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 Financial
Accounting
T E N T H E DI TIO N
HOGGETT
MEDLIN
CHALMERS
BEATTIE
HELLMANN
MAXFIELD
 Financial
accounting
TENTH EDITION

John Hoggett
John Medlin
Keryn Chalmers
Claire Beattie
Andreas Hellmann
Jodie Maxfield
Tenth edition published 2018 by
John Wiley & Sons Australia, Ltd
42 McDougall Street, Milton Qld 4064

First edition published 1987

© John Wiley & Sons Australia, Ltd 2018

Australian edition © John Wiley & Sons Australia, Ltd
1987, 1990, 1992, 1996, 2000, 2003, 2006, 2009, 2012, 2015

Typeset in 10/12pt Times LT Std

The moral rights of the authors have been asserted.

National Library of Australia

Cataloguing-in-Publication data

Author: Hoggett, J. R. (John Robert), 1948–, author.

Title: Financial accounting / John Hoggett, John Medlin, Keryn Chalmers,
Claire Beattie, Andreas Hellmann, Jodie Maxfield
Edition: Tenth edition.
ISBN: 9780730344575 (ebook)
Subjects: Accounting — Australia — Textbooks.
Accounting — Australia — Problems, exercises.
Other Authors
/Contributors: Medlin, John, author.
Chalmers, Keryn, 1961– author.
Beattie, Claire, author.
Hellmann, Andreas, author.
Maxfield, Jodie, author.

Reproduction and Communication for educational purposes

The Australian Copyright Act 1968 (the Act) allows a maximum of 10% of the pages
of this work or — where this work is divided into chapters — one chapter, whichever
is the greater, to be reproduced and/or communicated by any educational institution
for its educational purposes provided that the educational institution (or the body that
administers it) has given a remuneration notice to Copyright Agency Limited (CAL).

Reproduction and Communication for other purposes

Except as permitted under the Act (for example, a fair dealing for the purposes of study,
research, criticism or review), no part of this book may be reproduced, stored in a retrieval
system, communicated or transmitted in any form or by any means without prior written
permission. All inquiries should be made to the publisher.

Cover and internal design image: yienkeat / Shutterstock

10 9 8 7 6 5 4 3 2 1
CONTENTS
CHAPTER 1 2.2 Management functions 38
Role of managers 38
Decision making and the role of 2.3 Basic financial statements 40
accounting 1 The balance sheet 41
Chapter preview 2 The income statement 44
1.1 The dynamic environment of accounting 3 The statement of changes in equity 45
1.2 Decisions in everyday life 4 The statement of cash flows 45
Steps in decision making 4 2.4 Assumptions made and characteristics of
1.3 Economic decisions 5 information 48
1.4 The nature of accounting 7 The accounting entity assumption 48
Accounting defined 8 The accrual basis assumption 48
1.5 Users of accounting information 10 The going concern assumption 49
1.6 Using information in economic decisions 11 The period assumption 49
1.7 Accounting information and decisions 13 Fundamental qualitative characteristics 49
1.8 Management and financial accounting 14 Enhancing qualitative characteristics 50
What is management accounting? 14 The concept of materiality 51
What is financial accounting? 14 Benefits and costs 51
Management accounting versus financial 2.5 The effects of transactions on the
accounting 15 accounting equation and financial
statements 52
1.9 Accounting as a profession — Australian
Key terms 58
perspective 16
Discussion questions 60
1.10 Public accounting versus commercial
Exercises 60
accounting 17
Problems 65
Public accounting 17 Decision analysis 74
Accountants in commerce and industry 18 Critical thinking 74
Public sector and not‐for‐profit accounting 20 Communication and leadership 75
1.11 Ethics and accounting 20 Ethics and governance 75
Ethics in business 21 Financial analysis 76
Ethics and professional accounting bodies 22 Acknowledgements 77
Ethics in practice 22
CHAPTER 3
Key terms 24
Discussion questions 24 Recording transactions 78
Exercises 25
Chapter preview 79
Decision analysis 31
Critical thinking 31 3.1 Transactions 80
Communication and leadership 32 Types of transactions 80
Ethics and governance 33 Transactions of a business entity 80
Financial analysis 33 Source documents 81
Acknowledgements 34 3.2 The accounting cycle 82
The ledger account 83
CHAPTER 2 Account formats 85
Accounts commonly used 86
Financial statements for Accounts: balance sheet 86
decision making 35 Accounts: income statement 88
Chapter preview 37 General ledger 89
2.1 Types of business entities 37 Chart of accounts 89
3.3 Double‐entry accounting 92 4.7 Financial statements and decision making 172
Debit and credit rules 92 Key terms 174
Normal account balances 94 Discussion questions 175
Expanded accounting cycle 94 Exercises 176
3.4 General journal 95 Problems 182
Recording transactions in a journal 95 Decision analysis 193
Communication and leadership 193
Posting from journal to ledger 96
Ethics and governance 194
Illustrative example of journal and ledger 98
Financial analysis 194
3.5 Trial balance 112 Acknowledgements 194
Limitations of the trial balance 113
Correcting errors 114 CHAPTER 5
Use of dollar signs and decimal points 114
Key terms 116 Completing the accounting
Discussion questions 117 cycle — closing and reversing
Exercises 118
Problems 124
entries 196
Decision analysis 131 Chapter preview 197
Ethics and governance 133 5.1 The complete accounting cycle 198
Financial analysis 133 5.2 Closing temporary accounts 199
Appendix Introduction to the goods and services 5.3 Using the worksheet to record adjusting
tax in Australia 134 entries 200
The GST in practice 135 Recording adjusting entries 202
Accounting for the GST 136 5.4 The closing process 203
Accounts for recording GST 137 Closing the income (including revenue)
Acknowledgements 137 accounts 206
Closing the expense accounts 207
CHAPTER 4 Closing the Profit or Loss Summary account 208
Closing the Drawings account 209
Adjusting the accounts Account balances after the closing process 209
and preparing financial The post‐closing trial balance 218
5.5 Accrual entries in subsequent periods 219
statements 138 Reversing entries 220
Chapter preview 139 5.6 Accounting procedures applicable to a
4.1 Measurement of profit 140 partnership or a company 225
Cash basis 140 Accounting for a partnership 226
Accrual basis 140 Accounting for a company 226
4.2 The accounting cycle — expansion to include Key terms 229
adjusting entries 142 Discussion questions 229
The need for adjusting entries 143 Exercises 230
4.3 Classification of adjusting entries 144 Problems 236
Adjusting entries for deferrals 145 Decision analysis 248
Adjusting entries for accruals 152 Critical thinking 248
Communication and leadership 249
4.4 Adjusted trial balance 157
Financial analysis 249
Preparation of financial statements 159
Acknowledgements 249
4.5 Distinguishing current and non‐current assets
and liabilities 163 CHAPTER 6
Current assets 163
4.6 Preparing financial statements from a Accounting for retailing 251
worksheet 165 Chapter preview 252
Preparation of the worksheet 165 6.1 Inventory 253
Preparation of financial statements 170 Retail business operations 253

iv CONTENTS
6.2 Condensed income statement for a 7.2 Internal control systems 305
retailer 254 Internal control systems defined 305
6.3 Accounting for sales transactions, including Principles of internal control systems 306
GST 255 Limitations of internal control systems 308
Retailing and the goods and services tax 255 7.3 Manual accounting systems — subsidiary
Tax invoices 255 ledgers 309
Adjustment notes 256 Control accounts and subsidiary ledgers 309
Accounting for sales transactions 258 7.4 Manual accounting systems — special
Sales returns and allowances 258 journals 311
Cash (settlement) discounts 259 Sales journal 312
Trade discounts 261 Purchases journal 314
Freight outwards 261 Cash receipts journal 316
6.4 Accounting for purchases and cost of Cash payments journal 320
sales 262 Use of the general journal 323
Perpetual inventory system 262 7.5 Abnormal balances in subsidiary
Periodic inventory system 268 ledgers 325
Perpetual and periodic inventory systems Account set‐offs 326
contrasted 272 Demonstration problem 327
6.5 End of period processes 274 7.6 Accounting software 333
Illustration of worksheets in retail businesses 274 Electronic spreadsheets 333
Perpetual inventory system 277 General ledger programs 334
Periodic inventory system 277 Computerised accounting — advantages and
6.6 Detailed income statement for a retailer 278 disadvantages 334
6.7 Net price method and settlement 7.7 Accounting cycle — manual and
discounts 280 computerised 336
6.8 Profitability analysis for decision making 281 Key terms 337
Gross profit ratio 281 Discussion questions 337
Profit margin 281 Exercises 338
Expenses to sales ratio 282 Problems 345
Inventory turnover 282 Decision analysis 357
Ratios illustrated 282 Critical thinking 358
Key terms 284 Ethics and governance 358
Discussion questions 285 Financial analysis 359
Exercises 286 Acknowledgements 359
Problems 289
Decision analysis 297 CHAPTER 8
Critical thinking 297
Ethics and governance 298 Partnerships: formation,
Financial analysis 298 operation and reporting 360
Acknowledgements 298
Chapter preview 361
CHAPTER 7 8.1 Partnership defined 362
8.2 Advantages and characteristics of a
Accounting systems 300 partnership 362
Chapter preview 302 Characteristics of a partnership 362
7.1 Operation and development of an accounting 8.3 Partnership agreement 364
system 302 8.4 Accounting for a partnership 365
Operation of an accounting system 302 Method 1: Capital accounts that include profits
Converting data to information 303 and losses 365
Development of an accounting system 303 Method 2: Fixed capital accounts 365
Important considerations in developing an 8.5 Accounting for the formation of a
accounting system 304 partnership 366

CONTENTS v
8.6 Allocation of partnership profits and 9.5 Dividends 417
losses 368 Cash dividends 418
Fixed ratio 369 Preference dividends 418
Ratio based on capital balances 369 Share dividends 420
Fixed ratio after allowing for interest and Share splits 421
salaries 370 Comparison of share dividends and share splits 422
8.7 Drawings and loans made by partners 373 9.6 Reserves 422
Drawings 373 Creation of reserves 422
Loans or advances by partners 375 Disposal of reserves 423
8.8 Financial statements for a partnership 376 9.7 Income tax 423
Key terms 379 9.8 Preparing the financial statements 424
Discussion questions 379 Illustrative example: preparation of financial
Exercises 380 statements 424
Problems 384
Key terms 431
Decision analysis 394
Discussion questions 432
Communication and leadership 394
Exercises 432
Ethics and governance 394
Problems 436
Financial analysis 395
Decision analysis 446
Acknowledgements 395
Critical thinking 448
Communication and leadership 448
CHAPTER 9
Financial analysis 448
Companies: formation and Acknowledgements 449

operations 397 CHAPTER 10

Chapter preview 398
9.1 Types of companies 399 Regulation and the Conceptual
Limited companies 399 Framework 450
Unlimited companies 401
Chapter preview 452
No‐liability companies 401
10.1 Regulation and development of accounting
Special companies 401 standards 452
Advantages and disadvantages of the corporate Brief history of regulation 452
entity 401
Financial Reporting Council 454
9.2 Forming a company 403
Australian Accounting Standards Board 454
Replaceable rules and constitution 403
Australian Securities and Investments
The certificate of registration 404 Commission 455
The prospectus 404 Australian Securities Exchange 456
Administering a company 404 International Accounting Standards Board
9.3 Categories of equity in a company 406 (IASB) 456
Share capital 406 The IFRS Interpretations Committee 457
Retained earnings 407 Financial Accounting Standards Board (FASB) 457
Other reserves 407 The Asian‐Oceanian Standard‐Setters Group
9.4 Accounting for share issues 408 (AOSSG) 458
Private share placements 408 10.2 The Conceptual Framework 459
Public share issue, payable in full on Background to developing the Conceptual
application 409 Framework 460
Public share issue, payable by instalments 410 10.3 The reporting entity 461
Undersubscription and oversubscription 413 10.4 Objectives of general purpose financial
Rights issue of shares 414 reporting 464
Bonus share issues 415 10.5 Qualitative characteristics of financial
Formation costs and share issue costs 415 information 465
Preference shares 416 Fundamental characteristics 466

vi CONTENTS
 Enhancing qualitative characteristics 468 11.4 The petty cash fund 516
The cost constraint on relevant, faithfully Establishing the fund 516
representative ­information 470 Making payments from the fund 517
10.6 Definitions of elements in financial Reimbursing the fund 517
statements 470 11.5 Cash budgeting 520
Assets in the current Conceptual Framework 470 Need for cash budgeting 520
Assets in the proposed framework 471 Preparation of a cash budget 520
Liabilities in the current Conceptual 11.6 Cash management 523
Framework 472 Principles of cash management 523
Liabilities in the proposed framework 472 11.7 Analysing adequacy of cash flows 524
Equity in the current Conceptual Framework 473 Key terms 525
Income in the current Conceptual Framework 473 Discussion questions 525
Expenses in the current Conceptual Exercises 526
Framework 474 Problems 531
10.7 Recognition of the elements 475 Decision analysis 544
Asset recognition in the current Conceptual Critical thinking 544
Framework 475 Ethics and governance 544
Liability recognition in the current Conceptual Financial analysis 545
Framework 475 Acknowledgements 545
Asset and liability recognition in the proposed
framework 475 CHAPTER 12
Income recognition in the current Conceptual
Framework and standards 476
Receivables 546
Expense recognition in the current Conceptual Chapter preview 547
Framework 479 12.1 Types of receivables 548
10.8 Measurement 481 Accounts receivable 548
Measurement in the proposed framework 481 Bills receivable 548
Concepts of capital 481 Other receivables 549
Key terms 483 12.2 Accounts receivable (trade debtors) 549
Discussion questions 484 Recognition of accounts receivable 549
Exercises 485 Valuation of accounts receivable 550
Problems 490 12.3 Bad and doubtful debts 550
Decision analysis 498 Allowance method of accounting for bad
Critical thinking 498 debts 551
International issues in accounting 499 Estimating doubtful debts 552
Financial analysis 499 Writing off bad debts 555
Acknowledgements 499
Recovery of an account written off 556
Direct write‐off method 557
CHAPTER 11
Demonstration problem 558
Cash management and 12.4 Management and control of accounts
control 501 receivable 560
Credit policies 560
Chapter preview 502
Monitoring credit policies 561
11.1 Cash defined 502
Internal control of accounts
11.2 Control of cash 503
receivable 563
Control of cash receipts 504
Disposal of accounts receivable 563
Control of cash payments 505
Key terms 566
11.3 Bank accounts and reconciliation 507 Discussion questions 566
Cheque accounts 507 Exercises 567
Electronic funds transfer 508 Problems 569
The bank statement 509 Decision analysis 574
Bank reconciliation 511 Critical thinking 575

CONTENTS vii
 Communication and leadership 575 CHAPTER 14
Ethics and governance 576
Financial analysis 576 Non‐current assets: acquisition
Acknowledgements 577 and depreciation 625
14.1 The nature of property, plant and
CHAPTER 13 equipment 626
14.2 Determining the cost of property, plant and
Inventories 578 equipment 627
Chapter preview 579 14.3 Apportioning the cost of a lump‐sum
13.1 Determining the cost of inventory on acquisition 629
hand 580 14.4 Assets acquired under a lease
Performing a stocktake 580 agreement 630
Transfer of ownership 581 14.5 Depreciation 631
Goods on consignment 581 The nature of depreciation 631
The cost of inventory 581 Determining the amount of depreciation 632
13.2 Assignment of cost to ending inventory and Depreciation methods 633
cost of sales — periodic system 582 Comparison of depreciation methods 637
Specific identification method — periodic 584 Revision of depreciation rates and methods 638
First‐in, first‐out (FIFO) method — periodic 585 Accumulated depreciation does not represent
Last‐in, first‐out (LIFO) method — periodic 586 cash 639
Weighted average method — periodic 586 14.6 Subsequent costs 639
Comparison of costing methods 587 Day‐to‐day repairs and maintenance 640
Consistency in using a costing method 589 Overhauls and replacement of major parts 641
13.3 Costing methods in the perpetual inventory Leasehold improvements 641
system 589 Spare parts and service equipment 642
First‐in, first‐out method 590 14.7 Property and plant records 643
Last‐in, first‐out method 592 14.8 Disclosure of property, plant and
Moving average method 592 equipment 645
13.4 Comparison of inventory systems 593 14.9 Analysis, interpretation and management
13.5 The lower of cost and net realisable value decisions 645
rule 595 Analysis and interpretation 645
13.6 Sales returns and purchases returns 597 Management decisions 646
Returns using the first‐in, first‐out method 598 Key terms 648
Returns using the moving average method 599 Discussion questions 649
13.7 Inventory errors 599 Exercises 650
13.8 Estimating inventories 601 Problems 653
Retail inventory method 602 Decision analysis 659
Gross profit method 604 Critical thinking 659
13.9 Presentation in financial statements 605 Communication and leadership 660
Ethics and governance 660
13.10 Effect of costing methods on decision
Financial analysis 661
making 605
Acknowledgements 661
Key terms 607
Discussion questions 608
Exercises 608 CHAPTER 15
Problems 613
Decision analysis 623
Non‐current assets:
Critical thinking 623 revaluation, disposal and other
Communication and leadership 624
Financial analysis 624
aspects 662
Acknowledgements 624 Chapter preview 663
15.1 The revaluation model 664
Initial revaluation increases 664

viii CONTENTS
 Initial revaluation decreases 667 16.3 Provisions and contingent liabilities 711
Reversals of increases and decreases 667 Nature of provisions 711
15.2 The impairment test 669 Items excluded from provisions — future
15.3 Derecognition of non‐current assets 671 costs 712
Scrapping non‐current assets 671 Contingent liabilities 712
Sale of non‐current assets 672 16.4 Classification of liabilities 714
Derecognition of revalued assets 674 Need for classification 714
Exchanging non‐current assets 674 Basis of classification 714
Exchanging dissimilar assets 674 Categories 714
15.4 Composite‐rate depreciation 675 16.5 Current liabilities 715
15.5 Mineral resources 677 Accounts payable (trade creditors) 715
Exploration and evaluation costs 677 Bills payable 715
Development costs, construction costs and Employee benefits 717
inventories 678 Warranties 721
Amortisation 678 Onerous contracts 722
Depreciation of related construction assets 679 GST payable 723
15.6 Biological assets and agricultural 16.6 Non‐current liabilities 725
produce 679 The types of non‐current liabilities 725
15.7 Intangible assets 681 Debentures 726
Separately acquired intangibles 681 Other non‐current liabilities 728
Internally generated intangibles 682 Why finance through long‐term debt? 731
Intangibles subsequent to initial recognition 682 16.7 Analysing liabilities for decision making 732
Amortisation 683 Liquidity ratios 733
Patents and research and development Financial stability ratios 734
costs 683 Illustration of ratios 735
Copyrights 684 Key terms 737
Trademarks and brand names 684 Discussion questions 738
Franchises 684 Exercises 739
15.8 Goodwill in a business combination 686 Problems 742
Key terms 688 Decision analysis 746
Discussion questions 689 Communication and leadership 747
Exercises 689 Ethics and governance 747
Problems 694 Financial analysis 747
Decision analysis 703 Acknowledgements 748
Critical thinking 704
Communication and leadership 704 CHAPTER 17
Financial analysis 704
Acknowledgements 705
Presentation of financial
statements 749
CHAPTER 16 Chapter preview 751
17.1 External reporting requirements 751
Liabilities 706 Annual financial report 751
Chapter preview 708 Concise report 753
16.1 Liabilities defined 708 Interim financial report 754
Present obligation 708 General requirements for the annual report 754
Past event 709 17.2 Statement of profit or loss and other
Future outflow of resources embodying economic comprehensive income 757
benefits 709 Disclosure of income and expenses 758
16.2 Recognition of liabilities 710 17.3 Statement of financial position 760
Why recognition is important 710 17.4 Statement of changes in equity 762
Criteria for recognition 710 17.5 Demonstration problem 764

CONTENTS ix
 Key terms 772 Step 5: Cash and cash equivalents at beginning
Discussion questions 772 and end 832
Exercises 773 Notes to the statement 832
Problems 778 The indirect method of determining net cash from
Decision analysis 786 operating activities 833
Communication and leadership 786 Analysing the statement of cash flows 834
Ethics and governance 787 18.9 Limitations of the statement of cash
Financial analysis 787 flows 836
Acknowledgements 787
Key Terms 838
Discussion questions 838
CHAPTER 18
Exercises 839
Statement of cash flows 789 Problems 850
Decision analysis 868
Chapter preview 791
Communication and leadership 868
18.1 Purpose of the statement of cash Ethics and governance 869
flows 791 Financial analysis 869
18.2 General format of the statement of cash Acknowledgements 870
flows 792
18.3 Concept of cash 794 CHAPTER 19
18.4 Classification of cash flow activities 795
Cash flows from operating activities 795 Analysis and interpretation of
Cash flows from investing activities 796 financial statements 872
Cash flows from financing activities 796 Chapter preview 874
Summary of classification 796 19.1 Sources of financial information 874
18.5 Preparing the statement of cash flows — 19.2 The need for analytical techniques 874
direct method 797 19.3 Percentage analysis 878
Analysis of cash and other records 798 Horizontal analysis 878
Analysis of financial statements 799 Trend analysis 879
18.6 Notes to the statement of cash flows 810 Vertical analysis 879
Items included in cash and cash equivalents 811 19.4 Ratio analysis 880
Reconciliation note of profit and cash flows from Profitability ratios 880
operating activities (indirect method) 811 Liquidity ratios 886
Other notes 814 Financial stability ratios 889
18.7 Advanced issues 815 19.5 Some important relationships 891
Impact of the GST 815 19.6 Analysis using cash flows 892
Trade accounts receivable 817 Cash sufficiency ratios 893
Trade accounts payable and discount Cash flow efficiency ratios 895
received 819
19.7 Limitations of financial analysis 898
Non‐trade receivables and payables 819
19.8 The impact of capital markets research on
Bills receivable and bills payable 820 the role of financial statement analysis 899
Short‐term investments 821 Key terms 902
Dividends 821 Discussion questions 902
Income tax 822 Exercises 903
18.8 Comprehensive example 826 Problems 908
Step 1: Cash from operating activities — direct Decision analysis 916
method 829 Financial analysis 917
Step 2: Cash from investing activities 830 Ethics and governance 918
Step 3: Cash from financing activities 832 Communication and leadership 919
Step 4: Net cash increase/decrease 832 Acknowledgements 919

x CONTENTS
CHAPTER 1

Decision making and

the role of accounting
LEA RNIN G OBJE CTIVE S

After studying this chapter, you should be able to:

1.1 outline the dynamic environment in which accountants work
1.2 discuss the nature of decisions and the decision‐making process
1.3 outline the range of economic decisions made in the marketplace
1.4 explain the nature of accounting and its main functions
1.5 identify the potential users of accounting information
1.6 apply information to make basic economic decisions
1.7 describe the role of accounting information in the decision‐making process
1.8 compare accounting information for management and external users
1.9 summarise how the accounting profession is organised in Australia
1.10 identify the different areas of the economy in which accountants work
1.11 identify the importance of ethics in business and accounting and how to recognise and handle ethical
dilemmas as part of the decision‐making process.
 SCENE SETTER

Getting started with accountancy

A uniquely caring, fair and inclusive view of
society is most often the product of a recipe
that includes powerful life lessons, positive cul-
tural understanding and thoughtful reflection.
These influences have turned Corinne Proske
CPA into the person she is today. What is per-
haps most surprising is that she fell so comfort-
ably into accounting.
Proske grew up in Melbourne, but spent time
in the US, France and Germany when she was
young. Her parents’ respect for nature was
passed on to Proske who, as a teenager, once
considered chaining herself to a tree during an
anti‐logging protest. Instead, a philosophical
discussion with her father led her in an unex-
pected direction.
‘We had a talk about whether it is more effective to strap yourself to the tree and wait for the bull-
dozer or to drive the bulldozer yourself,’ she says.
‘I began to realise the power of blending two worlds together.’
Proske originally dreamed of becoming a park ranger but instead studied commerce, specialising in
environmental economics and later completing her accounting professional qualification.
‘There is a role for people to be outraged but, using the skills of accounting and economics, I have
been able to make the most impactful influences and decisions.’
Proske worked with NAB as head of community finance and development and led NAB’s impact invest-
ment business, an emerging field of investment activities that aims to generate a measurable and beneficial
social or environmental impact along with a financial return. The Australian market for impact investment is
estimated to reach A$32 billion by 2022, so it makes economic sense for the bank to be involved.
From ‘behind the wheel of the bulldozer’, she developed, managed and launched NAB’s microfinance
program, offering assistance to individuals and businesses that have difficulty accessing mainstream
finance.
‘There are two key commercial drivers,’ says Proske. ‘One is that, economically, it makes sense to
include everybody; it is good for GDP. Second, we will be regulated if we don’t get this right. It is also
simply about doing the right thing.’
Research from the Centre for Social Impact, conducted on behalf of NAB, shows that three million
adult Australians are fully or severely financially excluded.
Corinne is now General Manager, Online and Retail at Good Shepherd Microfinance.
‘I would never have got here without my accounting knowledge and experience,’ says Proske. ‘It has
allowed me some real clarity.
‘The tools that accounting offered me have been absolutely essential.’

One piece of advice

‘Doing the right thing and achieving commercial outcomes need to, and can, align. Business is only
successful when society succeeds. Accountants need to look beyond the numbers.’
Source: Excerpts from Sheedy, C 2016, ‘A natural progression’, InTheBlack, June 2016, p. 70, http://intheblack.com/
articles/2016/06/01/could-394000-microfinance-projects-change-australian-market.

Chapter preview
Welcome to your journey into the field of accounting. If your initial reaction to accounting is ‘boring!’,
then think again. Accounting, at times, can be full of politics and intrigue, and the financial figures
it produces are useful for informing many business decisions. The figures also may be the result of
unethical behaviour whereby people have ‘cooked the books’. So let’s begin.

2 Financial accounting
 Whether you are studying this subject with a view to following a career in community finance (as has
Corinne Proske in our scene setter), sports management, financial planning, or simply to gain a basic
understanding of the field as it relates to other areas of business, we hope that you find your study of
the subject enjoyable, challenging and useful. Inevitably, a study of accounting requires a basic under-
standing of record keeping, but accounting is far more than that. Accounting plays a vital role in the
decision‐making processes of every organisation, whether it is a for‐profit organisation (e.g. Common-
wealth Bank), not‐for‐profit organisation (e.g. a charity such as Oxfam) or a government organisation
(e.g. a local council).

1.1 The dynamic environment of accounting

LEARNING OBJECTIVE 1.1 Outline the dynamic environment in which accountants work.
Accountants traditionally have been viewed as the ‘bean counters’ or ‘number‐crunchers’ of an organ-
isation, but this is no longer their major task. Computerised accounting systems can now do much of the
work. Even small businesses have access to computerised accounting systems such as Mind Your Own
Business (MYOB) or Xero, so the role of accountants has changed radically. Accountants working in
organisations have become important members of the management team, as organisations have to con-
tend with social changes caused by several factors such as:
•• the dramatic development of information and communications technology including electronic
banking, the Internet and e‐commerce
•• the increasing demand by society for information of a non‐financial nature. This may include
information about an entity’s attention to such issues as occupational health and safety, social and
equity diversity (e.g. employment of people with disabilities and indigenous people), and environmental
considerations (e.g. water usage, the organisation’s carbon footprint and other sustainability practices).
•• the globalisation of business. Instead of merely being involved in a particular local community, many
organisations are seeing the world as their marketplace and as their source of labour and knowledge.
This has placed increasing demands on organisations to be accountable for their corporate behaviour in
foreign countries, including abiding by their rules and regulations, and their impact on the society and
environment of those countries. Questions being asked include: How well does an organisation treat
and pay its employees in developing countries? Is business conducted by way of political payments
(bribes) to influential officials in those countries? What corporate governance practices apply in those
countries?
•• the globalisation of regulations affecting business organisations, such as the development and adoption
of international financial reporting standards
•• digital disruption and unlocking the power of big data.
One thing is certain: change will continue. In order to cope, accountants of the future need to have
not only record‐keeping knowledge but also analytical and communication skills, and business strategy
and planning know‐how. They need the ability to think clearly and critically in order to solve problems,
a familiarity with information systems and technology, strong interpersonal communication skills with
clients and business associates, and sound ethical behaviour in different cultural environments.
This text is designed for all students studying accounting for the first time at university level, both
those majoring in accounting and those seeking a basic understanding of accounting but studying in
other fields, such as marketing, management, economics, information technology, law, engineering, the
arts and sciences. Accounting is usually a core unit in business degrees as it is the ‘language of business’.
Many students in non‐accounting majors can benefit greatly from reading this text. Engineers are often
involved in designing products to reduce costs and meet target prices, so much of their work is driven
by accounting measures. Marketers often strive to maximise sales, so a knowledge of costs, pricing and
accounting methods is helpful for success. Human resources managers are responsible for one of the
major costs in an organisation, so they need to choose a mix of staff to provide a quality service while
keeping control of salary and wages costs. Indeed, many professional groups outside of accounting find

CHAPTER 1 Decision making and the role of accounting 3

that having a good grasp of accounting concepts is an advantage and enhances the opportunities for suc-
cess in their chosen careers.
We begin the text by considering decision making in everyday life, and the role of accounting in pro-
viding information for the decision‐making process. Also in this chapter, we acquaint you with the types
of activities that are carried out by a professional accountant working in business.

LEARNING CHECK

■■ Accountants are not purely record keepers but are part of the management team in an organisation.
■■ Accountants need to have not only record‐keeping knowledge but also analytical skills, and
business strategy and planning know‐how.
■■ Accountants need the ability to think clearly and critically in order to solve problems, a familiarity
with information systems and technology, strong interpersonal communication skills with clients and
business associates, and sound ethical behaviour in different cultural environments.

1.2 Decisions in everyday life

LEARNING OBJECTIVE 1.2 Discuss the nature of decisions and the decision‐making process.
We make many decisions every day. For example, we decide when to get out of bed each morning
(sometimes prompted by our parents!); we decide the appropriate clothes to wear for the coming day’s
activities (influenced by our peers); we decide what to eat for breakfast, unless we are in too much of a
hurry, in which case we make another decision to go without breakfast.
Decisions involve choices because it is not possible to do everything we might like to do, as time and
resources are always limited. Some decisions can be made in no time at all with little thought, such as
putting on a coat if the weather is cold, but others may require much thinking, planning and information
gathering, such as choosing a career, buying a house or a car, moving from one city to another, going on
an overseas trip, choosing which subjects to study at university, and deciding when to retire from active
employment.
Sometimes, decisions made in haste can affect us adversely for the rest of our lives. Each decision we
make has outcomes which then affect decisions to be made at a later time. Ultimately, the decisions we
make, or the decisions made by others which affect us, determine our destiny in life. Decisions affect our
appearance, our economic wellbeing, even our emotional and spiritual wellbeing, so it is important that
we make decisions after careful consideration of all information available at the time.

Steps in decision making

In simple terms, a decision is the making of a choice between two or more alternatives. Every time
a problem arises and we need to make a decision, we consciously or unconsciously follow four main
steps, which can be framed as questions.
1. What are we trying to achieve? We must identify each situation in which a decision is needed and
determine the goals we wish to achieve. The decision we make will be influenced by our values,
motives and desires.
2. What information do we need? Information can help change our attitudes, beliefs or expectations.
Information relevant to each decision helps us determine the alternatives available from which to
choose given the time, resources and degree of effort that we are prepared to commit to making a
choice.
3. What are the consequences of different alternatives? Having obtained information to help us determine
the alternatives available, we then need to assess the consequences or outcomes of these alternatives.
Since the outcomes of each alternative lie in the future, every decision we make involves a degree of

4 Financial accounting
Other documents randomly have
different content
The Project Gutenberg eBook of Go to sleep, my
darling
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Title: Go to sleep, my darling

Author: Winston K. Marks

Release date: November 8, 2023 [eBook #72069]

Language: English

Original publication: New York, NY: Royal Publications, Inc, 1958

Credits: Greg Weeks, Mary Meehan and the Online Distributed

Proofreading Team at http://www.pgdp.net

*** START OF THE PROJECT GUTENBERG EBOOK GO TO

SLEEP, MY DARLING ***
 Go to Sleep, My Darling

By WINSTON K. MARKS

If you're totally convinced

it's a man's world, don't
read this. But if in doubt....

[Transcriber's Note: This etext was produced from

Infinity November 1958.
Extensive research did not uncover any evidence that
the U.S. copyright on this publication was renewed.]
At 46, Bertrand Baxter was a man's man, still struggling to adapt
himself to a smotheringly woman's world. His work, selling sporting
goods for Abernathy and Crisp Co., was his element. Not only was
he an ex-All American tackle, but his abiding love for sports had led
him into a business where he dealt almost exclusively with men.
Old Crisp had once told him, "Bert, if we had two more salesmen like
you we could fire the other twenty. You have a sixth sense dealing
with these coaches and school superintendents. They love you."
Yes, Bert Baxter could anticipate his male customer's requirements,
objections, moods and buying habits with an almost clairvoyant
insight. But give him a woman! He was licked before she opened his
catalog.
Women found him attractive enough. His six-foot-four, square-jawed
athletic prowess had given him the pick of the class of '29, including
the statuesque Rolanda. But to marry a woman and to understand
her were different matters: the former ridiculously easy, the latter
bewilderingly impossible.
The easy familiarity he enjoyed with men of the slightest
acquaintance was something he could never establish in his own
home with his own wife and his own daughters. Fate, as if to further
confound him, had presented Bertrand with four daughters.
Of all these females, Rolanda, Aileen, Grace, Norma and Annie, only
two month-old Annie was currently making sense to Bert Baxter.
That was because she was a baby, and not yet a female in the
baffling sense of the word. His other three daughters had had their
turns, but as they emerged from infanthood into childhood they
became unmistakable girl-children almost with their first mama-papa
lisps, and thereby removed themselves from Baxter's realm of
fathomable human beings.
He lay sleepless one November night beside the gently snoring
Rolanda, debating the wisdom of having induced her to try once
more to provide him with a son. Although Rolanda was forty at the
time, Annie had arrived without undue trouble, fitted immediately into
the Baxter feminine regime and established herself in Bert's heart
quite solidly, if only temporarily.
The misgivings that beset him were vague ones. Annie was the
apple of his eye, but in a few short months she would add to the
flooding tide of womanhood that swirled through his house,
squealing, giggling, moping, hair-curling, nylon-rinsing, plucking,
powdering, painting, primping, ironing, sweater-trading, lipstick-
snitching and man-baiting.
Too soon—much too soon—dear, understandable little Annie would
move off in her own miasma of perfume and verbal nonsense,
leaving Bertrand once again a lonely man in his crowded home.
The illuminated dial said precisely two o'clock when a tiny whimper
seeped through the adjacent wall from the nursery. Baxter was on
the verge of slipping into a doze, but it brought his eyes open.
The two o'clock feeding!
He loved Annie dearly, but it was high time she was omitting the late
feeding. It meant rousing Rolanda, who never heard the call. It
meant lights and commotion, short tempers, bottle-banging in the
kitchen. It meant disturbing the other girls, which occasioned a
slipper-shuffling parade to the bathroom with attendant flushing, tap-
turning, glass-rattling and ostentatious whispering that turned the hall
into a rustling snake-pit.
Don't wake daddy! He has to get up early.
Indeed daddy had to get up early if he hoped to enjoy his shower in
peace in the stocking-strewn bathroom.
"Go to sleep, Annie," Baxter said in the deep recesses of his mind.
"Go to sleep, my darling," he urged gently. "Please don't start the
circus! Let me rest. Go to sleep, my darling."
Annie's whimper faded. Stopped.
In the hazy realm between waking and slumber, it didn't seem
remarkable to Baxter. Not until he was stuffing his briefcase the
following morning did he recall that Annie had at last skipped her late
feeding. The memory of his urgent, silent pleading with her came
back, and he smiled to himself. If it were only that easy, he thought.
He had a strenuous day driving out to a rural school district and
rounding up five members of the athletic board to complete a nice
contract for basketball equipment. He dribbled an Abernathy & Crisp
basketball around the gym twelve times for the coach, lugged four
sample cases of uniforms up a flight of stairs, and made uncounted
round trips to his distantly-parked station wagon for afterthought
items to satisfy inquiries.
But he had energy enough to bowl all evening at the athletic club, of
which he was a board director. When he arrived home at ten o'clock,
a "bargain" in fireplace wood which Rolanda had purchased from a
late peddler was heaped across the short driveway and had to be
tossed into the basement before he could garage the car.
He had learned not to question Rolanda's bargains, regardless of the
time of day or night they occurred. She welcomed such criticisms as
occasions to strike for an increase in the household allowance. "Of
course, I wouldn't have to take advantage of these penny-savers that
you say cause more trouble than they're worth—if we could afford
another five dollars a week...."
So he changed clothes, threw in the wood, showered and sank
gratefully into bed. Rolanda was still wiping on cold cream. He
asked, "Would you please open the window before you jump in?"
"But it's cold out, dear."
"It's barely November," he pointed out. "We had that all out last year.
Closed windows only during blizzards and high winds."
"I know, dear, but summer's just over, and our blood's still thin.
Besides, we put on the electric blankets today."
Since, theoretically, expensive electric blankets were supposed to
add to one's security against chilling, the argument detracted not a
whit from Baxter's convictions, but he was too tired to pursue the
annual debate about chilling-versus-fresh air requirements.
He inhaled the dense mist of aromatic, warm, humid boudoir
essences and fell into exhausted slumber. His dream was a
recurrent one wherein he wandered barefoot through an echoing
chamber. He was a Lilliputian, searching the interior of Rolanda's
skull, a great, empty, reverberating dome. He had no notion for what
he was searching, but all he found were the roots of her yellow hair
sticking down through the pate.
The edge of his fatigue had just nicely worn off to that treacherous
point, where to be awakened would result in hours of wakeful
tossing, when the whimper came. It came again, and Baxter swam
up from the depths until he was half awake.
"Sleep, baby!" he urged. "Close your eyes and go to sleep, my
darling." His lips didn't move, and he was only dreamily aware of the
foolish hope that his good luck of last night might be repeated.
It worked. Annie quieted, went back to sleep and stayed asleep until
morning.

A week later Rolanda remarked about it at the breakfast table. It did,

indeed, seem that Annie had reformed her nocturnal habits; but
Baxter knew better. Each night, now, at the first whimper he sent his
silent, mental message winging through the plaster, lath and pink
wallpaper to the pink baby under the pink blanket in the pink crib.
Annie was still waking at two a.m. each night, but she was still
complying with his soothing thought-appeals.
That night, the whimper found him sleepless again. Starkly awake,
with eyes wide open, it seemed ridiculous to repeat such a foolish,
wishful-thinking process, and he refrained from doing so. Telepathy
was nonsense!
The whimper grew in volume, welled up into a full-throated wail that
prickled the short hairs of his neck. "Oh, no! Annie, for heaven's
sake!"
Without thinking further on it he slipped into his silent pleading. "Go
to sleep, baby. Go to sleep, my darling."
Annie had too much momentum to capitulate easily. He pleaded and
cajoled, and finally he mentally hummed three stanzas of "Rock-a-
Bye Baby."
The wail trembled and fell off into a few reluctant sobs. Annie was
comforted, reassured. Annie slept.

For all his preoccupation with sports and other manly extroversions,
Bertrand Baxter was not unimaginative. His stunning victory on this
seventh night was too dramatic to ignore. He said not a word about it
to Rolanda, but the following night he deliberately stayed wide
awake until Annie sounded off.
Instead of immediately flooding his infant daughter with the warm
reassurance and pleading requests that she sleep, Baxter let his
mind "feel" of the situation. He spoke softly to her in his unmouthed
mind-talk, and for the first time he became aware of a tiny but
positive mental response. There was a faint fringe of discomfort-
thoughts—a weak hunger pang, a slight thirst, a clammy diaper. But
mostly there was the cheerless darkness and a heavy feeling of
aloneness, a love-want, an outreaching for assurance.
As his thoughts went out he could sense that Annie did receive them
and take comfort from them—and the little physical hungers and
discomforts faded from her mind.
She felt reassured now, loved, petted, cosy and warm in the velvety
gloom, in the restful quiet.
He sensed the peace that settled through her, and the same peace
flooded through him, a rare sensation of security, understanding and
blind trust.
Annie slept. Baxter slept.
And then it was Saturday morning. Baxter stayed abed, yielding the
bathroom to his three teen-age daughters. Annie was still asleep,
too, so Rolanda was stretching leisurely beside him like a long, pink
cat. Noticing the time, she raised to an elbow and viewed him with
some concern. "No golf this morning? Aren't you well, Bert?"
Had he plunged out of bed to forage for his golf shoes as usual, she
would have grumbled about how it must be Saturday, and she
wished that she had a whole morning off each week to herself.
He replied slowly, "Later, maybe. Want to rest a little bit. Don't stare! I
feel fine. Just thinking a little."
She shrugged, put on her robe and entered the bathroom
competition.
Baxter lay waiting, eyes closed, concentrating. Then it came. The
sensation of gentle awakening. Light—at first just a diffused pink
light, then outlines forming: the ceiling fixture, the yellow-billed ducks
on the pale pink wallpaper, the round bars of the crib. The sensation
of movement, stretching, a glorious feeling of well-being.
Annie was awake.
Then in rapid succession, the sensation of wet diaper, cramped toe,
hunger pang, hunger pang!
Annie yelled.
The sound came through firmly and demandingly, interrupting
Baxter's concentration and breaking the remarkable rapport, but he
had proved to himself beyond all doubt what he had been dubiously
challenging: He had established a clear, telepathic entry into his
daughter's mind.

Now he was so excited that he forgot himself and tried to explain the
whole thing to Rolanda. She seemed to listen with half an ear as she
assembled breakfast. She didn't understand, or she misunderstood,
or she understood but disapproved—Baxter wasn't at all certain
which it was. When he finished she simply paused in her oatmeal
dishing, pulled her housecoat tightly about her and said, "Nonsense!
You went back to sleep after I got up. You're dreaming these things.
It is high time that Annie began skipping her night feeding."
But her eyes were narrowed cat-slits, and Baxter felt a positive
warning in them. He felt that since creation, probably no man had
actually penetrated a woman's brain to probe the willy-nilly logic that
functioned there:—functioned well, for somehow things got done, but
functioned in such a topsy-turvy manner as to drive a serious male
insane if he pondered it too long.
He retreated to the morning paper and said no more about it. Before
he left for the golf club he had another remarkable experience. He
stepped into the nursery and stared down at the adorable little pink-
cheeked Annie. He closed his eyes and sought her mind—and saw
himself standing above the crib—through her eyes! It was clear as a
TV image. In fact he noted that he needed a shave and looked quite
strange with his eyes closed.

In the days that followed Baxter became addicted to slipping into

Annie's innocent little mind at almost any hour of her waking. At the
office. In a customer's waiting room. Even out on the golf course
while waiting for a slow foursome to tee off ahead. Distance was no
obstacle to the telepathic rapport.
And he began to make fabulous plans. As Annie grew he would
follow her mental progress, investigating every aspect of her thought
processes to learn the key to womankind's inexplicable mind.
Through her eyes and other senses he would experience the
woman's world as it impinged upon her, and one day he would
fathom the deepest, eternal secrets of all womanhood.
Whether Rolanda divined his intentions Baxter never knew, but when
Annie was three months old she suddenly began resisting her
father's mental intrusion.
He first noticed it one evening right after Annie had been tucked in
for the night. Baxter was pretending to doze in his leather chair in the
den, but actually he had been keeping mental watch until Rolanda
cleared out of the nursery—for some reason he feared communing
with Annie while his wife was in the room.
Rolanda had come out, down the hall, stopped in the open door of
his den, and he had felt her gaze upon him for a long minute.
When she passed on without comment, Baxter sought to enter
Annie's mind and enjoy her nightly snugged-down feeling of
contentment. He probed gently, and to his surprise he met a barrier,
an impalpable resistance, a shutting-out that he had never
encountered. He pressed more firmly. Dim perceptions began to
come through to him, but they were dominated by displeasure
emotion.
Annie cried out.
Baxter withdrew instantly, feeling somewhat guilty. Then he tried
again.
Annie screamed.
Rolanda came down the hall, paused at his door and said, "What do
you suppose is the matter with her tonight? She always drops off."
Without waiting for an answer, she passed down the hall to the
nursery and comforted Annie to sleep. Baxter tried no more that
night.

It was the same each time he tried thereafter. Abruptly, Annie had
become irritable, intolerant of his probing. How she could understand
what was happening mystified Baxter, but he was determined to
retain contact. He kept pushing, gently but firmly, and although it
brought on some furious yells, he succeeded in making at least one
daily survey of his infant daughter's mind.
For a week Rolanda became increasingly hostile for no apparent
reason. Baxter felt that the tension that grew between them was in
some way connected with Annie, but his wife never spoke of it.
Never a particularly demonstrative woman, she became even colder,
and often he caught her regarding him with an enigmatical look of
suspicion.
As a long-sufferer to her moods, Baxter had no fear that an open
break might develop. His life was insured for $75,000, and Rolanda
was much too hard-headed to consider divorcing such a solid
"producer" of bread and luxuries as she and her female brood had
learned to enjoy.
Meanwhile, Annie's mind was becoming an even more fascinating
field for exploration. In spite of her resistance, Baxter's shallow
penetration revealed the amazing network of learning that daily
increased her web of knowledge, experience and stimulus-response
conditioning. Often Baxter pondered what a psychologist would give
for such an opportunity as this.
He became so bemused with his objective study that, the night Annie
withdrew her barriers, Baxter fell into her mind like a lion into a
game-hunter's animal pit.

He was, again, in his leather chair. Rolanda had just put Annie to
bed and passed his open door. He probed for Annie's mind and
leaned the heavy weight of his own strong mind on the expected
barrier. It was gone!
He sank deeply into his daughter's brain and caught his breath. He
had forgotten what it was like, this total absorption with her physical
and emotional sensations.
Annie was feeling good. Her stomach was full, she was warm, dry
and pleasantly tired from her evening romp. She stretched and
yawned, and a feeling of euphoria swept over Baxter.
Never had he completed such a transfer. He could feel every little
primitive pleasure sensation that rippled through Annie's healthy,
growing body. Conversely, two dozen trivial but annoying twinges,
aches, pains and bodily pressures that slowly accumulate with the
years vanished from his 46-year-old body.
The abscessed tooth that he should have had pulled a month ago
quit hurting. The ache from the slightly pulled muscle in his back
faded away. The pressure from the incipient gastric ulcer in his
stomach eased off and disappeared. All the tensions and minor
infirmities that had slipped up on him, almost unnoticed with middle
age, vanished; and Baxter knew once again the long-forgotten,
corporeal ecstasy of a young, human animal in the rapid-growth
stages.

He awoke to see the fuzzy image of Rolanda over him. It was

morning. Her face was faintly troubled, but she smiled with a rare
warmth when he cooed at her. She caught him up in her arms,
murmuring endearing sounds. Snuggled to her breast, he felt the
satisfaction of a great subconscious yearning as the scented
woman-smell pervaded his nostrils and her strong, warm arms
cuddled him tightly.
There was the unpleasant business of a diaper change, during which
he became sharply aware of hunger. He yelled lustily for food, and
soon he was sucking hungrily on a deliciously flexible rubber nipple
that yielded an ambrosia of warm sweetness.
A jumble of clear, high voices chirped familiarly in his ears, but he
paid no attention to the words as such. His bath was delightful,
although he sneezed violently at the talcum dust afterward. Now the
voices were silent except Rolanda's occasional soft words to him.
Again he enjoyed his liquid meal and slipped into delicious slumber
with the shades drawn.
Voices awakened him. A man's voice mingled with his wife's.
"In here, doctor. We managed to carry him to bed, and he hasn't
awakened yet."
Baxter heard the words with mild interest but no comprehension. The
man's voice came through the wall of the nursery from the next
bedroom, a low rumble of pleasant sound. "No sign of physical
impairment. Resembles a catatonic trance. Strange. Heartbeat is
rapid, light—respiration, too. Like a baby's. We'd better take him
down to the hospital."
"Is it that serious?"
"Will be if he continues unconscious. He'll starve."
"I'll call the ambulance."

Baxter fell asleep again. The chirping voices returned that afternoon,
but there was a subdued air about them. For a few days the routine
continued: eating, sleeping, eating, bathing, sleeping, eating—a
wonderous, kaleidoscopic fairyland of enjoyable sensations.
The subdued air disappeared, and the voices chirped loudly and
happily around him again. All was pleasant, comfortable, secure.
Then one morning his heart beat heavily, awakening him from his
nap. His eyelids tore open to a weird sight. Several strange men and
woman stood around him. They were dressed in white, and he was
in a hospital bed. As he traced a rubber tube from its stand-hung
bottle down to his arm, a rush of unpleasant sensations, twinges,
pains, stiffnesses swarmed back into him.
Reluctantly he heard the doctor speak and he tried to pay no
attention. "The adrenalin did it. He's coming around, I think. No,
dammit, he's closing his eyes again. Doesn't seem interested. I
thought for a minute...."
Baxter clenched his eyes tightly and tried to ignore the burning
emptiness of his emaciated stomach, the harsh roughness of the
hospital sheets against his weak, bed-sore calves. The drug was fire
in his veins, and his heart threatened to jump out of his breast.
Annie, where are you?
A soft, nonverbal little response touched his wracked brain, inviting
him to return. He concentrated, blocking out the muttering voices
around him....
"—can't keep a man his size alive indefinitely with intravenous—
better phone Mrs. Baxter—call a priest, too."

He made it. He was back in the crib. Rolanda was pulling up the
nursery shades terminating his nap. The phone was ringing.
"Be right back, sweetheart," Rolanda said. "Mother has to answer
the phone."
Her voice came only faintly from the hallway in dull monosyllables.
Then she was back, scooping him up in her arms. She sat in a
rocker and looked down at him thoughtfully, a serious frown across
her wide, white brow. "You poor little darling. You'll never know your
daddy."
For an instant Baxter's consciousness flickered back and forth
across miles of intervening space. A cold panic clutched his heart.
He heard a sharp sob escape from Annie's lips, then Rolanda was
rocking him and comforting him.
"Don't you worry, sweetheart. It's all right. We'll get along. Daddy's
insured. And there's his service pension. We'll get along just fine."
An intuitive flash of horror chilled Baxter. He struggled to escape to
his own brain, his own dying body, but now the barrier was up again,
not impalpable but tough and impenetrable.
The more he struggled the weaker he became. Sensations from the
nursery began to fade. The light grew dimmer, and Rolanda's face
became hazy. Frantically, he tried to withdraw from Annie's mind, but
he was mousetrapped!
Was this Annie's doing? Was this the vengeance she took against
her own father for his invasion of her privacy?
Or was it his own mind's refusal to face life again through the
network of pain and misery of his adult identity? Infantile regression,
the doctor had called it—but the doctor didn't know about Annie.
He could still feel the gentle rocking motion and his wife's arms
holding him tenderly in the warm blankets.
"We'll get along just fine, honey," she was saying. "When we get the
insurance money we'll have a larger house and a new car."
Rolanda! For God's sake, make Annie let me go!
"And you'll have a pretty room all to yourself when you are older. And
—and there's no reason why you can't sleep in my room tonight.
Would you like that, Annie?"
Now the light was dimming fast, but Baxter sensed the glow of
pleasure in Annie's tiny body and heard her soft cooing.
"Why, Annie," Rolanda's words came from a great distance, "you're
smiling! As if you understood every word! Why, you little dickens!"
Annie stiffened suddenly, then she sighed and gurgled happily—as
though she had just gotten something off her mind.
*** END OF THE PROJECT GUTENBERG EBOOK GO TO SLEEP,
MY DARLING ***

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