Columbia ELEMENTS OF ACCOUNTING Business 23-24. NEW YORK 1916 PROBLEMS AND PRACTICE DATA FOR ELEMENTS OF ACCOUNTING BY R. B. KESTER NEW YORK 1916 COPYRIGHT, 1916, BY R. B. KESTER UNIVERSITY PRINTING OFFICE COLUMBIA UNIVERSITY II PROBLEMS 1. On June 30, 1915, H. S. Homer has the following property: Cash $1675.29; Mdse. $15,683.71; Furniture and Fixtures $1275.-; Delivery Equipment $836.-; Stocks and Bonds bo't for investment at $5360.-; accounts owing him, Jno. Peter- son $69.50; Pete Hewitt $125.-; Chas. Jackson $742.69; Earl Jones $147.31; J. T. Squires $790.42; I. M. Axman $63.74; and S. P. Palmer $75.-. He owes James Bros. $1250.69, T. J. Stewart & Co. $965.-, T. Jennings Jinks $4692.43 for mdse. purchased; and his 60 da. note for $1000.- discounted at the bank at 6% is due tomorrow. What is his present interest in the business? 2. During the following 6 months he bo't goods amounting to $20,000.- paying $14,769.25 cash, the balance outstanding on Dec. 31. He paid on account James Bros. $1000.-, T. J. Stewart & Co. $469.31, T. Jennings Jinks $4500.-; for ex- penses of clerk hire $1500.-, rent $750.-, including heat, light, and water service, advertising $60.-, delivery equipment for repairs $75.-, deliverymen $600.-, sup- plies $150.- and general expense $250.-. He received on old accounts from Jno. Peterson $50.-, Pete Hewitt $125.-, Chas. Jackson $143.72, Earl Jones $147.31; J. T. Squires $600.-, I. M. Axman $13.74, and he is notified that S. P. Palmer has gone into bankruptcy and that he will pay 33 M% of all claims. Cash sales have been $10,763.25 and sales on account to new customers $25,637.52 of which amount $8,769.41 is now outstanding. Goods now on hand are valued at $12,- 673.49. He received in dividends and interest from his investments $268.-. Reckoning wear and tear on furniture & fixtures at 10% per annum and on delivery equipment at 12H%, what is his business worth on Dec. 31, 1915? 3. A railway company has the following assets: Cash $32,500.-, Office furniture $975.-, franchise $300,000.-, U. S. bonds 6% $30,000.-, Interest accrued on U. S. bonds $900.-, Power House $200,000.-, Construction $502,625.-, Motors & Cars $275,000.-, Car barns $18,000.-. Its liabilities are Notes Payable $35,000.-, Accounts Payable $12,500.-, First mortgage bonds $200,000.-, Interest due on same $5,000.-, Second mortgage bonds $250,000.-, Interest due on same $7500.-. What is the net worth of the company? 3 1 36247i Ill PROBLEMS 1. Make up three problems, using your own data, to illustrate the three types of business organization. 2. The following shows the financial condition of Jas. Shongood on Dec. 31: He owns a building costing $5000.- on land costing $1000.- in part payment for which he gave his note secured by mortgage for $3000.-. He has machinery valued at $900.-, loose tools at $150.-, finished goods on hand $2500.-, raw material and partly finished goods $8325.-, models and patterns $350.-, shop furniture $275.-, typewriter, safe, office desk, filing cabinet, chairs, etc., in all $150.-. His bank balance is $525.-, cash in safe $75.-, amounts due him from customers on open account $3967.50, on notes $572.25. He owes creditors on open account $2572.75, on accepted drafts $543.50, payroll earned but not due $150.-. Due to expansion of his market he needs more capital to take advantage of new opportunities. Accordingly he takes in a partner, Homer Goodwell, who invests cash equal to Shongood 's interest in the business, $9000.- of which is used to purchase the plant of a competitor ($1500.- for the ground and $1600.- for the machinery, $250.- for tools, $100.- for patterns, $500.- for shop furniture, and the balance for the build- ing), $5000.- to pay for product on hand which was taken over ($2000.- for fin- ished goods), and $2000.- for delivery equipment. Show a financial statement for Shongood and one for Shongood and Goodwell. [4 IV PROBLEMS 1. After operating for two years during which time their interests are kept equal Shongood and Good well realize that, if they are to meet competition on a satis- factory basis, they must secure large scale production. Therefore a company is formed with $75,000.- capital stock which takes over the fixed assets of the partnership at the values shown above, after allowing for depreciation at the rate per year of 3% on buildings; 6^% on machinery; 12% on office and 10% on shop furniture; 20% on models and patterns; 10% on delivery equipment. Small tools had been maintained at an even value for the two years. Assuming that no cash was turned over by the partnership and that all other assets and liabilities have the same values as shown in problem No. Ill, 2, draw up a financial statement of the company, using the additional information that $40,000.- worth of their capital stock was sold at 105 and that balance is accounted for by the purchase of the good will of the partnership and the partnership assets above mentioned. 2. A company is capitalized at $25,000.-. It has outstanding obligations on open account of $5621.75 and on its notes of $8341.37. It owns property as fol- lows: Mdse. $5339.40; Cash $3100.45; Notes Receivable $2500.-; First Nat'l Bank Stock $2000.-; Machinery and Tools $10,000.-; Furniture & Fixtures $590.-; Real Estate $15,900.-; Horse and Wagon $500.-; Accounts Receivable $11,592.76. It is estimated that Machinery and Tools have depreciated 12J^%, Furniture 10%, Real Estate 4%, and Horse and Wagon 12 H%, and that 2% of the outstanding accounts cannot be collected. Accrued payroll amounts to $500.- and taxes $250. Interest earned but not due amounts to $175.-. Make a financial statement of the company. (51 V PROBLEMS 1. A. Rowe at the beginning of 1912 had the following assets: Real Estate $2500.-; Furniture & Fixtures $400.-; Cash $1550.-; Accounts Receivable $3290.-; Merchandise $5710.-; and unexpired insurance for one year $50.-. His liabilities were: Mortgage on Real Estate $500.-; Accounts Payable $3000.-. At the end of 1912 he has assets and liabilities as follows: Cash $1000.-; Accounts Receivable $4390.-; Notes Receivable $525.-; School District Bonds $1000.-; Furniture & Fixtures $360.-; Real Estate $2425.-; Mdse. $6000.-; Accrued expense items $125.-; Notes Payable $250.-; Accounts Payable $3300.-. Determine Rowe's profit or loss. 2. Make an analytical statement to show the effect on the business i. e., the changes of such profit or loss. 3. Can you tell how the change in proprietorship came about? 6 ] VI PROBLEMS 1. From the following data show the cause of Rowe's changed proprietorship: Depreciation on real estate $75.-; on furniture $40.-; Interest paid on mortgage $35.-; Rent and wages now due amounting to $125.- as indicated above, purchases for the year $19,790; sales $25,000.-; other expenses, including insurance $3200.-. 2. Assuming that, instead of as stated in No. V, 1, the unexpired insurance was for 6 months at which time a new two-year policy was purchased for $225.-; that at the end of 1912 there was accrued interest on notes receivable of $15.-, on school bonds, of 9 months at 5%, and on notes payable $10.-, draw up a financial state- ment as at the end of 1912 and determine Rowe's profit for the year. Assume that the above items are in addition to those given in No. V, 1, and do not change the particular values there shown. 3. Rowe's profit under the conditions of No. 2 above is $2236.25. Can you make a profit and loss summary accounting for it? [7 ] VII PROBLEMS 1. As proprietor of a business, you started the year with $20,000.- worth of mdse., you bo't $100,000.- more during the year, and have on hand at the end $25,000.-. If your gross profit on sales was $40,000.-, what was the amount of your sales? Selling expenses were $15,000.- and general and administrative ex- penses were $10,000.-. Draw up a pro forma Profit and Loss statement. 2. Alex. Tuttle, your branch representative at Duluth, reported to you his year's sales as $92,350.-, his purchases $75,790.-, gross profit of $12,630.-. Referring to previous records you find he had on hand at the beginning of the year $21,070.- worth of goods and that the average cost of sales for the past five years has been 78.4% of the sales. What conclusion would you draw therefrom? [8] VIII PROBLEMS 1. On Nov. 26, your stock of goods is destroyed by fire but your records are saved. They show that you started the year with $14,575.20 worth of goods that you purchased during the year $73,974.75 worth, and your sales up to the time of the fire amounted to $97,534.69. Records for the past ten years showed an average gross profit on sales of 41.68%. What, approximately, was the value of the goods destroyed? Make a statement to show your claim. 2. From the following data concerning the Rawnser Goods Co., prepare pro forma Financial and Profit and Loss Statements: Goods on hand from previous year, $12,000.-; Purchases, $70,000.-; Sales $84,000.-; General Expenses $2000.-; Salesmen's Salaries $6400.-; Cash on hand $20.-; Cash in bank $2130.-; Manager's Salary $1250.-; Rent $900.-; Freight-in $250.-; Returned Sales $750.-; Returned Purchases $400.-; Business Plant $11,000.-; Accounts Receivable $8000.-; Notes Receivable $2000.-; Accounts Payable $6100.-; Notes Payable $850.-; Interest received on deposits $100.-; Office Furniture cost $600.-; Repairs to Business Plant $50.-; Advertising $1500.-; Gain carried forward from last year $2400.-; Goods on hand now $14,600-; Advertising prepaid $50.-; Office salaries now due but unpaid $200.-; Rent unpaid $100.-. Allow 4% for depreciation on Business Plant, 10% on Office Furniture, and 5% for estimated bad debts. Their Capital Stock is $25,000.-. 9l IX PROBLEMS 1. Draw up from your own data a financial statement for a partnership. (At least 10 assets and 4 liabilities.) 2. Making your own assumptions, set up a financial statement for the succeed- ing year and a comparative statement for the two years. (Same as in No. 1 above. ) 10] PROBLEMS 1. Draw up a Profit and Loss statement to account for the change in proprietor- ship shown by No. IX, 2, making your own assumptions as to items for the various sections of the statement. 2. State the probable business transactions occurring to bring about these changes in proprietorship i.e., show the interaction of the profit and loss ele- ments with the asset and liability elements in causing the changes in financial condition. II 1 XI PROBLEM 1. Using the schedule shown, write out at least three examples of each class and show their effects in each of the three opposite classes. (27 examples.) [ 12 1 XII PROBLEMS 1. On Aug. 1, A. B. Carnahan, a customer, owed us $135.30; Aug. 3, he paid $75.- on account; Aug. 10, he purchased goods amounting to $45.20; Aug. 12, he re- turned $10.- worth of goods as unsatisfactory; Aug. 20, he paid $31.68 in full settlement of his purchase of the 10th, being allowed a 10% discount for prompt payment; Aug. 25, he purchased a bill of goods amounting to $87.50. Set up Carnahan's account as it would appear in our ledger. 2. On March 5, we gave our note in settlement of account with D. E. Faraday & Co., the balance to date being $375.-; March 10, we purchased goods to $750.-; March 15, we returned $50.- worth of goods as not being what was ordered and put in a claim for $25.- on account of some goods not being of first class quality; March 24, we paid $300.- on account; and on March 29, we pur- chased goods for $550.-. Set up Faraday & Co.'s account as it would appear on our ledger. 3. a. Using the data of No. 1, set up our account on Carnahan's ledger, b. Using the data of No. 2, set up our account on Faraday & Co.'s ledger. 4. Set up a Cash account for the following: Received cash from a note discounted at the bank $990.-; paid out $25.- for stamps, $125.- for delivery wagon, $250.- for a horse, and $50.- for harness; received from sales $500.-, from customers on account $785.50; paid creditors $1000.-; clerks $250.-; rent $300.-. 5. Set up a Notes Receivable account for the following: April 2, received A. B. Clay's note for $500.-; April 10, received note from J. B. Gaynes for $250.-; April 12, transferred Clay's note in settlement of our account with Jacks & Co.; April 15, received R. B. Dobbs' note for $375.-; April 21, discounted Dobbs' note at the bank; April 30, received payment of Gaynes' note. 6. We purchased machinery for $1,500, f. o. b. factory; the freight and drayage amounted to $150; the cost of installation and attachments was $250. After using same for six months, one machine costing complete $225 was sold for $200. Show the above items in the Machinery account. 7. A piece of real estate was bought for $50,000. Investigation of title costs amounted to $1,000; side walks, curbing, and street paving to $585.50. The land was later sold for $75,000. Set up the Land account covering the above. XIII PROBLEMS 1. Set up all the accounts, both debit and credit, for the following transactions. List all expense items under a general title, Selling Expense. Be careful to main- tain the debit and credit equilibrium. Paid salesmen's salaries $475; delivery expense $75; boxes for shipping $15; premiums $42.65; salesmen's commis- sions $50; credit rating service $10; salesmen's traveling expenses $230.45; adver- tising $125; out freight $15.32; insurance on stock $22.50; packing supplies, paper, etc., $73.40; shipping clerks' wages $50; sales show room rental $75; received premium at fair on exhibit $25; sold small parcel of packing supplies $2.50. 2. Prepare as in No. 1 above ledger accounts for the following for the year 1913: 12-1, paid office supplies $35; 12-3, travelling expenses $20; 12-10, legal services $50; 12-11, special stenographic work $5; 12-15, telegrams $2.50; 12-20, collection agency fee $10; burglar insurance on safe $5; 12-24, charities $15; 12-29, received rent portion of office $10 and use of phone $2; 12-31, paid office help $75; mana- ger's salary $125; telephone $8.32; lights $2.50. 3. Enter the following data in one Gen'l Expense account: Paid rent $75; office supplies $15; repairs on delivery auto $20; telegrams $2.05; insurance $50; office help $40; printing and advertising $60; electric sign $25; discount on money borrowed at bank $3; received interest on loan $5.60; paid window lettering $3; coal $28 ; telephone $3.05 ; traveling expenses of salesman $75, and of manager $10 ; salesman's salary $150; gasoline for auto $15; wrapping paper and twine $10; postage $12; bags and cartons $7.50; street car tickets $5; and typewriter repairs $2.50. 4. From the data in No. 3, prepare accounts with: Delivery Expense; Adver- tising; Gen'l Selling Expense; Office Supplies; Gen'l Office Expense. 5. Proprietor invests $10,000; he withdraws $2000; pays a business debt of $500 out of his private funds; he turns into the business a piece of real estate valued at $5000; he pays his personal note out of business funds $500; his personal account credit balance of $1500 is transferred to his capital account. Prepare proprietor's capital account, treating all of the above items therein. 6. Proprietor paid personal coal bill $30 from funds of business; withdrew cash salary $25; collected miscellaneous small accounts $22.40 and retained money for private use; paid house milk bill in trade $6.20; had his account credited with two weeks' salary $50. Prepare proprietor's personal account. [ 14] XIV PROBLEMS 1. Sales for the year were $50,000, returns $2,500, inventory at beginning $8,000, purchases $40,000, returns $4,000, sales rebates and allowances $250; purchases rebates and allowances $325; freight and drayage-in $560. Show the above properly entered on the ledger in the various merchandise accounts. Merchandise. Inventory 4,000.- | Sales 10,000.- Purchases 2,500.- Discount 300.- Discount 120.- Returns 200.- Freight 300.- Sales 1,275.- Returns 450.- Sales 3,750.- Purchases 6,250.- Rebate 50.- Duty 250.- Discount 420.- Allowances 365.- Sales 8,960.- Discount 75.- Allowances 75.- Purchases 10,790.- Discount 163.- Returns 420.- Sales 9,475. Drayage 175.- Rebate 15.- Rebate 69.- Returns 590. Show these items properly on the ledger. 3. Furniture and Fixture account shows a cost of $2,500, sales at cost of $250. At end of fiscal period depreciation estimate is 12H%- Show the data on the ledger, setting up both the debits and the credits. 4. Loose Tools show cost of $375 and inventory shows $300 on hand. Show the data on the ledger. 5. Machinery shows cost of $10,000, additions and betterments of $2,000, sales at cost price of $1,500 during the first year, and loss by explosion of $3,000 during the second year. Depreciation is estimated at 10% on a reducing basis. Show the accounts at the end of the third fiscal period. [153 XV PROBLEMS 1. Set up the ledger account called for in XIII, 3, and show the account closed and the new accounts called for in XIII, 4, properly set up. (Be sure to make cross reference to pages and show the transfers between the several accounts.) 2. Under date of Dec. 31, 1912 set up the following accounts on the ledger, in proper form and under correct titles, and take a trial balance. T. C. Counts, investment $11,635, withdrawals $900; Purchases $12,300; Sales $11,850; Cash $1,040; Furniture $2,100; Notes Receivable $1,300; Notes Payable, Dr. $590, Cr. $2,400; Accounts Receivable $3,210; Horses and Wagons $1,940; Freight and Drayage $128; Insurance and Taxes $205; Interest and Discount Dr. $42; Expenses $850; Wages $1,280. Prepare Financial and Profit and Loss statements using these inventories and appraisals: Merchandise $7,500; Furniture $2,000; Horses and Wagons $1,700; Insurance unexpired $45; and Expense Supplies $170. [ 16 XVI PROBLEMS 1. Give several examples of deferred expense and income and accrued expense and income. Show these set up in account form. 2. Assuming an inventory of $2,500 for problem XIV, 2, as correctly set up, show the accounts closed. 3. Close the ledger for problem XV, 2. 17] XVII PRACTICE DATA The following transactions are to be set up, debit and credit, on the ledger: Use the transaction number as the day of the current month. Set up on your ledger the following account titles, in the order given, allotting to each the number of lines indicated by the numeral following the title: Cash 35 Green Cooper Company 10 Notes Receivable 10 James Black 10 Tom J. Dukes 10 U. R. Marchand, Capital 10 M. J. Scooner 10 U. R. Marchand, Personal 10 M. J. Smith 10 Profit and Loss 15 J. T. More 10 Purchases 15 M. I. Quinn 10 Freight-In 10 John Cohen 10 Purchases Returns and Allowances . . 10 Stan Edwards 10 Sales 25 Dan O'Shea 10 Sales Returns and Allowances 10 Merchandise Inventory 10 Salaries 10 Furniture and Fixtures 10 General Expense 15 Notes Payable 10 Expense Supplies 10 Johnson Brown & Co 10 Interest and Discount 10 Jackson & Little 10 Purchases Discount 10 1. U. R. Marchand invested cash $1,500 and merchandise $1,700. 2. Paid rent $30; bought merchandise of Johnson Brown Company $1,340 on account. 3. Sold mdse for cash $340.25 ; paid for office stationery, postage, account books, and miscellaneous supplies $45.75. 4. Sold mdse $375.20 to Tom J. Dukes, receiving $250 cash. 5. Bought office safe and typewriter $85. 6. Bought mdse of Jackson & Little, $327.40, paying $200 cash. Gave Johnson Brown & Co. $1,000 on account. Took mdse for your own use $25.60. 8. Cash sales were $234.69. Paid for advertising $10. 9. Paid clerk $12, fuel bill $22.50. 10. Bought mdse for cash at receiver's sale $325. 11. Sold Dan J. O'Shea mdse $35. Took his check in payment. 12. Paid $5 for sales tickets; postage $2.50; envelopes $1. 13. Sold bill of mdse $175.40 to M. J. Scooner, receiving cash $75.40, P. D. Jacks' note for $35, due in 10 days, and Scooner's note at 30 days for the balance. 15. Gave Johnson Brown & Co. your 10-day note for balance due. Scooner returned $10 worth of the mdse sold him on the 13th, claiming it inferior in quality. XVIII PRACTICE DATA 16. Cash sales were $395.40. Paid clerk $12. 17. Paid freight and drayage bills $22.30; light bill $5. 18. Drew for private use $25. 19. Bought, on account, 2-10, n-30 mdse from Green-Cooper Company $2,500. 20. Cash sales $425.67. 22. Sales on account: M. J. Smith $30; J. T. More $51.20; M. I. Quinn $10.03; John Cohen $43.30; Stan Edwards $69.30. 23. Returned mdse $200 to Green-Cooper Company as not being wh,at was ordered. 24. Paid clerk $12; received payment on P. D. Jacks' note and interest 25c. Was allowed by Green-Cooper Co., $10.- on damage claim. 25. Paid note, favor Johnson Brown & Co. with interest at 8%. T. J. Dukes pays $75 on account. Paid freight and drayage $25.04. 26. Took mdse for own use $25.30; sold Dan J. O'Shea mdse $125 receiving cash $40 and Jake Gibson's 6%, 60-day note for $75. 27. Paid 'phone bill $2; advertising $8; and bill heads $5. 29. Allowed D. J. O'Shea $5 claim for goods soiled. Had your note for $1,200 discounted at bank, 60 days at 8%. Paid Green-Cooper Co. amount due them. 30. Cash sales $235; paid clerk $12; fuel $22.50; drew for private use $25; collections were: M. J. Smith $20; J. T. More $21.20; John Cohen $5; Stan Edwards $25. 31. Paid Jackson & Little $100 on account; cash sales $500; received for the store farm produce $33.50 from Jas. Black, allowing him mdse $22 and bal- ance credited. Note. Be sure the date year, month, and day is entered. Assume addresses for all personal accounts. XIX PRACTICE DATA Take a trial balance of U. R. Marchand's ledger, recording it on a piece of journal paper. Marchand finds that he now has on hand goods valued at $3,364.39 and expense supplies of $21.40. Close the ledger, being careful to take account of the pre- paid discount on the $1,200 note payable and the interest income accrued on Gibson's note. 2 o XX PRACTICE DATA 1. Make up pro forma Financial and Profit and Loss statements for Marchand 2. Compare these statements with the post-closing trial balance and the Profit and Loss Account in your ledger. 3. Calculate percentages of cost of sales, gross trading profit, selling expenses, general and administrative expenses, net profit. [ 21 XXI PROBLEMS 1. For the month of January, the following purchases were made: 1-1, J. N. Muks Wholesale Hay and Grain Co.: 10 T alfalfa in the bale at $9.75; 50 T timothy and clover at $10.50; 25 T native at $12.25; 1,000 bu. wheat at 93^ c.; 2,500 bu. corn at 75c.; 3,000 bu. oats at 42^ c., terms 1-10, n-30. Hungarian Flour Mills: 5,000 sacks white flour at $1.40; 50 whole wheat at 90c.; 75 yellow corn meal at 55c. terms cash. Rocky Mountain Fuel Co.: 1 car hard lump 32.51 T at $12.25; 1 car lignite, mine run, 25. 5 T at $2.30; 1 car Canon nut 31.72 T at $4.50, terms 2-10, n-30. 1-5, Howry Grain Co.; 5,250 bu. wheat at 95c.; 2,250 bu. corn at 67 l Ac.; 1,500 bu. oats at 45c.; terms 2-5, n-30. 1-10, Central Coal and Coke Co.: 2 cars bituminous lump 34.8 T at $3.75; 1 car hard nut 29.16 T at $10.50, terms net 30. 1-17, Farmers' Co-operative Elevators: 2,500 bu. oats at 39%c.; 1,500 bu. corn at 68MC., terms cash. 1-24, John Johnson: 200 T alfalfa at $8.20; 150 T native at $11.75. Paid by check. 1-29, J. N. Muks Wholesale Hay and Grain Co.; 5,000 bu. wheat at 91%c.; 2,125 bu. corn at 72 Me., terms n-30. Make original entry of these transactions. 2. Sales for the month of January were: 1-2, Jackson & Weaver: 5 T timothy at $13.50; 10 T Canon nut at $6.-; 10 bu. oats at 50c., terms cash. T. M. Jeffery: 5 T hard lump $15.50; 50 sacks whole wheat flour $1.10; 30 cornmeal at 70c., terms n-10. 1-9, J. Thompson Grocery Co.: 500 buckwheat at 60c.; 750 graham at $1.00; 1,000 white $1.60; 100 bu. corn at 90c. Peter McGuire: 10 bu. wheat at $1.40; 25 bu. corn at 95c.; 15 bu. screenings at 95c.; 8 T bituminous lump at $5.10. 1-16 Jas. T. White: 2 T alfalfa $13.50; 3 T native at $16.75; 10 T timothy at $12.50; 500 bu. corn at 91c.; 1,000 bu. wheat at $1.35, terms net cash. S. V. Sifers: 10 T lignite, mine run at $4.25; 3 sacks whole wheat at $1.25. Received cash in payment. 1-23 Ole Oleson: 10 T timothy at $11.75; 15 T hard lump coal at $15.35; 8 sacks graham flour at $1.10; 5 sacks white $1.70, received cash. Ayres Elevator Co.: 10,000 bu. wheat at 99Kc.; 500 corn at 81%c., terms 1-5, n-30. 1-30, J. T. Thompson Grocery Co.; 250 cornmeal at 65c.; 275 graham at 95c.; 400 white at $1.55; 10 T timothy $12.25; terms 2-10, n-30. [22 } Jeffery: 10 T hard nut at $13.25; 5 white flour at $1.75. Received cash. S. V. Sifers: 5 T Canon nut at $6.25; 10 whole wheat at $1.30; 5 cornmeal at 75c. Enter the above in your sales book. 3. Rule up a Purchases Book with distributive heads of hay, coal, grain, flour, and enter the transactions of problem No. 1, using totals only. 4. Rule up a Sales Book with the same analysis columns as in No. 3, and enter the sales given under problem No. 2, using totals only. [23 ] XXII PROBLEMS 1. Enter the following transactions in the cash book: Ben Salzer invested cash $5,000; sold mdse for cash $75; paid cash for stamps $5; bought mdse for cash $230; loaned C. W. Jenks on note at 1% a month for 15 days $250; James Good- year is admitted as a one-third interest partner by paying $1,800; a $20 counter- feit note was discovered and we were unable to trace it; paid freight bill by check $39.03; paid light bill $5; bought coal $25; cash sales were $850; bought miscel- laneous supplies for office $15; paid John Smith $50 on account and Tom Jones $175 in full of account; paid store rent $90; water tax $12; received on account from Dick Roe $125, Jno. Joe $55, Chuck Adams $32.50; J. Jack Jordan $65, and from C. W. Jenks on his note $250, interest $1.25; paid office help $12, sales- man $17.50. 2. Balance and post the cash book in No. 1 above, taking account of a cash shortage of $3.42. 3. John Short makes the following investment: Cash $1,500; mdse $2,500; furniture and fixtures $500; delivery service $325; rent paid in advance $50; accounts receivable $1,250; accounts payable $2,000. Make the opening journal entry. 4. Make journal entries for the following items: We remit on account to the N. Y. Mfg. Co. our 60-day note for $235.67; a customer writes in claiming goods sold him are unsatisfactory and we allow him $15 if he will keep the goods; we receive from J. W. Baker his 30-day note to apply on account; we return goods to the Rawnser Goods Co. as not being what was ordered value $50; we receive from T. C. Jones, a customer, to apply on account, R. S. Tomson's note for $250. 5. Inventory at the beginning was $3,962.50, at the end $3,450.75. If the sales were $6,847.69 and there was a loss on sales of $340.27, make the journal entries necessary to close. [24] XXIII PROBLEMS 1. A trial balance taken from the books of X. Z. Snyder for the year ending Dec. 31, 1911 contained the following account balances: X. Z. Snyder Capital $25,910.67; X. Z. Snyder, Personal $2,045; Mdse $13,294.95 Dr.; Notes Receivable $597.40; Accounts Receivable $6,730.30; Accounts Pay- able $8,146.45; Notes Payable $2,900.75; Land $2,500; Building $5,000; Fixtures $1,210; Salesmen Traveling expenses $462.50; Salesmen's Salaries $1,400; Adver- tising $545.73; Office Salaries $700; General Expense $1,324.27; Cash $1,147.72. Set up the accounts on your ledger allowing 6 lines for each account after Accounts Receivable, Buildings, and Fixtures allow an additional 6 lines for the properly named valuation accounts. Take a trial balance to verify your work and record it on the last page of your journal. Close the ledger, taking into account the following items: Allow 1% depreciation on buildings. Fixtures are valued at $1,090; merchandise at $21,962.40; Accrued general expense is $124.92; bad debts are estimated at $225. [25] XXIV PROBLEMS Using the next blank page in your journal, make entries for the following, journalizing the cash make ample explanations: 1. We accepted May 1 at 60 days the draft of Johnson & Co., Chicago, for in- voice of mdse. delivered April 30, $217.90. 2. The Hamiltonian Bank notified us May 4, that a sight draft for $175 for collection, drawn by us on Haskin & Seltzer, Bridgeport, has been paid and the amount passed to our credit. 3. We have received from A. H. Neilson & Bros, credit memo for 10 bu. apples at $1.50, which we found unsalable and returned. 4. On April 24, we drew for collection through the Mechanics Bank a 90-day draft for $273.50 on A. J. Packard & Co., Kansas City. The bank has delivered to us their acceptance. 5. Remitted to Jordan & Anderson, Plymouth, Mass., a New York draft for $579.40 in payment of our acceptance of April 10 in their favor. 6. On October 29 C. H. Henry sent us a check for $96.50 to pay for a bill of mdse bought from us Sept. 30, for that amount. He now puts in a claim for our regular 5% discount for 30 days, which we allow, sending him a credit memo. 7. C. H. Morey presents our acceptance for $250 in favor of Jackson & Co., endorsed over to Morey and requests that same be credited to his account. We do so. 8. Cash was short $2.10. 9. Accepted Aug. 24, Bronstein & Co.'s draft on us for $195.40 in favor of A. B. Christian & Sons, drawn at 60 days' sight. 10. A counterfeit $5 bill was found in the cash sent to the bank for deposit. We were unable to trace it. I 26 ] XXV PRACTICE DATA Instructions to Students. Read Carefully For the set of transactions to be recorded now you will use a General Journal, a Sales Journal, a Purchase Journal, a Cash Book, and a Ledger. At the top of the first blank page in your "Journal" blank write "Journal of I .M. Butcher." Allow 130-150 lines for your Journal. The next blank DOUBLE page use for a Cash Book, marking the left page at the top left hand margin, "Dr." and near the middle "Cash." Similarly the right page, "Cash" and at the right hand mar- gin, "Cr." Allow 80-100 lines for each side of the Cash Book. The next blank page mark "Sales Journal" allowing 70-90 lines. The next blank page mark "Purchase Journal" allowing 1 page. The last 6 or 8 pages of the blank, reserve for Trial Balances and Statements. Number consecutively all pages in both blanks. In the Cash Book use the first column on either side for items, the second column for totals and balances. Balance and rule the Cash Book at the end of each week, extending the "items" total before balancing. Enter the balance on the "Dr." side in the "total" column and so keep each week's receipts segre- gated. At the bottom of a page, unless it happens to coincide with the end of the week, carry "totals" of each side forward, not the balance. In the Sales and Purchase Journals mark the first column "On Account" and the second "Cash" and make entries in them according as sale or purchase is "on account" or "cash." If "cash," entry must be made in the Cash Book also. In both places "check" the item in the ledger folio column as total sales and pur- chaser are to be posted from their respective journals. In making summary entries at the end of the month, rule and total each column, bring the cash column total over on the next line into the "on account" column, marking it "Cash Sales, total." Add these two and rule off marking them "Sales, Cr." and Pur- chases, Dr." respectively. Open the following accounts in your ledger beginning on the first blank page in order given and allowing the number of lines to each account indicated by the numeral following each: Notes Receivable 5 I. M. Butcher, Capital 10 J. Q. Quinn 10 I. M. Butcher, Personal 15 U. R. Sexton 10 Profit and Loss 20 A. M. Roberts 10 Sales 5 C. D. Keefe 10 Purchases 10 A. E. Parsons 10 In-Freight and Delivery 15 J. B. Mimmack 10 Purchases Returns 8 C. W. Collier 10 Salesmen Salaries 10 Meats Inventory 5 Advertising 10 Furniture and Fixtures 10 Expense Supplies 15 Depreciation Reserve Furniture Rent 5 and Fixtures 5 Insurance 8 Building 5 Office Salaries 10 [ 27 ] Lot No. 5, block 16 5 Sundry Expense 8 Notes Payable 5 Cash Short and Over 7 Marsh and Sons 10 Interest and Discount 8 Armour & Co 10 Depreciation 5 Geib & Hodgson 10 K. and B. Packing Co 10 Mortgage Payable 5 Before recording any transactions study carefully the accounts, particularly the expense accounts, which you will keep. Make your classification strictly according to them. Keep no additional accounts. TRANSACTIONS March 2, 1915, I. M. Butcher purchased the White Front meat market, paying $1,940.16 therefor. The assets taken over were: A note signed by C. D. Keefe for $125, due March 11, after which it was to bear 8% interest; outstanding ac- counts, J. Q. Quinn $150.25; U. R. Sexton $125.15; A. M. Roberts $240.20; C. D. Keefe $35.20; A. E. Parsons $115.75; J. B. Mimmack $322.45; and C. W. Collier $30.50; stock of meats and accessories $2,190.87; furniture and fixtures $500. The liabilities assumed were: A note dated Dec. 20, 1914 for 3 months at 6% in favor of the K. & B. Packing Co. for $580.40, the accrued interest as- sumed being $6.96; accounts due, Marsh & Sons $522.50; Armour & Co. $435.60, and Geib & Hodgson $349.75. Butcher deposited $500 in the City Bank as an additional investment. (Make the opening journal entry, showing the CASH in both journal and cash book. Be sure to give full explanations.) March 3. Bought for cash: Fuel $22.50, sales tickets $5, account books $3.20, rent Mar. 3-April 2, inclusive, $100. Sales were: on account, J. Q. Quinn $10.75; cash $123.19. March 4. Bought from Marsh & Sons on account $592.85. Paid freight-in $17.29. Bought for cash 1 year's insurance $24. Sales were: on account, U. R. Sexton $12.30; cash $145.80. March 5. Paid Geib & Hodgson balance due them. Sales were: on account, A. M. Roberts $14.70, C. D. Keefe $9.20, A. E. Parsons $15.75, C. W. Collier $8.25, cash $157.95. March 6. Bought from K. & B. Packing Co. on account $525.50. Returned to Marsh & Sons spoiled meats $75.20, Paid freight-in $15.26. Sales were: on account, J. B. Mimmack $11.30, Quinn $12.40, Sexton $9.40; cash $161.90. March 7. Received cash on account from: Quinn $50, Sexton $75, Roberts $100, Keefe $15. Paid: cashier $10, butcher $18. Cash sales were $170.29. Proprietor drew cash $15 and meat for the week $5.25. March 9. Paid Armour & Co. on account $350; ice bill $5.75; advertising $10.25. Sales were: on account, Roberts $12.50, Keefe $10.40, Parsons $17.90, Mimmack $14.90. March 10. Bought from Armour & Co. on account $619.70; paid $125 for cash register. Received cash on account from: Parsons $82.50, Mimmack $100. March 11. Paid Marsh & Sons $475 on account. Paid freight-in $12.92. Re- turned meats to Armour & Co. $40.85. Sales were: on account, Collier $12.80, Quinn $15.90. [ 28 ] XXVI PRACTICE DATA March 12. Bought country chicks and eggs for cash $50.22. Sales were: on account. Sexton $14.90, Roberts $18.20, Keefe $12.75, Parsons $13.45. March 13. Bought from Geib & Hodgson on account $490.10. Paid freight-in $14.47; Marsh & Sons balance due them. Sales were: on account, Mimmack $19.25. March 14. Paid: cashier $10, butcher $18. Cash sales for the week were $1,097.25. Proprietor drew cash $12 and meat for the week $7.50. March 16. Bought from Marsh & Sons on account $605.14. Paid: freight-in $20.19, ice bill $6.25, advertising $10.25, billheads, stationery, and stamps $7.80. March 17. Bought office safe $75 cash and paid freight on safe $7.22. Paid $25.40 for wrapping paper, twine, cartons, etc. Paid $3.25 for motor delivery service. March 18. Cash was short $1.10. Sales were: on account, Collier $12.90, Quinn $15.25, Sexton $10.40, Roberts $13.00, Keefe $8.95, Parsons $14.80. March 19. Paid $1.50 for sharpening knives and cleavers. Returned meats to Marsh & Sons $61.43. Bought from Armour & Co. on account $475.20. Paid freight in $18.90. March 20. Paid K. & B. Packing Co. note $580.40 and interest. March 21. Paid: cashier $10, butchers $36. Cash sales for the week were $1,150.95. Proprietor drew cash $15 and meat for the week $5.75. March 23. Paid: ice bill $4.90, advertising $12, vat and equipment for trying fats $25. Sold on account: Mimmack $12.45, Collier $16.50, Quinn $13.90. March 24. Sold bones for cash $5.90. Bought from Geib & Hodgson on account $520.90. Paid freight-in $17.45. March 25. Paid delivery service $2.50. Cash was short 95c. March 26. Bought for cash, turks, chicks and eggs $75.83. Sold on account: Sexton $11.50, Roberts $16.75, Keefe $11.85, Parsons $16.20, Mimmack $17.95, Collier $13.40. March 27. Returned meats to Geib & Hodgson $71.90. Cash was over $1.25. March 28. Paid: cashier $10, butchers $36. Cash sales for the week were $1,175.69. Proprietor drew cash $10 and meat for the week $6.50. March 30. Paid: K. & B. Packing Co. bill of 3-6; Geib & Hodgson $800 on ac- count; ice bill $5.20; advertising $12; proprietor's house milk bill $7.25. Cash was over 50c. March 31. Bought of K. & B. Packing Co. on account $583.60. Paid: freight- in $11.25, light and 'phone bills $12.93. Gave note at 90 days to Armour & Co. for $750 with interest at 6%. Collier paid $50 on account. Sales for the 2 days were cash $450.20. Proprietor took meat $1.10. Bought the lot $750 and build- ings $1,750 in which the meat market is located paying $500 cash and $500 from private funds, the remainder secured by mortgage at 6%. XXVII PRACTICE DATA Balance the Cash Book, total and make summary entries for the Sales and Pur- chase Journals. Post completely the Sales and Purchase Journals, then the general Journal and Cash Book. Take a trial balance of account balances and record it in the back part of your "Journal" blank book, labelling it Trial Balance March 31, 1915, I. M. Butcher. XXVIII PRACTICE DATA Close the ledger taking into account the following adjustments and inventories: Interest accrued on C. D. Keefe's note 56c. Expense Supplies inventory $9.50. Insurance unexpired $22.- Salesmen's Salaries accrued $12.- Office Salaries accrued $3.33. Advertising accrued $4.- Furniture and Fixtures valued at $725.- Meats Inventory $2,236.21. Take a post-closing trial balance. XXIX PROBLEM 1. A trial balance taken from the books of A. P. Lindsey for the year ending December 31, 1912 showed the following account balances: Cash $590.21; Notes Receivable $569.75; Accounts Receivable $8,275.46; Mdse. Inventory $4,975.20; Office Furniture $725.80; Store Furniture $2,490; Buildings $10,240; Land $3,000; Accounts Payable $5,460.75; Notes Payable $2,192.67; A. P. Lindsey, Capital $20,000; A.P.Lindsey, Personal $1,701.09; Sales $45,932.75; Sales Returns and Allowances $2,193.60; Purchases $30,190.40; Purchases Returns and Allowances $2,970.80; In-freight and Drayage $3,841.39; Salesmen's Salaries $2,390.67; Advertising $1,140.75; Insurance $316; Office Salaries $1,200; Light and Fuel $750; Office Supplies $250.30; General Expense $1,590.55; Inter- est and Discount $125.80 (Dr.). Set up the accounts on your ledger, allowing 6 lines for each account. Make provision for valuation accounts. Take a trial balance to verify your work. (Record the trial balance in the back of the Journal). Make adjusting and closing journal entries, taking into account the following items: Allow for depreciation: 1% on buildings, 10% on store and office furniture. Create a 3% reserve for doubtful accounts. Unexpired insurance amounts to $75.40. Salesmen's Salaries accrued $100. Mdse now on hand $5,190.34. Post the adjusting and closing entries and rule the necessary accounts in the ledger. 32] XXX PROBLEM 1. Take a post-closing trial balance of Lindsey's ledger. Draw up STATE- MENTS of financial condition and profit and loss. Calculate percentages of cost of sales, gross trading profit, selling expenses, general and administrative expenses, and net profit. (Use "Sales" as the basis.) 33 ] XXXI PRACTICE DATA Instructions to Students. Read Carefully This set comprises one Journal blank, one Ledger, and a Cash Book. First, page each blank consecutively beginning with the first page, excluding the index pages of the ledger. Of the Journal blank, pages i-io inc. will be used for the general journal, pages 11-14 mc - f r the sales journal, and pages 15-17 inc. for the purchase journal. Pages 18-35 inc. will be used for the trial balances as ex- plained later. Of the Ledger blank, pages 1-19 inc. will be used for the general accounts, pages 20-31 inc. for customers, and pages 32-35 inc. for creditors. The Sales, Purchase, and General Journals will be used as in the previous set. The cash book has three columns, the first on each side being used as a sundry column in which all amounts must be entered first; the second column is for Sales Dis- counts on the receipts side and Purchase Discounts on the disbursements side; and the third column is the "net cash" column. The cash balance is always the difference between the two net cash columns. When entering a sale or purchase transaction from which a discount is to be taken, the gross amount of the invoice is entered in the Sundry column, the discount in the discount column, and the net cash in the third column. In this way the extensions and additions may be proved, the sundry column total equalling the sum of the totals of the other columns. In handling the accounts of customers and creditors, daily postings and a careful observance of terms of credit will be necessary. The purpose of this set is primarily to give facility in the use of the various journals and in handling quickly a volume of transactions, summarization of the books, and the taking of monthly trial balances. To secure these features without too detailed work on the student's part, transactions are summarized for the month and are to be entered under date of the last day in each month. Where needed, as for interest calculations on notes, etc., specific dates are given. Before making any entries, familiarize yourself thoroly with the accounts to be kept in your ledger and adhere strictly to that classification. Open the follow- ing accounts in your ledger at the places indicated. The first numeral following the account title indicates the page, the second the line on that page. By "line I " is meant the first blue line at the top of the page. Lewiston School Bonds I, i Notes Receivable i, 13 Reserve for Doubtful Accts. i, 26 Merchandise Inventory 2, i Electric Light Deposit 2, 13 Horses, Wagons & Harness 3, i Depreciation Reserve Horses Wagons & Harness 3, 13 Store Furniture & Fixtures 4, i Depreciation Reserve Store Furniture & Fixtures 4, 13 Office Furniture & Fixtures 5, i Purchase Returns & Allowances 11,26 Salesmen Salaries 12, i Salesmen Travelling Expense 12, 13 Advertising 12, :?6 Shipping Expense 13, i Shipping Supplies 13, 13 Out-freight 13, 26 Rent 14, i Insurance 14, 13 Light, Heat & Power 14, 26 Depreciation 15, i Office Salaries 15, 13 Depreciation Reserve Office Furniture & Fixtures 5, 13 Notes Payable 6, I O. W. Ward, Loan 6, 13 O. W. Ward, Capital 7, I O. W. Ward, Personal 7, 13 C. Gneisel, Capital 8, I C. Gneisel, Personal 8, 13 Profit and Loss 9, I Sales 10, i Sales Returns & Allowances 10, 13 Purchases n, I In-freight & Cartage n, 13 Office Supplies Office Expense General Expense Cash Short & Over Charity Donations Credit Men's Association Membership Sales Discount Bad Debts Miscellaneous Sales Interest & Discount Purchase Discount 15,26 16, i 16,13 16,26 17,26 18,1 18,13 18,26 On pages 20-31 inc. enter the following customers' accounts, four to the page: Quinn Bros. Stewart & Son J. Jackson S. Koenig Jacob Green Gristede Bros. M. J. Downing Dodts' Grocery Store Casazza & Sons Capella Bros. S. Brown 4 Corners General Store Black Hills Mining Co. Blue Front Grocery R. B. Kennan J. Johnson Bull's Eye Mining Co. Badgley & Stewart Dewey Brown Evans Sons Fried Henry M. E. Dietrich Jas. Butler, Inc. C. A. Gerken John Johnson Fein Bros. M. Heitzman H. A. Krebs Andrew Davey Wm. Crick Russo Bros. Progressive Stores Co. J. Perlman P. Peterson Uintah Copper Co. Circle Bar Ranch J. R. Rice Al Morton J. J. Tommich J. Henry Witt U. B. Zipkin Las Vegas Cattle Co. Beginning on page 32, enter these creditors' accounts, four to a page. Swift & Co. Korn Products Co. F. Mezzadri Austin, Nickels & Co. Reid Murdock Co. Armour Packing Co. Grand Grocery Holland Gelatine Works Kataguri Bros. Van Dusen Co. Delico Food Products Co. United Supply Co. Federal Macaroni Co. Washburn Crosby Co. [35 ] XXXII PRACTICE DATA O. W. Ward, who had conducted a very profitable retail grocery at Big Falls, sold his business for $15,000 and moved to St. Paul to enter into a partnership with C. Gneisel for the purpose of carrying on a wholesale grocery business under the firm name of Ward & Gneisel. Ward's investment was $12,500 cash and Gneisel contributed the following assets at the values stated, which had been agreed upon by the partners; two notes receivable in his favor; one for $1000, signed by J. B. Jackson, non-interest-bearing for 60 days, due February 4; the other for $1500, signed by A. M. Stott, interest at 6% for 3 months, due March 8 both accepted at face value; a stock of groceries valued at $5893.25; delivery equipment $500; fixtures for store $1000; furniture in office $150; and cash neces- sary to bring his investment to an equality with Ward's. The partnership agreement provided that Ward was to be allowed a salary of $1800 per year and Gneisel $1500; that each was to be charged with interest on any drawings in excess of salary from the date such drawings exceeded the salary for the half-year until the date of closing the books; that profits and losses were to be shared equal- ly; and that the books were to be closed twice yearly on June 30 and Decem- ber 31 respectively. Make the opening entries in Journal and Cash Book for the above. Instructions covering unusual entries will be found at the close of each "Practice Data". Summarized transactions for the month of January were: PURCHASES Swift & Co., 2-5, n~3O, $512.50; Korn Products Co., 3-10, n-6o, $857.90; F. Mezzadri, 8-5, 5-10, 2-30, n~9o, $962.50; Austin Nickels & Co., 5-5, n~30, $1403.25; Reid Murdock Co., 3-5, 2-20, n~3O, $1865.05; Armour Packing Co., 2-20, n~3O, $1511; Grand Grocery Co., n-io, $2667; Cash purchases, $134-75- SALES Quinn Bros., n-io, $2189.60; Stewart & Son, 1-5, n~3O, $3942.75; R. Jackson, n~5, $2500.25; S. Koenig, 2-10, n~3O, $4189.40; M. E. Dietrich, 2-5, n-6o, $2140.50; Jas. Butler Inc., n~5, $3772.37; C. A. Gerken, 3-10, n~3O, $4125; John Johnson, 1-30, n-6o, $1819.15; Jacob Green, 3-5, n~3O, $2237.40; Gristede Bros., i-io, n~3O, $3100.95; M. j. Downing, 2-10, n~3O, $1680.40; Dodt's Grocery Store, 3-5, n-20, $1517.18; Cash sales $567.45; Ward drew groceries, $50. JOURNAL M. E. Dietrich returned unsatisfactory goods, $250.90; made C. A. Gerken allowance of $325 for goods lost in transit and filed claim against the C. N. W. Ry. for the amount; returned Reid Murdock Co. spoiled goods, $125; received 6%, 6o-day note, due Mar. 28, from Gristede Bros, for Jan. bill, less a special discount of 10%. CASH RECEIPTS excluding those listed above: Quinn Bros., Jan. bill net; S. Koenig, Jan. bill less 2%; M. E. Dietrich, balance Jan. bill less 2%; C. A. Gerken, balance Jan. bill less 3%; Jacob Green, Jan. bill less 3%. CASH DISBURSEMENTS excluding those listed above: Bins, shelving, partitions, counters, etc. for store, $2500; desks, tables, typewriters for office, $580.20; new horse, $300; deposit for electric current meters, $50; sales salaries, $2500; sales [36] travelling expense, $2650.50; advertising $2180.95; shipping clerks $750; lumber, boxes, and other packing material, $120.80; freight and drayage bills, $310.30; rent of store for Jan., $250; insurance Jan. I, 1916 to Jan. I, 1917, $116.80; coal, $90; light, $10.82; office salaries, $500; moving office partitions, $50; account books, stationery, stamps, etc., $125.90; janitor and watchman wages, $91.80; gift to deaf asylum, $25; Ward, $150; Gneisel $125; Swift & Co., Jan. bill less 2%; Korn Products Co., Jan. bill less 3%; Reid Murdock Co., balance Jan. bill less 3%; rent for Feb., $250; F. Mezzadri, Jan. bill less 8%; Austin, Nickels & Co., Jan. bill less 5%; Armour Packing Co., Jan. bill less 2%; bo't 5 Lewiston School Bonds, bearing 6% interest, par $1000, at 101 and accrued interest for 60 da., coupons due Nov. 24 and May 24; there was a cash shortage of $1.25. DIRECTIONS Enter the investment transactions complete in the Journal, checking the "cash" items. Be careful to enter all cash transactions in the cash book whether listed under "Cash" above or not. In entering the purchase of Lewiston bonds, in the Cash Book charge "Lewiston School Bonds" account with the cost value and "interest & Discount" with the accrued interest. The transaction means that he paid 1010 for each bond and bought out the seller's right to the interest earned up to the date of sale. The entry of this accrued interest to the debit of Interest & Discount will offset the credit to be made there when the interest for the six months is received and thus show, by the balance between the two entries, the true earning for the period during which the bonds were held. No record is made on the books of account of the claim for loss filed against the railroad company. Were there many such claims, a Claims Record book would be used as a memorandum record. It will be noted that some transactions are, on their face, for a longer period than the 6-months period under review. It is suggested, as a convenient method for keeping track of all such data which will have to be adjusted at the end of the period, that page 36 in your Journal be used as a memo for this purpose. Make record there of original date, term covered by the payment, amount, and particulars of the transaction. For example, the I yr., insurance policy on Jan. I is an item of which to make memorandum record here. [37 XXXIII PRACTICE DATA Summarize the Sales and Purchase journals, balance the Cash Book, and post completely all books of original entry. Take a trial balance of your ledger, being sure to include the cash balance, and record it under date of January 31, beginning on page 18 of the Journal blank. Write"Trial Balances 1916" at the top of the page and in the small space over the money columns "January 31". Reserve the first line of your trial balance for "Cash". From the Ledger, copy the names of ALL accounts whether or not there are as yet any entries in them in the order there shown. Be careful to write the account name at the extreme left of the "Explanation" space, closely against the "Date" column. Leave one line at the bottom of the page for "Totals for- ward"; likewise one line at the top and bottom of pages 24 and 30. Since one page is not sufficient to complete the record, continue it on pages 24 and 30, there recording the rest of the accounts and heading the page and columns as on page 1 8. The intervening pages will be used as shown in XXXV. XXXIV PRACTICE DATA Summarized transactions for February were: Purchases Holland Gelatine Works, 2-5, n~3O, $3358.25; Kataguri Bros., 3-10, n-6o, $2054.75; Van Dusen Co., 8-5, 5-10, 2-30, n-o.o, $3946.95; Delico Food Products Co., 5-5, n~3O, $2506.45; United Supply Co., 3-5, 2-20, n~3O, $4521.55; Federal Macaroni Co., 2-20, n~3O, $334.05; Washburn Crosby Co., n-io, $5568.30; Cash purchases $155.82. Sales Casazza & Sons, 1-5, n~3O, $1942.67; Capella Bros., 2-5, n-6o, $3189.65; S. Brown, 3-10, n~3O, $3920.18; Four Corners General Store, 3-5, n-6o, $4682.40; Black Hills Mining Co., i-io, n~3O, $1580.90; Blue Front Grocery, 2-5, n-2O, $2967.45; R. B. Kennan, 2-10, n~3O, $3852.75; J. Johnson, 1-5, n-6o, $4120.80; Bulls Eye Mining Co., n-io, $2879.20; Badgley & Stewart, 1-5, n~3O, $3755.35; Dewey Brown, n~5, $1925.47; Evans Sons, 2-10, n~3O, $3248.85; Fried Henry, 2-5, n-6o, $3869.68; Cash sales, $1236.40; Gneisel drew groceries, $60. Journal Goods were returned by S. Brown, $i79.8o,^and R. B. Kennan, $275.20 as unsatisfactory; made Four Corners General Store an allowance of $25 account of inferior goods; the Jan. freight bill, charged to In-freight, was found upon analysis to contain freight paid on sales amounting to $29.87. Cash Receipts Stewart & Son, Jan. bill, net; Jas. Butler Inc. Jan. bill, net; John Johnson, Jan. bill less i%; Casazza & Sons, Feb. bill less i%; S. Brown, balance of Feb. bill less 3%; Blue Front Grocery, Feb. bill less 2%; Badgley & Stewart, Feb. bill less i%; Fried Henry, Feb. bill less 2%; Cash was over $2.25; Jackson's note came due and was paid Feb. 4; sold crating materials, $20.50. Cash Disbursements Grand Grocery, Jan. bill net; Holland Gelatine Works, Feb. bill less 2%; sales salaries $2500; salesmen's railway mileage, entertainment, etc. $2870.90; advertising $3670.15; shipping clerks $750; paper, twine, wrapping supplies, $100.70; freight and drayage bills, $750.80; rent for March, $250; Kataguri Bros., Feb. bill less 3%; light and power bill, $105.18; office salaries, $500; Van Dusen Co., Feb. bill less 8%; board of horses, blacksmith, etc., $125.25; typewriter repairs, $5; Delico Foods Products Co., Feb. bill less 5%; printer's bill for office supplies, $72.80; watchman and janitor, $85; gift to Red Cross, $28.75; United Supply Co., Feb. bill less 3%; Federal Macaroni Co., Feb. bill less 2%; Ward drew $150; Gneisel, $125; cash was short $7.25. DIRECTIONS When the freight and drayage bills are paid, charge is made to In-freight & Cartage. Subsequent analysis shows the amounts paid on sales to customers made F. O. B. destination. Journal entry is made once a month to correct the original charge. Credit sales of crating material and other similar sales items to Miscellaneous Sales. 39 XXXV PRACTICE DATA Post completely and take a trial balance as of February 29. In making record of this and succeeding trial balances, to obviate the necessity of rewriting account titles, fold back the two money columns on page 19 so that they 'face up' on page 20, thus providing four money columns. This shortened leaf may now be used for recording trial balances for February and March. Similarly with suc- ceeding leaves. 40 XXXVI PRACTICE DATA Summarized transactions for March were: Purchases Swift & Co., 2-5, n~3O, $3431.65; Austin, Nickels & Co., 5-5, n~3O, $6675; Grand Grocery, n-io, $3821.95; Reid, Murdock Co., 3-5, 2-20, n~3O, $7384.60; Kataguri Bros., 3-10, n-6o, $4152.75; Washburn Crosby, n-io, $8472.80; F. Mezzadri, 8-5, 5-10, 2-30, n~9O, $4625; Cash purchases $580.19. Sales Fein Bros., n~5, $3782.25; M. Heitzman, 3-10, n~3O, $4174.85; H. A. Krebs, 1-30, n-6o, $1279.45; Andrew Davey, 3-5, n~3O, $2854.20; Wm. Crick, i-io, n~30, $1915.15; Russo Bros., 2-10, n~3O, $2518.75; Progressive Stores Co., 3-5, n-2O, $4189.60; J. Perlman, 1-5, n~3O, $3650.70; P. Peterson, 2-5, n-6o, $2500; Uintah Copper Co., 3-10, n~3O, $1755.85; Circle Bar Ranch, 3-5, n-2O, $2189.60; J. R. Rice, 3-5, n-6o, $1954.25; Al Morton, i-io, n~3O, $4520.67; J. J. Tommich, 2-5, n-2O, $3979.98; Ward drew groceries, $30; Cash sales $3987.40. Journal Accepted Austin, Nickels & Co., 3o-da. sight draft due April 24 for their bill of March less 5%; received goods returned by Progressive Stores Co., $1125.50; returned musty flour to Washburn Crosby $1500; received 6o-da. 6% note, due 5-20 from Dodt's Grocery for Jan. bill; received goods from M. Heitz- man, mistake in filling order, $1000; out-freight for Feb. was $80.19; received goods from Al Morton, inferior quality, $987.25; received 3O-da., 6% note, due Apr. 26 from Four Corners General Store for Feb. bill less 3%; cash shortage of Feb. is partly accounted for by failure to book a payment of $5.25 for general window cleaning. Cash Receipts Capella Bros., Feb. bill less 2%; Black Hills Mining Co., Feb. bill net; R. B. Kennan, balance Feb. bill less 2%; A. M. Stott's note fell due on the 8th and was paid with interest; Dewey Brown, Feb. bill net; Evans Sons, Feb. bill less 2%; Fein Bros., Mar. bill net; M. Heitzman, balance Mar. bill less 3%; Gristede Bros, note fell due on the 28th and was paid with interest; Andrew Davey, Mar. bill less 3%; Progressive Stores Co., balance Mar. bill less 3%; Circle Bar Ranch, Mar. bill less 3%; Cash was over $1.25; J. R. Rice, Mar. bill less 3%. Cash Disbursements Salesmen salaries, $3600; salesmen travelling expense, $3120.80; advertising $2560.18; shipping clerks, $900; Swift & Co., Mar. bill less 2%; F. Mezzadri, Mar. bill less 8%; shipping supplies cost $240.25; freight and drayage bills were $890.20; rent for April $250; insurance, i yr. policy, Mar. I, 1916 to Mar. i, 1917, $240; extra help in shipping room, wagon repairs, etc., $190.50; Reid Murdock Co., Mar. bill less 3%; coal, power and light bills, $127.80; office salaries, $575; office expense, $7.80; stamps, etc., $58.20; Kataguri Bros., Mar. bill less 3%; bo't office safe, $250 and paid freight on same, $28.30; gift to church bazaar, $30.25; i year's membership, Mar. 31, 1916 to Mar. 31, 1917, in credit men's association, $50; Washburn Crosby bill for" Feb. net; cash was short $18.40; Ward drew $500; Gneisel, $125. [41 DIRECTIONS Notice that the cash shortage recorded for February resulted from the failure to enter an expense item for window cleaning. This is discovered in March and should be corrected by journal entry debiting General Expense and crediting Cash Short and Over, giving adequate explanation. XXXVII PRACTICE DATA Post completely and take a trial balance as of March 31, [43 1 XXXVIII PRACTICE DATA Summarized transactions for April were: Purchases Reid Murdock Co., 3-5, 2-20, n~3O, $8954; Armour Packing Co., 2-20, n-30, $6256.55; Korn Products Co., 3-10, n-6o, $5820.20; Holland Gelatine Works, 2-5, n-30, $7778.90; Van Dusen Co., 8-5, 5-10, 2-30, n~9O, $9825.35; United Supply Co., 3-5, 2-20, n~3O, $8703.15; Cash purchases $1767.49. Sales J. Henry Witt, 2-10, n~3o, $3000; U. B. Zipkin, 1-5, n-6o, $4190.15; Las Vegas Cattle Co., 3-5, n-2O, $2150; Quinn Bros., n-io, $3975.20; Stewart & Sons, 1-5, n-30, $4005.35; S. Koenig, 2-10, n~3O, $2875.45; M. E. Dietrich, 2-5, n-6o, $4150.60; Jas. Butler, Inc., n~5, $5152.75; C. A. Gerken, 3-10, n~3O, $2875.60; John Johnson, 1-30, n-6o, $3105.20; Jacob Green, 3-5, n~3O, $2900; Bulls Eye Mining Co., n-io, $3219.65; Badgley & Stewart, 1-5, n~3O, $2850.70; Dewey Brown, n~5, $3390.79; Evans Sons, 2-10, n~3o, $2760.46; Andrew Davey, 3~5 n-30, $3840.90; Black Hills Mining Co., i-io, n~3O, $2160.50; Cash Sales, $5189.62; Gneisel drew groceries, $90; R. B. Kennan, 2-10, n~3O, $3140.65. Journal Transferred office cash register to cash sales department of store, $125 ; Returned spoiled canned goods to Austin Nickels & Co., adjustment to be made at time of paying their draft, $350; received goods returned by U. B. Zipkin as unsatisfactory, $875.50; received 6o-da., 6% note, due June 10, from M. J. Downing for Jan. bill, $1680.40; received spoiled goods returned by Stewart & Sons, of their Apr. purchase, $1250; out-freight for Mar. was $100.25; received goods of Apr. bill returned by Jas. Butler Inc., error in filling order, $1580.20. Cash Receipts R. B. Kennan, Apr. bill less 2%; J. Johnson, Feb. bill net; Bulls Eye Mining Co., Feb. bill net; Badgley & Stewart, Apr. bill less i%; Dewey Brown, Apr. bill net; Four Corners General Store note came due on the 26th and was paid with interest; H. A. Krebs, Mar. bill less i%; Wm. Krick, Mar. bill net; Russo Bros. Mar. bill less 2%; J. Perlman, Mar. bill less i%; received refund of $75.80 from railroad for overcharges on freight bills already paid; income from delivery service rendered others $25.40; P. Peterson, Mar. bill less 2%; Uintah Copper Co., Mar. bill less 3%; Al Morton, balance Mar. bill less i%; J. J. Tom- mich, Mar. bill less 2%; discounted note at 30 da., 8%, due May 26, for $10,000. Cash Disbursements Korn Products Co., Apr. bill less 3%; salesmen's salaries, $5000; salesmen's travelling expenses $4720.80; advertising $5000; shipping clerks, etc. $1250.70; packing supplies $150.50; freight and drayage bills $1206.17; Reid, Murdock, Apr. bill less 2%; Grand Grocery, Mar. bill net; Washburn Crosby, balance Mar. bill net; rent for May, $250; light and power, $92.25; office salaries, $750; office expense, $8.50; office supplies, $97.60; general expense, $95.68; sales display room furniture, $375; comptometer and filing cabinets for office, $750; new horse, $315; associated charities, $20.10; cash was short $3.19; Ward drew $750; Gneisel, $500; paid Austin, Nickels Co., draft on April 24, with adjust- ment of $350. 44 DIRECTIONS Be careful to make proper entry of the equipment transferred from office to store; of the railroad refund; and the delivery service income. To book the $10,000 discounted note payable, in the Cash Book, show the face of the note discounted in the General column; the discount in the Sales Discount column but mark a small 'x' in front of it; and the net cash as usual. The Austin Nickels draft transaction, with $350 adjustment, should be entered completely, including cash, in the journal and posted from there, the cash book entry being 'checked'. [451 XXXIX PRACTICE DATA Post completely and take a trial balance as of Apr. 30. In summarizing the debit side of the cash book previous to posting, remember that included in the Sales Discount column is an item of bank discount on the firm's $io,ooo-note, which must be shown separately and charged to Interest & Discount. Be sure you show this in the summary entries, in addition to the Sales Discount summary. [46 ] XL PRACTICE DATA Summarized transactions for May were: Purchases Washburn Crosby Co., n-io, $10,149.60; Federal Macaroni Co. 2-20, n-3O, $5219.80; United Supply Co., 3-5, 2-20, n~3O, $8620.95; Delico Food Products Co., 5-5, n-30, $5419.40; Van Dusen Co., 8-5, 5-10, 2-30, n~9o, $7684.25; Kataguri Bros., 3-10, n-6o, $6714.80; Cash purchases, $537.92. Sales Las Vegas Cattle Co., 3-5, n-2O, $1200; U. B. Zipkin, 1-5, n-6o, $4760.40; J. Henry Witt, 2-10, n~3O, $5120.60; J. J. Tommich, 2-5, n-2O, $2130.65; Al. Morton, i-io, n~3O, $1825.75; J- R- Rice, 3-5, n-6o, $3250.75; Circle Bar Ranch, 3-5, n-2O, $1314.55; Uintah Copper Co., 3-10, n~3O, $1192.20; P. Peterson, 2-5, n-6o, $4376.80; J. Perlman, 1-5, n~3O, $3895.35; Progressive Stores Co., 3-5, n-2O, $5940.65; Russo Bros., 2-10, n~3O, $1937.50; Wm. Crick, i-io, n~30, $2562.45; Gristede Bros., i-io, n~3O, $10842.25; M. J. Downing, 2-10, n~30, $3947-75: Casazza & Sons, 1-5, n~3o, $2100; Capella Bros., 2-5, n-6o, $2875.42; S. Brown, 3-10, n~3O, $1987.60; Black Hills Mining Co., i-io, n~3O, $987.15; J. Johnson, 1-5, n-6o, $1236.40; Ward drew groceries, $100; Cash sales, $6725.43. Journal Received goods returned by J. Henry Witt of their Apr. purchase as unsatisfactory, $1320.70; out-freight for Apr. was $125.90; received goods returned by Progressive Stores Co., error in filling order, $1560.90; Cash over for this month was accounted for by failure to record kindling sales, $30.25; received spoiled goods from Gristede Bros., $2150; received from M. J. Downing, I. B. Perkins' 6% 6o-da., note due July 15, $2000, to apply on account; returned to United Supply Co., goods, on account of error in filling our Apr. order, $1580.20; gave Van Dusen Co. our note dated May 8 at 6o-da., non-interest bearing, but with 60 days' interest, $50, included in the face, for their bill of Apr. less 5% discount and cash payment of $4334.08 for balance. Cash Receipts Quinn Bros., Apr. bill net; Stewart & Son, balance Apr. bill net; S. Koenig, Apr. bill net; M. E. Dietrich, Apr. bill less 2%; Jas. Butler Inc., balance Apr. bill net; C. A. Gerken, Apr. bill less 3%; John Johnson, Apr. bill less i%; Jacob Green, Apr. bill less 3%; Gristede Bros., $4500 on account; Cash was over $30.25; C. N. W. Ry. settled our claim of $325 for Gerken by paying $250; sold packing supplies, $15.75; Casazza & Sons, May bill less i%; Black Hills Mining Co., Apr. bill net; Evans Sons, Apr. bill less 2%; Andrew Davey, Apr. bill less 3%; J. Henry Witt, May bill less 2%; U. B. Zipkin, $5000 on account; Las Vegas Cattle Co., $2500 on account; Dodt's Grocery note came due May 20 and was paid with interest; Lewiston School Bonds' interest for the half year was received May 24. Cash Disbursements Salesmen's salaries, $6250; salesmen's travelling expense, $6100.50; advertising, $5280.17; shipping expense, $1392.20; shipping supplies, $120; in-freight and cartage, $1319.18; rent for June, $250; insurance policy for I year, May I, 1916 to May I, 1917, $240; light and power $140.69; office salaries, $980; Armour Packing Co., Apr. bill less 2%; Holland Gelatine Works, Apr. bill [ 47 1 less 2%; Van Dusen Co., $4334.08 on account, as above; United Supply Co., balance Apr. bill less 2%; office expense, $19.15; office supplies, $175.20; general expense, $138.20; furniture for store, $625; cash was short $27.80; donations to charity, $18.75; paid our note at the bank, $10,000; Ward drew $350; Gneisel, $500. DIRECTIONS Transfer the large credit of $30.25 in Cash Short & Over to Miscellaneous Sales. The receipt of $250 from the railroad in settlement of our claim against them might be set up as a credit to Freight Claims Income were it desirable to have the infor- mation as to income from that source. It is perhaps best handled as a credit to Sales Returns & Allowances to offset the charge here made at the time of the cus- tomer's complaint about lost goods; and it will be so treated in this case. The effect of adding interest to the face of a non-interest bearing note is to secure a compounding of the interest if the note is not paid at maturity, as the note will bear legal rate of interest after maturity. Be careful to get the debit and credit of this transaction with Van Dusen Co. 48 XLI PRACTICE DATA Post completely and take a trial balance as of May 3i [49] XLII PRACTICE DATA Summarized transactions for June were: Purchases Grand Grocery, n-io, $7978.45; Armour Packing Co., 2-20, n~3O, $9768.30; Reid Murdock Co., 3-5, 2-20, n~3O, $12,567.90; Austin Nickels & Co., 5-5, 11-30, $8675.20; F. Mezzadri, 8-5, 5-10, 2-30, n~9O, $1793-35; Korn Products Co., 3-10, n-6o, $5787.85; Swift & Co., 2-5, n~3O, $9652.40; Cash purchases were $786.45- Sales R. B. Kennan, 2-10, n~3O, $3967.20; Blue Front Grocery, 2-5, n-2O, $1282.95; Four Corners General Store, 3-5, n-6o, $1875.60; Dodt's Grocery Store, 3-5, n-20, $2500.55; Andrew Davey, 3-5, n~3O, $3125.60; H. A. Krebs, 1-30, n-6o, $3527.80; M. Heitzman, 3-10, n~3O, $3768.95; Fein Bros., n~5, $4280.20; Fried Henry, 2-5, n-6o, $5192.67; Evans Sons, 2-10, n~3O, $1875.20; Dewey Brown, n~5, $1225.80; Badgley & Stewart, 1-5, n~3O, $1937.60; Bulls Eye Mining Co., n-io, $875.20; Quinn Bros., n-io, $3120.67; Stewart & Son, 1-5, n~3O, $3940.55; S. Koenig, 2-10, n~3O, $4120.65; M. E. Dietrich, 2-5, n-6o, $2900; Jas. Butler Inc., n~5, $10,100.55; C. A. Gerken, 3-10, n~3O, $1762.40; John Johnson, 1-30, n-6o, $789-63; Jacob Green, 3-5, n~3O, $1250; Casazza & Sons, 1-5, n~30, $1320.25; Progressive Stores Co., 3-5, n-2O, $575.80; Gristede Bros., i-io, n~3O, $3140.20; J. Henry Witt, 2-10, n~3O, $2769.75; Ward drew groceries, $35; Gneisel drew groceries, $65; Cash sales were $7267.40. Journal Out-freight for May was $150.50; received goods returned as unsatis- factory from Andrew Davey, $525, from Fried Henry, $1540.10, from S. Koenig, $1750.90; received from Capella Bros., A. M. Tuttle's 9O-da., 6% note, for $2500, dated May 24, with 24 das. interest accrued to date, which we allow them, in payment of their May bill less 2% and cash payment of $307.91 to balance; returned inferior goods to Reid Murdock Co., $2180.20 and to Swift & Co., $1650.80; cash shortage of May was partially accounted for by failure to book purchase of shipping supplies, $20.25. Cash Receipts Jacob Green, June bill, less 3%; M. J. Downing, $1000 on account; Capella Bros., balance as above; J. Johnson, $1000 on account; Bulls Eye Mining Co., Apr. bill net; M. Heitzman, June bill less 3%; Wm. Crick, $2000 on account; Russo Bros., $1500 on account; Progressive Stores Co., balance May bill less 3%; J. R. Rice, $3000 on account; Al Morton, $1500 on account; J. J. Tommich, May bill less 2%; M. J. Downing's note came due June 10 and was paid with interest; cash was over $2.50; sold horse costing $225 for $175; sold 3 Lewiston School Bonds at par and 30 das. accrued interest; Ward made a loan to the business at 6%, dated June 15, of $5000; sold kindling, etc., $51.25. Cash Disbursements Salesmen's salaries, $6000; salesmen's travelling expense, $6396.90; advertising, $4498.80; shipping expense, $1180.35; shipping supplies, $225.40; freight and drayage, $1310.75; rent for July, $250; office salaries, $960; office expense, $9.75; office supplies $189.15; general expense, $91.75; cash was short $2.25; gifts to charity, $15.90; Ward drew $150; Gneisel $125; Kataguri Bros., $4000 on account; Van Dusen Co., May bill less 5%; Delico Food Products [50] Co., $3000 on account; Federal Macaroni Co., $5000 on account; Washburn Crosby on account, $3000; new delivery equipment, $750. DIRECTIONS Show the Tuttle note transaction complete in the Journal 'checking' the item in the Cash Book, with reference to the journal entry for explanation. Be careful to get the debit and credit of the transaction. For the delivery horse transaction, clear H. W. & H. account of the horse sold, at cost price, by debiting Cash and Depreciation and crediting H. W. & H. the full amount. Record the sale of the Lewiston Bonds as a credit to the Bonds account which will require adjusting at closing time to show the loss on the transaction. Ward's loan, credit to his ' Loan ' account. [51 3 XLIII PRACTICE DATA Post completely and take a trial balance as of June 30. [52 J XLIV PRACTICE DATA Close the books, thru the Journal, for the six months ending June 30, 1916, taking account of the following adjustments and inventories: Accrued Expenses Salesmen's salaries, $2070; shipping clerks, $200; board of horses, $50.10; blacksmith bill, $15.25; advertising, $500; freight bills, $150.25; light and power bills, $106.21; bookkeepers, stenographers, billing clerks, etc., $125; office expense, $5.25; janitor and watchman, $90; interest accrued on Ward's loan, $12.50. Prepaid Expenses J uly rent, $250; insurance, $418.40; membership in credit men's association, $37.50; interest on note held by Van Dusen Co., $5.83. Accrued Income Interest on I. B. Perkins' note, 45 days, $15; interest on A. M. Tuttle's note, 37 days, $15.42; interest on Lewiston Bonds, I month 6 days, $12. Write off the R. Jackson account to Bad Debts on account of his absolute bankruptcy. Out-freight for June is $182.63. Charge depreciation as follows: 10% per annum on store and office furniture and fixtures. l6 %% per annum on horses, wagons, and harness, except on the last purchase of $750, on which charge no depreciation. Set aside 3% of the outstanding accounts as a reserve for doubtful accounts. Inventories were: Merchandise, $16,497.23; packing materials, $105.20, office supplies, $75.18. Upon appropriation of profits, take account of the agreement as to salaries and excess drawings. For interest calculations, assume that drawings are made on the last day of the month. 53 XLV PRACTICE DATA Draw up pro forma statements of profit and loss and financial condition for Ward Gneisel for the six months. In drawing up the statements include 'Mis- cellaneous Sales' with merchandise sales under the general head 'Sales,' and segregate trading expenses including the depreciation on the trading equipment from general and administrative expenses. As a matter of convenience, record these statements in the back of the cash book. [54 XLVI PROBLEM A partnership agreement provides that before net profits shall be determined, the partners shall be charged with 6% interest on their 'personal' withdrawals from the dates of such withdrawals to the date of closing the books and that net profits shall be divided in proportion to the net 'capital' investments and the length of time of their investment. The profits before taking the above into con- sideration were $3569.72 and the partners' combined capital and personal accounts show as follows: A. K. A very 1914 1914 Jan. 20. Capital 5,000.00 Jan. i. Capital 10,000.00 Feb. 28. Personal 300.00 Feb. 15. Capital 2,500.00 April 10. Capital 3,000.00 May 10. Capital 5,000.00 June 10. Personal 250.00 C. E. Clarence 1914 1914 Feb. i. Personal 250.00 Jan. 15. Capital 5,000.00 Mar. 15. Capital 7,500.00 May 20. Capital 5,000.00 May 31. Personal 300.00 June 10. Capital 5,000.00 If the books are closed on June 30, 1914, what is each partner's share of the profits? 55 ] XLVII PRACTICE DATA Instructions to Student. Read Carefully. This set comprises a general journal, a sales journal, a sales returns and allow- ances journal, a purchase journal, a purchase returns and allowances journal, and the cash journals, for convenience bound together in one blank; a note journal to be used as a posting medium for notes receivable and notes payable; and a general ledger, a purchase ledger, and a sales ledger bound together in one blank. Of the journal blank, pages 1-8 comprise the general journal, page 9 the sales journal, page 10 the sales returns, page n the purchase journal, page 12 the pur- chase returns, and page* 14-15 the cash journals. Of the ledger blank, pages 1-15 will be used as the general ledger, pages 16-19 the sales ledger, and pages 20-22 the purchase ledger. The general journal will be used as previously, i.e., for the record of all items not otherwise specially provided for; the sales journal provides for analysis of the sales, the first column being the total or general column, the others, ' Dept. A', ' Dept. B ', and 'Out-freight' respectively; the sales returns and allowances journal makes provision for the same analysis as the sales journal except that there is no 'Out-freight' column, that not being used; the purchase journal columns are respectively, 'Total', 'Dept. A', 'Dept. B' and 'Sundries', with the same column headings for the purchase returns and allowances journal. The cash book columns will be, on the debit, 'General', 'Sales Ledger', 'Sales Discount ', and ' Bank ' and on the credit, ' General ', ' Purchase Ledger ', ' Purchase Discount', and 'Bank'. The note journal will be analyzed, summarized, and posted just as the other subsidiary journals are handled. Daily posting of items affecting customers' and creditors' accounts should be made, observing carefully terms of credit. The purpose of the set is to give practice in handling various controlling ac- counts; the summarization and ruling of columnar books; and to bring out some of the difficulties involved in treating controlling accounts under given conditions. Record will be made of transactions for the last month of the fiscal year, the pre- vious eleven months being summarized in the trial balance given to start with. The Hardware Specialties Co. was organized and incorporated under the laws of the State of New York. Its fiscal year closes on November 30. A trial balance from the general ledger on October 31, 19 , shows as follows: I, City National Bank $ 5,250.69 I, Petty Cash 150.00 i, Notes Receivable 7, 390-5 1, Sales Ledger 75,820.75 2, Reserve for Doubtful Accounts $ 1,319.86 2, Reading Ry. Stock 10,1 12.50 2, Department A, Inventory 22,362.36 2, Department B, Inventory 18,179.40 3, Store & Warehouse Furniture & Fixtures 2,310.75 [ 56 ] 3, Depreciative Reserve, Store & Warehouse F. & F. $508.20 3, Office Furniture & Fixtures $850.25 3, Depreciation Reserve, Office F. & F 170 30 4, Delivery Equipment 3,79O-7O 4, Depreciation Reserve, Delivery Equipment 718.41 4, Buildings 46,210.00 4, Depreciation Reserve, Buildings 1,470.75 5, Land 15,000.00 5, Notes Payable 14,157.83 5, Purchase Ledger 55>94-3 I 5, Mortgage on Real Estate 10,000.00 6, Unissued Capital Stock 20,000.00 6, Capital Stock 125,000.00 6, Surplus 44,862.19 7, Trading 7, Profit and Loss 8, Department A, Purchases 332,190.80 8, Department A, Purchase Returns & Allowances. 10,120.68 8, Department B, Purchases 295,780.19 8, Department B, Purchase Returns & Allowances. 9,876.20 9, In-freight & Cartage 6,125.63 9, Department A, Sales 401,675.35 9, Department A, Sales Returns & Allowances 7,392.15 9, Department B, Sales 359,817.50 10, Department B, Sales Returns & Allowances 4,563.27 10, Salesmen's Salaries 25,190.00 10, Travelling Expenses 19,240.80 10, Advertising 14,640.75 n, Sales General Expense 4,870.13 n, Out-freight 216.13 n, Insurance 5,760.20 n, Office Expense 1,100.25 12, General Expense 55,172.40 12, General Salaries 29,275.80 12, Interest & Bank Expense 1,250.18 12, Sales Discount 12,769.80 13, Bad Debts 13, Depreciation 13, Purchase Discounts 8,174.80 14, Consignment, J. B. Grover 14, Consignments-Out 1,042,966.38 1,042,966.38 Open all the above accounts in your general ledger, at the places indicated, and enter under date of Nov. I the balances given in the trial balance. The number in front of the account title indicates the page on which to enter the accounts. Give [ 57 J each one-fourth of a page, except on page 7, where give Trading one-fourth and Profit & Loss three-fourths. In the Sales Ledger, beginning on page 16, open the following accounts, four to a page, and enter the balances as of Nov. I : Colonial Supply Co $ 1,250.60 Block Hardware Co 2,100.10 Ted S. Class 1,780.90 Frank & Bros i ,590. 1 7 M. Shapiro & Co .7,008.73 A. Mishkin 1,190.16 J. Kapner 2,317.69 L. M. Hoffman 1,670.80 B. F. Salzer 1,419.25 Lowell & Meservy 1,975.63 Builders Supply Co 3,100.72 Sundry Customers 55,416.00 $75,820.75 The ' Sales Ledger ' account on the general ledger controls this ledger. In the Purchase Ledger, beginning with page 20, open the following accounts, four to a page, and enter the balances as of Nov. I : American Hardware Supply Co $ 3,119.83 Mechanics Hardware Co 2,567.20 Norton Door Check Co 1,176.19 The Stanley Works i, 935.73 Simmons Hardward Co 2,875.50 Dixie Lumber Co Central Machinery & Supply Co 4,100.93 Griffen Manufacturing Co 751.82 Sundry Creditors 38,567. 1 1 55,094.31 The ' Purchase Ledger ' account on the general ledger controls this ledger. The two accounts, 'Sundry Customers' and 'Sundry Creditors' are used to secure volume of transactions without involving too great detail. They should be treated in all respects as personal accounts. In the Notes Receivable Journal, enter the following notes: No. 57, made by Ted S. Class in our favor, for mdse., dated Aug. 5, 19 , for 3 mo. at 6%, amount, $1,875.15. No. 61, draft drawn by us on M. Shapiro & Co., dated Sept. 25, at 60 das., amount, $1,750. No. 63, made by B. F. Salzer in our favor, for mdse., dated Oct. I, at 6%, for 2 mos., amount, $1,765.35. [ 58 ] No. 65, made by Builders Supply Co., in our favor, for mdse., dated Oct. 15, at 6% for 30 das., amount, $2,000. Enter these in the Notes Receivable Journal, add them in the 'Amount' column and rule it off as they are already posted in your General Ledger ' Notes Receiv- able' account. In the Notes Payable Journal, enter the follov/ing notes: No. 15, made by ourselves in favor of the City National Bank for discount, dated Sept. 23, at 8% for 60 das., amount, $10,000. No. 1 6, draft by Sundry Creditors, accepted by ourselves, dated Oct. 13, for 2 mos., amount, $4,157.83. Enter these in the Notes Payable Journal and treat as with Notes Receivable above. Your books will now show, general and subsidiary, the condition as at the begin- ning of business Nov. i. 59 XL VIII PRACTICE DATA Make record in the various books of original entry of the transaction for November. Where needed, directions appear at the close of each lesson. Nov. I. Sold Colonial Supply Co., 1-5, n~3O, $967.40 (A) and $205.10 (B) on which we prepaid freight and charged to them $30.65. Received cash on account from A. Mishkin, $1000. Paid cash on account to The Stanley Works, $435.73. Nov. 2. Bo't of American Hardware Supply Co., 3-5, n-2O, $1963.75 (A) and $2189.62 (B). Sold Block Hardware Co., 2-10, n-6o, $1242.75 (A) and $963.29 (B). Received cash on account from Ted S. Class, $1780.90. Paid cash on account to Central Machine & Supply Co., $4000. Nov. 3. Sold Ted S. Class, n~5, $2120.75 (A). Received cash on account from Colonial Supply Co., $1000. Nov. 4. Sold Griffen Mfg. Co., 3-10, n~3o, $314-75 (A) and $175.20 (B). Received cash on account from M. Shapiro & Co., $2008.73. Nov. 6. Bo't of Mechanics Hardware Co., 5-10, n~3O, $i 126.81 (A) and $1093.42 (B). Sold Frank & Bros., 2-5, n~3O, $1250 (A) and $319.25 (B), with prepaid freight charged them $17.40. Received cash on account from Block Hardware Co., $2000. Gave our note No. 17 at 6% for 30 das., favor of American Hardware Supply Co. to apply on account, $2500. Nov. 7. Sold M. Shapiro & Co., 1-5, n-6o, $2500 (B). Our note No. 57, Ted S. Class, maker, came due and was paid with interest. Paid cash to American Hardware Supply Co., for inv. Nov. 2 less 3%. Nov. 8. Sold A. Mishkin, i-io, n~3O, $790.30 (A) and $410.75 (B). Block Hardware Co. returned goods, inv. Nov. 2, $15.32 (A) and $125.61 (B). Received from Colonial Supply Co. their note dated Nov. 6, for 30 das. at 6% in payment of inv., Nov. I less i%. Nov. 9. Bo't of Norton Door Check Co., i-io, n-6o, $2819.18 (A) and $1371.93 (B). Paid cash for insurance policy, $590.20. Nov. 10. Sold J. Kapner, i-io, n-6o, $1745.75 (A) and $730.19 (B). Received cash on account from L. M. Hoffman, $1670.80. Nov. ii. Bo't of The Stanley Works, n-6o, $3100.95 (A). Sold L. M. Hoffman, 2-5, n~9O, $1010.90 (A) and $593.70 (B). Griffen Mfg. Co. returned goods, inv. Nov. 4, $69.81 (A) and $93.74 (B). Nov. 13. Sold B. F. Salzer, 3-5, n-6o, $527.55 (A) and $1013.05 (B). Frank & Bros, returned goods, inv. Nov. 6, $72.17 (A) and $25.83 (B). Received cash from Frank & Bros, for balance inv. Nov. 6 less 2%. Bo't new equipment for the office, $375 cash. Nov. 14. Bo't of Simmons Hardware Co., 3-10, n~3O, $819.36 (A) and $3181.64 (B). Sold Lowell & Meservy, i-io, n~3O $1190.10 (A) and $970.16 (B), with prepaid freight charged to them, $51.19. Received cash from Block Hardware Co. for balance inv. Nov. 2 less 2%. [60] Nov. 15. Sent a consignment of Department B goods, $1500, to J. B. Grover to be sold for our account on a 5% commission basis. Drew a 3O-das. sight draft on Frank & Bros, to apply on account, $1000, which he promised to accept. Received cash from Ted S. Class for inv. Nov. 3. Paid out-freight charges, $175.80. DIRECTIONS Be sure to enter the opening cash balance in both the General and Bank col- umns of the Cash Book. The ' (A) ' and ' (B) ' following sales and purchase transactions show the sales or purchases for Department A and Department B. The prepaid freight which is to be charged to the Colonial Supply Co. on Nov. I is to be entered in the out-freight column of the Sales Journal and included in the Total column amount to be charged them. The Griffen Mfg. Co. account is a mixed creditor and customer account, bu- is carried only in the Purchase Ledger. Make journal entry to adjust the cont trolling accounts as soon as sale of Nov. 4 is entered in Sales Journal. On Nov. 8, the note transaction with the Colonial Supply Co. involves a Sales Discount. Since no provision is made in the Note Journal for such, it will have to be run thru the general journal. Make the entry as follows: Sales Discount $12.03 Colonial Supply Co. (Sales Ledger) 12.03 The ' (Sales Ledger) ' shows that the controlling account is affected and must be credited, also, to maintain a proper control, there being no special 'Sales Ledger' column in the journal for such transactions. The Griffen Mfg. Co. returned sales of Nov. n must be adjusted thru the journal as in the Nov. 4 transaction, but of opposite effect. Raise memo accounts thru the journal for the J. B. Grover consignment of Nov. 15. [61 ] XLIX PRACTICE DATA Nov. 16. Bo't of the Dixie Lumber Co., 11-90, lumber and supplies for the building of sky lights on our warehouses, $723.18 with freight charges of $59.20 We returned to Norton Door Check Co., inv. Nov. 9, $421.16 (A) and $83.24 (B). Sold Builders Supply Co., n-6o, $1920.18 (A) and $1000 (B). Gave our note No. 18 at 6% for 30 das., favor Mechanics Hard- ware Co., for inv. Nov. 6 less 5%. Received cash from M. Shapiro & Co. for inv. Nov. 7 less i%. Nov. 17. Sold Colonial Supply Co., 1-5, n~3O, $579.63 (A) and $814.12 (B), with prepaid freight charged to them $32.16. Our note No. 65, Builders Supply Co., maker, came due and was paid with interest. Paid in- freight and cartage bills to date, $364.20. Nov. 1 8. Bo't of Central Machine & Supply Co., 2-5, n-6o, $1283.17 (A) and $2719.72(6). Sold Ted S. Class, n~5, $879.63 (A) and $479.81 (B). B. F. Salzer returned goods, inv. Nov. 13, $110.35 (A) and$38.25 (B). Drew from stock for building sky lights, goods, $200 (A) and $57.80 (B). Paid Norton Door Check Co. balance inv. Nov. 9 less i%. Nov. 20. We returned to Simmons Hardware Co., inv. Nov. 14, $89.33 (A) and $187.55 (B). The receiver announced there would be no dividends paid by one of our bankrupt Sundry Customers who owed us $219.57. We accepted The Stanley Works draft, to apply on account, drawn at 60 das. from date Nov. 15, amount $1500. Nov. 21. Bo't of Griffen Mfg. Co., 3-10, n~3O, $2901 (A) and $1275.91 (B). Sold M. Shapiro & Co., 1-5, n-6o, $867.50 (A) and $1375.90 (B). Builders Supply Co. returned goods, inv. Nov. 16, $172.18 (A) and $114.27 (B). Received cash from B. F. Salzer for balance inv. Nov. 13 less 3%. Nov. 22. Bo't of American Hardware Supply Co., 3-5, n-2O, $983.67 (A) and $2875.28 (B). Sold J. Kapner, i-io, n-6o, $919.55 (A) and $1591.25 (B). Received cash from Colonial Supply Co. for inv. Nov. 17 less i%. City National Bank notified us that our account was charged with $10,000 on account of our note No. 15, due this day. Nov. 23. Bo't of Norton Door Check Co., i-io, n-6o, $137943 ( A ) and $2519.77 (B). Discounted our note No. 20 at 8% for 60 das., at City National Bank, face of note $5000. Paid Central Machine & Supply Co., inv. Nov. 8 less 2%. Nov. 24. Bo't of Simmons Hardware Co., 3-10, n~3O, $3520.18 (A) and $492.16 (B). Sold L. M. Hoffman, 2-5, n-9O, $319.36 (A) and $1580.25 (B). Received cash, account of cash sales $125.16 (A) and $114.34 (B). Paid Simmons Hardware Co., balance inv. Nov. 14 less 3%. Issued our check for $10 on account of inability to make change. Received letter from Ted S. Class calling attention to overcharge of $100 in inv. Nov. 1 8 due to error in addition. Nov. 25. Bo't of Dixie Lumber Co., n-QO, lumber for repairing buildings, $651.72 with freight charges, $51.19. We returned to Sundry Creditors r 62 1 $509-26 (A) and $722.73 (B). Sundry Customers returned goods, $215.52 (A) and $119.35 (B). Received note at 6% for 30 das., dated Nov. 16, from L. M. Hoffman for inv. Nov. n less 2%. The bank notified us that M. Shapiro's draft due yesterday had gone to protest and our account charged with protest fees of $2.50 for which we issue them our check. Received cash from J. Kapner for inv. Nov. 16 less I %. Paid advertising bill, $2543.65. Nov. 27. Sold Builders Supply Co., n-6o, $1725.17 (A) and $1836.10 (B). Received cash from M. Shapiro & Co. for protested note and fees, $1752.50, stating that protest was in error. Paid American Hardware Supply Co. inv. Nov. 22 less 3%. DIRECTIONS Nov. 1 6. Enter the Dixie Lumber Co. purchase in the Total and Sundries columns, marking it as a charge to 'Buildings'. The 'Purchase Discount ' on the Mechanics Hardware Co. note transaction is handled thru the journal, similarly to the Colonial note on Nov. 8. Nov. 20. Charge off the bankrupt Sundry Customer to the Reserve, being careful to indicate the controlling account affected. Nov. 23. Enter discount on $5000 note in Sales Discount column with an 'x' in front of it. Enter the note also in the Notes Payable Journal with an 'x' in front of the amount column. These are for use as guides in summarizing. Nov. 24. Be careful about the $10 check for change and the Class overcharge. Nov. 25. The Dixie Lumber Co. transaction is similar to that of Nov. 16 ex- plained above. Handle carefully the Hoffman note and sales discount. Charge Shapiro by journal entry with the protested note. His charge for fees will come from the Cash book where the controlling account affected must be indicated. I 63 J PROBLEM i A corporation is formed with a capital stock of $100,000, entirely subscribed for and with two-fifths paid in cash. Show journal entries covering: PROBLEM 2 The remaining three-fifths of the capital in No. I is subject to call at the end of each succeeding month. The first call has been made and one-half paid in. Show journal entries covering. PROBLEM 3 Lehman and Underwood, partners in a trading business, decide to incorporate. The authorized capital stock is to be $50,000; shares $50 par value. They interest J- Q- Quinn and I. M. Bean in the new company, receiving subscriptions, paid in cash, for 100 and 300 shares respectively. Lehman and Underwood subscribe for the remaining stock in the ratio of their interests in the old business, which at that date shows as follows: Assets Liabilities and Capital Cash $ 4,500.00 Accounts Payable $ 5,269.30 Stock 8,250.00 Mortgage Payable 4,500.00 Accounts Receivable 10,690.30 Notes Payable 1,500.00 Notes Receivable 1,250.00 Rent Accrued 125.00 Land 6,000.00 Interest Accrued 26.00 Buildings 5,000.00 Lehman, Capital 17,470.00 Furniture & Fixtures 1,000.00 Underwood, Capital 8,735.00 Delivery Equipment 875.00 Insurance Prepaid 50.00 Interest Accrued. . 10.00 $37,625.30 $37,625.30 They pay their subscriptions by turning over to the corporation their old business at the values stated above except the cash which is retained by them personally. Open a new set of books for the corporation. Close the partnership books and show distribution of assets. PROBLEM 4 The Jackson Co. has outstanding capital stock of $75,000. This year's Profit & Loss shows a profit of $2120.69. The previous Surplus balance is $12,182.40. They declare and pay a 6% dividend. Show, in journal form, the entries covering the above. [64 ] LI PRACTICE DATA Nov. 28. Bo't of Griffen Mfg. Co., 3-10, 11-30, $1193.69 (A) and $2987.12 (B), with prepaid freight charged to us of $193.72. Received cash from Lowell & Meservy for inv. Nov. 14 less i%. Made partial payment on sky light contract $192.50. Nov. 29. Bo't of Sundry Creditors, 3-10, n~3O, $8084.29 (A) and $11,057.08 (B). Sold Sundry Customers, 2-5, n~3O, $21,491.98 (A) and $22,821.69 (B). Received note at 6% for 2 mo., dated Nov. 18, from A. Mishkin for inv. Nov. 8 less i%. Received cash from Sundry Customers for invoices amounting to $46,875.10 less discount of $910.10. Received cash from sale of office safe $150. The safe had cost $250, this year's depreciation being estimated at $15. Reimbursed petty cashier for vouchers turned over, $134.75 and distributed same, $75.80 to Sales General Expense, $10.19 to Office Expense, and $48.76 to General Expense. Paid Sundry Creditors, invoices of $18,697.23 less $317.13 discount. Paid salesmen salaries $3750, travelling expense, $3,675.80, sales general expense $672.50, general salaries, $3971.20, interest and bank expense $115.75, and general expense, $6127.80. Charge Build- ings, thru the journal, with $35 of the general salaries paid our own mechanic for work on the sky lights. DIRECTIONS Study the office safe sale transaction carefully. Make complete entry of it in the journal. Summarize the various subsidiary journals carefully, taking note of any extraneous items. This applies particularly to the Purchase Journal. In the Notes Payable summary treat the $5000 note separately as it is posted from the Cash Book where also its discount must be listed separately in the summary entry. In summarizing the cash receipts you must subtract the Nov. I balance before obtaining the correct charge to the bank. [65 1 LII PRACTICE DATA Post completely and take a trial balance of the general ledger, recording it on page 7 of your general journal. When posting customers' and creditors' accounts, make sure that the corresponding controlling accounts will receive, either in totals or in items, the same amounts. Prove your Sales and Purchase Ledgers and record the proof formally on page 8 of the general journal. [ 66 ] LIII PROBLEM i What single rate of discount is equivalent to the series 20%, 20%, and 20%? 50%, 10%, and 5%? PROBLEM 2 Feb. I, 1915, the bank rendered statement of account of Jackson-Richter, showing a balance subject to check of $3950.26. Jackson- Richter's cash book showed $4190.38. In reconciling, the following information is secured. Jackson- Richter checks outstanding were, No. 219 for $125, No. 230 or $75.20, No. 201 for $19.18, No. 241 for $605.73, No. 236 for $5.25, No. 225 for $21.40, and No. 217 for $6.30; checks on out-of-town banks deposited for collection and credit but not yet credited, Utica $598.18, Syracuse $720.50, Buffalo $279.50. Prepare a reconciliation statement. PROBLEM 3 Upon establishing an 'Accounts Receivable' controlling account on the general ledger the total of customers' balance was $21,492.17. At the close of the month the cash book showed receipts from customers of $25,487.50, the bill book total was $5250.40 all of which except a note for $500 was received from customers, the sales book total was $39,420.17 of which $5280.65 was cash and $327.50 were proprietor's withdrawals, the sales returns and allowances journal totaled $1219.75. Set UP the general ledger Accounts Receivable account and show all postings to it. 67 1 LIV PROBLEM i On July i, 1910 a trader's stock of goods was destroyed by fire but he saved his books of record. His goods were fully insured and he proved his loss from the following facts: value of goods on hand Jan. i, 1910, $21,500; purchases from Jan. I, 1910 to July I, 1910, $54,300; sales from Jan. I to July i, $63,750. His records for the past three years showed an average gross profit of 20% on sales. Find the value of the stock destroyed by fire. PROBLEM 2 On Dec. 4 you received a consignment of goods for sale on account of Jas. Scoville & Co. showing an invoice value of $2150. You paid freight and cartage of $50.25. Sales were made on Dec. 10, $750 and Dec. 21, $1025.75 on a 5% com- mission basis. On Dec. 31, upon closing your books, you inventory the balance of the unsold consigned goods at $537.50. Show your treatment of the above, when closing. f 681 LV PROBLEM The Carney-Edmunds Co. general ledger shows the following trial balance for the fiscal year ending December 31, 1910: Land $ 10,000 Buildings 9,000 Office Furniture & Fixtures 500 Store Furniture & Fixtures 2,200 Delivery Equipment 2,000 Inventory Department A 4,000 Inventory Department B 5,ooo Department A, Purchases 20,000 Department A, Purchase Returns & Allowances $ 1,000 Department B, Purchases 28,000 Department B, Purchase Returns & Allowances 2,000 Department A, Sales 25,100 Department A, Sales Returns & Allowances 800 Department B, Sales 38,000 Department B, Sales Returns & Allowances 1,700 Taxes 840 Insurance 500 Office Expense 450 General Expense 200 In-Freight 500 Out-Freight 100 Horse- keep 400 Sales Discount 300 Purchase Discount 890 Interest & Discount 125 Collection & Exchange 25 Printing & Stationery 100 Advertising 1,500 Travelling Expense 750 Salesmen's Salaries , 5,ooo General Salaries 6,000 Capital Stock 50,000 Surplus 10,000 Trade Customers 25,000 Trade Creditors 3, 300 N. Y. National Bank 7,400 Petty Cash 100 Notes Receivable 2,800 Notes Payable 2,000 Mortgage Payable 3,ooo $135,290 $135,290 Draw up pro forma balance sheet, trading and profit and loss statements, taking account of the following adjustments and inventories: Allow: 2% depreciation on buildings 10% depreciation on store and office furniture depreciation on delivery equipment of Trade Customers and Notes Receivable for bad debts. Defer $125 insurance and $200 advertising Salesmen's salaries $75, interest on mortgage and notes payable $120, and bill for repairs to building $62.50 are now accrued and unpaid. Interest earned but not due amounts to $23. Stock of merchandise now on hand is: Department A, $6,340.20 Department B, 9,871.30 Apportion the in-freight to the two departments on the basis of purchases. Charge 90% of the insurance cost to Trading. A 10% dividend is declared and paid. LVI PRACTICE DATA Close the ledger, thru the journal, taking account of the following adjustments and inventories: Accrued Expenses: Sales salaries, $250; general salaries, $342.75; unpaid bills on buildings repairs, $436.20; in-freight, $314.75; mortgage interest, $50; interest on note held by Mechanics Hardware Co., $4.92, and one held by American Hardware Supply Co., $10. Prepaid Expenses: Advertising, $983.50; insurance, $2501.67; general expense, $129.60; discount on company's $5OOO-note, $58.89. Accrued Income: Interest earned on the following notes: Salzer, $17.36; Colonial Supply, $4.76; Hoffman, $3.67, and Mishkin, $2.38. Take account of depreciation at yearly rates of: 2% on Buildings 15% on Delivery Equipment 10% on all Furniture & Fixtures Set aside 2% of the outstanding accounts and notes receivable as a reserve for doubtful accounts. Inventories on hand at the store and warehouses are: Department A, $41,276.20 Department B, $43,987.56 Take into consideration Department B goods out on consignment. Charge 80% of the insurance cost to trading. Apportion in-freight between the two de- partments on the basis of purchases. Declare a 10% dividend to be paid on Dec. 15 and carry the balance of the profit and loss to Surplus. LVII PRACTICE DATA Draw up pro forma Balance Sheet and Statement of Profit & Loss for the year ending Nov. 30, 19 . Show the gross profit on both kinds of sales. I 72 LVIII PROBLEM Jackson and Edson had on June 30, 1913 the following assets and liabilities: cash $1000, notes receivable $2500, unexpired insurance $150, notes payable $3150, interest unpaid $125, mdse. on hand $15,800, accounts receivable $20,500, coal $50, office supplies $25, furniture & fixtures $375, delivery equipment $1100, accounts payable $8225. Of the net worth % belonged to Jackson and % to Edson. Keeping their accounts by single entry and dividing profit and loss on the 2 to i basis referred to above, they find their condition at the end of fiscal year to be: cash $2500, notes receivable $3000 on which was accrued interest of $25, unexpired insurance $225, mdse. $12,490, accounts receivable $18,175, coal $140, office supplies $10, furniture and fixtures $510, delivery equipment $1275, building $5000 on which was a mortgage for $3000, notes payable $4250 with accrued interest of $50, accounts payable $8550, and salaries unpaid but earned $150. During the year Jackson had made an additional investment of $2500 and Edson of $1250; Jackson had withdrawn $7500 and Edson $4000. Determine the net profit or loss for the period and set up the partners' accounts showing their present worth at the close of the year. I 731 LIX PROBLEM i A note for $1500 dated June 20, 1908, bearing interest at 5% had payments indorsed as follows: Dec. 5, 1908, $300; Apr. 2, 1909, $10; July 20, 1909, $500; Dec. 31, 1909, $400. Find the amount due June 22, 1910. (U. S. Rule.) PROBLEM 2 In a manufacturing concern the total value of buildings and euqipment subject to insurance was $155,000 distributed as follows: Department I, $25,000; Depart- ment 2, $45,000; Department 3, $35,000; Department 4, $10,000; Power House, $40,000. The annual insurance premium amounted to $3105. The rates on Departments I, 2 and 3 were the same; on Department 4 the rate was double that on Department I and on the power house 2^ times that on Department I. Find the amount of insurance burden chargeable to each department and the power house. 74] LX PROBLEM Equate the following account and find the cash balance due Aug. I, 1907, money being worth 4 3^%: F. T. Frederick 1907 1907 May 4- Mdse. 60 da. $1360.00 May 14. Cash $360.00 May 14. Mdse. 30 da. 720.00 Returnee mdse. 150.00 May 26. Mdse. 60 da. 1080.00 June 10. Cash 800.00 June 21. Note, 20 da. 750.00 [ 75 LAST DATE OVERDUE. HF THE UNIVERSITY OF CALIFORNIA LIBRARY