores Account 
 Running Machinery 
 Machinery Repairs 
 
 Pattern Making 
 
 Manufacturing Account 
 
 Sundries, Dr. to Wages Account 
 Rnnnins' Machinery 
 Machinery Repairs 
 
 Pattern Making 
 
 Manufacturing Account 
 
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 Mar. 
 
 Sundries, Dr. to Stores Account 
 Running Machinery 
 Machinery Repairs 
 Pattern Making . . 
 Manufacturing Account 
 
 Sundries, Dr. to Wages Account 
 Running Machinery 
 Machinery Repairs 
 Pattern NIaking . . 
 Manufacturing Account 
 
 Apr. 30 
 
 Sundries, Di. to Stores Account 
 Running Machinery 
 Pattern Making . . 
 Manufacturing Account 
 
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 Sundries, Dr. to Wages Account 
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 May 31 
 
 Sundries, Dr. to Stores Account. 
 Running Machinery 
 
 Pattern Making 
 
 Manufacturing Account 
 
 Sundries, Di. to Wages Account 
 Running Machinery 
 
 Pattern Making 
 
 Manufacturing Account 
 
 Sundries, Dr. to Stores Account. 
 Running Machinery 
 Machinery Repairs 
 
 Building Repairs 
 
 Pattern Making 
 
 Manufacturing Account 
 
 Sundries, Dr. to Wages Account 
 Running Machinery 
 Machinery Repairs 
 
 Building Repairs 
 
 Pattern Making 
 
 Manufacturing Account 
 
 £ s d 
 
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 9 7 
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 76 
 
 engineers' and shipbuilders' accounts. 
 
 JOUR'S AL—conftnued. 
 
 June 30 
 
 Sundries, Dr. to Stores Account. 
 Running Machinery 
 
 Building Repairs 
 
 Pattern Making 
 
 Manufacturing Account 
 
 July 31 
 
 Sundries, Dr. to Wages Account 
 Running Machinery 
 
 Building Repairs 
 
 Pattern Making 
 
 Manufacturing Account 
 
 Aug. 31 
 
 Sundries, Dr. to Stores Account. 
 Running Machinery 
 
 Pattern Making 
 
 Manufacturing Account 
 
 Sundries, Dr. to Wages Account 
 Running Machinery 
 
 Pattern Making 
 
 Manufacturing Account 
 
 Sundries, Dr. to Stores Account. 
 Running Machinery 
 Manufacturing Account 
 
 Sept. 30 
 
 Sundries, Dr. to Wages Account 
 Running Machinery 
 
 Pattern Making. 
 
 Manufacturing Account 
 
 Sundries, Dr. to Stores Account. 
 Running Machinery 
 
 Pattern Making 
 
 Manufacturing Account 
 
 Sundries, Dr. to Wages Account 
 Running Machinery 
 
 Pattern Making 
 
 Manufacturing Account 
 
 Oct. 31 Sundries, Dr. to Stores Account . 
 Running Machinery 
 Manufacturing Account 
 
 Nov. 30 
 
 Sundries, Dr. to Wages Account 
 Running Machinery 
 
 Pattern Making 
 
 Manufacturing Account 
 
 Sundries, Dr. to Stores Account. 
 Running Machinery 
 
 Pattern Making 
 
 Manufacturing Account 
 Building Repairs 
 
 Sundries, Dr. to Wages Accouut 
 Running Machinery 
 
 Pattern Making 
 
 Manufacturing Account 
 Building Repairs 
 
 £ s d 
 
 15 
 I 
 
 1,320 
 
 35 
 
 37 
 
 45 
 
 1,301 
 
 II 
 
 3 
 18 
 
 2 
 
 9 7 4 
 
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 28 
 
 34 
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 8 13 6 
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 28 o o 
 
 27 o o 
 
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 9 
 
 £ s 
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 1,474 4 o 
 
 1,815 9 3 
 
 1,543 18 9 
 
 engineers' and shipbuilders' accounts. 
 
 JOURNAL— r<9 ;///;; //^tf. 
 
 U 
 
 Dec. 31 
 
 Dec. 31 
 
 Sundries, Dr. to Stores Account. 
 Running Machinery 
 Manufacturing Account 
 
 Sundries, Dr. to Wages Account 
 Running Machinery 
 
 Pattern Making 
 
 Manufacturing Account 
 
 r s d 
 
 • ■ 
 
 5 13 o 
 
 1,416 o I 
 
 35 o o 
 
 40 o o 
 
 1,002 o o 
 
 Dec. 31 
 
 Trade Account, Dr. to Sundries 
 Rent, Rates, and Taxes 
 Gas and Water . . 
 
 Insurance 
 
 Discount 
 
 Management Wages 
 Drawing Office Wages. . 
 Travelling Expenses 
 
 Stationery 
 
 Engine Coal 
 Smithy Coal 
 
 Carting 
 
 Railway Carriage 
 Machinery Repairs 
 Building Repairs. . 
 Pattern Making Account 
 Manufacturing Account 
 Running Machinery 
 
 40,06 
 
 Sales Account, Dr. . . 
 To Trade Account 
 
 4 6 
 
 € s d 
 
 1.4^1 13 I 
 
 1,077 o o 
 
 Profit and Loss Account, Dr. to 
 
 Freehold Buildings for Depreciation at 5% 
 Machinery and Plant Do. at ^% 
 
 Patterns Do. at 10% 
 
 Pattern Account, Dr. 
 
 To Pattern Making Account 
 
 (For Estimated Value of additions to Patterns) 
 
 
 
 A(>2 3 4 
 
 
 
 197 6 
 
 
 
 70 n 
 
 
 
 lU) 7 10 
 
 
 
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 6o(i 
 
 
 
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 51 
 
 
 
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 193 4 7 
 
 • • 
 
 
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 5011 
 
 35,553 II 
 
 2 
 
 
 
 
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 «25 
 
 11 
 
 
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 75 
 
 « • 
 
 
 600 
 
 • • 
 
 
 150 
 
 100 
 
 
 
 
 
 
 100 
 
 If we pursue the.se Ledger Accounts in theiu order, the ih-.st 
 (Share Capital) requires no special notice. It is the onHnarv 
 Capital Account of a joint-stock company, and governed l>y the 
 conditions of promotion and the issue of shares of the com- 
 pany. Excepting fresh capital is raised, or a reduction ot ^hare 
 values is sanctioned by the Supreme (^ourt con.sequent upon 
 losses in tradiiif^, it remains unaltered from vear to vear. 
 
 The Reserve Account is deserving of very careful considera- 
 tion on the part of directors and officers responsible for the 
 
I ! 
 
 M 
 
 II 
 
 H 
 
 II 
 
 7« 
 
 engineers' and shipbuilders' accounts. 
 
 tiiiancing of the company or firm. There is a great difference 
 in the character of reser\es for banking, financial, or merchant 
 busint-sses, and those for manufacturing and producing concerns. 
 In the former, the danger to be guarded against is a direct loss 
 in trading; in the latter, there is not only this possible direct 
 loss to be provided for, but also funds to be set aside for the 
 replacement of buildings and machinery used in the business. 
 By treating these se\eral purposes in one account, and employing 
 the money reserved in the ordinary business of the company, 
 there is always a danger that one of the risks so insured against 
 will be neglected or postponed when a more pressing demand 
 presents itself. A threefold accumulation is required, viz. : — 
 
 (i) For equalisation of dividends and reserve against general 
 trade contingencies. 
 
 (2) For development and replacement of buildings. 
 
 (3) For replacement of machinery. 
 
 The first reserve is demanded by a failing in human nature, 
 from which shareholders are by no means free — from a dis- 
 inclination to accept without murmuring an unavoidable 
 diminution of happiness. When a bad trading year comes 
 round directors are frequently, and sometimes unjustly, blamed 
 for losses which have been caused by the general course of the 
 market, and not by any action of the individual board. It is, 
 therefore, more usual than is generally supposed to make some 
 provision of this kind, unknown to the shareholders, by 
 reducing the value of the stock or work in progress at the close 
 of a prosperous year, so as to have something in hand for a 
 succeeding lean one. The expedient is, however, a temporary 
 one, ineffective over a long period, and unscientific in method. 
 It is much better to fix a maximum dividend, not by articles of 
 ass(X^iation, nor by special resolution having an inflexible force. 
 
 engineers' and shipbuilders' accounts. 
 
 79 
 
 but by mutual understanding and agreement at the general 
 meeting ; and, when in any year the profits exceed the amount 
 required to pay this dividend, to carry the excess to reserve, 
 and arid any similar balances to it from time to time. This 
 accumulation should appear distinctly in the account books and 
 Balance Sheets as " Reserxe for equalisation of dividends and 
 against general contingencies," or some similar title which will 
 properly define the objects to which it can be applied. It may 
 generally be employed in the business, since the demands upon 
 it can be foreseen and provided for, when the course of the 
 trading is sound, by an arrangement with the firm's l)ankers; 
 but there must be no misunderstanding about the way in which 
 the reserved profit is calculated. All Dividends declared and 
 paid, all Depreciation, Repairs, Replacements, and other con- 
 tingencies must be written off the Profit and I-oss Account 
 before any amount is transferred to Reser\e, with as much 
 circumspection as if the money were to be immediately used in 
 the payment of an additional dividend. If there is not this 
 '' morality of accountancy," a very delusive statement may be 
 presented to the shareholder. 
 
 The second reserve — that for Replacement of Buildings — is 
 irrespective of profits made. The amount which, after mature 
 consideration, is deemed necessary, must be written off the value 
 of buildings each year, whether a profit or loss has been made 
 in trading — before, indeed, such profit or loss can be ascer- 
 tained. This, indeed, is the usual practice as shown in the 
 Profit and Loss Account and Balance Sheet (Specimens Nos. 
 22 and 23), but, unfortunately, it is seldom carried to its 
 legitimate conclusion. The deduction is made for a specific 
 purpose — to replace buildings which in the ordinary course of 
 time must become worn out and useless. The money ought 
 therefore to be available for this purpose, and, more especially 
 in small firms, where the temptations to use it are great, ought 
 
8c 
 
 engineers' and shipbuilders' accounts. 
 
 engineers' and shipbuilders' accounts. 
 
 8i 
 
 to be invested in marketal)le or readily axailable securities 
 outside the business. Mortgages, when they are first charges 
 witli a sufficient margin, are a perfectly legitimate and sound 
 sttnirity for this purpose : they can hie obtained to afford fair 
 rates of interest, and can readily be transferred when the money 
 is requireil. Moreover, as the approximate dates when the 
 rebuilding will be needful can be calculated with some degree 
 of precision, the loans can be arranged for terms of lo or 15 
 years, so that the repayment will synchronise with the 
 rebuilding. 
 
 One factor, however, affects these buildings reserves in the 
 present day, which was absent, or of less importance, in past 
 times J'he tendency to expansion of works, to amalgamation 
 of funis, tu trade combines, has its reflex in the demand for 
 larger and more spacious buildings ; and the substitution of 
 machinery for manual lalx)ur, which every day increases, ren<lers 
 cramped workshops with partition walls and passages econo- 
 mically objectionable. In the case of Shipbuilding-yards, this 
 feature is accentuated by the increasing length of modern slips. 
 Slipways which 50 years ago afforded ample sjjace for the 
 building of a first-elass liner. hav«- now to be lengthened and 
 otherwise extended for laying down a modern warshij) or 
 Atlantic liner. A very grave (juestion. therefore, arises whether 
 sufficient i)rovision is made at the present time by the majority 
 of Engineering and Shipbuilding firms for rebuilding worksho])s, 
 or whether some portion of such cost is not sometimes thrown 
 upon the Capital Account instead of being i)rovide<l for out of 
 l)rior j)rofits. 
 
 The ihiril reserve — that for Re[)lacement of Machinery — will 
 follow tlie same lines as the second reserve, but tlie reasons for 
 investing it outside the business, and earmarking the securities 
 for it. are e\en more imperative, it is impossible to take up 
 
 any of the Engineering magazines without observing the rapid 
 progress which is being made in improvement of machine tools, 
 and the great development of labour-saving appliances. Lathes 
 bv the very best makers become out of date, not because they 
 are untrue, not because they do not turn out sound and reliable 
 work, but because they are wanting in some appliances fitted to 
 modern, and maybe inferior, lathes which increase the speed 
 of working. The adoption of standard sizes and angles pro- 
 motes the use of chucks and special cutters, and renders the 
 old-fashioned machine an incumbrance in the workshop. The 
 modern Engineer is therefore ever face to face with an artificial 
 ratio of Depreciation— with a Depreciation which does not 
 effectively operate merely when his machinery is worn out, but 
 at the far earlier period when some rival has invented an 
 improvement. If, therefore, he wishes his business to be per- 
 fectly sound he will accumulate a machinery replacement, or 
 improvement, fund as rapidly as possible, and invest it in readily 
 available and marketable securities outside his own particular 
 business. 
 
 The auditor has special and onerous obligations thrown upon 
 him in relation to Ship-yards and Engineering Works, and 
 should bring to his work a considerable amount of common- 
 sense. The ordinary checking of postings must receive careful 
 attention, and the examination of the Invoice Book demands 
 special consideration. The amounts of the invoices will most 
 probably be correct ; the debits to Stores and Timber Accounts 
 will be 'found in order; the charges for Coal Carriage, Sta- 
 tionery, Rent, and the like, are very easy to check; but the 
 auditor will need to be alert when any debits are transferred to 
 New Machinery or New Buildings. A new lathe is placed in 
 the shops, and the question arises : Is it an addition, a replace- 
 ment, or a substitution? If it is a substitution for one which 
 is yet mechanically perfect, but economically out of date, then 
 
 i 
 
 ^1 
 
 :l 
 
82 
 
 engineers' and shipbuilders' accounts. 
 
 must be considered the addition, if any. which has been made 
 to the value of the plant at the works. The problem is not an 
 easy one to solve, and dogmatic rules (annot be laid down for 
 it : the auditor must take counsel with the works' manager, with 
 the foremen who superintend the tools, not with the bookkeep- 
 ing and clerical element, and from their experience gather such 
 help as he can to estimate the value of the item. With the 
 best intentions and the widest experience, alterations in, and 
 additions to, machinery will be a source of grave anxiety to the 
 auditor, and demand his most solicitous examination. 
 
 The Stores Ledger, if properly kept, is a valuable check upon 
 the stocktaking. The goods in store should be weighed or 
 counted by an independent officer of the company, and entered 
 in a book or on sheets. The quantities so arrived at should 
 correspond — very nearly — with the balances shown in the 
 Stores Ledger. It will seldom be possible to check all the post- 
 ings of the Stores Books, but the total of the money balances of 
 the Stores Ledger should correspond with the balance of Stores 
 Account in the General Ledger. Li every case, however, it is 
 desirable to check some of the storekeeper's work, and this 
 checking should be of various items taken at haphazard 
 throughout the entire period. 
 
 »l 
 
 Li Ship-yards a great discrepancy will be found in the 
 Timber Accounts. This cannot be a\oided without seriously 
 impeding the work, or without the introduction of a system of 
 Cost Cards, the practical utility of which is still doubtful. 
 An account of the variation Ijetween the actual stocktaking 
 quantities and the Timber Ledger quantities should, how^ever, 
 be extracted at each audit, and the attention of the managers 
 drawn to it. This will probably tend to reduce the limits of 
 variation, but, after all, it is purely a matter of yard 
 management. 
 
 It 'i 
 
 engineers' and shipbuilders' accounts. 
 
 83 
 
 Tlie foundations and beds for machinery require close 
 scrutiny. They are really part of the cost of the machinery 
 in place, as it is unworkable without them, and the cost may 
 vary considerably in consequence of the character and position 
 of the works and local conditions. Superintendence during 
 erection is a perfectly legitimate charge to make, but it must 
 not be more than the actual value of it — that is to say, the firm 
 must not make the machinery more costly by (Joing the work 
 themsehes than it would have been if erected by an outside 
 contractor. Here, again, the auditor will require, above all 
 things, to exercise common- sense and the gentle manners the 
 Latin proverb commends. 
 
 In some Ship-yards the slipways have to be underpiled. The 
 come of this work is great, and the unitiated visitor wouhl set- 
 no evidence of it. Careful enquiry may help the auditor to 
 satisfy himself that the charge is not excessive, but it can only 
 help him; he is ultimately very largely at the mercy of the 
 vard officials. 
 
 The Cost Accounts referred to in the next chapter are pre- 
 pared for technical financing, rather than for business 
 financing, and are subject to so many technical and professional 
 limitations that little or no good would accrue from detailed 
 auditing of them. Their correctness depends upon a \ast 
 number of minute items, which no after examination would set 
 right if they were improperly treated at the time, but the pro- 
 fessional auditor can render valuable assistance to the Engineer 
 in inaugurating a proper system, although he must rely on the 
 works' bookkeepers for seeing that such system is properly 
 carried out. 
 
I 
 
 I 
 
 CHAPTER VII. 
 
 I 
 
 COST ACCOUNTS. 
 
 i\i 
 
 The most specialist-d portion of Engineering bookkeeping is 
 that known as the C(ist Accounts. Since Messrs. Garcke and 
 Fells published their classical work on Factory Accounts 
 numerous treatises ha\-e been written on the subject, some of 
 them by practical Engineers and others by public accountants, 
 and many and varied systems have been submitted for public 
 approval. Even the principles upon which these, accounts 
 should be compiled are not agreed upon. One recent writer 
 says. '' There is much difference of opinion as to how the 
 oncost should be allocated." The same writer says, ''Cost 
 has been defined by economists as the total values of the 
 materials, services, labour, and capital entering into any 
 product." Whilst he again divides this cost into conditions, 
 which he thus defines : — 
 
 '' Prime Cost is the summation of the cost of materials, 
 labour, and outside services, chargeable solely and directly 
 against the product." 
 
 '• Oncost is the direct expenditure incurred for the purpose 
 of increasing the productive power of labour, and includes every 
 outlav whatever not chargeable to a specific product. Oncost 
 includes Depreciation for tear and wear, obsolescence, and all 
 safeguards of capital against risks and casualties, but the 
 remuneration of capital is not included as oncost." 
 
 " Gross Cost is the sum of prime cost and oncost." 
 
 engineers' and shipbuilders' accounts. 
 
 85 
 
 (( 
 
 IVet Cost is the gross cost, less the value, for future use of 
 any plant or tools made specially for the production of the 
 special contract. 
 
 )j 
 
 There is an equivocal vaguent-ss about these sentences which 
 sufiiciently indicates the difticulties of the subject and the varied 
 methods by which it may be treated. 
 
 One very usual method is to charge to each contract, or job, 
 or repair, all the direct wages and materials employed for it. 
 thus arriving at the " Prime Cost " before referred to. and to 
 add thereto a fixed percentage for " Oncost," or. as it is more 
 frequently termed south of the Tweed, for " Establishment 
 Charges." Specimen No. 15 is an example of a hook which has 
 been, for the past 15 years, found very useful for this purpose 
 in a large Geneial Engineering Factory. 
 
 •1 
 
 I 
 
 II 
 
 I* 
 
86 
 
 engineers' and shipbuilders' accounts. 
 
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 Vrt 
 
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 engineers' and shipbuilders' accounts. 
 
 o J 
 
 In the factory in question the Annual Wages amounted to ... /32..>oo 
 From these are deducted the Wages of the Foremen Pattern 
 Makers, Moulders, and Fitters, of the Labourers, Engine 
 Drivers, Carters, and of the Management Staff 1(1,150 
 
 Leaving Productive Wages 
 Add 105 per cent., say... 
 
 35'S5o 
 375<'4^ 
 
 Cost of Products, exclusive of Material 
 
 £73-4 
 
 M- 
 
 On reference to the Commercial Accounts of the firm the gross 
 
 Trade Expenditure was found to be ;<.'io5,7oo 
 
 But from this had to be deducted the following amounts for 
 Materials issued to the respective departments for work 
 upon them, viz. : — 
 
 Fitting and Turning ;^i6,ooo 
 
 Smithy ... ... ... ... ••• ••• 2,100 
 
 Foundry 12,200 
 
 And for Machinery additions 2,500 
 
 32,800 
 
 Leaving Cost of Production, exclusive of Material ... /.■72,ooo 
 
 It will thus be seen that in this particular instance 105 per 
 cent, for Establishment Charges was as nearly correct as such 
 a percentage can be. when taken over the entire factory and 
 averaged for the whole twelve months. Great care will, however, 
 have to be taken that none but actually i)roductive — that is, 
 skilled artisans — wages are charged in the Cost Book under 
 the head of the several trades, and that all labourers and 
 untrained men are relegated to the 105 per cent, added. Black- 
 smiths' strikers, whom some might term labourers, are a seeming 
 exception to this rule, and are included under the head of smiths, 
 but then they are really trained men — almost as much skilled 
 artisans as the blacksmiths themselves. 
 
 The great objection to this method is the want of uniformity 
 of work, both of quantity and quality. It is evident that in 
 
 G 2 
 
 41 
 
88 
 
 engineers' and shipbuilders' accounts. 
 
 engineers' and shipbuilders' accounts. 
 
 89 
 
 I 'I 
 
 I 'I 
 
 
 shops liable to great pressure during certain prosperous epochs, 
 and to lack of work during lean years, the percentage cannot 
 be maintained at the same figure without great inaccuracy in 
 costing. Even the merest tyro in Engineering will understand 
 that it is utterly impracticable to reduce Management Wages, 
 Rent, Insurance, Running Machinery, Depreciation, and other 
 general expenses in the same time, or in the same ratio, as 
 productive (skilled labour) wages are depleted. There is also 
 another grave objection to it as it is usually employed. Whilst 
 the gross cost of a machine, a contract, or an installation, con- 
 sidered as a whole, may be thus arrived at, it does not readily 
 lend itself to the costing of parts. In a foot or treadle press, 
 for instance, there are 26 or more parts, and for accurate 
 detailed costing each of those parts must be treated as a 
 separate entity. The reader will see that great difficulty would 
 arise in treating so many different parts in a book ruled and 
 kept as in Specimen No. 25, though, of course, it is not 
 impossible. 
 
 A second method, advocated by many Works' Pingineers, and 
 supported by arguments founded on the most profound 
 problems of the calculus, is to debit each particular item of 
 work with a charge per hour for the machine used upon it. 
 Thus, in a factory there is a large ma( hine costing ;£4,ooo. 
 
 The Annual Charge for area occupied is said to be ,{.232 16 o 
 
 The Interest on the Machine Cost 200 o o 
 
 And the Depreciation 400 o o 
 
 This would be charged against any work upon which it is used, 
 at the rate of 8s. ^d. per hour. 
 
 In the same factory there is a smaller machine, costing ;£2oo. 
 
 The Charge for area occupied is ^6 15 o 
 
 •luicrcsi ... ... ... ,,, ,», .,, ,^, 10 Q Q 
 
 Depreciation 10 o o 
 
 and the charge for this machine against any work upon which 
 it is employed would only be ^d. per hour. To ensure proper 
 charging of the whole of the machinery it would be necessary 
 to open an account for each machine, and credit such account 
 with its liypothetical earnings through the Cost Book. It is 
 hardly possible to employ all the machinery of an amply- 
 equipped factory at the same time j there must be long periods 
 when many of the machines lie idle, and for these periods no 
 provision is made by most Engineers who adopt this method, 
 although the floor space must remain (xxupied, and Interest, 
 and at least part of the Depreciation, be running on. Of neces- 
 sity such Cost Accounts show better results than the commercial 
 books of the hrm — that is, they show a smaller cost of produc- 
 tion than actually exists, and a consequent higher, but 
 fallacious, margin of prolit. 
 
 Mr. David ('owan, in a paper read before the Institution of 
 Engineers and Shipbuilders in Scotland, on the 19th March 
 1 90 1, very forcibly points out the difficulties of machine 
 charges. He is evidently thinking chiefly of the incidence of 
 Depreciation, with which he has been dealing in the preceding 
 paragraph, but liis words are so graphic and pertinent, and so 
 full of meaning with regard to machine charges generally, that 
 they may be reproduced here with great advantage, for the 
 warning and instruction of the reader. 
 
 " One machine may cost, installed complete, say, ^"2,000 or more ; for 
 its operation it will require a large amount of power and crane service, 
 and may have to be attended to by one highly-skilled craftsman, with 
 now and then some attendance from unattached labour. It is subject 
 to a Depreciation charge corresponding in amount to the capital 
 invested therein, and the class to which it belongs. Another may only 
 cost ^."200 or less, and being nearly automatic in its action, may only 
 require the attention of a low-grade man, either during the whole or 
 part of his time. It requires probably very little power to drive it; it 
 needs no auxiliary service, and carries a Depreciation charge very 
 
 f 
 
90 
 
 ,-, J 
 
 ENGINEERS AND SHIPBUILDERS ACCOUNTS. 
 
 engineers' AND SHIPBUILDERS' ACCOUNTS. 
 
 91 
 
 different from the larger machine. It is evident that real cost of work 
 performed on the larger machine, taking rent of capital, shop floor 
 space, services, and all other usual items into ((msideration, is much 
 greater than that of the smaller machine. 
 
 " When no capital charge is made, and the depreciation and other 
 shop charges are departmentally averaged up all round, and when these 
 are recovered on the quantities of labour, the charge for facilities per 
 hour of the machinists in such cases is the same — that is to say, the less 
 costly machine is too highly weighted, and the more costly too lightly. 
 The question is : Does the difference in weighting in the case of the 
 smaller priced machine properly compensate for the greater share of 
 the shop facilities provided, which the low-grade labour operating it 
 use- up? Should each machine bear the same load of oncost, or should 
 this load differ for each? Which should carry the greater, and which 
 the lesser? 
 
 " To answer these questions properly, for the two types of machines 
 cited, and for all the machines intermediate between them, special 
 considerations are necessary in each case. Although the cost of one 
 machine may be high, yet, in computing the Depreciation, a lower rate 
 if charge may be suflicient, if this machine is of a standard type; in 
 the other it may be much higher if the machine be classed as special or 
 semi-special. Likely enough, in the case of the special machine, more 
 repairs would be required, as also more outlays for cutting tools and 
 for supervision on the part of some special superintending tool maker. 
 The more costly tool may be idle for a considerable part of its time ; the 
 i)thtrr may be running to its full capacity, or it may be partly idle. 
 Many other considerations besides these enter into such questions. 
 They cannot be answered in a general way ; each case requires special 
 cun-ideration. The running time of each should be kept, as is done 
 with individual workmen. An estimation of power for driving, and 
 the rent of the capital invested in each, is required. Accounts based 
 on these data, and all ordinary running expenses, are a necessity if 
 thf separate hourly cost of running is demanded. 
 
 *' It can be conceived that there may be occasion for such an account- 
 ing. Such occasions are more likely to arise in the future than in the 
 past. In an engineering shop making a variety of heavy products, in 
 tht present state of the art of shop management, such a state of account- 
 ing is neither possible nor desirable. In the case where pr(jducts are 
 much alike, and specialised, it is unnecessary. 
 
 " When the machine tools in any department do not vary greatly ia 
 capacity or value, it serves no useful purpose to make specific individual 
 charges for each, since it is not always possible to assign just the kind 
 of work most suitable to the performance of each. For most ends it 
 is sufficient to average matters up all round, and trust to the e.xecutive 
 officials in charge to do the best they can, as, when there is not a 
 sufficiency of work for the heavy tool, and there is more light work in 
 the shop than can be overtaken, then the heavy tool may be used for 
 light work. Such adaptations are, however, difficult with tools of the 
 special class." 
 
 It is hardly necessary to adduce further reasons for saying 
 that Cost Accounts, based on separate charges for each machine 
 employed, must be generally hypothetical, and that in many if 
 not in the majority of cases they must be delusively hypo- 
 thetical. The commercial Trading Account will generally point 
 the moral. 
 
 No Cost Accounts can be considered satisfactory, from an 
 accountant's point of view, unless they can be checked by the 
 Trade Account of the firm. But as the.se accounts are compiled 
 for the purposes of the Engineer — for his estimates and shop 
 management — changes are continually being made in them, 
 fresh details being introduced and others withdrawn, and the 
 interlocking of them with the commercial books is therefore 
 troublesome, and, in many cases, costly. The tinal results 
 should, howe\er, agree if the two rec^ords are compiled from 
 the same subsidiary books, and equal care is taken with each 
 of them. Some difficulty arises in framing Cost Accounts, owing 
 to the requirements of the Engineer, and the varied purposes 
 for which he employs the figures not being sufficiently con- 
 sidered. If they are to be of the fullest possible service to him 
 they must be of a threefold character, and must show him his 
 expenditure (in materials and wages separately) on : — 
 
 (I 
 
t 
 
 92 
 
 engineers' and shipbuilders' accounts. 
 
 (*/) The various departments— such as Offices, ^fould Loft, 
 Joiners, Pattern Makers, Moulders, Machinemen, 
 Blacksmiths, Fitters, &c. 
 
 (b) The various sections of each contract; as, for instance. 
 Cylinders (high, intermediate, and low pressure). 
 Cylinder Fittings, Cylinder Covering, Pistons, Con- 
 necting Rods, Crank Shaft, &c., each section having 
 its cost completed independently and in its own 
 entirety. 
 
 \c) The total cost of each separate contract. 
 
 In a series of articles in Engineering, commencing 5th 
 January 1894. the writer first suggested the following forms 
 of Cost Accounts, which appear to meet the somewhat complex 
 problem which is presented, and are at the same time capable 
 of agreement with the commercial accounts of the expenditure 
 of the firm. The same original books of record (Invoice Book, 
 Cash Book, Wages Book, &c.) are used for both statements, and, 
 though the figures are manipulated in different ways, the 
 exercise of ordinary care should prexent any great discrepancy. 
 There must, however, be no evasion of the prime fact which 
 underlies all true costing. All tlie expenditure of the firm ; all 
 wages of managers, foremen, draughtsmen, and clerks; all 
 materials and workmen's wages, and Depreciation of plant and 
 buildings (which under another form is payment for their use) : 
 in short, all the expenditure which appears on the debit side of 
 the Trading Account is cost of production, and must in some 
 form or other appear in the Cost Accounts. The costings 
 should be completed, so far as the A sheets hereafter described 
 are concerned, to the close of each month, as longer periods 
 would involve much complication, and it is essential for correct 
 results that the establishment charges for any one month are dis- 
 tributed over the direct wages for that month, and over no other. 
 
 engineers' and shipbuilders' accounts. 
 
 93 
 
 The forms are threefold, to answer to the threefold require- 
 ments of the Engineer already indicated. 
 
 Form A, for Departmental Accounts. 
 
 Form B, for Process Accounts — process meaning the sec- 
 tional portion of any particular machine or 
 contract, such as a lathe-frame or propeller shaft. 
 
 Form C, for Contract Accounts. 
 
 It will easily be seen that the majority of charges will follow 
 this sequence : iron issued to the smiths will pass into that 
 department for labour on it ; when transformed into a ship's 
 da\it it will be transferred into its proper place in the Process 
 Accounts ; and when a linal collection of all the charges against 
 the contract is made, it will find its resting place under one of 
 the headings in Form C. But there is an earlier sequence in 
 the A sheets, in consequence of establishment charges having 
 to be dealt with as a primary departmental charge, to be dis- 
 tributed over other departments in the ratio of the wages paid in 
 them. The grouping or division of these charges is a matter of 
 internal arrangement, and will vary with the conditions and 
 requirements of each particular yard or factory. In Specimen 
 No. 26 the title used is '' Management Expenses," but it may be 
 supposed to include general office expenses, running machinery, 
 timekeeping, storekeeping, carting, and all the thousand and 
 one expenses which do not belong exclusi\ely to any single 
 department, but are necessary for the working of all. 
 
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 engineers' and shipbuilders' accounts. 
 
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 engineers' and shipbuilders' accounts. 
 
 95 
 
 On the (lel)it sidr of thf anxmnt, the piirclinses obtained 
 from the Invoice IJook must a;;ree with the totals of the respec- 
 tive Analysis cohimns. 'Vhv Sahiries and Wages will be 
 extracted from the Directors' Fee Book, the Salary Book, and 
 the Analysis of Wages ; whilst the Cash payments will be taken 
 from the Cash Book, care l)eing exercised that no amount is 
 included as a purchase^ through the Invoice Book, and also as a 
 cash i)ayment. On the debit side of the account will be noticed 
 a transfer to B Slieet for ex[)enses in arranging a contra(^t with 
 the Ackroyd Colliery Company. A new colliery is being opened 
 out; the directors and manager of the Engineering Company 
 have spent a considerable time, and incurred expenses in having 
 drawings prepared, in order to secure the contract for the 
 equipment of this pit. It is a specific expense for a specific 
 object, and can be easily sejoarated from other management 
 expenses. It is, therefore, charged to a B Account, which may 
 be entitled " Preliminary Expenses for Ackroyd Colliery 
 Contract No. 4,746." The difference between this amount and 
 the total debits are transferred to the different producing 
 dei)artments in proportion to the working wages paid in them. 
 Thus, if pattern-makers' wages are one-twentieth part of the 
 whole, then that department will be debited one-twentieth part 
 of the management expenses for the month, and so on through 
 all the producing or manufacturing departments. 
 
 Specimen No. 27 deals with Stores Receipts and Issues. It 
 is really a summary of the Stores Receipts Book and Stores 
 Is.sued -Book, with the necessary adjustment of stock, and is 
 onlv included in the Cost Accounts for convenience of refer- 
 ence. The purchases per Invoice Book and per Cash Book will 
 correspond with the total of the Stores Received Book for the 
 month (Specimen No. 4), and the Returns from Departments 
 will also corres])ond with the total for the month of the book 
 (Specimen No. 6). On the credit side of the account the issue's 
 
 i 
 
96 
 
 ENGINEERS AND SHIPBUILDERS ACCOUNTS. 
 
 engineers' and shipbuilders' accounts. 
 
 97 
 
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 tu d(q)aitni» nts will correspond with and agree in total with the 
 Stores Issued Hook (Specimen No. 5), whilst the returns to 
 manufacturers will correspond with the lKX)k kept for that pur- 
 pose, as in Specimen No. 7. The sto<;k on hand should agree 
 each month end, both with the total of the stock in the various 
 accounts of the Stores Ledger, and with the balance of the 
 Stores Account in the General Ledger. 
 
 The numbers given on both sides of the account — namely, 
 for returns from, and issues to, departments — are the dis- 
 tinguishing marks of the various contracts or jobs affected by 
 the transactions. No special imj)ortance must be attached to 
 them, as each particular factory has its own method of earmark- 
 ing its contracts or jobs, and the mode adopted is usually deter- 
 mined more by Engineering and Drawing Office necessities than 
 by commercial or clerical convenience. What is of supreme 
 importance is that, by some means or other, each job, contract, 
 or building, or machine repair shall be absolutely distinguished 
 from all others throughout its career. 
 
 The Departmental Accounts all present the same character. 
 They will be opened for pattern makers, moulders, machine 
 men, smiths, fitters, and any other trades which may be 
 employed. Thus, in a Shipbuilding-yard, in addition to these 
 five, there will be platers, rivetters, joiners, and shipwrights ; 
 whilst in specialised factories — such as electrical or gun- 
 making manufactories — other trades or sub-divisions of trades 
 will be introduced. It is well to here observe one marked dis- 
 tinction between the costing of a Machine-making Factory and 
 that of a Ship-yard. In the former, whether it be a tool-making, 
 textile machine-making, or engine-building factory, the cost of 
 each particular item of the structure is required, whereas in the 
 lattfT the division is rather into ])articular i)arts of a shi|). 
 although such parts might, on the machine-shop' principle, be 
 sub- divided into numerous details. 'I'hus, for a foot -press (we 
 
 III 
 
 i|i 
 
H ) 3 
 
 I 
 
 . I 
 I 
 
 4 
 
 1 
 
 1 
 
 4 
 * 
 
 \ 
 
 98 
 
 ENGINEERS AND SHIPBUTI.DERS ACCOUNTS. 
 
 art; (|u»)tin;j; from an American symlx)! system), the cost will be 
 separate!) arrlvrt] at for tin- frame, jil), siile bar, front leg, 
 Itaek leg. treadle, lever, lever weight. \-e. ^Kre.. and each of these 
 details would in some way or other he distinguished as a sub- 
 division of the contract. In a ship, on the other hand, the 
 costs are usually taken for such broad detat^hments as Frames, 
 Plating and Rivetting. Rudder. Bulkheads. Main Deck, Davits, 
 Cabins and Fittings. Saloon, i^'C. although some of these items 
 — such as ('al)in Fittings — comi)rise a considerai)le number of 
 arti(des — settees, sidelK)ards. chairs, tables, hw^kers. and berths 
 — which are distinct from each other and manufactured entirely 
 separately. This difference does not affe<;t the principle of 
 costing ; it is merely an ada})tation. which is 'vnistantlv varying, 
 to the requirements of the particular firm. 
 
 No difii<nilty arises on the debit side of the Shipwrights' (or 
 other Trade) Account A. The purchases are <ierived from the 
 In\oice Hook, but only when special goods have been l>ought for 
 a specific^ object ; the transfers from Stores department will 
 agree with credit entries on the Stores Sheet, and those for 
 management charges, motive power, and drawing office with 
 corresponding anterior sheets. The items Interest and Depre- 
 ciation are those charges on the machinery em[)loye(l in the 
 particular department. But the opposite side of the account 
 demands more attention and care. We have to transfer to a 
 B Sheet headed '* Ship 47 — Pumps," the charges against that 
 l)articular work, which has been fini.shed during the month. 
 These charges are the jmmps purchased from (iwynne & Co., the 
 wages paid for fitting them in place, the materials issued for 
 them from the stores, together with the proportion of establish- 
 ment charges, inclusive of interest and depre<Mation, for the 
 month, apportioned in ratio to the direct wages paid. The 
 following tables will explain the method of doing this, it being 
 clearly un<lersto<)d that the di.stribution is made over work in 
 
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 engineers' and shipbuilders' ACCOUNTS. 
 
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 engineers' and shipbuilders' accounts. 
 
 progress carried forward as stock, as well as over work 
 sufficiently finished to be transferred to B Sheets. The direct 
 wages are ;£i24 i6s. od. The establishment charges in the 
 Materials and Expenses column, including Interest and Depre- 
 ciation, amount to ;£33 6s. 2d., and in the Salaries and Wages 
 column to ^£26 3s. 4d. 
 
 
 Materials 
 
 and 
 Expenses 
 
 Add Proportion 
 of Establish- 
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 Amount 
 
 to 
 Credit 
 
 Item No. I 
 
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 Amount 
 
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 Item No. I 
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 1 
 
 When the transfers and stock on the credit side of the 
 account are calculated in this maimer they will exactly balance 
 the debit side. 
 
 Thf lonii ot ihr H Shrrt diflcr.s slightly from that of the A 
 Slut't. l»e<-.iiiM' the work iranslnrt'd to it may extend over many 
 niontlis before it is comi)leted. The laying of the decks of a 
 
 ENGINEERS AND SHIPBUILDERS ACCOUNTS. 
 
 lOI 
 
 large ocean liner like the Oceanic would pn)l)ably extmd o\t*r 
 two or three months. The cost would not be carried forward 
 as work in progress, that being intended only for specific jobs 
 nearly completed, and for which it is not desirable to open a 
 secondary account; such jobs, for instance, extend only over a 
 few days before, and a few days after, the end of any month, 
 and are then finished. In the B Sheets it is, therefore, neces- 
 sary to provide for a succession of months. It must also be 
 remembered that these accounts are a summary of the 
 expenditure on one specific item of a contract, as, for instance, 
 the propeller shaft, or the cathead davits of H.M.S. Acorn, 
 and must therefore contain the wages spent in, the materials 
 used by, and the proportion of establishment charges for all 
 and every trade which has in any way been employed upon such 
 shaft or davits. With this explanation the debit side of the 
 account presents no difficulties. On the credit side (Specimen 
 No. 29) there are very few entries. A credit may appear for 
 Scrap returned into Stores, because it is at times difficult to say 
 what department is entitled to it, although the item of the con- 
 tract may be sufficiently evident ; and the final entry is a transfer 
 to the C or Contract Account, which must be made when, and 
 only when, the particular shaft, davit, or other detail involved 
 is finally completed, and will have nothing further spent upon it. 
 
i 
 
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 H 
 
 <a 
 
 CO 
 
 
 
 n( 
 
 I4 
 
 
 Oi 
 
 
 
 
 
 "^ 
 
 ca 
 
 ■^s 
 
 n 
 
 '^ 
 
 
 
 
 H 
 
I04 
 
 engineers' and shipbuilders' accounts. 
 
 The C Sheet is a summary of the entire contract — the Ledger 
 Cost Account of the contract, as it were — and it will be found 
 particularly \aluable for reference when preparing further 
 estimates and tenders. Specimen No. 30 will sufficiently show 
 the form, but the entries on the debit side will be much more 
 numerous. They, of course, will agree with the number of B 
 Sheets, and these will be determined by the number of pieces 
 in a machine, or of grouped items in more complicated 
 structures — such as ships or marine engines. This division will 
 usually be determined by the necessities of the Engineering 
 manager. The debit side merely consists of transfers from B 
 Sheets as they become completed. The credit side is a record 
 of payments received, and of scrap material returned which 
 cannot be credited to any particular portion of the work. The 
 difference between the two sides is the profit or loss on the 
 contract or job. 
 
 With Cost Accomits we reach the vanishing point of 
 Engineering Accountancy. They are probably the most 
 difficult portion of it, but many of the difficulties will disappear 
 if the objects for which they are compiled are kept in view ; if 
 they are treated as records to assist the manager in the com- 
 mercial portion of his business, and not as a sequence in a 
 pedantic system of bookkeeping. Elasticity is, above all things, 
 necessary if they are to serve their full purpose, and elasticity 
 can be secured without sacrificing scientific accuracy of detail 
 or result. 
 
 f 
 
 INDEX 
 
 >i 
 
 Abstract of Wages Paid ... 
 
 Audit, Duties of Auditor 
 
 Balance Sheet 
 
 ••• ••• ... .,, 
 
 Bookkeeping for Engineers, Essentials of ... 
 
 Objects of 
 
 Buildings, Reserve for 
 
 ■■■ •■• aw* 
 
 Cash Book ... 
 
 ■•• •■•• ««• ,,j 
 
 Contracts and Manufactured Goods ... 
 
 Cost Accounts, Audit of 
 
 ••■ ••• ... 
 
 f» )« First Method 
 
 *"* ■•• ••• 
 
 Second Method by Debiting Individual Machines 
 Third Method by Apportionment through Depart- 
 ments 
 
 • • • • ■ ■ 
 
 Departmental Accounts 
 for Details of Work ... 
 
 •*• ••• ,,, 
 
 »» js j> Completed Contracts 
 
 Credit Book, Stores ... 
 
 ••* ■•• ••• ... 
 
 Credits to Customers... 
 
 ... 
 
 Day Book, General ... 
 
 *** ••• ••» 
 
 »» ji * Warehouse 
 Depreciation . ... 
 
 s) of Loose Tools ... 
 
 •"• ••• ... 
 
 Details of Work in Shipyards 
 
 Dividends, Reserve for 
 
 *"■■ ••• ••• 
 
 Engineering Business, Books for 
 P^qualisation of Dividends, Reserve for 
 
 fy 
 
 »» 
 
 PAGE 
 
 81 
 
 74 
 2 
 
 I 
 
 78 
 41, 42 
 
 34 
 
 83 
 86 
 
 88 
 
 91 
 
 94-101 
 
 »» 
 
 102 
 
 104 
 
 19 
 
 41 
 
 37 
 
 45> 46, 47 
 ... 2o 
 
 ... 7S 
 
 5 
 
 ••• *& 
 
io6 
 
 INDEX. 
 
 Establishment Charges, First Method... 
 „ „ Second Method 
 
 „ Third Method 
 Forms — Orders for Materials 
 Passing Invoices 
 Invoice Book 
 Stores Received Book 
 
 ,, Issued Book ... 
 Credits to Departments 
 l^ebits to Works 
 Return of Stores Issued 
 Stores Ledger 
 Wages Book ... 
 Abstract of Wages Paid 
 Day Book 
 
 Warehouse Received Book 
 ,, Issued Book 
 
 ,, Ledger 
 
 ,, Day Book 
 
 Credits to Customers Book 
 Cash Book ... 
 Schedule of Loose Tools 
 Ledger, General 
 Trade Account 
 Profit and Loss Account 
 Balance Sheet 
 Journal 
 
 Cost Accounts, First Method... 
 „ „ Departmental 
 
 Details 
 Contracts 
 
 »» 
 
 ft 
 
 
 PAGE 
 
 mm * 
 
 86 
 
 mm • 
 
 88 
 
 • •• 
 
 9« 
 
 • • • 
 
 8 
 
 • • * 
 
 9 
 
 • *• 
 
 lO 
 
 *>»• 
 
 14 
 
 «*• 
 
 i6 
 
 • »■ 
 
 19 
 
 «•« 
 
 '9 
 
 w • * 
 
 20 
 
 22, 
 
 23. 24 
 
 ««« 
 
 29 
 
 • • « 
 
 3^ 
 
 • • ■ 
 
 37 
 
 • • • 
 
 38 
 
 * • • 
 
 39 
 
 ■ • • 
 
 39 
 
 • *• 
 
 40 
 
 H « ■ 
 
 4» 
 
 ■ • * 
 
 43 
 
 » • « 
 
 47 
 
 • • • 
 
 50-71 
 
 • • • 
 
 72 
 
 B*li 
 
 73 
 
 • ■ « 
 
 74 
 
 75. 
 
 76, 77 
 
 « • • 
 
 86 
 
 94. 
 
 c/j, 99 
 
 • •'• 
 
 102 
 
 • • • 
 
 104 
 
 INDEX. 
 
 a 
 
 )i 
 
 Gross Cost, Definition of 
 Introductory ... ... • 
 
 Invoice Book 
 
 Invoices, Examination of 
 
 Issued Book, Stores ... 
 
 it f, Warehouse 
 Journal 
 
 Labour, Details in Shipyard ... 
 Ledger, General 
 
 Nominal Accounts ... 
 Stores 
 „ Warehouse ... 
 Machinery Additions, Charging of 
 
 }» Reserve for Replacement 
 
 Manufactured Goods and Contracts 
 Materials 
 
 „ Orders for... 
 Naval Ship, Terms of Contract for 
 Net Cost, Definition of 
 New Machinery, Charging of 
 Nominal Accounts ... 
 Objects of Bookkeeping 
 Oncost, Definition of 
 Prime Cost, Definition of 
 Profit and 'Loss Account 
 Received Book, Stores 
 
 J I » Warehouse ... 
 
 Reserve Fund 
 
 Reserves for different purposes 
 Returns, Stores 
 Salaries 
 
 of 
 
 107 
 
 I'AGE 
 
 • <• ' O A 
 
 I 
 10 
 
 16 
 
 39 
 
 75. 76, 77 
 
 28 
 
 48, 50-71 
 
 49 
 21 
 
 39 
 
 ... ol 
 
 78 
 
 34 
 
 • • » 7 
 
 8 
 
 34 
 
 ... 85 
 
 81 
 
 49 
 I 
 
 • • • oA 
 
 73 
 13 
 
 ... Jo 
 
 77 
 
 ... 7*» 
 
 13 
 
 33 
 
io8 
 
 INDEX. 
 
 
 Stores 
 
 Accounts 
 
 Credit Book ... 
 
 Issued Book ... 
 
 Ledger 
 Received Book 
 
 Returns 
 
 Timber Accounts, Discrepancies in 
 
 Trade Account 
 
 Wages, Abstract of .. 
 
 ,, Book 
 
 „ Unpaid 
 
 Warehouse Day Book 
 
 „ Issued Book 
 
 „ Ledger ... 
 
 „ Received Book 
 
 War Vessel, Terms of Payment for 
 
 Work in Progress 
 
 PAGE 
 
 7 
 15 
 >9 
 16 
 
 22 
 
 «3 
 20 
 
 82 
 
 72 
 
 32 
 
 2Q 
 
 31 
 40 
 
 39 
 39 
 38 
 34 
 36 
 
 it 
 
 ;. i 
 
 
 
 
• * > ,4 
 
 hsH o^yso 
 
 JUN 23 1920 
 
 NEH 
 
 FEB 1 5 1995 
 
 <^9A:MMBIA UNIVERSITY LIBRARIES 
 
 0044244495 
 
•II 
 
 ^l 
 
END OF 
 TITLE