The Romance of Double-Entry Bookkeeping
Feature Column Archive
3. Sugar and Spice
For the months of March and April, 1540, many of the entries in Alvise Vallaresso's Journal concern spices and sugar.
As part of his capital were 8 sacks of pepper with a total weight of 3800 libre (about 2518 lbs), and a total value of of 855 ducati (so Pepper was worth about $34 a pound). This was recorded at the beginning of the Journal as:
We have already seen his first Ginger transactions:
Alvise also deals in cinnamon.
On March 15, Alvise also bought 12 cases of Madeiran sugar, of total weight 4344 libre, from Ser Zuanne Bustrun of Cyprus. This purchase was made on credit, with the agreement that Ser Zuanne would pay the 2% sales tax (messetaria). The price of the sugar was 8 3/4 ducati per hundredweight (about $13 a pound), coming to 380 ducati 2 grossi and 12 piccioli. The sales tax came to d.7 g.14 p.14 leaving Alvise owing Ser Zuanne d.372 g.11 p.30. Hence
Paying the sales tax was the buyer's obligation, and Alvise had acquitted himself of it by his agreement with Ser Zuanne:
On April 2 Alvise sold the sugar, which now weighed 4342 libre only, to Zuan Maria d'Alban. The price was 9 1/2 ducati per hundredweight, or d.412 s.1, with Alvise agreeing to discount the price by half of the 2% sales tax, i.e. by d.4 s.- g.3. The sale was made on credit, with Ser Francesco Colonna acting as middleman.
The middleman's fee was 1% of the undiscounted sales price
Finally the sugar account is balanced out with the profit credited to Profit & Loss.
Here is the way the sugar transactions appear in the Madeiran Sugar account in the Ledger. Each transaction is also entered in the opposite column of the other account mentioned.
MADEIRAN SUGAR 29. to Zuanne Bustrun l.37 s.4 g.11 p.30 | 55. from Zuan Maria d'Alban l.40 s.16 g.9 p.- 30. to Sales Tax Office l.- s.15 g.2 p.14 | 56. to Francesco Colonna l.- s.8 g.3 p.- | 57. to Profit & Loss l.2 s.8 g.3 p.20 |
As the year progresses, Manzoni leads us through the repertoire of business practices, showing how they can all be systematically rationalized using the double-entry method.