MINE BOOKKEEPING MINE BOOKKEEPING A COMPREHENSIVE SYSTEM OF RECORDS AND ACCOUNTS FOR MINING OPERATIONS OF MODERATE DIMENSIONS BY ROBERT McGARRAUGH, E.M. First Edition Second Impression McGRAW-HILL BOOK COMPANY, Inc. NEW YORK: 370 SEVENTH AVENUE LONDON: 6 & 8 BOUVERIE ST., E. C. 4 1920 t ' \> sS> f^mWQ DEPT. Copyright, 1920, by the McGraw-Hill Book Company, Inc. PRINTED IN THE UNITED STATES OF AMERICA ^^f / 4-3 I t THE MAPLE PRESS COMPANY, YORK, I'A. PREFACE This book has been prepared in the belief that a real need exists among engineers and operators for a comprehensive outline of bookkeeping and accounting methods, applicable to the requirements of mining operations of modest size. At the beginning, it can be stated with conviction that neither the perfect system of accounting nor the perfect set of ac- counts has yet been produced, at least as applied to the mining industry. A timely word of caution is extended to the reader against the too literal acceptance per se of the forms and records as given. Each individual case presents its own set of conditions, to which the records must be adapted, and the various forms should be regarded as suggestive rather than constituting a definite outline to be followed under all circum- stances. In the following pages, a knowledge of the principles of simple bookkeeping has been assumed. Acknowledgment has been made wherever the writer is aware that material has been gleaned from books and maga- zine articles on the subject, but as the methods outlined have been gradually developed in practice, no doubt the written ideas of others have been taken in some instances, while the sources of information are now forgotten. Special acknowl- edgment is made to Mr. W. H. Charlton, whose excellent work, "American Mine Accounting," has been a valuable reference in the preparation of this small volume. Robert McGarraugh. CopPERHiLL, Tennessee, January, 1920. 872880 CONTENTS CHAPTER ONE Introduction 1 Objects in View — Classification of Accounts — Capital and Suspense Accounts — Amortization — Depreciation — Operating Expenses. CHAPTER TWO Outline of Accounts 9 General Mine Accounts — Current Capital Charges — Suspense Accounts — Other General Ledger Accounts — Diagrams — Definitions of Accounts. CHAPTER THREE Outline of Essential Records 20 General Office Records of Accounts — Timekeeper's Records — General Office Records of Supplies — Warehouse Records. CHAPTER FOUR General Office Records of Accounts 24 Cash Journal — Petty Cash — Cash Vouchers — Journal-entry Vouchers — General Distribution — General Ledger — Individuals and Companies Ledger — Invoice Record — Side Ledger of Capital Charges. CHAPTER FIVE Time-keepers' Records 47 Office Time Book — Foremen's Time Books — Time Tickets — Labor Dis- tribution — Force Account Pay-rolls — Contractors' Pay-rolls — Pay Envel- opes — Voucher Pay-checks. CHAPTER SIX General Office Records of Supplies 59 Purchase Orders — Local Purchases — Supplies on Hand and on Order — Register of SuppUes Ordered — Cost Book. CHAPTER SEVEN Warehouse Records 67 Way-bills — Stock on Hand Index — Stock Books — W^arehouse Requisi- tions — Requisitions for Bills-of-Material — Materials Returned — Sup- plies Distribution — Inventories. vii viii CONTENTS CHAPTER EIGHT Monthly Statements 76 Cost Statement — Comparative Costs for Year-to-Date — Mining & Metal- lurgical Statement — Receipts and Disbursements — Outstanding Checks — Accounts Payable and Accounts Receivable — Trial Balance. CHAPTER NINE Records and Reports of Daily Operations 86 Summary of Daily Operations — Daily Reports — Working Face Records. CHAPTER TEN Miscellaneous 96 Machinery Index — Machine Repair Parts — Contract Work — Personal Records — Smelter Shipments — Records for New Operations. CHAPTER ELEVEN Mercantile Store Operation 105 Operation on Selling Price Basis — Purchase Orders — Merchandise Regis- ter — Losses and Gains — Coupons — Charge Accounting — Store Accounts. MINE BOOKKEEPING CHAPTER ONE *' . INTRODUCTION Objects in View. A comprehensive system of records and accounts is the only safe foundation upon which to build any successful business. Accounting and cost-keeping as applied to the mining industry constitute a special field which cannot be adequately covered by any stereotyped outline of records and accounts; the phases of mining work are infinite and the conditions met with will require adjustments of the methods employed in almost every case. To the mine operator, the careful study of working costs is essential in establishing and maintaining an efficient organization. Suggested improve- ments and changes are of frequent occurrence, and these can only be considered in relation to the reduction in operating expenses, or to the increase in output, which will be effected. Once established, a cost system serves as a gauge to deter- mine the relative value of the results which are being obtained. After the work in any department is running smoothly, with waste in effort and materials eliminated, it should be a com- paratively easy matter to maintain, or perhaps to exceed, the standard of economy which has been set . By keeping cost data always in evidence, a healthy state of rivalry may be estab- lished in every branch of the work; each department head is given an incentive to keep down expenses and to increase the efficiency of his part of the organization. Present results can be compared with those obtained during previous periods; waning effort or wasteful methods will soon be detected. Such a condition of rivalry is invaluable in keeping up general interest and in getting each subordinate to contribute his best • efforts to the common end. 1 2 MINE BOOKKEEPING Information should be at hand, in an easily accessible form, showing in detail the costs of performing any operation involved in the work, as well as a comparison between the present cost and that of former periods. The itemized cost- in-place of any important piece of machinery, or of any other item Oi installation or construction, should be available with- out waste of, time in searching through the records for it. tn Lftost cases, such information, as a source of comparison with the results obtained at other mines, will prove to be of little value. The principal object of any system of cost-keep- ing should be to furnish reliable information and comparisons as applied to the work at hand. The variations in working conditions which prevail in different districts, and even among the mines of the same locality, are sufficiently marked to make comparisons with other places misleading. Furthermore, the details of cost-keeping, and the classifications in use, will differ to an extent that comparisons of cost data from differ- ent places cannot be regarded with confidence. The segregation and distribution of cost data is essentially an engineering undertaking, and, as such, should be under the supervision of some one who is familiar with all phases of the work and who clearly understands the results which are de- sired. If left entirely to clerks, who as a rule have compara- tively little knowledge of the working conditions, the methods employed will inevitably degenerate into a cut-and-dried routine and much of the value of the accounts will be lost. The working out of the details of accounting should be dele- gated as much as possible to the clerical staff, where it belongs, but persistent supervision is necessary in order that the results shall represent the existing conditions to a reasonable degi'ee of accuracy. In outlining a system of accounts, the first consideration should be concerning the amount of detail which can be accurately handled. A comparatively simple set of accounts, with the classification of expenditures accurately made, is of incomj^aratively greater value for the analysis of costs than an elaborate subdivision, the details of which have been largely approximated or guessed at. In ordcT that the handling of accounts does not become an onerous burden to MINE BOOKKEEPING 3 those who already have an abundance of other duties, they should be made as concise and as easily understood as possible. The name used to designate each account should be definite and also descriptive; this tends to avoid confusion, as many details will have to be left to shift bosses and others who are not familiar with the accounts, and who are usually not especially interested in them. To make an intelligent analysis of the work at hand, the cost of performing each operation must be determined in terms of the unit involved; this unit may be ton of ore milled, ton of ore stoped, foot of drift or crosscut, etc. It is obvious that to be of economic value, a saving in the cost per ton of ore produced must not be accompanied by a corresponding drop in the grade of that ore; on the other hand, an increase in the cost of production may be more than offset by the gain in recovery which has been effected. The grade of ore which can be mined and treated at a profit should be definitely known. It is sometimes the case that this factor has not received suffi- cient consideration, or that it has not been kept before those who are responsible for the actual mining operations. Where appreciable variations in mining conditions occur in different parts of the mine, the grade of ore which can be taken out at a profit from each working place should be determined. Ore which assays above this grade can be profitably mined and treated; anything of lower grade can only be handled at a loss and should be left. In case that a shortage of ore which can be mined and treated at an actual profit occurs, the grade at which ore can be handled in preference to running below capacity must be determined. Muck from development faces must be disposed of, and it is then the question whether rock which is abeady broken and in the car should go to the treat- ment plant or over the dump. While cost statements furnish valuable information con- cerning the economy of the operations, they should not be de- pended upon entirely for the direction of the work, as by the time that monthly statements have been completed the information contained in them is of the nature of past history. The live manager or superintendent will require sufficient 4 MINE BOOKKEEPING daily records to keep his hand upon the pulse of the organiza- tion at all times, and any irregularity which may develop wall be recognized as soon as it makes an appearance. To this end, daily reports should be required from each depart- ment, giving the essential information concerning the work and the results accomplished. The use of such reports fixes responsibility between the superintendent and the heads of departments, and serves in a gi-eat measure to prevent pro- crastination and slacking of interest. Records of supplies on hand and on order must be kept ; these are of particular importance when the mine is located beyond easy access to the sources of supply. Statements showing the average consumption of each essential item of material used will facilitate the maintenance of an adequate stock without loading up too heavily with any one article. When the mine is located at some far-distant place, where the delivery of supplies is a matter of many weeks or even months after the order has been sent forward, the maintenance of a well balanced stock of supplies is one of the most difficult, and cer- tainly one of the most important, problems which must be met. The object of this volume is to show an adequate system of records and accounts for smaller mines, as distinguished from the elaborate systems, requiring a large clerical staff, which may be necessary when the operations are conducted on a very large scale. The system as outlined can be main- tained at a minimum of office expense, as the object in view at all times is to eliminate unnecessary posting and copying, and to get the accounts into their final form with the fewest possible intermediate operations. As in any branch of engi- neering, the best results can only be obtained by establishing order and well-defined methods for handling the variety of detail which is a necessary adjunct to any form of accounting. Filing and indexing appliances are in almost universal use at the present time. Here, as elsewhere, simplicity is desirable, and standardized methods of filing should be used in all departments to avoid confusion and loss of time. Classification of Accounts. In general, mine expenditures fall into three classes; these MINE BOOKKEEPING 5 are known as ''Capital Charges," ''Suspense Charges" and "Operating Expenses." "Capital Charges" comprise those expenditures which represent the original investment and additions and improvements of a permanent nature. "Sus- pense" or "Deferred Charges" are made for outlays, the benefits from which will be derived at some future time, usually extending over a considerable period; payments of taxes, insurance premiums, etc., which cannot properly be charged out at once to the expenses of mining and treating the ore, are carried as suspense accounts and are charged out into the operating expenses thi'ough the period during which the benefits from the expenditure are realized. "Operating Expenses" include all charges w^hich are incident to the proc- ess of mining and treating the ore and of marketing the product, with the exception of those items which have been charged into the capital and suspense accounts. Capital and Suspense Accounts. As a general rule, the tendency of the mine operator is to charge too many expenditures into the capital accounts, in a misguided effort to show low working costs. New construc- tions, permanent improvements and additions in equipment should be included under capital charges, as well as important renewals to the installation, the cost of discarded equipment being written off as depreciation. Such items as shafts, headings, etc., which are necessary to maintain the production of ore, add nothing to the actual value of the property but rather serve to indicate a diminishing ore reserve. It may be desirable, however, to carry such expenditures as suspense accounts, to be charged off upon an equitable basis to the operating expenses, in order that the value of the working costs for comparisons will not be affected. By many com- panies, underground work such as main shafts, stations, exploration crosscuts, etc., are included in the capital charges, being considered as coming under the designation of improve- ments, and this should be done when the work adds a tangible value to the property. The more common practice, however, is to charge out as many of these expenditures as possible to 6 MINE BOOKKEEPING the operating expenses, when there is no definite distinction at which a line can be drawn between work done to maintain the output of ore and that which can be considered as an improve- ment to the property. Amortization. ]\Iining ventures differ from most forms of enterprise in that the supply of raw material, the ore, is a fixed quantity which cannot be replenished. To be classed as a profitable business, it is essential that the operation of the mine not only show a reasonable return on the investment as interest, but the principal must be returned by the time that the ore- supply has become exhausted. The length of useful life of a mine, in the great majority of cases, is of comparatively short duration, and a basis of reimbursement from the gross in- come must be adopted, which will eventually return the original investment, after deducting the ultimate selling value of the property. This return of the principal by a reimburse- ment fund, independent of dividends, is known as "amortiza- tion. " In order to determine the rate of amortization to be allowed, the probable length of useful life of the mme must be defined. If there is no knowledge of the ultimate ore- supply upon which to base a more definite conclusion, a period of years must arbitrarily be decided upon, during which the return payments of the capital invested are to be set aside from the gross earnings. The advance of mining operations will give additional knowledge concerning the extent of the ore-bodies, and revisions in the estimated length of life of the mine may be considered advisable and necessary from time to time to conform to the variations in conditions. Amortization charges will not appear in the mine accounts, but will be taken care of in the records at the head office of the company. Depreciation. The plant and improvements on the proi)erty are subject to a constant diniinutioii in value; machinery wears out or becomes obsoh^te and improvements become useless as the MINE BOOKKEEPING 7 field of operations changes with the mining out of the ore- bodies. This expiration of values, due to the wearing out and obsolescence of equipment, and also to the termination of its usefulness by the exhaustion of the ore-supply, is known as "depreciation." With the exception of repairs and minor replacements, which can be charged out at once to the operat- ing expenses, the cost of all new equipment should be charged into the capital accounts, to be written off to the costs of current operations over the estimated period of useful hfe of each installation. When equipment is scrapped, if the original cost, with deductions for salvage to be realized, has not been covered by the depreciation already allowed, the difference should be charged off at once to Profit and Loss. All charges for depreciation should appear in the mine accounts. ^ Operating Expenses. Operating expenses fall into two groups; these may be called '' Direct Charges, " and "Indirect " or "Redistributable Charges." "Direct Charges" include all expenditures which are made for some defined result in the operations, or for some purpose for which no equitable basis for redistribution is apparent. "Redistributable Charges" are those which must be "spread" over the other accounts, in proportion to the benefits conferred, in order that the ultimate results from them may be determined. In the segregation and division of the operating expenses, the greatest inherent difficulty is usually found in this "spreading" of the redistributable charges. These expenditures must be subdivided among the other accounts, each redistributable account being considered separately. It will be recognized that some classes of work show no definite results which can be referred to the accounts ultimately benefitted, and these could only be redistributed by an arbitrary division. For instance, mine maintenance accounts, supervision, etc. offer no basis for an accurate re- 1 Engineering & Mining Journal of April 6, 1918; notes on depreciation and obsolescence as allowed by the U. S. Federal Tax Laws, from a pamphlet issued by Loomis, Suffern and Fernald, Public Accountants, New York. 8 MINE BOOKKEEPING distribution to the costs of the different workings in the mine and could only be arbitrarily divided among them. The "spreading" of the indirect charges is often the source of misleading results, and efforts in this direction should be confined to those accounts which present definite data for their subdivision. The personal element is certain to appear in distributions which are arbitrarily made and the resulting working costs are rendered unreliable for comparisons with other periods, when a different basis of subdivision may have been used. It must also be recognized that the "spreading" of these charges over the other accounts has a tendency to obscure the differences which the working costs are intended to expose, by burying accurate data under a mass of figures, which, at best, can only be regarded as an approximation. In the subdivision of accounts, the point is soon reached at which further refinements only make for confusion. It is to be recommended that efforts be directed towards sim- plicity and clearly defined results, rather than towards the accumulation of a large amount of intricate detail which cannot be accurately determined without an unwarranted outlay. CHAPTER TWO OUTLINE OF ACCOUNTS In establishing a system of accounts, the details of the work must necessarily be adapted to the local conditions, and the accounts to be used can only be decided upon after a careful study of the case in point. In order that the reader may recognize more readily the uses and application of each record described in the following pages, a typical outline of accounts has been adopted; it should be a comparatively easy matter to alter these accounts to apply to the particular case. The accounts shown are simple and easily kept, but they may be elaborated upon to any reasonable extent with- out affecting the application of the methods outlined. GENERAL MINE ACCOUNTS Operating Expenses. Direct Charges Dead Work. 01 Breaking ground 02 Tramming 05 Timbering 06 Pumping 1 Development. 11 Breaking ground 12 Tramming 15 Timbering 16 Pumping 2 Stoping. 21 Breaking ground 22 Tramming 23 Shoveling 24 Filling 25 Timbering Indirect Charges A. Hoisting B. Drills and compressors C. Tool sharpening A. Hoisting B. Drills and compressors C. Tool sharpening A. Hoisting B. Drills and compressors C. Tool sharpening 9 P. Power P. Power P. Power 10 MINE BOOKKEEPING 3 Mine General. 31 Foremen cand bosses 32 Track & supplies 33 Drill steel 34 Maintenance tramming P. Powder 35 Maintenance timbering 36 Maintenance pumping & draining 37 Mine miscellaneous 4 Ore Treatment. 41 (Subaccounts should be carried to 42 cover each operation in the proc- P. Power 43 ess of treatment) 44 etc. 5 Marketing Bullion. 6 General Expense. 61 General office 62 Engineering 63 Assaying & sampling 64 Hospital 65 Legal 66 Taxes 67 Insurance P. Power 68 Boarding house 69 Policing 610 Stable 611 Building maintenance 612 Water supply 613 Lighting 614 Telephones 615 Roads 616 Tools account 617 Shop expense 618 Surface foremen & bosses 619 General miscellaneous Current Capital Charges. 7 Live Stock & Vehicles. 8 Furniture & Fixtures. MINE BOOKKEEPING 11 Constructions & Improvements. 91 (A subaccount is opened for 92 each construction or installation) 93 94 etc. P. Power Suspense Accounts. Taxes Insurance Other General Ledger Accounts. Head Office Bullion Cash Accounts Payable Accounts Receivable General Supplies Unclaimed Wages Profit & Loss Diagrams. The entries for any transaction will be clarified by the use of a diagram, which serves to visualize the operation. The diagram shows the debits and credits involved and furnishes a concise means of indicating the completed transaction. The following diagram shows the entries in simple for the purchase of a bill of supplies from the Mine & Smelter Supply Co.: General Supplies Mine & Smelter Supply Co. Cash Dr. Cr. Dr. Cr. Dr. Cr. (1) $726.00 (2) $726.00 $726.00 $726.00 $726.00 Closed $726.00 the first entry charges General Supplies with the amount of The materials purchased and credits the account of the Mine & Smelter Supply Co. The second entry indicates the pay- 12 MINE BOOKKEEPING ment of the bill; this closes out the account of the Mine & Smelter Supply Co. and Cash is credited with the amount paid. DEFINITIONS OF ACCOUNTS Operating Expenses. The entries to Operating Expenses and also to the Current Capital Accounts are invariably debits, with the exception of a very few minor credits, as medical dues credited to the Hospital account, payments received for assaying done for outsiders credited to Assaying & Sampling, etc. These minor credits are entered upon the books in red ink. Direct Charges. In the outline of accounts given. Dead Work, Develop- ment and Stoping are intended to cover direct charges only. The expenditures for Hoisting, Drills & Compressors, Tool Sharpening and Power are included under Indirect Charges and these are redistributed to the accounts benefitted at the end of the month. 0. Dead Work includes the costs of all mine openings, as shafts, stations, crosscuts, etc., which are not driven in the ore-body. 1. Development includes the costs of all openings, the purpose of which is to block out ore and to make the ground accessible for stoping. 2. Stoping charges include the costs of breaking ore, of delivering it to the loading chutes, and of sui)porting the resulting excavations while the work is in progress. Sub- accounts for filled stopes are shown. 3. Mine General: Under this heading, those mine accounts appear which do not offer an adecjuate basis for redistribution to the essential accounts benefitted, namely, Dead Work, Development and Stoping. 31. Mine foremen & bosses: This account is charged with the salaries and wag(\s of all underground fonunen and bosses ; also with any supplies used by them, as for lighting, etc. MINE BOOKKEEPING 13 32. Track & supplies: The costs of all track material for mine use, as rails, bolts and nuts, splice bars, spikes and ties are charged to this account. The labor of laying track may be charged out here or directly to the account benefitted. When track is torn up for the recovery of materials, the work is charged to this account. 33. Drill steel: The cost of all machine and hand steel for underground use is charged to this account when the material is issued from the warehouse; also cost of shanking and preparing new steel for use. 34. Maintenance tramming: The upkeep of mine tracks and of tramming equipment is charged to this account. 35. Maintenance timbering: This account covers the charges for repairs and replacements of mine timbers. Char- ges to new timbering are made directly to the account bene- fitted whenever possible. 36. Maintenance pumping & draining: This account covers the costs of pumping and draining, other than the costs of keeping Dead Work and Development openings un watered ; it includes costs of cutting and maintaining ditches, etc. If ditches are cut when the headings are driven, the costs may be charged directly to the headings. 37. Mine miscellaneous: Items of mine expense which cannot logically be charged elsewhere are thrown into this account. The Miscellaneous account should be used as little as possible. 4. Ore Treatment charges include the costs pertaining to the extraction of the valuable content from the ore, after this ore has been mined and delivered at the reduction plant. Subaccounts should be in use showing each step in the process of treatment. 5. Marketing Bullion charges include the costs of delivery and sale of the resulting bullion. 6. General Expense is made up of the following subac- counts :- 61. General office: This account is charged with the sal- aries of the administrative and clerical staff, and includes the salaries of time-keepers, warehouse clerks, etc. It is also 14 MINE BOOKKEEPING charged with the costs of stationery and printing, postage and general office supplies. 62. Engineering includes the charges to the engineers' office : draughtsmen, surveyors, helpers and supplies. 63. Assaying and sampling includes the cost of labor, supplies and power charged to this work. The account is credited with any income received from outside sources for assaying. 64. Hospital expense includes the cost of salaries, supplies, etc. Employees are usually charged a medical fee and the amount collected in this manner is credited to the Hospital account. 65. Legal: Court expenses, retainer fees, etc. and all costs incurred thi'ough litigation are charged to this account. 66. Taxes: The yearly taxes are anticipated and are charged out in equal monthly installments. Any differences between the estimated and the actual amounts are adjusted at the end of the year. Payments for taxes are handled through a ledger suspense account. 67. Insurance premiums are handled in the same manner as payments for taxes. 68. Boarding house: The total cost of operating the com- pany hotel is charged to this account. It is credited with the receipts for board furnished. 69. Policing expense includes the wages of policemen and watchmen; also the cost of any materials issued to them for illumination, etc. 610. Stable expense includes the costs of labor, feed, main- tenance of pastures, operation and maintenance of motor vehicles, etc. 611. Building maintenance is charged with the upkeep of the company offices, dwellings, etc. It is credited with the receipts from house rents. 612. Water supply includes the costs of maintaining the water supply for mine, plant and dwellings. 613. Lighting expense includes the costs of operation and maintenance of all electric or other lighting by the company. MINE BOOKKEEPING 15 614. Telephones expense includes the cost of operating and maintaining the telephone system. 615. Roads expense includes the costs of upkeep of roads and trails. 616. Tools account: All tools issued from stock for general use are charged to this account. Records of tools loaned and returned are kept at the warehouse and lost tools are charged to the workmen to whom they were issued. 617. Shop expense: Whenever possible, the work done in the shops is charged out directly to the proper accounts. Any charges which remain, as the maintenance of shop ma- chinery, power, etc. are included under this account. 618. Surface forernen and bosses: Foremen and bosses employed on general work, so that their time cannot readily be distributed, are charged to this account. 619. Genl. miscellaneous: Items not chargeable to other accounts are included under the heading of General Miscel- laneous expense. In order to avoid the danger of making this account the dumping ground for careless distribution, an itemized monthly statement of the charges included in it should be required. Indirect Charges. A . Hoisting expense is charged with the costs of operation and maintenance of the hoisting equipment; also with the wages of station tenders, top-landers, etc. The account is redistributed upon the basis of the actual tonnage hoisted. B. Drills & compressors: This account is charged with the operation and repairs of mine compressors and with the upkeep of machine drills. Redistribution is made upon the basis of the number of machine shifts performed to each class of work. New machine drills may be charged out as a sub- account under Constructions & Improvements when they are issued from the warehouse, their value being written off as depreciation upon the basis of the estimated length of life of the drill. C. Tool sharpening: This account may be subdivided 16 MINE BOOKKEEPING according to the actual number of drills sharpened for each class of work; a simpler way is to make the redistribution in proportion to the charges for breaking ground to the mine accounts between which it is divided. P. Power expense is also a redistributable charge, but it should appear as a separate account as its redistribution includes charges to the other indirect accounts. This account includes all costs of the operation and maintenance of power plant and appurtenances. It is charged out to the accounts benefitted upon the basis of the actual power consumption in the various departments. The redistribution is arrived at from wattmeter or other readings, or from the manufacturers' ratings of the machines in use. Current Capital Charges. The Capital Charges include all expenditures which are made for permanent improvements or additions to the prop- erty. The value of all such improvements and additions is systematically written off to Profit and Loss as depreciation, usually at the end of each year, over a period of time decided upon as the probable useful length of life of the installation. 7. Live Stock & Vehicles. This account covers the value of all live stock, harness, wagons, motor vehicles, etc. 8. Furniture & Fixtures. This account covers the value of all house and office furniture and fixtures. 9. Constructions & Improvements. This account covers the value of all constructions, improvements and additions in equipment. A separate subaccount is opened under this heading for each new construction or installation. Suspense Accounts. Taxes Suspenses. The taxes for the year are anticipated and are charged off to the operating expenses in equal monthly installments. Any differences between the esti- mated and the actual amounts are adjusted at the end of the year. Insurance Suspense. Insurance premiums are paid in advance, and the amount paid out for this purpose is charginl MINE BOOKKEEPING 17 into a suspense account. The total cost of insurance is then charged out to General Expense in twelve equal monthly installments during the year, the suspense account being closed out by the December entry. Example: Insurance Suspense Cash General Expense Dr. Cr. Dr. Cr. Dr. Cr. (1) $3900 $3900 (2) Jan. $325 $325 (3) Feb. 325 325 (4) Mar. 325 325 (12) Nov. 325 325 (13) Dec. 325 325 1 Closed 1 $3900 $3900 Other General Ledger Accounts. Head Office. This account is credited with all remit- tances and payments of bills made for the account of the mine by the head office; it is charged with all income from the sale of bullion or from other sources. The funds neces- sary for current expenses are furnished by the head office, either as bank deposits to the credit of the mine account or as payments of bills. Entries for these transactions are made upon the mine books as follows: Upon receiving advice from the head office of a deposit at the bank of say $10,000 and of payments of bills for sup- plies purchased to the amount of S3, 625: Head Office Cash General Supplies Dr. Cr. Dr. Cr. Dr. Cr. $13,625 $10,000 $3,625 Upon making shipment from the mine of bullion, valued by mine assays at $38,500: 18 MINE BOOKKEEPING Head Office Bullion Dr. Cr. Dr. Cr. $38,500 $38,500 Suppose that the actual liquidation received from the sale of the above bullion shipment is 838,800, or S300 more than the estimated value already entered upon the books. Then $300 is charged to the Head Office Account and the Bullion Account is corrected to show the actual value of the shipment: Head Office Bullion Dr. Cr. Dr. Cr. (1) (2) $38,500 300 $38,500 300 $38,800 $38,800 Bullion. This account shows the bullion production for the year to date. The value of each shipment is estimated as already explained, a correction being made later, when the actual liquidated value has been received. The Bullion Account is credited to Profit and Loss to the end of each year. Cash. The Cash Account constitutes the record of all cash received and paid out, and of the cash balance, on hand or deposited in the bank. The account includes money and commercial paper, as checks, drafts, etc., which is redeema- ble at face value upon presentation. The Cash Account is debited with money received and credited with money paid out. The account may be separated into several accounts, in order to show transactions from actual cash-on-hand, and also transactions with each bank with which the comi)any carries a deposit. Accounts Payable. This account represents the total of bills owed by the company ; the total of the account is the MINE BOOKKEEPING 19 total amount of the credit sides of the Individuals & Cos. Ledger and Invoice Record. Accounts Receivable. This account represents the total of bills owing to the company; it is made up of the total of the debit sides of the Individuals & Cos. Ledger and Invoice Record. General Supplies. This account is charged with the materials and supplies received at the warehouse and cred- ited with the materials and supplies issued; it should show at the end of each month the value of stock on hand. The account is adjusted after inventory to show the actual value of stock, the difference being charged out to Profit & Loss or charged pro-rata to the various accounts. Unclaimed Wages. Employees' wages not claimed within a reasonable length of time are returned to the cash and credited to this account. If these wages are paid later, the account is charged with the amount. Profit & Loss. At the end of each year, all operating expenses, losses and depreciation are charged off to the Profit & Loss Account; the bullion production and income from all other sources are credited to it. CHAPTER THREE OUTLINE OF PRINCIPAL RECORDS USED A brief general outline of the system of records to be described in the following pages will assist in giving a clear understanding of the uses of each record and of its relation to the general system. To prevent confusion, only the more essential records will be listed in this summary, as the uses of the others will be understood without difficulty if the purpose of each principal record is made entirely plain. In the outlines at the beginnings of the following chapters, the records which are essential to a complete system are listed apart from the secondary ones, which may be required as auxiliaries to the principal records or to furnish additional information to aid in following the details of the work. Essential Records. General Office Records of Accounts. Cash Journal Vouchers General l)islribution General Ledger Time-keeper's Records. Time Book Labor Dislrihution Pay-rolls General Office Records of Supplies. Purchase Orders Register of Supplies Ordered Cost Book Warehouse Records. Stock on Hand Lndex Warehouse Requisitions Supplies Distribution 20 MINE BOOKKEEPING 21 GENERAL OFFICE RECORDS OF ACCOUNTS Cash Journal. The Cash Journal takes the place of Cash Book, Journal and Voucher Register. All transactions, both expenditures and receipts, are recorded in this book, in which columns are provided for debiting and crediting the amount of each entry to the accounts concerned. The charges and credits to each account are then added up at the end of the month and are posted as one entry to that account in the General Ledger. Vouchers. The Voucher furnishes a statement in detail concerning the purpose of the corresponding transaction. A receipted Cash Voucher should be on file for every disbursement as recorded by the Cash Journal; a Journal-entry Voucher is only necessary when the space afforded by the Cash Journal is too limited to give full details concerning the journal entry. General Distribution. The Cash Journal only distributes each transaction to the General Ledger accounts, which are the main headings in the outline of accounts as given in Chapter Two. The distri- bution of current expenditures to the various subaccounts is carried out on the General Distribution sheet; this record furnishes the information for making up the monthly Cost Statements. The General Distribution record is only con- cerned with the items which go to make up the operating ex- penses and current capital charges; no other entries appear upon it. General Ledger. The Ledger constitutes the permanent record of the gen- eral accounts in their final form. TIME-KEEPER'S RECORDS Time Book. The Time Book shows the hours worked by each employee and charges out this time to the various jobs upon which he was employed. 22 MINE BOOKKEEPING Labor Distribution. The daily labor charges as given by the Time Book are classified to the accounts benefitted upon the Labor Distri- bution sheets, which segregate the costs of every class of labor to each job and operating account. Labor costs for any account can be analysed at once by referring to the corresponding Labor Distribution sheet. Pay-rolls. The Pay-rolls are posted daily from the Time Book; at the end of the period, they show the gross earnings, deduc- tions and net balance due to each employee. GENERAL OFFICE RECORDS OF SUPPLIES Purchase Orders. Orders for warehouse stock to be purchased are made out upon this form. Register of Supplies Ordered. This record assembles all information concerning supplies and materials purchased and furnishes the cost of each item as delivered at the warehouse. Cost Book. The cost price per unit of each article of warehouse stock is given in the Cost Book; it also contains the Purchase Order numbers applying to each article, thus serving as an index to the Register of Supplies Ordered. WAREHOUSE RECORDS Stock on Hand Index. The daily receipts and issues of supplies are entered upon this index, which furnishes a perpetual inventory of the ware- house stock on hand. Warehouse Requisitions. The Warehouse Requisition constitutes the warehouse clerk's receipt for supplies issued. A separate slip is used in making a reciuisition for supplies to each subaccount. The rcciuisitions are then segregated and filed under the headings of the subaccounts. MINE BOOKKEEPING 23 Supplies Distribution. The Supplies Distribution sheets classify the supplies used for each job and operating account; they are posted from the Warehouse Requisitions. Material costs for any account can be analysed at once by referring to the corresponding Supplies Distribution sheet. The items making up any charge upon the sheet are immediately accessible from the corresponding Warehouse Requisitions, which have been segregated and filed to each subaccount. CHAPTER FOUR GENERAL OFFICE RECORDS Essential Records : Subsidiary Records : Cash Journal Petty Cash Vouchers Individuals & Companies Ledger General Distribution Invoice Record General Ledger Side Ledger of Capital Charges Cash Journal (Figs, la & b). The present tendency is to get away from posting and copying accounts through Cash Book, Journal and Voucher Register by the use of a single book, known as the Cash Journal. By the use of this record, the charges to the various accounts are segregated and balanced before they are posted to the General Ledger. Instead of the laborious repetition required in posting through the Journal, only the total amounts of the accounts which are much in use are transferred to the Genera) Ledger at the end of the month. The Cash Journal should contain a sufficient number of columns, so that ordinary transactions can be debited and credited at once to the proper accounts; this avoids the necessity of posting each entry to the General Ledger. In the application of the classification of accounts already out- lined, columns should be provided for the following: DEBITS Individuals & Companies Cash Bank Store Expense \ These accounts are needed onlj^ in case that the com- Mehciiandise J pany operates a general mercantile store. Genkhal Supplies Vakious (Each item must be entered to the General Ledger) Constructions & Improvements Power 1 These are closed out at the end of the month to the Indirect ('harges J other accounts. 24 MINE BOOKKEEPING 25 Marketing Bullion Ore Treatment Mine General Stoping Developmeistt Dead Work CREDITS Individuals & Companies Various (Each item must be entered to the General Ledger) General Supplies Store (This account is used only when the company operates a store). Cash Bank The above headings will be found to handle nearly all entries. At the end of the month the columns are added and the Cash Journal is balanced. The total of each account is then posted to the General Ledger. The ideal Cash Journal would have a column for every ledger account, thus avoiding the posting of any individual entry to the General Ledger, but this would necessitate a volume of unwieldy dimensions. In order to keep the record to as small size as possible, ac- counts only occasionally used are entered through the "Vari- ous " columns and each entry to these accounts must be posted separately to the General Ledger. Bills owed by, and owing to, the company are posted to the subsidiary ledger known as ''Individuals and Companies." Transactions of all kinds, which have a place in the ac- counts, are entered upon the Cash Journal. Any case which may arise can be handled by this record, if the form in use has been adapted to the requirements. The Cash Journal can easily be introduced into any bookkeeping system, to replace Cash Book, Journal and Voucher Register. By carry- ing it for a time with the records which it is intended to super- cede, upon forms ruled by hand or printed upon black-process paper, the most effective arrangement of headings will be determined. A few blank columns should be provided for new accounts which may be needed. Figs. 1 a &h show a form of Cash Journal with examples of entries. Some of the exam- ples are given below in diagram: 26 MINE BOOKKEEPING -1 <; z u. D O X < onoj D-a s s. 3 ca w a o - k- 1) i> a o ° a' > - ^ -a a u 3 O 0] O MINE BOOKKEEPING 27 a S3 1 15 *-< ) « JO o »-4 o> a « a O — 1 0} o CTJ 8 Ol o ■»-H a r 3 ■—1 a a o s s o> n ■^ = t* £ . J M 4^ o -^ Cl u o X S S o GO CO GO I s oiioj to Ol >■ o 3 O U o 1 ■a a as to S E-.B 1^ s ^1 CO w fe & •« •« a 6 (A ?" 1 n 4-f 05 C> •a ■a a, ■2 s s <» S. V ^CQ ^ ^ O n * J. i v. ■a a u d 6 e «4 a o o s "5 i s s o S a 5^ s o 1 s 1^ to t3 o 1 S S o 5; CO I w a : H >-H >H *-H >s '-H 3]B(I •^ O^ 1>5 Oj OJ S3 B3 •OS 5 f2 <>< 00 ■-5 3 00 ■^5 W3 00 Oi •a jg o y^ a ^ O otioa ^ Si "O o S 55 3E 5 si c s 5 " s go ^1 1=^ \ 4;oj i>"N 03 fl ^1 3 O 1-5 ja . O T) S a CQ > U U 2 Fro. 3a. — Voucher Check (face). II MARY MINING COMPANY |j ^^''^ ^'°'''^"' ^' Bearcat, New Mexico ! To Denver Fire Clay Co. D..5SZ__. — ■ 1 Denver, Colo, A^X.. Purpose of Payment Ma7j 17 ^ Invoice for assaying supplies " 85 70 !| " 29 " " " " I 101 30 \ !i II — — .. 1 1^-— J _TotaI jl /67 00 Indorsement should be made on reverse side. No other receipt is required. Deposit in any bank for collection. FiQ. 36. — Vouchor Check (reverse). MINE BOOKKEEPING 31 Cash Voucher lio._J87_ Check NcJ^i^ j Amount $.J87M. MARY MINING CO. Receipt Voucher of Peiwer_Fir£_Clay_Co^ _D ate_of_i)ayrn ent_ _ _June_ 7jJ.92_ — Fig. 4. — Envelope for filing cash voucher and invoices. 32 MINE BOOKKEEPING is to require all bills and invoices to the company to be made out in duplicate. After an account has been paid, the can- celled check and the original papers are filed into a voucher envelope and forwarded to the head office; the duplicate bills are also filed into an envelope and are kept for record at the local office. (2) J ournal-e7itry Vouchers (Fig. 5). All journal entries are made directly to the Cash Journal; unless the transaction is so simple that it will be readily understood by the entry as made upon the Cash Journal, it should be accompanied by a Journal-entry Voucher, which states the purpose of the entry in full detail. The explanation of the entry as given upon the Journal-entry Voucher should be such that the transac- tion will be clearly understood by anyone who may have occasion to refer to it. The Journal-entry Vouchers should be filed into loose-leaf binders for reference. General Distribution (Figs. 6 a to ^ doz. tin pans X ?0. 10 3 00 68 General Merchandise 611 2 paint brushes X $1.00 7 3 1 6 160 2 00 00 00 00 00 00 179 00 Entered Folio 58 Correct Approved Fig. 5. — Journal-entry Voucher. 34 MINE BOOKKEEPING 1 Month of June 192- GENERAL DISTRIBUTION o ■go- > •i Entry p s i < Dead Worlt Development tetoping -Ho M 3 S 2 02 I. H 05 i. 06 ■3 H f! J" 15 i. i6 '« H 1^ y B 22 is 23 bo 24 II '=25 H Labor JS3 31 Payrolls /or June 10905 S76 331 50 (25/ 9-iS 350 50 [54; 15U i59 132 S70 145 265( etc Svpplics ail 19 Stovcwuod /or board- 22 J81 31 Store issues 179 J82 31 Warehouse issues 7909 622 21 no rss ew 2S i4^ SJ5 7i2 SO 9 i4 205 i007 CJ,3. 31 Petty Cash 37 etc ' J 1 I- Sundries J77 SI Traveling expenses IS 31 Taxes SCO etc Fig. 6a. — General Distribution. MINE BOOKKEEPING 35 1 Mi ne Generi >1 1 Indirect Charges 1 a 45 46 a a i 47 "3 J. ° ill if 4i2 475 1 55 4i4 57 Z79 5ir 257 200 54 2i44 1? 52 56 94 7 5 iO 2h 28 124^ 57 5 Z556 -•S7 C76 77J 1 — - Fig. 6c. — General Distribution. MINE BOOKKEEPING 37 Cvanidine 1 H V [arketine Bullion 1 li 1,15 ^ 1 e. a 5 - a ^ ilS 6 i 1,19 ill 52 S g s s 52 1^ < 5 53 "3 I 9 7 325 31 622 7765 25 25 kU 115 t Zill S56r -1 Fig. 6d. — General Distribution. 38 MINE BOOKKEEPING GENERAL DISTRIBUTION | General 1 Expense 1 D PR a o 61 P V 62 65 3. o ca 6^ •3 65 m 66 • 67 fl us a 2 69 1 670 S s 611 •II Ci2 -J " 613 lOkO 175 257 s^ 73 55 73 56 29 10 29 22 I 6 100 2 9 i 60 / 29 S IT 2 J , J ■ soo Fia. 6c. — General Distribution. MINE BOOKKEEPING 39 1 General Expense ■3 M g s ^7" 5 I i i Gil, 1 615 "3 6/6 6i7 675 "5 J2 o s e/9 25 28 ;?- ;i C5 2907 QO 1C9 3G ns i5 dU 37 __J 1 19 19 300 FiQ. 6/. — General Distribution. 40 MINE BOOKKEEPING GENERAL DISTRIBUTION Contructions & ImproTCCDents N-w Office Eld«. 1 1 tlODJ 92Sa tkOQS ■ 923h iruciur* 923c 3 96 79 200 375 H 1,2 COO C5G Fig. 6ff. — General Distribution. MINE BOOKKEEPING 41 should appear at the head of the column to facilitate finding it readily. The costs of labor, suppHes and sundries should be kept separately. "Sundries" include all charges which are for neither labor nor supphes, as payments for taxes, fees, miscellaneous credits for medical dues, house rents, etc., etc. In order to separate the costs of labor, supplies and sundries to each account, the charges should be segregated upon the General Distribution sheet; that is, all labor entries, for example, should be made together upon one part of the sheet, etc. Practice will soon determine the approximate number of spaces required under each caption. A few blank columns should be provided for new accounts which may be needed. Credit items are entered in red ink. The total charges to each account, as taken from the General Distribution sheet, are used to make up the monthly Cost Statements, the forms for which are considered in Chapter Eight. Redistributable Accounts. After all entries for the month have been made upon the General Distribution, the Indirect Charges are redistributed. The charges to labor, supplies and sundries to each indirect charge are apportioned to the accounts benefited and the corresponding amounts under Indirect Charges are closed out in red ink. Constructions & Improvements. In keeping costs of installations and construction work, the expenditures for the various operations which make up the completed job should be determined. Excavations and grading, foundations, superstructures, wiring, painting, etc. should be kept as separate items; these details furnish information to be applied to similar work in the future and some of them are necessary for insurance purposes. Each item of construction which is to be determined is given a column under ''Constructions & Improvements" upon the General Distribution; these columns are in blank to be filled in as needed. The job is indicated in the narrow blank space above the spaces for the names of the subaccounts. The monthly charges to each construction job are entered into 42 MINE BOOKKEEPING the Side Ledger of Capital Charges to make up the cost record of the completed job. The total charge to the General Ledger account, ''Constructions & Improvements," from the General Distribution, appears as one entry for the month in the General Ledger. General Ledger (Fig. 7). The General Ledger is the final record of the major ac- counts; all entries to it are posted from the Cash Journal. The General Ledger may be permanently bound or loose-leaf, and is of the standard form which can be purchased almost anywhere. An account is opened in the General Ledger for each one of the major headings as given in the general outline of accounts, a page in the ledger being given to each account. To make the subject clear, these General Ledger accounts are repeated: GENERAL LEDGER ACCOUNTS: Dead Work Taxes Suspense Development Insurance Suspense Stoping Head Office Mine General Bullion Ore Treatment Cash Marketing Bullion (Bank) General Expense Accounts Payable Indirect Charges Accounts Receh'able Power General Supplies Live Stock & Vehicles Unclaimed Wages Furniture & Fixtures Profit & Loss Constructions & Improvements At the end of each month, the columns in the Cash Journal are balanced; these totals are then posted to the correspond- ing accounts in the General Ledger. Only one monthly entry to each active account is required, with exception of the entries made under the "Various" columns; each item of these must be posted separately to the General Ledger. When all entries for the month have been made from the Cash Journal, the General Ledger must balance; i. c., the total debits of the ledger must be equalled by the total credits. The balanced MINE BOOKKEEPING 43 Account: ORE TREATMENT Debit Credit Jan. 31. Feb. 28. Mar. 31 Apr. 30. May 31 . June 30. July 31 . Aug. 31. Sept. 30 Oct. 31. Nov. 30 Dec. 31. Cash Journal do do do do do do do do do do do Folio 4 8 11 14 17 20 24 27 30 33 36 40 6220 . 50 6739.20 4976.41 5884.17 6150.49 6023.12 6336.10 5784.00 5919.07 6540 . 30 6441.17 5832.23 72846 76 Dec. 31 Profit & Loss Folio 40 72846.76 72846.76 Fig. 7. — General Ledger, 44 MINE BOOKKEEPING statement of the General Ledger Accounts, showing that the total debits and total credits are equal, is called the "Trial Balance." Individuals & Companies Ledger. Miscellaneous open accounts with company employees and outsiders are usually kept in a separate ledger record known as "Individuals and Companies." This record is really a part of the General Ledger and all the accounts may be carried in the General Ledger if desired. Accounts with concerns who bill out their goods by invoice should not be entered upon the Individuals and Companies Ledger; these are more easily handled by the use of an additional ledger form, known as the ''Invoice Record." The total debits and credits from the Individuals and Companies Ledger and the Invoice Record make up the General Ledger entries to Ac- counts Payable and Accounts Receivable. Invoice Record. The Invoice is a statement covering the purchase price of goods shipped to the company; the shipper mails an invoice for each consignment of goods as shipment is made; at the end of the month, he renders a statement covering the total amount due to date. The Invoice Record is a simple ledger form, into which the invoice amounts are posted directly, after the invoice has been approved for payment, thus avoid- ing the necessity of making entry for each invoice through the Cash Journal. "WTien settlement is made after the end of the month, the account in the Invoice Record is closed out and entry covering the payment is made in the Cash Journal. Side Ledger of Capital Charges (Fig. 8). The object of this record is to furnish the details of all charges to the current capital accounts and to provide moans by which these accounts may be systematically charged off to depreciation. Each job is carried upon a separate sheet in this record; w^hen the work is completed, the record of it is filed alphabetically into the back of the book for fut\n-e refer- MINE BOOKKEEPING 45 Ul kO C) ( «•?; CO Ol ) 3 O 00 lO a oa Oi r lO CO o^ 1 O 1 lO lO ^s Oj o> ■? ° G^ c^i Q*' CO Co 1 ""H '^i , lO 101 o 4-< t>:i »o Oj o ^.. '-i e* H 'O «0 ~* Ul OJ is o CL, Vi iJ Lh -a c D 1 CO 1 CO \ u lO lO o 1 -^ Oi >-< OJ / a, Oi -<^ i>j «o Co ^^ O) »~( o Q o t^ -^ XI ~* t^ q IJi Oj . rn 1-4 ©< o z w «4-< C a S M •c»> C« «0 S «-> « a -*o 1) a u s -to ^ o s - 8J 1 4> - , Oi 1 05 1 »-< >^ G >^ >^ '-1- rt , CO co Q •k O O ' \ o OJ o o bfi -a o o 00 46 MINE BOOKKEEPING pnce. All pieces of machinery, etc., which may be used later at some other place than that where they were first installed, as hoists, motors, pumps, etc., are separated out from the installation for which they are intended and the cost of each piece of machinery, etc., as delivered at the property is kept as a separate record. In this way, no confusion will arise later in making charges for additions and improvements, or for depreciation. The monthly charges to the various capital accounts are posted to this ledger from the General Distribution; the details of the charges for labor and supplies are given upon the Labor and Supplies Distribution sheets, so that a com- plete analysis of all capital charges is immediately available by referring back to these records. Labor and Supplies Distribution records are considered in Chapters Five and Seven. The charges to depreciation are segregated from the Side Ledger of Capital Charges, and the total amount of depreciation allowed for any period is charged off to Profit and Loss in the General Ledger. CHAPTER FIVE TIME-KEEPER'S RECORDS Essential Records: Subsidiary Records: Office Time Book Foremen's Time Books Labor Distribution Time Tickets Pay-rolls Pay Envelopes or Voucher Pay-checks Office Time Book (Fig. 9)/ The name of each workman is given a page in this form of time book; the record should be loose-leaf and so constructed that the sheets can readily be transferred in it from one place to another as desired.^ In this way, each class of labor can be segregated in the time book to facilitate the daily distri- butions; that is, the carpenters, the blacksmiths, the labor- ers, etc. can be kept together, and each class of labor indexed in the book by a tabbed sheet for ready reference. The time of the workman is usually noted in hours and his rate given as a rate-per-hour. The jobs upon w^hich he worked are indicated by number. At the end of the period, the total time worked and the total amount due each workman are extended in the time book as a check against the pay-rolls. The usual practice is to count time worked in half hours; if the workman comes on shift a few minutes late, a half hour is deducted from his time for the day. In all examples of time-keeping records showTi, payments twice monthly have been assumed. Time records should be printed for the 1st to 15th of the month and others for the 16th to 31st, to avoid unnecessary clerical work; or the dates for both periods may be printed in the title spaces and a line drawn through the figures not used. Workmen's time is usually kept at the time-keeper's office by time-clocks or by a check system. Where the check system is used, a metal identification check, stamped with the workman's number, is issued to each man from the time iRef. "Engineering Office Systems and Methods" by John P. Davies; McGraw-Hill Book Co. 47 48 MINE BOOKKEEPING office. Before the beginning of the shift, the check is handed in at the office, where here it is hung in its place upon a board; at the end of the shift, the check is returned to the workman as he passes the window. These checks also serve as a means of identification at the store, the paymaster's window, etc. Employee's Name Chas. White Number 428 0<'cupation Acct. 1 2 3 4 5: 6 1 7 8 9 10 11 1 12 13 14- 15 Total hours Rate Amount Blacksmith C 8 4 6 8 2 1 32 4 34 2 4 — — — ! 42 2 ] 1 1 j 1 — 1 1 1 t — — — — Fig. 9.— Office Time Book. Foremen's Time Books (Fig. 10). A pocket-sized time book may be supplied to each foreman, in which the time of his men is kept. A page in this book is assigned to the name of each workman and sufficient spaces are provided for the total number of days during the period. The daily hours worked by each man are noted in the book, his time being divided up to show the number of hours put in on each class of work or job. The book is delivered at the end of the shift to the time-keeper for posting the time and distributions to the Office Time Book. MINE BOOKKEEPING 49 Time Tickets (Fig. 11). Instead of the Foremen's Time Book, an Individual Time Ticket form may be used for keeping account of the work Name — Arturo Castro No. 237 Occupation— Machine runner Month June, 192— Date Hours Work performed Acct. 1 8 Drilling, 1200S Heading 11 \ / ~j [^ " ■ " Fig. 10.- — Foremen's Time Book. Name— Fred Fiske No. 129 Occupation — Timberman Date — June 1, 192— Hours Work performed Acct. 7V2 Retimbering on 900 level 35 1 -^ 1 — J -^ ^ ^ . --s_— .^^^ .^ ^_ _, _ ^ In 7.10 Mining Out Department Foreman Fig. 11.— Time Ticket. performed. A blank form, stamped with the date, is issued from the time-keeper's window to each workman as he goes 4 50 MINE BOOKKEEPING on shift; the form is filled in and signed or punched by the foreman during the shift; it is then returned to the time- keeper at the end of the day. ]\Iany workmen, especially those employed in the higher classes of labor, will be able to make out their own tickets after they have been shown what is required, as each ticket must be approved by the foreman before it is returned. Credit for time worked will depend upon the return of the ticket properly made out, so that little difficulty in that direction will be experienced. Time tickets are often used in the shops, where a workman may be employed upon a number of jobs during the day and the workman himself can best account for the time put in on each job, pocket time books being used for mine labor and for miscellaneous labor employed upon surface. Labor Distribution (Fig. 12). The first object of this record is to apportion the labor roll among the various accounts, for entry upon the General Distribution at the end of the month. It also affords a statement of the costs of each class of labor which make up the daily expenditures to each account. A separate sheet, or a part of a sheet as required, is kept by the time-keeper for each active account, and the total charge to each class of labor is posted to it daily from the Office Time Book. The totals of the Labor Distribution for the period must check with the corresponding pay-rolls. At the end of the period, the sheets should be filed under the headings of the accounts rather than by months, so that the itemized labor cost for performing any completed operation will be readily accessible. The Labor Distribution furnishes the essential information for the analysis of costs as shown by cost state- ments, and a variation in the cost of labor for any class of work can be located immediately. Force Account Pay-rolls (Fig. 13). The time worked by each employee is posted daily to the pay-rolls from the Office Time Book. Fig. 13 shows a form of pay-roll for workmen who are employed by the company. It often occurs that a workman will be emj)loyed at several MINE BOOKKEEPING 51 Mine Account-r General ■«-• h o CO O CO (M o 1 T-H CN 00 ON t^ f-4 U VO ^ ^ Co -<^ >o t^ P o M C8 EO Co '-■o <-o CO Co a o 3 Si u O ' 52 MINE BOOKKEEPING r~- ■J-^ , — . . ^ r- w^ 1 y-t 03 Co CT) Co t*« •-t 1 (M i-t to Co f— 4 f-H 1 O to Co o\ «>. CO CO Co CO t^ Co Co VO u-i CO CO '*■ oo CO ro ^ 00 / s C9 CU, s E w ■t. rt S ^ ^ CO s •< 03 -si d c^ <^ C'i 5o 1^ = '^t »>< W3 ^ rt c^ ^H ^ in ^H u c:i c;< 2 S 3 f( Cl JQ C3 u cq b c <=i •T3 ^ c^ ^^ to 00 u ° 3 H -a IM Q *J 1 E c < '-I ♦J 3 •d "S (-1 c ^ 3 £ n < fe; ti X 1 »^ • X « 5 ^- 3 ^3 ■^ Cki ^ w 5 n --> r> J> ■» n o a (9 a S o U "0* C w U J3 V 4> a 0\ lO * o 2 u u u z % O U O z z -«: u u a V (A « w w * * u JS 0^ a a C3 "n a ^2 z O H o u 4> z a u a u cS u u I >. O > o c 1^ aaXcj '. 3Joq sjnoinosjopai jjn o>irj^ :uiq)iM pojtijs sn oui onp junoam aijj UIOJJ poAioooy MINE BOOKKEEPING 67 •4-J o § o • 5ii E <3^ VO tsl • oo OS < ■M CSV Co rt • *-< o o *^ o rt l>J -* 3 Z Pi h 3 -a « i> V u u a 13 ■S 3 o -* XI a o o -* 50 B t HK Z u fc u- o o u-i 00 ■>»- ^ i-l <=) 4-t c o i-H 00 a CO -» -- r^ 00 n o <:3 VO C3 u-i 00 C3 r^j o en •<^ oo Vi 1' ro CO IJ OJ Li ^-i • O r-J CO O O H .-H 00 1 wa 1 c £3 u .2 CO _o s o O z a, 3 3 O >o tt C/3 1 n > v o a> X! u I PL, u u 3 O > 58 MINE BOOKKEEPING The daily time worked is posted to these checks from the Office Time Book, instead of to the pay-rolls; the workman then has a complete statement of his time worked and the company's record is the Office Time Book, which is all that is necessary. When this form of check is used, the pay-roll form does not show the daily time, but has columns for gross earnings as taken from the voucher check, together with the deductions and balances columns as on the form of pay-roll used for cash settlements. After the voucher pay-checks have been cashed, they are cancelled and returned by the bank to the company's office and are either placed on ffie with the corresponding pay-rolls, or forwarded to the head office. CHAPTER SIX GENERAL OFFICE RECORDS OF SUPPLIES Essential Records: Subsidiary Records: Purchase Orders Local Purchases Register of Supplies Ordered Supplies on Hand & on Order Cost Book Purchase Orders (Fig. 16). Orders for new warehouse stock should be given on special numbered forms, made out in triplicate. The original is sent forward to the purchasee, one copy is kept at the general office, and one copy is sent to the warehouse clerk. The office copy is filed with the other unfilled purchase orders; the Acknowledgement of Order stub,^ as detached and filled in by the purchasee, is attached to the corresponding Purchase Order when received. When the warehouse clerk advises the general office that the shipment has been received and accepted, the amount of the invoice is credited to the pur- chasee in the Invoice Record; the purchase order is then taken from the ''Unfilled Orders" file and placed on per- manent record in its numerical order in the ''Filled Orders" file. The rule should be enforced that supplies must always be ordered upon the standard order form; the practice of placing verbal orders is to be avoided. The writer well remembers an unhappy period in his early experience, when his verbal order for 2000 running feet of mine rails resulted in the arrival at the mine of 2000 rails, each 20 feet long! Specifications for supplies should be made as explicit as possible, so that no question may arise as to the brand or quality of material required. A form upon which materials may be asked for by heads of departments should be in use, and all requests iRef. "The Efficient Purchase and Utilization of Mine Supplies" by Stronck and Billyard; John Wiley and Sons. 59 60 MINE BOOKKEEPING Purchase Order No. 563 Mary Mixing Co., Bearcat, N. M., August 15, 192- Ordered from Harron, Rickard & McCone, 225 So. San Pedro St., Los Angeles, Cal. Gentlemen: Please ship by freight to Bearcat, New Mexico, the following materials: Quantity Articles 6 Doz. Round point, D handle. Red Edge shovels No. 3 Terms. — 2% ten days Note: Our Purchase Order Number must appear on your invoice; otherwise, invoice will be returned for correction. Invoice in duplicate and bill- of-lading with weights and freight rates must be sent promptly on ship- ment of goods. Mary Mining Co. per Purchasing Agent. Acknowledgment oj Order Mary Mining Co. Bearcat, N. M., Aug. 15, 192- Purchase Order No. 563 Please fill in this slip and return immediately : Shipment date 192 From I'urciiasoe Fig. IC. — Purchase Order. MINE BOOKKEEPING 61 for new stock should be required in writing. More care will be taken in the ordering of supplies if this rule is observed. Local Purchases. While materials and supplies will be purchased whenever possible in quantity from jobbers or manufacturers, in order to obtain the lowest market prices, it often happens that purchases must be made locally to meet an emergency. A Local Purchase form should be used for this purpose; all such purchase orders should be made out in duplicate, the copy being placed on file at the general office. Local mer- chants should be notified that goods can only be charged to the company's account when the order is given upon the Local Purchase form, properly made out and signed by an authorized person. Supplies on Hand and on Order (Fig. 17). The object of this record is to show the quantities of the OIL Heavy Black ^ Previous year, used ^^^^^ ^^^^^ ^^^ per month, 77 •|go_ Unit — gallon Date On hand 1st of month Used during month Received Order No. On Order Remarks 1/i 287 72 Inventory 2/1 215 69 2/5 187 300 3/1 U6 76 3/16 300 187 370 , ^.^_ __, ^ ____ Fig. 17. — Supplies on Hand and on Order Index. more essential supplies in stock at the warehouse and on order. When the mine is located within easy reach of the sources of supply, so that materials can be obtained within a short time when needed, this record may not be considered 62 MINE BOOKKEEPING necessary, as the control of stock on hand may be intrusted to the warehouse department. However, when the amval of suppHes is a question of several weeks or months after the order has been sent out, a close supervision by the manage- ment of the stock of essential supplies on hand and on order becomes a matter of primary importance, as the exhaustion of the stock of any item may be the cause of serious in- convenience and loss. A card index is perhaps the most convenient form for this record, a separate card being used for each kind of material or article. The consumption of each item for the previous month, the quantities received during the month and the stock on hand are posted from a report submitted at the end of the month by the warehouse clerk. When a Purchase Order for supplies is made out, the date, order number and quantity of each article ordered are posted upon the Supplies on Hand and on Order index. Only the principal articles of warehouse stock are entered upon this record; minor articles are reported by the warehouse clerk when his stock card for any item shows that the supply on hand has become less than the minimum allowed. In the example given in Fig. 17, the inventory taken at the first of the year showed a stock of 287 gallons black oil; during January, 72 gallons were issued, leaving 215 gallons on hand Feb. 1st. On Feb. 5th, 300 gallons were ordered by Purchase Order No. 187, etc. Register of Supplies Ordered (Fig. 18). When the Purchase Order is made out, each item is listed upon the Register of Supplies Ordered; the subsequent details concerning the shipment are entered as they are re- ceived, to furnish a complete record of the order as filled and to determine the cost of each item as delivered at the ware- house. The average of the cost per unit of the new material with that already in stock is entered to the Cost Book, to- gether with the purchase order number; in this way, the Cost Book serves as an index to the Register of Sup])lies Ordered, as the numbers of all purchase orders upon which any article appears are listed under that article in the Cost Book. MINE BOOKKEEPING 63 o t-i be 3 O 2' -a C u 3 ■-. ao Q o z o a • O O (O ;.) CO S 1 ^ S c2 i* fc; _co 'CJ O, Si o o o o CO o c3 !^ CO O -Si J- eo CO Cl5 ►si CO CO >> CO H S S^ c a a « i. "^ •o o U3 C^ H ^ <3-» Co GO J lO O «i >o <3* i o »s Local Haul o o O o so CO o Ol ^^» • CO t>. ^ ^ U o ^o C> o lO GO »o ** d "^ 0-) Oi Cj o o o ^ 1 .y « ITS o ~* o» \ o o o* o • CO ^- \ ^ ^ £>. *-< 1 G* y^ I W5 CO ^ Cj H O o CO 1 >^ -T3 • CO intit eive >-< s •^ •t o Co o 3 u c> Co »-< a e^ o a> O ft ft 3 to Pi 00 f-H 6 SAoqe luojj p3nui;uoQ I 64 MINE BOOKKEEPING d E O o 5a «4-. 13 <-. >a -c ^ fcji K 3 O o pq s o s 1 !-• CO bl ^^: t-.. .5^ «-^ C3 q^ o O* u o *j 0. Q ^ Ui O ■a o U o c ri CO ^ V V X :\ »-( w o ^ « w «< 6 >. rO '^ c o CO o 3 a o D' o' is. ■3 (U .^ t>. '-H -T3 u (» O tu Q 5 — ^. . he i-« c .2 ■■"5 ;■;! a .i' t t '^ i: c 3 O Oi O o S u i* CJ o o oii: '-I Lh 1_ 3 u 31 C • CO "^ ^T i^ S '^l D ^ X P / O a *.* o o o C) > U O C ^ •o " u o ~ c CO Q o —I *j \ .-» o t> / w u k s rt Q o (O •-I Q u< c^ •=^ v^ _> "u «£ >^' Q CVJ l/J 1 *^ CO u . u C) I > •-I 1 3J a> Lh Y o c2 a, o .id c u o to ?• Cm U c CO o G 1) 1 -^ I E O Q Tl — a> V ^' / w / bl .s ♦- N ^ C/3 W5 E CO U.S. Cy. Cost per Unit i Ci c D o U.S. Cy. Total Cost 1^ CO U.S. Cy. Equivalent of Native Charges t3^ Rate of Ex- change o c k-. 3 u CO o H Cm 01 St JCO c* R.R.Kreight Handling Co / 1 -3 C rr. CO o Pi SAoqu uiojj p3rtujiuo3 AAoqD uioii panujiuop MINE BOOKKEEPING 65 Fig. 19 shows a form of Register for handling supply orders in a foreign country, where shipment is made by steamer. The invoices and bills-of-lading for each shipment received are filed under the name of the steamer and the date of arrival in port. These papers may be filed conveniently in a heavy envelope, upon which the essential information concerning the shipment is noted. Article Unit Cost per unit Dynamite Gelatin 40 % lb. 0.246 0.24' :0.24' 0.26^ 103 137 156 174 198 1 1 1 i Dynamite, lb. Gelatin 50% | 1 198 1 ^ i 1 ^ 1 ! , 1 j ! i i i 1 i ; 1 i i i 1 ' 1 1 1 1 j : ! ' 1 1 j i 1 i 1 1 { i 1 1 1 1 Fig. 20.— Cost Book. Cost Book (Fig. 20). The cost of each item of material as taken from the Register of Supplies Ordered is averaged with the cost of the stock 5 66 MINE BOOKKEEPING already on hand, and the average cost per unit for the entire lot is entered to the Cost Book, to be used in charging out the material as issued from the warehouse. For example : 1200 lb. wire nails costing $86.40 is received at the warehouse, and 920 lb., costing 80.068 per pound, is already on hand. Then the average unit cost for the entire stock of 2120 lb. wire nails is 86.40 + (920 X 0.068) . _ ._. , f fi. i . 9T9fS ^^ ^ • P poui^tl for the lot. This amount is entered upon the Cost Book as the unit cost price of all wire nails on hand. When the Purchase Order is made out, its number is entered in the Cost Book under the name of each article included in the order; the unit cost of the stock on hand after the ship- ment has been received is filled in as soon as the charges upon the shipment are complete. The Cost Book is an index to the Register of Supplies Ordered, showing the purchase order numbers of all previous orders of any article. In the exam- ples given in Fig. 20, former warehouse prices for 40 percent Gelatin dynamite were 24.6 and 24.7 cents per pound, the present stock being issued at 26.2 cents. Purchase Order No. 198 includes an order for 40 percent Gelatin which has not yet been received. CHAPTER SEVEN WAREHOUSE RECORDS Essential Records : Stock on Hand Index Warehouse Requisitions Supplies Distribution Subsidiary Records: Way-bills Requisitions for Bills-of-Material Materials Returned Inventories Way-bills (Fig. 21). Where the mine is located at a distance from the railroad, a representative must be arranged for at the railroad station o o Thei del Virginia M. & M. Co. 'ollowing freight has been ivered to Way-bill No. 2748 Date May 26, 192- Forwarding Agt. No. Description Contents Gross wt. Deliver at 6 5 1 12 Kegs Bbls. Bbl. Cases Nails Oil Oil (leaking) Dynamite 652 1820 340 846 Mine warehouse Mine warehouse Mine warehouse Magazine 3658 Received Delivered Freighter Warehouse Clerk Fig. 21.— Way-bill. to receive freight and to forward it to the mine. If ore ship- ments are made, he arranges for cars and attends to the loading and shipping of the ore to the smelter. At small stations, the railroad agent is usually employed to look after 67 68 MINE BOOKKEEPING the company's shipping. This representative, or forwarding agent as he is called, advises the general office by mail or telephone concerning the contents of each shipment of supplies as received at the station. He supervises the loading of freight for transportation to the mine and furnishes each freighter with a way-bill for the contents of his load. The way-bill states the number of pieces, as barrels, boxes, sacks, etc. which each freighter has received, together with the contents, gross weight and destination of each item. The way-bills are numbered and are made out in triplicate; the original is given to the freighter, one copy is mailed to the mine office, and the other copy is held by the agent. All three copies are signed by the freighter upon receiving his load. When the freight is delivered at the warehouse, the clerk checks the way bill with the load as received and files it. The freighter is issued an order upon the cashier for the amount due, if the hauling is done by contract. The warehouse clerk should be provided with forms for notifying the general office of all supplies received. Stock on Hand Index (Fig. 22). The object of this record is to show at all times the stock of supplies and materials on hand at the warehouse for which it is kept. A card index is usually used for this purpose; a separate card is kept for each size and variety of every kind of material or article in stock. Warehouse issues are posted directly to the Stock Cards from the Warehouse Requisitions. With items of stock which are constantly being issued in small quantities, as nails, waste, etc., the necessity of making many entries upon the stock cards can be avoided by charging out such articles upon the cards to a reserve stock in suflicient quantity to last for several days at the normal rate of con- sumption. New stock is entered upon the cards when received at the warehouse. On the example of Stock Card shown in Fig. 22, the symbol + is used to denote now stock received and — to denote stock issued ; the warehouse inven- tory taken on Jan 1st showed 107 lb. 4" wire nails in stock; on Jan. 2nd. 8 lb. was issued, leaving 159 lb. on hand; on MINE BOOKKEEPING 69 the 3rd, 300 lb. of new stock was received, making a total stock on hand of 459 lb., etc. The unit cost is entered to the card from the Cost Book in pencil, so that the amount can be changed with each new shipment received. When the stock on hand falls below the minimum allowed, the clerk should notify the general office. Orders for warehouse stock should be made out or checked by some one who is familiar with the current needs, so that materials no longer used will be recognized and those for which the rate of consumption has changed may be ordered in quantities to meet present conditions. Nails Wire ,4" ... o 1 " Location in p ■• q Minimum Stock 4 Wire Nail S Warehouse ' ^°°^^'' Unk-Lb. Unit Cost $O.Q20 .„. Inv. ^^^~ m 167 8 1/2 159 + 300 ifs i59 6 l/S 1,53 1 _ Fig. 22. — Stock on Hand Index. The warehouse clerk should be required to inventory parts of his stock from time to time, to see that the warehouse system is running smoothly and that his cards agree with the actual stock on hand. Only small discrepancies should occur and these are corrected upon the cards as they appear, the general office being notified regarding shortages so that they may be charged out at the end of the month to the current operations. These charges for shortages in the warehouse stock may be distributed to the various accounts in the pro- 70 MINE BOOKKEEPING portion of the monthly distribution of the supplies issued. Stock Books (Fig. 23). At points where materials are kept on hand but no clerk is employed, as at small outside prospects, etc., a card index will not be needed for keeping account of the supplies. The record will usually be kept by persons of little or no clerical ability, and a strong book, ruled off to suit the requirements, will be found more satisfactory. Fig. 23 shows a form of Stock Book of this kind. The book is kept in a similar manner to the stock cards, a full page or a part of a page be- ing given to each item. Only important supplies should be ■ - -■ ■ Article 'a ID CO a 192- •d > '3 Qi T3 U 73 e CO X a Issued for what purpose Blasting Caps, 5X each 2/4 800 800 2/j 100 700 To Simpson, contractor 2/c 10 G9C Development i 2/s 25 665 >> \ 1 1 (_^ . 1 - Fig. 23.— Stock Book. carried in stock at such places, small items being charged out to the work at once whenever possible. The reports at the end of the month from these places should include an inventory of the actual stock on hand, so that the issues and receipts can be checked by the difference of the stock from month to month. As a rule, such records are kept in a more or less haphazard manner; they are usually subject to many errors and these must be hunted down at the office. Warehouse Requisitions (Fig. 24). The issuing of materials and supplies from the general storehouse to the numerous ramifications of the work is one of the most potent sources of loss in the direction of mining operations. Workmen, as a class, are notoriously wasteful of company stores, and it is only by keeping a vigilant watch MINE BOOKKEEPING 71 over the delivery of supplies that extravagance and waste, as well as dishonesty, can be prevented. The simple knowledge that a close check is being kept upon the materials issued will do much to promote economical methods. Sup- phes should be issued from the warehouse only upon the pre- sentation of an order, made out and signed by a foreman or some other authorized person. However, care in the issuing of supplies does not imply needless formality or waste i 9 o o ft Date April 9, 192- Warehouse Clerk: Please deliver the following: Article \ Quantity Amt. Intended for what purpose Group No. %" galv. pipe Vi" elbows Vi tee 40 ft. , 3 1 Dwelling #34 Dwelling #34 Dwelling #34 17 17 17 Note: Use for supplies t o one subaccount only. Account No. 612 Foreman Fig. 24. — Warehouse Requisition. of workmen's time; the material called for should be dis- patched from the warehouse with as little delay as possible when the requisition is delivered. These Warehouse Requi- sitions constitute the clerk's receipts for supplies issued; they should show a clear statement of the use to be made of the materials ordered. By using separate requisitions for mate- rials to each subaccount, they can be segregated for convenient reference. At the end of the month, they should be filed together in a binder, tab indexed to show the requisitions to each subaccount. 72 MINE BOOKKEEPING Foremen and workmen should be encouraged to practice rigid economy in the use of suppUes; they should be made to feel that the consumption of warehouse stock is under the critical eye of the management, and that judgement and care in the use of supplies will be recognized and rewarded. If left to itself, a requisition system will invariably degenerate into a mere formality. The foreman is usually occupied with numerous duties and unless he makes a special effort to find out the purpose for which supplies are intended and sees that they are used for that purpose the workmen soon learn that to obtain all the material wanted is only a matter of asking for the requisition. Requisitions for Bills-of-Material. Bills-of-]Material or Job Requisitions should be employed whenever they can be used. "With this method, the quantities of materials needed for any job are determined as exactly as possible, usually by the engineering department, and a bill-of -material for the job is sent to the warehouse. The materials called for upon this statement are then subject to delivery to any responsible person, upon his giving a receipt. Spoiled material must be returned to the warehouse to be replaced, and material in excess of the amount stated upon the bill-of-material will not be issued without an explanation from the foreman and authorization from the office for the issue of the additional material required. No loss of time should be incurred by the application of this rule, as the fore- man should be required to keep account of the condition of his allowance of materials and to give notice that an additional supply will be required before the deficiency occurs. Materials Returned. Materials are sometimes issued and not used, or they maj" be used for a time and then returned in good condition to the warehouse. A Materials Returned slip, preferably on colored paper, should be used to give credit to the proper accounts for supplies and materials returned to the warehouse. MINE BOOKKEEPING 73 Credits entries for these items are made upon the SuppHes Distribution and upon the General Distribution in red ink. Supplies Distribution (Fig. 25). The object of this record is to make the final distribution of the daily issues of materials and supplies from the ware- house to the accounts benefitted. It also furnishes a perma- nent record of the materials used on each job or operation. The classification of supplies to be used with this record will vary with conditions; the following classification is given in the example shown in Fig. 25: Group No. Group 1 Bolts, nuts, washers, etc. 2 Brick, cement, etc. 3 Locomotive, car and truck parts 4 Carbide and candles 5 Chemicals 6 Drill parts 7 Drill steel 8 Explosives 9 Electrical supplies 10 Fuel 11 Iron & steel 12 Lumber and mine timber 13 Miscellaneous 14 Nails, screws, etc. 15 Oils, grease, etc. 16 Packing, waste, etc. 17 Pipe & fittings 18 Tools 19 Track & supplies A separate Supplies Distribution sheet is carried for each active account ; these sheets are posted daily from the Ware- house Requisitions. From the Supplies Distribution, the total warehouse charge for the month to each account is posted to the General Distribution sheet, which is carried at the general office. After the records have been closed at the end of the month, the Supplies Distribution sheets should be filed under the headings of the accounts, rather than by months, so that the costs of supplies and materials used on any job can be found without loss of time. 74 MINE BOOKKEEPING 00 l-> . . O ? a. «i u •I- c 3 O o < o h 3 C la r" - o 1 o — ^ —^ ' — " ~ — i-H o\ 1 C/Q o r^ f-H o l-< ID E "^ O 4-« CI. u Cfl ■j 9* o Z O 03 so O ., h t>' Co C3 w h to Cm 3 O >-• o CO so HO s o -o 1 c -♦o c/1 o v. fc-i CO HO •1 CO s HO CO HO CO CM s »^ CO S CO cu *»o •-0 a. CO ■*o a ■*o 65' Q CO W D o o J. c3 CO a o ■(O s HO V3 O 1 o s S e O CO 5^ a. is; CO •^0 (/J V) a • o »~i o vi <>. Co oi o •-^ <^» 03 --t- »o CO t^ 00 OJ y. *-i •~( »-l "-H •^ »-t »-< •^ "^1 •^ CO c CO "c. C. (N 6 MINE BOOKKEEPING 75 Inventories. — An inventory of all warehouse stock should be taken at regular intervals, usually twice yearly. Losses from handling, leakage, etc. are unavoidable, and to prevent any considerable difference between the book cost and the actual inventory value of stock on hand, a small percentage above cost may be allowed in charging out warehouse supplies; this should not exceed five percent and will usually be less. The percentage to be allowed may be changed from time to time, in order to make the inventory value of the warehouse stock check out as closely as possible at the end of the period with the book cost. This method of an adjustable ''selling" price has the disadvantage that the amount of actual short- age cannot easily be determined. By charging out the ware- house issues at cost, or at a fixed percentage above cost, a definite check on the warehouse issues can be obtained. Any difference at the end of the period between the inventory value and the book cost should be charged off to Profit and Loss, or it may be charged out at once or during the next period in the proportion of the material charges to the various accounts. If a "selling" percentage is added, it should be changed after each inventory to maintain the balance as closely as possible. The principal items of supplies, as ex- plosives, carbide, etc., should be inventoried at the end of each month and any shortages corrected by charging them out to the current accounts for the month. CHAPTER EIGHT Monthly Statements. The final analysis of expenditures and income is given by the Monthly Statements, which are compiled from the general office records after the books have been balanced at the end of the month. These statements constitute the financial report to the head office, covering the operations during the month ; they should afford a clear basis for compari- son of the work done and the results accomplished, by which a definite conclusion can be reached concerning the efficiency and economy of the operations. The following statements will be considered as comprising a specimen monthly report to the head office; these will be supplemented in practice by such additional information as may be desired: Cost Statement Comparative Costs for Year-to-date Mining & Metallurgical Statement Receipts & Disbursements Outstanding Checks Accounts Payable & Accounts Receivable Trial Balance Monthly Cost Statement (Figs. 26 a to d). This statement is made up from the total distributed charges for the month as taken from the General Distribution record. Working costs are based upon the cost per di*y ton mined or per dry ton treated at the reduction plant, and also upon the cost per unit involved in any particular class of work, as per foot of development work, per ton of ore stoped, etc. In the example shown in Figs, 26 a to d, an average working cost per foot for Dead Work has not been extended, as this account often includes charges for work not measured in terms of lineal feet, as shaft stations, etc. The cost figures 76 MINE BOOKKEEPING 77 Ore milled, tons 4100 Ore stoped, tons 3240 Dead work, feet 428.0 Development, feet 812.8 San Antonio Mining Co. Month of Jane, 192- Dead work No. Labor Sup- plies Sun- dries Total Per ton nulled Breaking ground . . . . Timbering Pumping Tramming Hoisting Drills & compressors Tool sharpening Total 01 02 03 A B C D 827.40 39.34 263.18 32.70 22.45 28.70 1213.77 628.10 103.18 7.45 3.77 29.93 28.16 800 . 59 15.75 31.97 47.72 1455 . 50 142.52 270.63 52.22 84.35 56.86 0.355 0,035 0.066 0.012 0.021 0.014 2062.08 0.503 Development Per foot Breaking ground . . . . Timbering Pumping Tramming Hoisting Drills & compressors Tool sharpening Total 11 12 13 A B C D 1013.26 42.02 270 . 34 60.47 49.55 33.20 1468.84 671.00 145.34 13.50 6.97 56.60 32.60 926.01 29.09 64.90 93.99 1684.26 187.36 283.84 96 . 53 171.05 65.80 2488 . 84 0.411 0.046 0.069 0.024 0.042 0.016 0.607 2.072 0.230 0.349 0.119 0.211 0.081 3.062 Stoping Breaking ground . . . . Timbering Tramming Hoisting Drills & compressors Tool sharpening Total 21 22 A B C D 1728.28 135.80 655 . 86 202 . 45 64.88 49.36 2836.63 775.73 179.20 39.70 23.35 86.53 48.37 1152.88 97.06 92.33 189.39 2504.01 315.00 695 . 56 322.86 243.74 97.73 4178.90 0.611 0.077 0.170 0.079 0.059 0.024 1.019 Per ton stoped 0.773 0.097 0.215 0.100 0.075 0.030 1.290 Mine general Supervision Mtce. timbering Mtce. pumping & draining Track & supplies Steel Mine miscellaneous Total 31 32 33 34 35 36 456.93 42.70 35.60 535.23 17.06 38.56 10.02 162.52 107.68 335.84 473.99 81.26 45.62 162.52 107.68 871.07 0.116 0.020 0.011 0.040 0.026 0.213 Remarks: Accountant Supt. Fig. 26a. — Monthly Cost Statement. 78 MINE BOOKKEEPING Ore milled, tons . . . . Ore cyanided, tons. .4100 .4183 Sav An'tonio Mixing Co. Month of June, 192- Ort treatment No. Labor Sup- plies Sun- dries Power Total Per ton milled Milling Supervision Crushing * Conveying & sorting Stamping Amalgamation General maintenance. . Miscellaneous Total 41 42 43 44 45 46 47 125.00 53 . 34 303 . 58 330 . 74 243.96 70.14 7.15 33 . 22 1430.94 44.54 146.78 1126. 76] 1662. 63 94.60 9.46 378.40 125.00 155.09 346 . 26 2140.08 288 . 50 216.92 482.46 0.030 0.038 0.084 0.522 0.070 0.053 3271.85 0.797 * Sorted out 916 tons waste. Cyaniding Per ton treated Supervision 451 452 125.00 13.34 0.98 47.30 125.00 61.62 0.030 0.015 0.029 Classification 015 Concentrates treatment. . . 453 45.00 286.86 47.30 379.16 092 091 Sands treatment 454 78.36, 640.22 94.60 813.18 0.198 194 Slimes treatment 4.55 94.42 693.52 359.50 1147.44 2S0 274 Precipitation 456 7.00 419.80 426.80 0.104 102 Cleanup & smelting 457 6.48 126.92 133.40 033 032 General maintenance 458 20.58 3.52 24.10 006 006 Miscellaneous 459 1.96 2173.78 1.90 000 000 Total 390 . 18 548.70 3112.66 0.758 0.744 Total ore treatment . . 1516.94 3836.41 1031.16 6384.51 1.556 Marketing bullion Transportation Insurance 51 52 53 7.50 245.20 153.00 97.60 252.70 153 .00 97.60 0.061 0.037 0.024 Assay charges Total 7.50 495.80 503.30 0.122 Remarks: Accountant Supt. Tig. 2Gb. — Monthly Cost Stateuieiit. MINE BOOKKEEPING 79 Ore milled, tons 4100 San Antonio Mining Co. Month of June, 192- General expense No. Labor Sup- plies Sun- dries Power Total Per ton milled General office Surveying Assaying & sampling. . Hospital Legal Taxes Insurance Boarding house Policing Stable Building maintenance . Water supply Lighting Telephones Roads Tools account Shop expense General miscellaneous. Total 61 62 63 64 65 66 67 68 69 610 611 612 613 614 615 616 617 618 1025 175 155 77 75 32 76 52 17 12 25 14 18 61 14 41.09 49 9.75 70 143.14 90 5.46 00 1820 52 154 60 06 44 86 .10 80 08 J55 04 18 1.62 63.72 69.76 17.60 3.40 14.50 10.34 103.20 7.40 0.40 645 . 56 57.60 (Or.) 420.00 160.20 (Cr.) 54.90 (Or.) 147.30 9.46 141.90 18.92 26.57 196.85 1066.23 185.24 308 . 30 25.76 75.00 420 . 00 26.50 78.22 115.78 32.30 30.46 145.30 39.60 25.14 103.20 44.40 88.32 2809.75 0.260 0.045 0.076 0.006 018 0.102 0.006 0.019 0.028 0.008 0.007 0.035 0.010 0.006 0.025 Oil 0.022 0.685 7 78.40 78.40 0.019 Furniture & fixtures 8 42.15 1 1 ! 42.15 0.010 Constructions & improvements 9 Bunkhouse jf3 Superstructure . 945 Total . 190.40 489.30 14.60 190.40 I 489.30 14.60 694 . 30 694 . 30 0.169 0.169 Remarks: Accountant Supt. Fig. 26c. — Monthly Cost Statement. 80 MINE BOOKKEEPING Ore milled, month 4100 Ore milled, year to date 24260 Sa.v Antonio Mining Co Month of June, 192- Summary Labor ^HP- f^ii- plies dries Power Total Per ton milled Operating expense Dead work Development Stoping Mine general Ore treatment Marketing bullion General expense Total operating expense. 1213.77 1468.84 12836 . 63 635.23 1516.94 7.50 1820.04 9398.95 800 59 926 01 1152 88 335 84 3836 41 645 56 7697 29 495.80 173.87 47.72 93.99 189.39 1031.16 170.28 669.67 1532.54 2062 08 2488 84 4178 90 871 07 6384 51 503 30 2809 75 19298 45 . 503 607 1.019 0.213 1 .556 0.122 0.685 4.706 Capital charges Live stock & vehicles 190.40 78.40 42.15 489.30 14.60 78.40 42.15 694.30 019 Furniture & fixtures 010 Constructions & improvements . . 0.169 Total capital charges 190.40 609.85 14.60 814.85 0.198 Grand total 9589.35 8307.14 684.27 1532.54 20113.30 4.904 Financial statement Month Year to date Total Per ton Total Per ton Operating revenue Bullion production per mine assays Adjustment for liquidations received Operating expense Operating revenue 43337.50 19428.15 23909.35 10.85 4.74 6.11 248350.90 842 . 30 119140.70 130052.50 10.24 0.04 4.91 5.37 Non-operating revenur Store profit for year to date Misc. income & charges Interest on bank deposits Non-operating revenue otal incc Capital Surplus Remarks: 5420.00 0.22 142 JO 0lO1_ 5562.10 0.23 Total income 23909.35 6.11 133614.60 5 60 Disposition of income Capital charges 814.85 23094.50 0.20 5.91 8392 . 12 35 Surplus 127222.48 5.25 Accountant Supt, Fig. 2M. — Monthly Cost Statement. MINE BOOKKEEPING 81 used are based upon results from operations in Central America. Comparative Costs for Year-to-date (Fig. 27). All cost data appearing upon the monthly Cost Statement is posted to small tracings of the same size as is used for the Cost Statement forms (standard letter size), and copies of these are included in the Monthly Statements. These sheets furnish a comparison of the monthly costs during the year, so that a variation from the normal costs for any item will be noticed at once. The foreman of each department is supplied with the sheets showing the results from the work under his charge, and he is encouraged to make a close study of his working costs. This plan will do much to stimulate interest in keeping down operating expenses; it gives every foreman an incentive to work for better results and to establish a creditable cost record for his department. Mining & Metallurgical Statement (Figs. 28 a & 6). This statement shows the total advance made in the headings during the month, the number of tons of ore stoped, the total ore production, etc. It also outlines the ore treat- ment, with all information available for checking up the actual results realized, with the calculated results as indicated by the daily routine mill assays. Receipts & Disbursements. This statement is a summary of all cash transactions for the month, as taken from the Cash Journal. Outstanding Checks. The bank will render a monthly statement to the company, showing deposits received, checks cashed and balance on deposit. The checks cashed during the month are cancelled and returned to the company with the statement; these are checked off in the Cash Journal with the checks sent out, and a list is made of Outstanding Checks. The sum of the Cash Journal bank account balance and the total amount of the checks outstanding must give the balance of the bank state- ment for the same period. 6 82 MINE BOOKKEEPING u ■t.' 1 . 1 Ave raj Currei Yeai 1 I — V o 1 u ii 11 L, - -T- 1 Feb. L L -i- — — 1 1 1 — + 1 1 1 • h c PS i 1 1 1 1 1 1 o '^ 1 1 1 1 1 1 1 Averag Previou Year 1 1 1 \k 1 1 1 h z w Oh o w > w Q i Ii CO Pi, a. s C/3 to Per Foot Labor CO -u 03 Ii 03 O. s o o d fc4 MINE BOOKKEEPING 83 Ton = 2000 lb. Au, $20.67 per oz. Ag, $1.00 per oz. San Antonio Mining Co. Mining & Metallurgical Statement Month of June, 192- Month Year to date Advance in feet Dead Develop- work 1 ment Total Dead Develop- work ment Total 208.0 220.0 812.8 1020.8 220.0 963 . 792.0 3970.6 4933.6 Drainage tunnel 792.0 Total 428.0 812.8 1240.8 1755.0 3970.6 5725.6 Ore production Dry tons Ore milled Less broken ore on hand June 1st ... . Difference Broken ore on hand July 1st Total ore production during month. Less ore from development Ore stoped during month 4100 1430 2670 1590 4260 1020 3240 Month Year to date Stamping record Running time Dry tons crushed Running time Dry tons crushed Full days % Total Rate per full day Full days % Total Rate per full day 28.5 95.0 4100 143.9 170.7 94.3 24260 142.1 Amalgamation Au Ag Total Total assay value, month Bullion recovered, month Total assay value, year to date Bullion recovered, year to date Mill heads $9.47 $2.26 811.73 4.52 2.01 6.53 48093.00 26773.00 21320.00 44.3 20167.50 41.9 276432.00 156669.60 119762,40 43.3 Plate tails Indicated recovery % indicated extraction . 4.95 52.3 0.25 11.1 5.20 116476.90 42.1 Cyanide plant, tonnage statement Concentrates Sands Slimes Total On hand, June 1st 3.85 26.28 515 2204 390 1870 909 Received during month 4100 Total Less on hand, July 1st 30.13 3.04 2719 463 2260 360 5009 826 Tonnage treated during month Tonnage previously treated 27.09 151.17 2256 10426 1900 9563 4183 20140 Total tonnage treated, year to date 178.26 12682 11463 24323 Remarks: FiQ. 28a. — Mining and Metallurgical Statement. Supt. 84 MINE BOOKKEEPING Ton = 20001b. Au, S20.67 per oz. Ag, $1.00 per oz. Ore milled, month, 4100, year to date 24200 San Antonio Mining Co. Mining & Metallurgical Statement Month of June, 192- Cyaniding Au Ag Total Total assay value, month Total assay value, year to date Concentrates, tons 27.09 Heads Tails Recovered by assay. % recovered by as- say S30 . 76 1.21 29.55 96.1 $12.36 2.09 10,27 83.1 $43.12 3.30 39.82 1168.12 89.40 1078.72 92.3 7486.92 552.00 0934 . 32 92.6 Sands, tons 2256 Heads Tails Recovered by assay . % recovered by as- say 4.67 0.39 4.28 91.6 1.81 0.69 1.12 61.9 6.48 1.08 5.40 14618.88 2436.48 12182.40 83.3 80530.70 12935.64 67595.06 83.9 Slimes, tons 1900 1 Heads 4.46 1.53 5.99 11381.00 68778.00 Tails 0.29 0.56 0.85 1015.00 9514.29 Recovered by assay . 4.17 0.97 5.14 9766.00 59263.71 % recovered by as- say 93.5 63.4 85.8 86.2 Month Year to date Cyaniding summary Dollars per ton treated Total value Dollars per ton treated Total value Heads 6.49 0.99 5.50 5.54 27168.00 4140.88 23027.12 84 , 8 23170 00 85.3 6.45 0.95 5.50 5.42 156795 62 Tails 23002 53 R<;covered by assay % recovered by assay BtiUioii recovered ".'u bullion recovered 133793.09 85 . 3 131874. (H) 84.1 Production summary on basis of ore milled Dollars per ton ore milled Total value Dollars per ton ore Total value milled Mill heads „ , ,. / mill bullion Production < . , ,,,,,. [ cyanide plant bullion. . U .73 5.20 5.65 10.85 48093.00 20107.50 23170.00 43337.50 1 1 . 39 4.80 5.44 10.24 276432.00 110470.90 131874. (H) total production 248350.90 Total recovery by mill tonnage. . . . 90 . 1 % 80.0% Uemarks: Supt. Fia. 2S?>. — MiiiiliK iind Mot:dliirKi<:il SlutcintMit. MINE BOOKKEEPING 85 Accounts Payable & Accounts Receivable. This statement shows a list of all accounts owed by, and owing to, the company when the books were closed at the end of the month. Trial Balance. The Trial Balance is a list of all active accounts as taken from the General Ledger, with the total debit or credit to each account. The balancing of the total debits with the total credits proves that the final accounts are correct. CHAPTER NINE RECORDS AND REPORTS OF DAILY OPERATIONS Summary of Daily Operations: (Fig. 29 a & 6).^ This record presents a general summary of the daily reports from the various departments. It should give a complete resume' of the results obtained from general opera- tions and will be found very useful to the superintendent as a wall sheet for constant reference. From it, a clear outline of the progress of the work from day to day is at hand; any irregularities, as a high labor cost, variation in production, etc., can be noted immediately and these differences should be explained by reference to the corresponding report of the department in question. The superintendent is able to determine where the work is running as it should and can devote his attention to the places where it is most needed. An example of a Summary of Daily Operations record is shown in Fig. 29 a & h; this outline will be enlarged upon in practice to cover all variable factors which may require attention. Daily Reports. Brief daily reports, covering the more important details concerning the work and the results obtained, should be required from the foremen of the various departments. All changes, delays, difficulties encountered, etc., should be ex- plained, regardless of verbal reports which may already have been made. These daily reports form an important link between the office and the actual operations; they furnish a means of definitely fixing responsibility and enable the super- intendent to see at a glance when the work is running as it should. Moreover, they afford an opportunity for the fore- man to air his own ideas, and to make recommendations ' "Principles of Mine Management" by Chas. A. Chase, Engineering it Mining Journal, Dec. 30, 1911. 86 MINE BOOKKEEPING 87 concerning the work under his charge. The summary of these daily reports is posted to the Summary of Daily Operations in the superintendent's office. The Daily Mine Report (Figs. 30) should cover those phases of the mine work which may require special attention: the number of each class of workmen employed, approximate grade of ore sent to the mill, etc. The reverse side of the sheet may be ruled for making a general report of conditions, under this caption :- Daily Mine Report. If sent forward in blank, mine fore- man assumes the responsibility of Approximate grade of ore sent reporting satisfactory conditions. If to mill $ ore is below grade, state reasons. List supplies needed and purpose of same on separate sheet. The daily report from the treatment plant covers the essential details of the process of ore treatment, with a state- ment of difficulties or needs and recommendations regarding the work. A comprehensive discussion of metallurgical records is beyond the aspirations of this volume and examples of records covering this phase of the work have been purposely omitted, as they could not be given in such form as to be of general application. A most important consideration with any method of ore treatment, and one which is frequently neglected, is the practice of keeping complete and intelligible records of all tests and experiments which may be made in connection with the work. All data of practical value should be recorded and filed for future reference, and copies of all such information should be forwarded to the head office. The daily foremen's reports are made out from the time- keeper's records and from reports to each foreman from bosses and workmen. These latter reports furnish the ultimate details concerning the work, for the information of the foreman and for making up any additional data which may be desired at the general office. A few of these interdepart- mental reports are given as examples; others can readily be worked out as their need becomes evident: 88 MINE BOOKKEEPING T FioX •^ «) <-l 3UJIJ -J3AO ~^ ;UT3[^ apiucX^ >-< u J3 CD H-1 II! IV =>5 z o H < OS punojS CU -aapun O ;>- hJ •< SDcjjng Q b O JCJ31I3Q OS < Piox »~( S S J Sui C/3 <^ C V5 -do;s lu^uido -PA3Q »o ^•fOM ^-J pCDfT ■o ajsE^^ 3i m £ S? r U ^ IIIIV h 01 DJO ""I OICQ ^^ rt Cl CO h 4-' c tJO to c < o u 3 '^:l rt < h to tN. a. >. h • en tc to < C) 3 to < ■^ _ rt >~( CO h Vi a fcuO »."5 u < '-1 30 u to 7i < to ^^ --> •:zz >o h >-( ^ >-. ""I -1 <: <5^ 3 ~* < J3 *-< u E Q rt ■< M M 2 n < r 5 1 ^•^li!IV o suox n -^ h ■♦-J c u u oo c < o u 3 <>i < to c _o 3 " C/5 to 3^ o -3 ■ h •~( X u V3 < bJ < „ <3^ 1 << o CM 1 1-^ o u suox "-I to c 3 o 3 lo J= ^ c h o 09 c u bi 03 c < •^l u 3 < 0* 0^ n ^ *^ '•J c CO o ♦J h >. "-I rt txc Js V3 < < ts. 3 00 < to' <^3 StlOJ CO - aAoqn uioaj p9nu|)U03 3AoqD uiojj panuijuoj MINE BOOKKEEPING 89 SUMMARY OF DAILY OPERATIONS CYANIDE PLANT— COMPLETED CHARGES June,192— s o h HEADS TAILS % Indicated Recovery Assay Content Assay Content Au Ag Total Au Ag Tola: Au Ag' rota: Au Ag' Iota Au A. rota C/5 h < 25» 1.C67 29.70 ss.oo 51.7G 50 ss 46 0.S2 1.06 ;.ss i O $ 97.2 95.2 96.4 h z w u o u 1 5J,7 151. S S.30 1.79 5.09 501 -'?-' 77S U.SO 0.63 0.93 i6 95 lU 90.9 6i.S b'1.7 I—— 2i.S 2-^9.6 !t.3k 1.00 5. 3 J, 996 230 1226 O.Gi 0.36 0.9S U2 S5.7 GJ,.0 S1.6 CO n z < Fig. 29&. — Summary of Daily Operations. 90 MINE BOOKKEEPING Powderman's Report (Fig. 31). A daily report is made out by the powderman, showing the quantities of explosives issued. If a separate record is kept for each working face, the Powderman's Report shows the amount issued to each place. The report is submitted to the warehouse clerk, who is responsible for the distribution of the charges for explosives and for the accuracy of the Daily Mine Report Date— March 9. 192- Cars trammed Machine shifts Labor employed Working face £5 ^ s ^ Working face OJ Surface m Underground Block 717 49 do 2 Bosses 1 Shift bosses 2 18 Iloistmen 3 Machinemen Block 722 42 do 2 I.anders Blacksmiths 3 2 Machincmen helpers Muckers 4 7 Block 812 30 do 2 Mechanics Carpenters 1 1 Trammers Skip tenders 8 2 Block 815 18 Watchmen Laborers 1 4 Trackmen Timbermen 2 2 900 drift N 6 12 do 2 Pumpmen Laborers 2 5 1000 drift N 23 do 1 Shaft No. 4 Drainage tunnel 32 22 do do 6 4 Overtime 2 Overtime Blacksmiths 1 Laborers 168 66 19 18 53 Fig. 30. — Daily Mine Report. records of stocks on hand. The stocks of explosives should be checked at the end of the month and any shortages charged out to the costs of the current operations. Tramming Report (Fig. 32). A report is made out by the boss trammer of each shift, stating the number of cars of ore and waste trammed from each working face; the number of cars of ore sent to the mill, cars of waste hoisted and dumped into old stopes, approximate distances trammed, etc. This report gives the mine foreman and the superintendent a definite idea as to how much work each set of trammers is doing. MINE BOOKKEEPING 91 a SS a u O Q H O Cu. CO z Q O 04 Pi e o " !- y l-t flj o ^ (U 1^ *-• 4.J c«r} q^ cJ D oj ^ u, - c B Q \r\ U C C O o o < lo «. CO Ci 1 ^ O »~i O i-i o <>* Oi '~( «l> t^ §" •B CO a. S o O -si o a a « o Ph CO 6 92 MINE BOOKKEEPING o u E E (3 U c3 H O o Z <; ai H J3 00 o z C3 e > -3 u o - •-. >*- h h o p 5 I' ^ CO < u 2 -, "" r! ^ O 3 oil o <5* ^ Co o a o S a CO d MINE BOOKKEEPING 93 u u T3 c "a o H 2 :5 Q O o z H CO Q o z C3 C/2 £ G5 CO h ^:a a, a. 3 CO 13 U w u ll 4-> u '3 E nt O h o o Di 3 Q u _ C4 U > O 2; o a M O CO CO o 94 MINE BOOKKEEPING C O X --oij- C E a X o a ajsc^YY ^^^D 3J0 SJE^ 31SE^\\ SJC3 SJQ SJE3 ZI X 2 ^ 9x9 K 8 X 8 01 X or 3snj sdE3 sjuuhuXq ^ SJ3d[3fJ J3qunx uauUDqiutjL SJ3[3AOHg sjodpii 3 U III .11; [^ sjsuun^ 3uupi:i^ sijiilS'M^i^IAJ aiBQ 5o OJ z ■ u a ai 1 > z c c ♦-' u 3 ■a u Oh •0 E E C3 u u 1S03 XEssy 32EJ3Ay 50 suox '--5 i^Essy CO suox 10 Co -I- a u aa u u ;so3 XEssy 33EJ3Ay suojL 3n[EA XEssy suox ifi *-j (/: U ■a ;e (A PJOi s33xEq3 [rj3ti3f) Siiijsjopj Suiuiiuujj;^ jsqunX S3AISO[ilx3 joqcj ^ii!'a 3UU[0CI^ 3Aoqn mojj panujiuo^ C3 CO ■J MINE BOOKKEEPING 95 Hoisting Report (Fig. 33). The Hoisting Report is made out by the top-lander or hoistman of each shift. It shows the number of cars or skips of ore and waste hoisted, trips made for other purposes, etc. This report must check with the corresponding Tramming Report. Working Face Records (Fig. 34). Cost records for each working face are most easily kept as estimates, which are not dependent upon the general accounts, although the totals as extended for the month should not differ materially from the full book costs. These records are used to determine the relative cost per ton, as compared with the average grade of ore recovered, from the work in each stope; they are also kept for each heading, to show the cost of the work per foot and per ton of ore recovered. As the tonnage from any stope can only be approximated in most cases, it is evident that fine details of cost-keeping for this work are not needed. Costs per foot of advance in the head- ings can be determined with accuracy, but the estimated costs are close enough for all practical purposes. Fig. 34^ shows a form for stope records; a similar form should be used in determining costs per foot of advance and per ton of ore recovered from development work, and per foot of advance or per cubic foot for dead work. A standard wage for each class of labor is assumed in the example given. At convenient intervals during the month, the totals for the month-to-date are added and the corresponding amounts are extended to the columns under "Estimated Costs" to obtain the costs per unit. 1 Peele's "Mining Engineers' Handbook," page 1277. CHAPTER TEN MISCELLANEOUS Machinery Index (Fig. 35). An index should be kept of all machinery which is liable to be moved about from one place to another, as electrical apparatus, hoists, pumps, etc. A record of this kind will be found of particular value for properties where the work is more or less scattered. A complete history of each machine should be kept, showing where it has been used, important repairs and replacements, present location, etc. ; minor repairs need not be considered. Fig. 35 shows a suitable form of index for this, purpose. The name, local serial number and manu- facturer's rating are stated upon the card, and a complete record of the machine is kept, the last entry showing its present location. The main subheadings of the index, as generators, hoists, motors, etc., are made by division cards tabbed at the left hand side of the index as indicated. Upon the upper margin of each card of the index are divisions show- ing the different places where the machine may be used, as power house, miine, mill, etc. A movable clip is fastened upon the space showing the location of the machine, the clip being changed to indicate the new location each time that the machine is moved. When the card is in the index, it is filed under the subheading to which it belongs, as generator, motor etc., the rows of clips showing the machines which are in each place. In the example given, the location of the marker shows that the motor in question is at Shaft No. 1. Machine Repair Parts (Fig. 30). For the upkeep of air drills, compressors and other ma- chinery, a large assortment of small repair parts must be kept on hand, and it is important that the stock of these parts is not allowed to become depleted. Fig. 36 shows a form for keeping account of these items; the records are posted month- 90 MINE BOOKKEEPING 97 <» 1=^ CO o 00 o o a o I, m CO 3 § 3 o Z o fa o o O > o h U Oh CO O z CL. o CO &5 S HO d O u O o H -5 CO 1- c O Sh c? Rf rt »H J< , HO o :2: •^ s Cf s ri' o -Sj s t/3 cu in , ^ HO Si Vt !4J o "Si ^ f-^t R, K s o 8 "a u •-0 V. o a Ho « CO to •--1 Jh 98 MINE BOOKKEEPING J3qU13D3Q jaquiaAoj^ 1 jaqoioO - ^> 1 1 '^ 1 kO -- + XI 1 lO — - 1 1 t^ 1 1 "|7 4 1 1 to 1 — -' 50 1 — + --4 to Co — Co 1 co| — f— — f— . 1 •> —■ r —- 1- J3qui3}d3§ ;sa3ny . „ , J — • Co 1 =o 1 ^ 1 °° — - t " 1 Co f^ 1 1 ^ 1 1- 1 — - 1 — H 1 1 «o Co Co (^o J^-i — 1 ^> — + — 1 to 1 to — + — 1 Co »-< 1 <5* H 1 ^T 1 ^* 1 ^ Co y3 CO 1" - — i- 1- — +- 1 -1-- <5^ 1 — t- \ — 1- ©J 1 Xjnf 3unf Co <3^ to to 1 1 CO 1 ---t— ■ 1 1 -> __l __ 1 ■3^ 1 ^ 1 1 "^ 1 O) 1 'O 1 ) — ^> Xrj^j <5^ --■ i ludv 1 to >•< — XjEnjqaj XJBnuEf .__ <>3 --• Stock on hand 1st of month c n c O 1 0) •a u o c O > O m 1 •a c CO C O (U T3 u O C O t3 > o 1 1 1 1 -a •a S m 1 c ^ 1 o 1 1 u v •a o c O •d > u u ■a v 3 VI V) a c O V, V •d u O c O •a u > '3 u u s 1 ^ O u •a O c O ■a 4) > '5 u (2 •a 1 3 1 tn 1 Machine Drill JACKHAMER BCR 430 Ingersoll Rand Co. 1 ' — ' — ' c X J ^ — . — . 1 . — . — , u 1 u '% c. j -g ^^ ^ i '*- !2 o o 1 1 1 t^ 1 — 1 1 -I 1 Oo, 1 1 1 1 pq 1 \ ro 1 1 1 i .a a o a u a MINE BOOKKEEPING 99 ly from a separate book kept at the warehouse, into which the daily issues and receipts of repair parts are entered. From these records, the approximate consumption for any repair part can be seen at a glance, for guidance in determining the quantity to be kept in stock. Contract Work. To avoid misunderstandings, and to furnish a record for future reference, contract or bonus agreements should be made out upon a Contract form (Fig. 37) which is signed by both the foreman and the contractor. These forms should be stamped with a serial number and should be made out in duplicate; one copy is filed at the foreman's office and the other at the general office. They should be filed under the name of the contractor while in effect, those no longer in use being transferred to the back of the index and filed according to the mine workings or other classification of the contract. Personal Records (Fig. 38). Every person to whom the company considers giving employment should be required to fill out a Personal Record form when he applies for work. These are placed on perma- nent record and a live file of men actually employed is kept; the records of men who have left the employ of the company and of those who are considered undesirable from their records are placed for reference in another file, with notations as to date and reasons or leaving, reasons for not giving employ- ment, etc. Smelter Shipments. When ore or concentrates shipments are hauled from the mine to the railroad, a local way-bill should be used for the purpose, similar to the form of freight way-bill shown in Fig. 21. Arrangements are made with the railroad for cars by the company's forwarding agent, who also attends to the loading and shipping of the ore. Shipment is usually made directly to the smelter, where the ore is weighed and sampled before a mine representative. If the results of the smelter analysis are not satisfactory to the shipper as a basis of settlement, a 100 MINE BOOKKEEPING O 2 o u o z E u n c u Q 13 o -T3 O Q c "o o H o o o o 05 § (3v» O CO E C o 3 ■5 .2 i> V4-1 C ♦-' 3 rt c •- o — T3 u J3 -a a c4 > (J r! S o S - c rt E u o o 03 IH o Si 7) 1> o o o o MINE BOOKKEEPING 101 o o o o Name No . Date Date applied for work employed . Class employment desired Employment given . Rates 1 understand that the above rate will continue in effect until a definite ar- rangement is made at the time-keepers* office for a change in rate. Age Nationality Relationship, if any, to foreman . In case of serious accident notify. By what company were you last employed . Reasons for leaving All of the above statements are true to the best of my knowledge. Give names of two former employers as references Signed Address Employed by Dept. Date of leaving & reasons Fig. 38. — Personal Record Form. 102 MINE BOOKKEEPING o Q c« Z < h O B Qi ^ O h »— « W < ^ ; V5 01 O t. o u e -M ^^ o 4-> -o u cu a. ^ U3 lU U "3 ^ o U A o o ^ A 3)EQ £^ Mn < ° 3 N H w 0^ O z - h = o Pi <9 a o. -a M ki o "3 S 6 aAoqo luojj'iuoa oAoqn uiojj-;uo3 aAoqn luo^ 'juo^ I MINE BOOKKEEPING 103 part of the smelter sample is sent to a customs assayer, who has been accepted by both parties, and the settlement is based upon his returns. If the railroad freight rate varies with the grade of ore, as is commonly the case, a copy of the final analysis is sent to the railroad company's office, as a basis for determining freight charges upon the shipment. Cost Statement for May, 192-. No. 61 69 612 616 901 902 902a 9026 902c 902d 903 903a 9036 903c 903 fii "o «-* u < Q) ( « '*-' ft; O \ 1 -J w "a o SI 1 1 M H S' u .t; tol a 4> C C) 1 a 0- D "--1 h o e' H OQ MH <» en w g O u "a SI 10 <^ o H •^ o 8 o >~-i CO ^ &3 a a J3 ^ * o 1 ^ 1 ^^__ •<1< « 3 "ofl " « c ^ 2 O M •- ^ 1 o 4-* Qi ^-oe §1 o OS 2 0> %^ 5 credited to Store and charged to Store Earnings. (9) The total stock purchased has cost $20,000; it has been charged out Merchan- dise Store Store Earnings Store Ex- pense Cash Profit & Loss Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. (1) Stock purchased, cost price 20000 20000 1 (2) Stock purchased, selling price .... 25000 25000 (3) Estimated unearned . gross profits from total stock 5000 5000 (4) Goods sold during Dec. 1 9000 1 9000 1 (5) Store expense 500 500 500 500 (6) Spoilage & losses 30 30 (7) Inventory, Dec. 31 . . . 15900 15900 (8) Inventory shortage, to balance 70 70 (9) Estimated unearned gross profit from stock 3180 3180 (10) Net profit 1220 1220 Balance, Dec. 31 12720 Closed Closed Closed 11500 1220 (11) Stock on hand, Jan 1, selling price 15900 15900 (12) Estimated unearned gross profit from stock on hand 3180 3180 Fig. 46. — Diagram of Store Transactions. to the store department at $25,000. Then the cost price of goods on hand at the end of the year, with an inventory value at selling prices of $15,900, may be taken as ^ g'rTonn^ or $12,720, the amount which will appear upon the Gen- eral Trial Balance; the difference of $3,180 is estimated gross profit not 8 114 MINE BOOKKEEPING yet realized, as the goods have not been sold. Accordingly, S3, 180 is credited to Merchandise and charged to Store Earnings. (10) The balance of the Store Earnings account shows a net profit of $1,220; the total balance of this account for the year is charged oflf the Profit and Loss. (11) At the beginning of the new year, Merchandise is credited and Store is charged with the selling price of the stock on hand as shown by inventory. (12) ISIerchandise is charged and Store Earnings credited with the estimated gross profit of $3,1^0 to be realized from the sale of stock on hand. Inventories. Inventory of merchandise stock is usually taken once or twice a year; the practice of taking occasional inventory at unexpected intervals may sometimes be advisable. INDEX Accounts, Definitions of 12 Outline of 9 Payable 18, 85 Receivable 19, 85 Mercantile Store 110 Amortization 6 Assaying and Sampling 14 Bills-of-Material 72 Boarding House 14 Buildings Maintenance 14 Bullion 18 Capital Charges 5, 16 Cash 18 Cash Journal 21, 24 Vouchers 29 Charge Accounting, Mercantile Store 108 Checks Outstanding 81 Pay 53 Voucher 29 Classification of Accounts 4 Compressors, Drills and 15 Constructions and Improvements 16, 41 Contract Work 99 Contractors' Pay-rolls 53 Cost Book 22, 65 Statements 76, 104 Costs for Year-to-Date 81 Coupons 108 Daily Mine Report 87 Daily Operations, Records & Reports of 86 Dead Work 12 Depreciation 6 Development 12 Diagrams 11 Direct Charges 7, 12 Disbursements, Receipts and 81 Distribution, General 21, 32 Labor 21, 50 Supplies 23, 73 115 116 INDEX Drill Steel 13 Drills and Compressors 15 Engineering 14 Envelopes, Filing, for Cash Vouchers 29 Pay 53 Force Account Pay-rolls 50 Foremen's Time Books 48 Furniture & Fixtures 16 General Distribution 21, 32 Expense 13 Ledger 21, 42 Ledger Accounts 42 Mine Accounts 9 Miscellaneous 15 Office 13 Supplies 19 Head Office 17 Hoisting 15 Hoisting Report 90 Hospital 14 Indirect Charges 7, 15 Individuals and Companies Ledger 44 Insurance 14 Insurance Suspense Account 16 Inventories 73, 114 Invoices 44 Invoice Record 44 Journal-entry Vouchers 3 > Labor Distribution 22, 50 Ledger, General 21, 42 Accounts 42 Legal 14 Lighting II Live Stock & Vehicles lt> Local Purchases 61 Losses and Gains 107 Machinery Index 96 Machine Repair Parts 96 Maintenance, Buildings 14 Pumping & Draining 13 Tiiiil)ering 13 Tramming 13 INDEX 117 Marketing Bullion 13 Materials Returned 72 Mercantile Store Operation 105 Merchandise 110 Merchandise Register 105 Metallurgical Statement 81 Mine Foremen and Bosses 12 Mine Report, Daily 87 Mine Miscellaneous 13 Mining & Metallurgical Statement 81 Miscellaneous, General 15 Monthly Statements 86 New Operations, Records for 104 Objects in View 1 Obsolescence 7 Office, General 13 Time Book 47 Operating Expenses 7, 12 Orders, Purchase , 59, 105 Ore Treatment 13 Outline of Accounts 9 Principal Records ■. 20 Outstanding Checks 81 Pay-checks 53 Pay-envelopes 53 Pay-rolls 22 Pay-rolls, Contractors' 50 Force Account 50 Personal Records 99 Petty Cash Book 29 Policing 14 Powderman's Report 90 Power 16 Profit and Loss 19 Pumping and Draining, Maintenance 13 Purchase Orders 59, 105 Receipts and Disbursements 81 Redistributable Charges 7, 41 Register of Supplies Ordered 22, 62 Requisitions for Bills-of-Material 72 Warehouse 22, 70 Roads 15 Sampling, Assaying and 14 Shop Expense , 15 118 INDEX Side Ledger of Capital Charges 44 Smelter Shipments 99 Stable 14 Statements, Cost 76 Mining & Metallurgical 81 Monthly 76 Stock Books 70 Stock on Hand Index 22, 68 Stoping 12 Store Account 112 Earnings 112 Expense 112 Operation 105 Summary of Daily Operations 86 Sundries 41 Supplies Distribution 23, 73 Supplies on Hand and on Order Index 19, 61 Surface Foremen and Bosses 15 Suspense Accounts 5, 16 Taxes 14 Taxes Suspense Account 16 Timbering, Maintenance 13 Telephones • 15 Time Book 21,' 47 Time Tickets 49 Time-keeper's Records 21, 47 Tools Account 15 Tool Sharpening 15 Track and Supplies 13 Tramming, Maintenance 13 Report 90 Trial Balance 44, 85 Unclaimed Wages 19 Voucher Checks 29 Pay-checks 53 Vouchers 21 , 20 Warehouse Records 22, 67 Requisitions 22, 70 Water Supply 14 Way-bills 67 Working Face Records. . 95 y /~ R78680 THE UNIVERSITY OF CALIFORNIA LIBRARY