1 1 1 u stf atlve COMPLETE COURSE LIBRARY OF THK University of California. GIFT OF Class UNIVERSITY OF CALIFORNIA DEPARTMENT OF EDUCATION GIFT OF THE PUBLISHER No. S'i^ ^ ' /?^mw^ / ^/ S , IVILLMMS & ROGERS SERIES Modern Illustrative Bookkeeping DESIGNED AS A TEXT-BOOK FOR ALL SCHOOLS GIVL\G A COURSE IN BUSLNESS TRAINING COMPLETE COURSE RV E. TIRGJLt^^EAL Author of Modern Eankixq and Bank Accounting AND C. T. CRAGIX SCRIPT IWA'STRATIOXS V.Y E. C. MILLS N"EW YOEK . : • CIXCIXXATI - : • CHICAGO AMERICAN BOOK COMPANY rt^ % Copyright, 1900. by Williams & Rogers Copyright, 1901, by American Book Company MOD. IlV. BKPG. complete M. 3 llfltC c <■ INTRODUCTORY? T This book is designed to teach bookkeeping as it is practiced by the best business houses. We have no apology to offer for the innovations in methods, or the deviation from the school forms of balance sheets, statements, loss and gain accounts, etc. We believe the time has arrived when all progressive teachers will w^elcome practical l)usiness methods, even though they supplant long cherished school forms and practices. In the compilation of this work we beg to acknowledge the courtesies and assistance extended us by Lord & Taylor, New York; John Wanamaker, New York and Phila- delphia; Park & Tilford, New York; Baldwin lyocomotive Works, Philadelphia; Gimbel Brothers, Philadelphia; Comptroller of Currency, Washington, D. C; Assistant Secretary of the United States Treasury, New York, and of over a hundred other leading business houses and banks which have cheerfully permitted us to examine their books and whose head bookkeepers have furnished much valuable information. TO THE STUDENT. Accuracy is the first essential of business; without it you cannot hope to hold a paying position in the commercial world. Accuracy can be acquired only b}^ painstaking, thoughtful w'ork on your part from the start. Read carefully all instructions, and do just as you are told to do. Do not make mistakes in simple mathematical operations. Errors in addition, sub- traction and multiplication are inexcusable, and will not be tolerated in business. Verify all additions and multiplications. Know you are right before you go ahead. Neatness and Leg'ibility. A neat, legible style of handwTriting which can be executed at a fair rate of speed, and absolute legibility in figures, are necessities in the modern office. The acquirement of these attainments will necessitate constant practice on the part of most students. The script illustrations in the book are excellent models to follow. Do not allow yourself to do careless and slovenly work either in writing or in making figures. Details. Inability to estimate the importance of a thorough mastery of details is the cause of more failures in life than all other causes combined. Learn to pay attention to the little things. Follow 3^our instructions implicitly; do not be content with doing a thing nearly right, but do it exactly right. Remember, " Perfection is made up of trifles, but perfection itself is no trifle. ' ' The successful business man must master multitudinous detail. 221751 CONTENTS. Work for the Student, January, 5 Model journal-daybook, 6 Model ledger, 8 How to journalize, 10 Directions for posting, 13 Directions for taking a trial balance, .... 18 Review questions, January, 20 "Work for the student, i<*ebruary, 22 Directions for checking from journal to ledger, 26 Work for the student, March, 27 Bills Receivable ( form ) , 28 Bills Payable " 30 Indorsements, 32 Trial balance of differences, 33 Directions for detecting errors in a trial balance, 34 Directions for making a statement, 34 Directions for making a proof of statement, . 38 Review questions, March, 39 Directions for closing the ledger, 42 Directions for making a proof trial balance, . 46 Test ledgers Nos. one and two, 48 Work for the student, April, 49 Flour, Grain and Produce business, 50 Method of opening a bank account, 54 Statements of customers' accounts, 64 Review questions, April, 66 Model cash book, 68 Model sales book, 70 Work for the student. May; Tea, Coffee and Spice business, 71 How to calculate interest and discount, ... 76 Shipping receipts, 85 Telegram, • 86 C. O. D. sales, 88 Form of loss and gain statement and balance sheet, May, 92 Directions for making statement, May, ... 94 Exercises in bank discount and interest, ... 98 Price lists, May and June, 100 Review questions. Ma}', 102 Drafts, 103 Exercises in journalizing drafts, 109 Model bill book, 112 Model invoice book, 113 Articles of copartnership, June, 114 Work for the student, June; Wholesale Gro- cery, Tea, Coffee and Spice business, ... 114 Cash check, 121 Model statements, June, 126, 128 Examination, June, 130 Review questions, June, 133 Commission, Shipping and General Merchan- dising business, 134 Model loose leaf consignment ledger 135 Model commission cash book, 136 Model shipment ledger, 138 Model commission sales book, 139 Model account sales register, 140 Model letter impression book, 142 Model journal, Juh-, 143 Work for the student, July, 144 Check for New York draft, 151 Directions for posting, July, 154 Overdrafts, 158 Model statements, July, 160, 162 Interest on partners' investments, 164 Review questions, July, 165 Wholesale Dry Goods business, 166 Model special column journal, 167 Model cash book, 168 Work for the student, August, 170 Memorandum of credit, 178 The balance ledger, 179 Directions for posting, August, 180 Directions for finding partners' interest, . . . 183 Model statement, August, 184 Directions for closing Loss & Gain account, August, 1S6 Work for the student, September, 187 Model statement and proof for September, . . 192 Price lists, August and September, 194 Review questions, August and September, . . 196 Model single entr^^ journal, 198 Model abstract sales book, 201 Model purchase book, 202 Model cash book, 204 Model ledger card, 207 Work for the student, October, 208 Model statement of Resources & Liabilities, . 216 Work for the stvident, November, 21S Review questions, October and November, . . 226 Joint stock companies and corporations, . . . 227 Model stock certificate, 232 Opening the books of a corporation, 234 Model voucher, 238 Work for the student, December, 242 Model journal, 244 Model sales book, 245 Model cash book , 246 Model voucher register, 246 Model petty cash book, 250 Model statement of losses & gains, 258 Model statement of resources & liabilities, . . 260 Directions for closing the ledger, 260 Review questions, December, 262 Appendix, 263 MODERN ILLUSTRATIVE BOOKKEEPING. Bookkeeping is the art, method, or practice of recording business transactions. There are two methods, termed Single Entry and Double Entry. Object of Bookkeepiiii--. — The object of bookkeeping is to enable the proprietor at any time to determine whether his business is being conducted at a profit or a loss, the sources from which the profits or losses arise, and to afford a record of all debts due and all property belonging to the business and a record of all debts due by the business. Single Entry Bookkeeping- usually provides for keeping accounts with persons only. Double Entry Bookkeeping provides for keeping accounts with persons, property, expenses and allowances. Books Required. The books required depend upon the nature of the business, but a complete record of any business may be kept in two books — the Journal-Daybook and the Ledger. Tbe Journal-Daybook. This book contains a record of each transaction as it takes place, and also the names of the accounts affected by the transaction, showing which accounts are debited and which are credited. The Ledger. This book contains the names of all accounts occurring in the journal, with all debits from the journal carried to the debit or left-hand side of the ledger accounts, and all credits to the credit or right-hand side, so that a ledger account will show upon its face all transactions by which that account has been affected in the course of the busi- ness as recorded in the journal-daj'book. Auxiliary Books. — Ever}- business will keep such auxiliary books of record as the nature of the transactions may require. WORK FOR THE STUDENT. Xo. 1. — Take a sheet of journal paper and carefully copy the model journal shown on pages 6 and 7, following carefully the script forms of both letters and figiu^es. No. 2. — Take a sheet of ledger paper and carefully copy the model ledger shown on pages 8 and 9, writing four accomits on a page. Be careful to make plain, neat figures. Make the ledger headings larger than ordinary writing, and see that each heading is written in the center of the page, so that the double lines which divide the page into two equal parts will come exactly, or nearly, in the middle of the heading. Do your very best work both in the journal and ledger exercises, for they will not be accepted unless the w-riting is legible and neat, and the figures plain. Present your work to 3'our teacher for examination and approval. 6 MODERN ILLUSTRATIVE BOOKKEEPING. J^^^-^^^:^^^^^ /, y^^- / / / / / / / 'O, yZ^^?i^^.i^, ^M(2/A^ Z' / ^'t^^Z-J-^/L- 1^3 ~^^^^^ZJ>^^^r^^ (/■:<^^t^^i^^z^ r^i^ .^£^£>: yi^-et^^iU^^ Z^£'-g?,'Ci^ a. Z- ■S 2 ^iP -^C'-Z^, 0?%^'i.i-^> 3, '^' ?-t / C^(? 4 £P /^ 7 / ^ f- MODKRN ILLUSTRATIVE BOOKKEEPING. il(i^y^^^^^^^-^€^^y / / , z^^- z / z z. / / z I J^r^S^.-'^.^ipi-y-z^ K&^ ■i? : ■jry / ■ ^7 4^ ^'^^'^J^Z^ iJZ-i^i;^^ /^ ;^^^i^s5o^:^^2^^^-/2'^y!:^^^^ ^ (^M(2/^c^ -J^, / / 2c Zff£' Z^ -^i-t^, .^^^^^^^^ V/-^ ^/ / ^ (P / ^ ff / f Zl^^.^C^^€^^^y /, /^ t^- (S-^Z-^i^^^^ z ^/ ^J~lp z ^7 J'£> £^ ^i? Zoc' 6 J J f 3jr J ^/ jT/P ' J^^ j07 8 MODERN ILLUSTRATIVE BOOKKEEPING. '^ •y c- 3 ^ i? ff / > J // /z i-^ ff. ^o 2 Z 2. 3 £P £> IP / ^ ^ 33cr ^> V jri> 3 6 ..J^i^, J/ zC ^7 / / 2- z i. J i f Zy-'S f Z-A 3- zc ^j£i^. ^ / ^f / / 1: J 22S- 333" Z3 ^ J-/ 3 ^y' d-iz •J- * 3~

2^ 33,f j'^ .,^7^^ ^ J J" ^^J, ^7 ^y. ^7/ J 9 ' ^^- £Z--?^^ 2-^- Z zz- Z3-7 V i A. •JTi^ y3 ?/^r / ^ ^ /SZ'^^-Z-'V^ Z /'?'f / fc- U^^ /z 10 MODERN ILLUSTRATIVE BOOKKEEPING. WORK FOR THE STUDENT. GENERAL RULES FOR DEBITING AND CREDITING. Rule 1. — Debit what the business receives, Rule 2. — Credit what the biisi?iess disposes or what costs value. of, or what produces value. To BE Entered in the Journai^-Daybook. Make the entries required by the following transactions similar in form to those shown in model journal-daybook on pages 6 and 7. No. 1. — ^January i, 190-. I (your name) engage in the Flour and Grain business, investing cash, $4000. Instructions. — Whatever the business receives, or what comes into the business, should be debited; that is, it should be entered on the left-hand side of your journal- daybook. In this instance the business has received cash to the amount of $4000, hence Cash should be debited. WTiatever the business disposes of, or whatever produces value to the business, should be credited; that is, it should be entered on the right-hand side of your journal-daybook. In this instance the proprietor has produced, or given, value to the business to the amount of $4000 by making an investment, hence the Proprietor should be credited. The following illustrates the form of the entrj^ though the amounts and explanation are different: ^Z^m-C^>€ZyiyU /, Z^^- i'^^t^^. ^ Z^4-€Z-i>1>^Z^ ,^S>t:Z^ 'S'S'O O 3cr(P (p Make an entry in 3'our journal-daybook according to the above form. Write your name instead of that of F. W. I^eonard, and place $^000 opposite Cash, and $^000 oppo- site your name, instead of the amounts shown in model. The amount placed in the left- hand column of your journal-daybook should be the same as that placed in the right-hand column; in other words, your debits and credits should alwaj^s be equal. The name of the account debited is placed near the vertical lines at the left, and the amount placed in the left-hand money column. The name of the account credited is written one line below the debit, and about three- fourths of an inch farther to the right. The credit amount is placed in the right-hand money column. Rule 3. — Debit Cash for all cash received. MODERN "ILLUSTRATIVE BOOKKEEPING. 11 The term "cash" includes specie (gold, silver, nickel and bronze), treasury notes, national bank notes, gold and silver certificates, checks, post-office money orders, express money orders, bank drafts, and certificates of deposit. Rule 4. — Credit the Proprietor with all amounts which he invests in the business. No. 2. — January 2, 190-. Paid J. C. Smith $75 for one month's rent of store. Instructions. — Whatever costs the business value should be debited. In this instance you have paid $75 rent for the benefit of the business. Rent has cost the business value. It is an expense to the business, hence Expense should be debited. Cash has been disposed of. It has produced value to the business; that is, it has been used by you to pay the rent of your store, hence Cash should be credited. The following illustrates the form of your entry, though the amounts and explanation are different. Z ■t-e^^^t,'^ ..-C'-^^Z^ ■^^z^ /(PC / C (/ Before attempting to make the above entry, examine the model journal-daj'book on page 6 so as to be sure of the form and arrangement. Do not copy the illustrations, but make entries similar to them. Your entries must be made for the transactions given, and your amounts must be the amounts given in the transactions, and not the amounts shown in the illustrations. Leave one blank line after each transaction, and write the date in the center of this line, using ditto marks if the date be the same as that of the preceding transaction. Rule 5. — Debit Expense for all expenses of the business. The expenses of a business include such items as outlays for rent, postage stamps, sta- tionery, fuel, light, clerk hire, etc. Rule G. — Credit Cash for all amounts which are paid out, or taken from the business. No. 3. — January 2, 190-. Bought of Scran tom & Wetmore, books and stationery for office use, for which I paid cash, $15. Instructions. — This transaction is of the same nature as the preceding one. Debit Expense (see rule 5); credit Cash (see rule 6). In the right-hand half of the wide space in 3- our journal-daA-book is written a complete record of the transaction. This record should be as brief as possible, yet it must show exactly what took place, for should any dispute arise it is this record and not the journal entry nor ledger record that will be used as evidence. No. 4. — ^January 3, 190-. Bought of the Upton Coal Co. for cash, for use in store, 5 tons of coal at $5.50 per ton; total, $27.50. Instructions. — As the coal is to be used for fuel, it becomes an expense to the busi- ness. Make entry similar to transactions Nos. 2 and 3. Determine the debit by reading rule 5; determine the credit by reading rule 6. 12 MODERN ILLUSTRATIVE BOOKKEEPING. No. 5. — January 3, 190-. Paid postmaster $10.50 for 500 stamped envelopes. No. «. — January 4, 190-. Bought of P. D. Hamlin, for cash, 100 brls. flour at $3.90 per brl., 400 bu. oats at 35^/ per bu.; total, $530. Instructions. — Goods which j^ou buy with the intention of selling are called " mer- chandise." You have bought $530 worth of flour and oats for this purpose, hence Mer- chandise should be debited. You have paid out or disposed of cash to the amount of $530, hence Cash should be credited. The following is the form of your entry, though the amounts and explanation are different. ^ 4^ SVC, ^--^-i^, 1^^ ^'ZJ^'^-^^z^ ¥iPi- fJ'^ / ^r^ Rule 7. — Debit Merchandise for all goods which you buy for the purpose of selling. No. 7. — January 4, 190-. Bought of Charles A. Hubbard, for cash, 1000 bu. oats at 30^' per bu.; total, $300. Instructions. — This transaction is similar to the preceding one. Merchandise should be debited (see rule 7); Cash should be credited (see rule 6). No. 8. — January 4, 190-. Bought of M. F. lyynch, for cash, 500 bu. corn at 35^' per bu.; total, $175. Instructions. — Make entry similar to transaction No. 6. Determine the debit by reading rule 7; determine the credit by reading rule 6. No. O.^January 4, 190-. Bought of H. P. Dennis & Co., for cash, 100 bu. rye at ^ot:i.. CP tP A^iP C IP In posting always place the number of the page of the journal from which the amount is posted in the folio column of your ledger, and place the number of the page of 5'Our ledger on which the account is written in the folio column of j'our journal. This is termed " postmarking." Second Step. — All the debits in your journal should be posted first, then the credits. The next debit item in your journal is Expense; the amount is ^75. Turn to 3'our Expense account in the ledger and write ^75 in the amount column. Place the page of the journal (i) in the folio column, and the date of the transaction (Jan. 2) in the date column. The following illustrates the form of your ledger entrj'. O^. IZ'-T^^Z- 7' MODERN ILLUSTRATIVE BOOKKEEPING. 15 Place the page of your ledger (i) in the folio column of your journal. (For form of entry, see illustration of journal in first step; also see model journal on page 6.) Third Step. — The next item on the debit side of your journal is Expense; the amount is $15. Turn to the Expense account in your ledger and place the amount on the debit side, writing the page of the journal in the folio column of the ledger, and the date (Jan. 3) in the date column of the ledger. The following illustrates the form of the entry, showing the Expense account as it should appear in your ledger at the present time. 3 7 Write the page of the ledger in the folio column of your journal. Fourth Step. — The next item on the debit side of your journal is Expe^ise; the amount is $2^.5 o. Post this to your ledger, as previously instructed. The following illustrates the form of an Expense account with three items entered thereon. ■2- 3 3 / 7^ / /J / V j-a Fifth Step. — The next item on the debit side of your journal is Expense; the amount is $10.^0. Post as before to the left-hand side of Expense account in the ledger. Do not neglect to place the ledger page in the folio column of your journal. Sixth Step. — The next item on the debit side of your journal is Merchandise; the amount is $S3o. Post this to your ledger as previously instructed. The following illus- trates the form of the entry. ^i^^^z^^^-^-^^^^/ld^^ 2- i? / V^ 4^ Ninth Step. — The next item on the debit side of your journal is Merchandise; the amount is $2^^. Post this to the debit side of your Merchandise account. Tenth Step. — The next item on the debit side of your journal is Cash; the amount is $28^. Post this to the debit side of your Cash account. The following illustrates the form of the Cash account as it should appear in your ledger at the present time. ^^t7^. 'Z' A^ (P tP c 2. ci"^ MODERN ILLUSTRATIVE BOOKKEEPING. 17 Eleventh Step. — The next item on the debit side of your journal is Cash; the amount is $i^o. Turn to the Cash account in your ledger and make entry on the debit side, placing $i^o in the amount column, the page of your journal in the folio column, the date of the transaction (Jan. 6) in the date column. Place the ledger page in the journal folio column. Twelfth Step. — The next item on the debit side of your journal is Cash; the amount is $80. Post this amount to the debit side of the Cash account in your ledger. Thirteenth Step. — The next and last item on the debit side of your journal is Cash; the amount is $112. Post this to the debit side of the Cash account, as previously instructed. You should now have five items on the debit side of your Cash account; namety, $4000, $285, $140, $80, and $112. All the items on the debit or left-hand side of your journal have now been transferred to the debit or left-hand side of yoiir ledger. Fourteenth Step. — As you have finished posting the debit items, you should next post the credit items of 3'our journal to the credit or right-hand side of your ledger. The first credit item in your journal is that in which you are credited with your invest- ment, $^000. This should be transferred to your account on the credit side of the ledger. The following illustrates the form of the ledger entry. ^:;^^-^^ '^<7 - dZyy^Z^^ / A^C? ^ £P Be sure to place the page of your ledger in the folio column of the journal immediately preceding your name. Fifteenth Step. — The next credit item in 3'our journal is Cash; the amount is $j^. Transfer the amount to the credit side of the Cash account in the ledger. The following illustrates the form of the Cash account in your ledger as it should appear at the present time. l^. cT- J~ Com. — 2 / / Z- ■■ f- Z- /^ 18 MODERN ILLUSTRAriVE BOOKKEEPING. Sixteenth Step. — Transfer the remaining credit items of j-our journal-daj^book to your ledger. (For form of ledger showing accounts with several items entered thereon, see model on page 8. ) The Cash account in j'our ledger will contain eight credit amounts, and the IMerchandise account four credit amounts. All the credit items of your journal have now been transferred to the credit or right- hand column of your ledger. As the amounts in the debit and credit columns of the journal are equal, it is evident, if you have made no mistake in transferring the entries, that the amounts on the debit and credit sides of your ledger must also be equal; that is, that the sum of the amounts on the debit side of your ledger should equal the sum of the amounts on the credit side of j'-our ledger. To ascertain if this is true, we take what is known as a trial balance. TRIAL BALANCE Take a sheet of journal paper, write the words Trial Balance at the top, and under it, at the left, write the names of all the accounts that appear in yowx ledger, with the ledger page in the folio column. The following illustrates the form. ^ i^.^^^^^(^, Z^^- / / / The names of the accounts in the left-hand colunni must be the names of the accounts in your ledger. The footing of the debit side of all the accounts in j^our ledger must be entered in the debit or left-hand column of your trial balance. The footing of the credit side of all the accounts in 3'our ledger must be entered in the credit or right-hand column of j'our trial balance. The first account in the ledger is the proprietor's (your own) account. There is nothing on the debit side, hence no entry will be made in the debit column of your trial balance. There is $^000 on the credit side of your account. Enter this amount ($4000) in the credit or right-hand column of your trial balance. The following illustrates the form; the amount is diiferent. MODERN ILLUSTRATIVE BOOKKEEPING. 19 ^Zy^^i^^, /a<^~ y^Z,-C^ 3. — February 26. Received cash of J. S. Sumner, $100, to applj'^ on account. Instructions. — This transaction is similar to the preceding one, with the exception that the explanation should read To apply on account instead of In full of account. Xo. 27. — February 27. Paid A. J. I^ane cash, $82.50, in settlement of his account to date. Instructions. — In transaction No. 15 you became indebted to A. J. L,ane to the amount of $82.50. You now get out of his debt by paying him in cash; thus A. J. Lane costs the business value, hence A. f. Lane should be debited; cash has been disposed of, hence Cash should be credited. The following illustrates the form of your entry, though the amounts are different. /Ty^y)^r<:::yC^ 2-: >^^2^ a^-€.^f>!^--~^ / (p / •^ Rule \'2i.-— Whenever you pay a person on account, debit that Person. ^o. 28. — February 28. Paid W. H. Stevens cash, $100, to apph^ on account. Instructions. — Make entry similar to preceding transaction, with exception that the explanation should read To apply on account instead of /;/ full of account. No. 29. — February 28. Received cash of E. H. French & Co., $342, inpayment of bill of 19th inst. (Entry similar to transaction No. 25.) No. 30. — February 28. Sold Emerson & Sons, on account, 100 bu. corn at 40^/ per bu., 60 brls. flour at $4.50 per brl., 100 bu. oats at 35^' per bu.; total, $345. (Determine the debit by rule 10; determine the credit by rule 8.) No. 31. — February 28. Paid for postage and advertising $12, cash. (Determine the debit by rule 5; determine the credit by rule 6.) No. 32. — Open the following new accounts in your ledger, leaving space as indicated. W. A. Scott, nth line, page 4. S. A. Dodge & Co., 22d line, page 4. J. S. Sumner, 33d line, page 4. E. H. French & Co., top of page 5. Emerson & Sons, nth line, page 5. A. J. Lane, nth line, page 7. W. H. Stevens, 22d line, page 7. F. A. Smith & Co., 33d line, page 7. Rice, Miller & Co., top of page 8. No. 33. — Post the entries from your journal-daybook to your ledger, according to instructions given on page 13. Do not open new accounts in your ledger with Cash, Merchandise, and Expense, but post the items under the old accounts, as this is simply a continuation of your business. The following illustrates the form of a Merchandise account, showing how it should appear in the ledger with the pencil footings for the first trial balance. (This is not your Merchandise account). 26 MODERN ILLUSTRATIVE BOOKKEEPING. T" / z z 3 / 6 £P {? .^Jr / z z^ / z z .3 6 s'lP 3 Z3- 2. f/v a ^Z£^ DIRECTIONS FOR CHECKING FROM JOURNAL TO LEDGER. In order to avoid mistakes in posting, many bookkeepers check every item from the journal to the ledger after it has been posted. As you have completed the posting for the month of February, you may check your entire journal to j'our ledger. On page i of your journal you find the item Cash, Dr., $2500. Put a small check mark opposite the $2500, as shown in the following form. ^^^^^^-^^^^ /, /^^ /^c — 7^^^^^^ ~t^3'^'r?^?^-^2'^^rP~~4^^^f-:n^-aA^ ^^6? £? ^■^>!PZ^^-?«^'t^.aL. ' ^^^^ V-V^St^^?-^---^^?^^^-/--^ -^^ V-9o^ ^^-}^Jt^k^mi^^/^y/um//i^ ^-?-?^-^- --Q:^^^^^^-^^::^^^-^^-^^ ^^^-^'-^^g^^^g^^-^-^e- g CF Morns S!iiljDivr.rii](hisrer,.\l ; Instructions. — You have bought merchandise and have given Kidder & Hill your note or written promise to pay the amount of the bill in lo days. Written promises to pay, given by you for the benefit of the business, are called " Bills Paj^able," and, like any other property, they should be credited when issued or disposed of, and debited when paid or received; hence Merchandise should be debited and Bills Payable credited for the amount of the note. The following illustrates the form of your entry, though the amounts and explanation are different. (^l^ . 6 C £> 6 c c>-'V^-t^i^r'(Oyt:^^i'^^^z^ ^^A' Rule 16. — Credit Bills Payable for all 7iotes {written promises to pay) which are sighted by the Proprietor, and given for the bcneft of the business. No. 55. — March 20. Bought of Warner & Freeman, on your note at 10 da3^s, 600 bu. corn at 35^/ per bu.; total, $210. (Entry similar to previous transaction.) N<). 50. — March 21. Sold A. H. Warren, on his note at 30 days, 50 brls. flour at $4.60 per brl., 190 bu. corn at 40/' per bu.; total, $306. (Entrj^ similar to transaction No. 48.) No. 57. — March 22. Sold Weston & Hill, on account, 25 brls. flour at $4.60 per brl., 380 bu. corn at 40^' per bu.; total, $267. No. 58. — March 23. Bought of Chas. A. Hill & Co., on your note at 60 days, 1000 bu. oats at 33;^' per bu., 500 bu. corn at 35'/ per bu.; total, $505. (Entry similar to transaction No. 55.) MODERN ILLUSTRATIVE BOOKKEEPING. 31 No. 59. — March 23. Sold. Roberts Bros., on account, 15 days, 50 brls. flour at $4.50 per brl.; total, $225. No. 60. — March 23. F. W. Garland has paid, you his note of 12th inst. in cash, $230. Instructici^S. — You have received cash and disposed of the note, which should be returned to F. W. Garland. As Bills Receivable was debited when the note was received, it is evident that Bills Receivable should be credited when the note is disposed of. The following illustrates the form of your entry, though the amounts and explanation are different. Z<9 ^y^h:LJ^ -S-'i^", .'-i.^-y^z^.-^^ih^Z'^z^^f-T-t^y'-^^'^^-^^ A^6 ^ ^& tp Rule 1 7. — Credit Bills Receivable when notes signed by other persons are disposed of . No. 61. — March 24. J. S. Sumner has paid his note, due this day, in cash, $250. (Entry similar to previous transaction.) No. 62. — March 24, You have paid your note of 19th inst., favor of Kidder & Hill, in cash, $975. Instructions. — You have disposed of cash and received therefor your note. As Bills Payable was credited when your note was issued, it is evident that Bills Payable should be debited when your note is paid or redeemed. The following illustrates the form of your entry, though the amounts and explanation are different. 2-f 6. — March 26. Paid clerk hire, $15, stamps, etc., $2; total, $17. (Entry similar to transaction No. 31.) No. 07. — March 27. Gave Kidder & Hill 3-our note at 30 da3\s, for $340, to apply on account. No. 08. — March 27. William Archer & Co. paid their note of the 13th inst. in ca^li. $690. No. Ol). — March 28. The freight and drayage bills to date are $12; the}' have been paid in cash. (Entry similar to transaction No. 42.) No. 70. — March 28. You have taken from the store, for use in }our family, 2 brls. flour at $4 per brl.; total, $8. Instructions. — You (the proprietor) have taken from the business, for 3-our own private use, merchandise valued at $8. The Proprietor shonld lie debited for the withdrawal from the business, and Merchandise should be credited, as it has been sold to the proprietor. No. 71. — March 29. Bought of A. J. Eanc, on account, 600 bu. oats at 32'/ per bu., 200 bu. r3'e at 55^' per bu.; total, $302. No. 72. — March 29. Paid F. A. Smith & Co. cash, $165, in full of account to date. No. l',\. — March 29. Received of Wni. Archer & Co. cash, on account, $150. No. 74. — March 30. Bought of Rice, Miller & Co. on account, 30 days, 50 brls. flour at $3.95 per brl., 400 Im. corn at 35/- per bu.; total, $337.50. MODERN ILLUSTRATIVE BOOKKEEPING. 33 Wm. Archer & , top of page 6. Kidder & Hill, No. 75. — March 30. Sold W. A. Scott on account, 30 days, 400 bu. oats at 38'/ per bu., 50 brls. flour at $4.50 per brl.; total, $377. No. 7<>. — March 31. Bought of F. A. Smith & Co. on account, 30 days, 75 brls. flour at $4. per brl.; total, $300. No. 77. — Open the following accounts, leaving space as indicated. lyoss and Gain, nth line, page 2. Bills Receivable, top of page 4. ^o., 22d line, page 5. Weston & Hill, 33d line, page 5. Roberts Bros. Bills Payable, top of page 7. H. S. Clough & Co., nth line, page 8. 2 2d line, page 8. Post from your journal, following directions for posting on page 13. Take a trial balance (see instructions below), and present your journal, ledger and trial balance to your teacher for approval. In taking the trial balance, March 31st, you may write only the difference between the two sides of each account in the money columns of the trial balance. Pencil foot your ledger accounts as usual. On the larger side of the ledger account, in the explana- tion space, near the top of the account, write the pencil footing of that side of the account; underneath it write the pencil footing of the smaller side; subtract, writing the remainder underneath, and leave these pencil figures in your ledger. Carry this remainder only into the trial balance opposite the name of the account, and on the larger side. Use a hard, sharp-pointed pencil and make your figures small like all pencil footings. (See Cash and Merchandise accounts in model ledger, page 8, to show the method of finding the differ- ence between the sides of accounts to be used in this form of trial balance.) The following is a trial balance taken in this manner from the model ledger on pages S and 9. r ^ J^y^^- 23 / 6> 2- / iP ^ & Z oT^ J-^ ^i'A^^- 2.a.J~ £^ f^Zi? ^ Com. — 3 34 MODERN ILLUSTRATIVE BOOKKEEPING, DIRECTIONS FOR FINDING MISTAKES IN TRIAL BALANCES. The. debit and credit columns of your journal are equal. If the items are posted cor- rectly, it is evident that the debit and credit sides of your ledger will also be equal. The debit and credit money columns of your trial balance should be equal, as the trial balance is made up of the differences between the debit and credit money columns of your ledger; but every bookkeeper finds from practical experience that errors occur, and it is by no means uncommon to find a difference between the debit and credit money columns of the trial balance when it has been taken off from the ledger. If 3^ou have checked the items from the journal to the ledger, as directed on page 26, any mistakes in posting should be discovered, but many bookkeepers do not check, using every other means of finding mistakes before resorting to this expedient; for, in a large business, it is a considerable addition to the work of the bookkeeper if he is obliged to check all postings a second time. The following directions will, it is believed, enable you to detect most mistakes. 1 . Verify your additions, both in the trial balance itself and in each account in the ledger. 2. See that the subtraction has been correctly performed in finding the differences between the sides of the ledger accounts. 3. Find the exact amount of the difference between the two sides of the trial balance. Look through your journal and see if any such amount appears in either column of the journal. If you find the amount, it has very probably been omitted in the posting and will rectify the error. 4. L,ook in the journal for an amount equalling half the difference between the two sides of the trial balance. A debit amount of half the difference posted to the credit side. or a credit amount posted to the debit side of the ledger would give the amount of the difference. 5. See if the difference between the sides of the trial balance is divisible by 9; if so, it is probable that figures have been transposed in posting, e. g., 39 posted as 93. There is no method of locating such an error except by checking. Finally, if the error is not discovered by any of these methods, it is necessary to check from the journal to the ledger. In doing this work be sure that you check in both books. If this is carefully done errors must be detected. STATEMENT. In addition to keeping accounts, the bookkeeper must be able to show at any time whether the business is profitable or unprofitable, and from what sources (accounts) the gains and losses arise. This is usually done at stated periods — generally yearly — by making a statement which shows in detail just what property or resources the business has on hand, what debts or liabilities it has outstanding, what gains it has made, and what losses it has sustained. From this.material it is easy to show the present staiiding or worth of the business, and determine whether it is prosperous or unprosperous, as well as to indicate the sources from which the gains arise or the losses occur. The first step in making out a statement is to take an inventory of the property on hand. MODERN ILLUSTRATIVE BOOKKEEPING. 35 INVENTORY. An inventory is a list of unsold merchandise and other property on hand at the time the statement is rendered. Since Merchandise is debited when bought, and credited when sold, it is evident that the value of unsold merchandise must be ascertained before it can be determined whether there has been a gain or a loss. A complete list of every article of merchandise is taken and kept in a book or on sheets, with the value indicated. The cost price of merchandise is generally assumed to be the value of the goods unless there has been a decided rise or fall in the market price since the articles were purchased. By comparing the purchases and sales in your journal, it is found that you should have on hand the following. 2830 bu. Corn, 1250 " Oats, 400 " Rye, 213 brls. Flour, Inventory, Mar. 31, 19- 35^', 990.50 309^-, 375- 55^/', 220. 3 -90, 830.70 2416.20 CLASSES OF ACCOUNTS. Every business will contain two classes of accounts, which may be called Accounts of Business and Accounts of Finance. Accounts of Business are those accounts which indicate a gain or a loss to the business, such as Merchandise, Expense, Interest, Discount, Real Estate, and other accounts of a similar nature. The chief business account of any business will be Merchandise, for it is from the buying and selling of goods that the principal profit is derived. All accounts of business are placed together on a statement known as a statement of losses and gains. The following is the form of such a statement. -^^^^i^S^^^^^^^^-^c^-^'^^^^z^c;^^^^^:;^^^/ ]^<^^^-gZ^^^^2^, ^//^^^^l^. yj/, /f^- 9^.^^, ^^oc. 36<^Z. 5-S2'^^<*2-' Losses. y Z-& ^ra ^^ / ^oT/" ^c Gains. OTX'./' ■j'~j'^'I-Z>d.fS^ y^^ /' -c 4^Z u '<'-Z'S"^S-=/,^'»'*£:-<2i^-«ZW^?-e-«zii--?-z-^ ?s ^/P/ Z 2v>- z^ i HOW TO MAKE OUT A STATEMENT OF RESOURCES AND LIABILITIES. Take a sheet of journal paper and write at the top thereof, Statement of Resources and Liabilities, Mar. ji, ip — . Write on the statement the names of all accounts in your ledger, except 3our own, Expense, and lyoss and Gain, as shown in the above model, but do not put any figures in the amount columns. The left-hand or debit column of your statement is used for j^our resources; the right-hand or credit column is used for your liabilities. 1. Take the amount of merchandise you have on hand, as shown by your inventory ($2416.20), and place it after M erch acidise , in the Resource column. 2. The debit side of your Cash account, as shown by your trial balance, is $1145.50 more than the credit side. This is a resource, and should be written after Cash in the Resource column. 3. The debit side of the account of W. A. Scott, as shown by your trial balance, is $377 more than the credit side. This is a resource, and should be placed after W. A. Scott in the Resource column. 4. 5. Treat the accounts of S. A. Dodge & Co., J. S. Sumner, E. H. French & Co., Emerson & Sons, \Vm. Archer & Co., Weston & Hill and Roberts Bros, in a similar manner. 6. The debit side of j^our Bills Receivable account, as shown hy your trial balance, is $669.50 more than the credit side. Place this amount in your Resource column. In making up 3'our statement all resources should be given first, then the liabilities. 7. By referring to your trial balance, it is ascertained that the credit side of your Bills Payable account is $845 more than the debit side, hence you have a liability of $845. This amount should be placed after Bills Payable in your Eiability column. 38 MODERN ILLUSTRATIVE BOOKKEEPING. 8. By referring to 5"our trial balance, it is ascertained that the credit side of the account of A. J. Lane is $302 more than the debit side. Place the amount after ^-i./. Lane in the lyiability column. 9, 10. Treat the accour.ts of W. H. Stevens, F. A. Smith & Co., Rice, Miller & Co., H. S. Clough & Co. and Kidder & Hill in a similar manner to that of A. J. Lane. 1 1 . Find the difference between your Resource and Liability columns. The difference in the present instance is $3042.70. Place this amount in your Liability column, in red ink, after the words Present Worth. The difference between the resources or property of any business and its liabilities or debts will show the present worth of that business. In case the liabilities or debts should exceed the resources or property, it is evident that there w^ould be no present worth, and that the business would be insolvent; that is, it could not pay its debts if called upon to do so. 12. You will now make out a proof of j^our statement of resources and liabilities. See model below. ~~':^^^i^gr^^y^t^~-G^^^ ^r^AC'^k^^. 'C-€', / ^/,J.. / 3 /^/fy^- 4^J / .J^ ^^f C 2j- The amount of the Proprietor's investment is taken from the credit side of his ledger account. In your ledger this amount is $2500. The amount of his withdrawals is taken from the debit side of his ledger account. In your ledger this amount is $33. Subtract the withdrawals from the investment, which will give you the net investment, and in yowx case the amount is $2467. Place this after your name, as shown in model. 13. The amount of your gain, as shown l)y your loss and gain statement, is $575.70. Place this after Net Gain. 14. Your net gain added to your investment should give the present worth of the busi- ness, which is $3042.70. This amount agrees with the amount shown in the statement of resources and liabilities, hence the statement is correct. If the business shows a loss, the amount of the loss should be subtracted from the net investment to find the present worth. MODERN ILLUSTRATIVE BOOKKEEPING. 39 QUESTIONS. 1. Define buying on account. 2. Define selling on account. 3. When are personal accounts credited ? When debited ? 4. What is the object of checking from the journal to the ledger after posting ? 5. Why should the Merchandise account be debited for freight and drayage? 6. Why should the proprietor be debited for money taken from the business? 7. Define a note. 8. Wliat are bills receivable? 9. When should the Bills Receivable account be debited? 10. What are bills payable? 1 1 . When should the Bills Payable account be credited ? 12. When should the Bills Receivable account be credited? 13. When should the Bills Payable account be debited ? 14. Define indorsement. 15. How does the trial balance of March 31st differ from those previously taken? 16. What should the bookkeeper's statement show? 17. Define an inventory. i8. Why is it necessary to take an inventory before making a statement? 19. How is an inventory taken? 20. What price is given the goods ? 21. Define accounts of business. Give examples of such accounts. 22. What information should a statement of the losses and gains contain? 23. Define accounts of finance. 24. In what statement should these accounts appear? 26. How is the present worth of any business determined ? 25. Explain the method of taking a proof of statement of resources and liabihties. 40 MODERN ILLUSTRATIVE liOOKKEEPIXG. Proprietor. ■ ^o- iZ-^^'Z^'ZS- 3 . / 2 c^ C' 7 ^'■jr^ f7 ^. ' ^ c - ^sz-^^z/ / s / y^C-^^ '^'^S^Z^Z.^i.''^^ 7 i'J'Z 6 cT- L>- fif^/ jTeP r ^ "^f7 C(P yz / A^^ /C / /^' (y 3 / 7 er / ^7 3 z / £> ZJ^ r> z 3 7 6zz ^tp y-^Z 3 / ZM^/ ^A^ Z 3Z/ O t? 7 / Z£^ z^ £Z a--9^/^ /a /J z / Z-jT ^z z,/ ££.7 jT/? Zfi / ^^^:;^^-c£^ cilla^^^^ Z-rz^^ym^ • ^<7 - f^/. / 3^Z -Z cT/ a^^'Z^.j / ^^^zi*^:.^^^ MODERN ILLUSTRATIVE BOOKKEEPINCi. 41 /^a- ^^^^^^^^^^^^ / ^ £>- ^i^<=^ V 2 6 22 6 ^ '(^^Z-^i^^ ' 3 / 2^^ ^ 3 ^ff" /eP 4^ ^J-2- y-^ /J- yjT J / 2 / 2 ^ £> "?0'^^'^^^<^'2^'Zi-<^-^ ' 5fCP 3/ -:?0^:Z-i^«--i^2-i:-<^-^ ^ -^7 <^.r7^ ^7 ^77^ ^7 ..C^ / ¥2ff ^7 0^-^^^^ ^ / 2(^ £> ^ 7 42 MODERN ILLUSTRATIVE BOOKKEEPING. MODEL LEDGER. The preceding two pages represent a model ledger properly closed and ruled. The student should carefully examine the form and ruling. HOW TO CLOSE THE LEDGER. Close your accounts of business first, then your accounts of finance. Merchandise. — The first account in your ledger which shows a loss or a gain is Mer- chandise. The debit side of this account is $1736.50 more than the credit side. This indicates that you bought $1736.50 worth more merchandise than you have sold, but you still have on hand (see inventory, page 35), $2416.20 worth of merchandise. It is pre- sumed that you can sell this merchandise for its cost value, $2416.20; if so. Merchandise should be credited for this amount. Place your inventory on the credit side of your Mer- chandise account in red ink. Write March ji in the date column, the word Inventory in the explanation column, and $2^16.20 in the amount column. (See illustration below; also see illustration in model ledger, page 40. ) The footing of the credit side of your Merchandise account, including the inventory, is now $8533.20. The footing of the debit side is $7853.50. As the footing of the credit side is the larger, it is evident that there has been a gain of $679.70 ($8533.20— $7853. 50=$679. 70). Place the amount of the gain, in red ink, on the debit side of Merchandise account, writing March ji in the date column, the word Gain in the explanation column, and $6'jg.'jo in the amount column. (See illustration below; also model ledger, page 40.) Foot your Merchandise account, rule it, and bring your inventory below the ruled lines on the debit side. — y y t>- / z / J^^S z^ — / y V- OT z. ^ £> £> zo ^ /^VJ' ^a / z.- r^?2^ // / z 6^ r pr r J- / ZO / re? %^ z6 7 /■S zz z^ 31 ^JC-yz-'-zy'tiy^t^^^-^ 7 r- f // ^ / z / ZZ £> f /J" / a 6 f X J Z (7 y z 7 -^ Z4::^'d..^ J ^JZ •j-a ^^e^ ZJ ZO 3 / / / /z Cz i /' * / J~£> 6j- j-^z ^t? .r^ z s-a 44 MODERN ILLUSTRATIVE BOOKKEEPING. Transfer the loss ($104) of the Expense account to the debit side of the Loss and Gain account — this restores the equihbrium of the ledger — and place the loss on the loss side of the Loss and Gain account. The following represents a Loss and Gain account as it will appear after the transfers have been made. The figures in the amount columns are different from your figures. <=^0C:^£^^ Y>gz^^>:n^ -X/^Z^^l J?/ 0yi^^ ^:<;^z-€^ ■7-Z.J^e^ ^■JZ ^£! yy^^^i^z^/j / / f ff~ / / Z£^ V ra Lioss and Gain. — Your Loss and Gain account now contains on the debit side the names of all accounts that show a loss to the business, and on the credit side the names of all accounts that show a gain. This being the case, it is evident that the difference between the sides of the Loss and Gain account will show the net gain or net loss to the business. As the credit side of this account is $575.70 in excess of the debit side, it is evident that the business has gained $575.70. Place this amount on the debit side of the Loss and Gain account, in red ink, writing the name of the proprietor (yourself) in the explanation column, and foot and rule the account. The following represents a Loss and Gain account properly closed. The figures in the amount columns are different from your figures. czi>«^^^^^:^-i;^<:''^'tZJ y^^^^i^^fp^'--. Proprietor. ^3Z Zi£^ / z ^ / < riP 'J/ Proprietor's Account. — The amount of the net gain ($575.70), as shown by tlic Loss and Gain account, should be transferred to the acceunt of the Proprietor (student ) . Write, in black ink, on the credit side of the Proprietor's account. Net Gain, $575.70. The following represents the Proprietor's accoiuit as it should appear at I he present time. The figures in the amount columns are different from your figures. MODERN ILLUSTRATIVE BOOKKEEPING. 45 PROPRIETOk. '?' .^^ <3 / /"^^^^.J^S^^-Z^z^^^^-i^^ 7 / Z.S ■7 '^ ^ ^ zA^ 3 19 \j-j(P / 5^.y^ ■C'-zz^i^yz^ (^^^^^ ' / - -^feli,^.?^:;^^^**^^-^^ ■ Accounts of Finance. — With the exception of the Proprietor's account, it is not customary to close the accounts of finance. Should a personal account balance at any time, it may be footed and ruled, or a single red line may be drawn under each side to indicate that the account balances. (See model on page 41.) Should it be desired to close the accounts of finance at any time, this may be done by taking the difference between the sides and placing it on the smaller side, in red ink, writing the word Balance in the explanation column. (See Cash account in model ledger, page 41.) The accounts may then be footed and the red ink balance brought below the ruled lines on the opposite side from which it is written. 40 MODERN ILLUSTRATIVE BOOKKEEPING. INSPECTION BY TEACHER. Your ledger is now closed. Present the work to your teacher for inspection. Be sure that every detail has received proper attention, and that no dates, page marks, nor expla- nations have been omitted. Notice the fact that your closing entries in the ledger are in red ink, and that all transfers are in black ink. Some accountants use no red ink, but make all entries and rulings in black ink. PROOF TRIAL BALANCE. After closing the ledger, the student should take off a proof trial balance in order to be sure that the ledger is in balance before making additional entries therein. HOW TO MAKE OUT A PROOF TRIAL BALANCE. Take a sheet of ordinary journal paper, and at the top write the heading Proof Trial Balance, March j/, igo-. Do not write the names of the accounts in the explanation column, as the amounts are sufficient for this work (see illustration, page 47). Commence with the first account in your ledger. If the balance is on the debit side, write the balance in the debit column of your proof trial balance; if the balance is on the credit side, write the balance in the credit column. In the present instance the balance as shown by your account is $3042.70. Place this in the credit column of your trial balance. The balance as shown by your Merchandise account (as brought below the ruled lines) is $2416.20. Place this in the debit column of your trial balance. There is no balance shown b}^ the Expense account or Loss and Gain account, so omit these accounts from your trial balance. The balance shown by your Cash account is $1145.50. Place this in the debit column of your trial balance. Continue this process until the balances of all the accounts in your ledger have been placed on your trial balance, then foot your trial balance. If it balances, present it to j^our teacher for examination and approval. QUESTIONS. 1 . What class of accounts should be closed first ? 2 . What should be done with inventories ? 3. In what color should they appear on the ledger? 4. In what color should closing entries always be written? 5. In what color should transfers be written? 6. What shovild the debit side of the Loss and Gain account show? MODERN ILLUSTRATIVE BOOKKEEPING. 47 / / 3 7 7 / / r r U! & C 3 y" O Z Z3^ /"^ 3

^a (? £^ Xo. 2. — April i. Mr. Hastings has rented the building at 146 Elm St. from R. B. Hines. According to the lease he is to pay $100 per month rent. Pay the rent for April in cash, placing the cash in your " Cash Paid Out" envelope. Determine the debit by rule 5, page 11; determine the credit by rule 6, page 11. The following illustrates the form of your entry, though the amounts and explanation are diiferent. ^^-2E.^^^ y/C<:7^j^j7^^^--^^. -^Vr^ z. z^ '^^^^-/^. y/^-^r^L^^^^^£^^^^ ^■£t ^y ^y ^? ^ JL Zj^ ^^d^^fc^^-^^ ^JZl ^ ^ zl z_ 3 ^^^gz:::^^^. -T<7 2=^i^^=:is^ ^Ar .?.j- ^ ^ / J^ /•? '.'i/y.--€^.^<^^ /. JZ 7- ''A^ a^ 'j^ 4 (2 'IZ^^^-^L^^^A-f^ h^yJ/. ?^:Z2Z«,£i 22. ia2^^^^ y-^^ z^ ^ ^.ui^'v ?.^ . ZQ.2^ . J6^^^ U^ 52 MODERN ILLUSTRATIVE BOOKKEEPING. If the bill is correctly made out, take the money to pay it from your Cash Drawer, and place it in "Cash Paid Out" envelope. Place the merchandise in the envelope marked "Store Room." Determine the journal entry by referring to rule 7, page 12, and rule 6, page 1 1 . The following illustrates the form of your entry, though the amounts and explanation are different. ~'^^^^<^^C' Z^6> O Z^o 60 Fold the bill lengthwise, face outward, and write across the face, Eyitered, with the date underneath. Place it in the envelope entitled "Voucher File." No. 4. — ApriIv 2. This bill shows a purchase from D. Deavenport & Co., for cash, of 1200 bu. corn at 28!^' per bu., 150 brls. apples at $1.65 per brl. Check and O. K. the bill as in No. 3. Take cash to pay the bill from your Cash Drawer, and place in "Cash Paid Out" envelope. Place the merchandise in the Store Room. Your journal entry will be similar to No. 3. Fold the bill, write Entered across the face, and file as in No. 3. Follow all instructions in the exact order in which they are given. No. 5. — Aprii, 3. Mr. Hastings has taken this order and received the cash for the goods, 50 brls. apples, 50 brls. floiu. Copy the selling price-list which your teacher assigned you on voucher No. 5a, and paste it on the inside of the front cover of your text-book. Select from your Store Room the merchandise which the order calls for, and make out a bill to J. A. Barker at your selling price on one of the blank billheads which 3'ou will find in your envelope entitled " Business Forms." Use one of the bills in your Voucher File as a model. After making out the bill, review yoiu* multiplications and additions so as to be posi- tive that they are correct. Remember that bills sent from an ofiice viust be right. If the bill is correctly made out, its amount will agree with the cash received with the order (No. 5), and yow may receipt the bill and place the cash in your Cash Drawer. Place the merchandise and the receipted bill in the envelope entitled ' ' "\'ouchers for Others." Determine the debit by reading rule 3, page 10; determine the credit by reading rule 8, page 12. The following illustrates the form of the journal entry, though the amounts and explanation are different. o> / O /Z rZ ^^ rz CJ^~:^^S^^7^:rz^^ /t^^^^ P^yc:Af^-z:z^^<^ In this instance 3'ou represent Mr. Hastings, and he has given 30U the power of attorne3^ to sign his name. Take the power of attorney (No. A) from 3'our Voucher File, and read it carefully. Next detach the blank card (No. 11) from your incoming voucher pad, and write the name of J. M. Hastings and 3'our name thereon, according to form shown above. You should write the signature on the card in the exact manner in which you propose to write it on checks. Give the card to the bank. In case there is no regular bank in the school, your teacher will receive your signature card and transact with you the business of the bank. Make out a deposit ticket for $5000. The model shown on page 55 illustrates the form of ticket you should make out. MODERN ILLUSTRATIVE BOOKKEEPING. 00 In making out a deposit ticket be sure to list currency and checks separately. Each check should be set down as a separate and distinct item. Take $5000 in cash from the Cash Drawer, and take the money, deposit ticket and bank pass book to the bank and present them to the teller, who will receive the cash and give you credit for the amount, by entering it upon the left-hand page of the bank pass book, with the date and his initials. (If the school has no regular bank, go to your teacher, who will make the teller's entry.) Form of Deposit Ticket. DEPOSITED BY ^ IN V \ Commercial Bank UmaSt: ttgrBCKafggfe^tJ-ffRftTELY :i Currency Checks 11 Dollars ^jT^ /p (p Cents. 11 11 n •n •n 11 « n Make a record of the deposit on the stub of the check book according to the following form . Form of Check and Stub. Deposited . Lyr^i6-<^. V ^ jTc^c^ Dale Order of ^igo For . A mail til of Hill, $ _ DtscQunt i, S- A mou Tit of Ch -^ct^ S - fYour pl»ce ber«.) ys(i_ T&_ Lomr/m/aa/y Mo'/iAy ^.6^. A. Wright & Co. Mr. Hastings' note for $400, at 10 days, on account. Make out a note, using Voucher No. 18 as model; also see form of note, transaction No. 54, page 30. Be sure to fill out the blanks on the stub of your note book before removing the note. Make proper jom^nal entry. Determine the debit by rule 12, page 25; determine the credit by rule 16, page 30. Place this note in the envelope entitled " Bills Payable File," which you will find in your package of Business Forms. Do not lose the contents of this envelope, as you will be required to take from it each note or bill payable when it becomes due. No. 22. — April 14. This order from Ellis & Rand is for merchandise on account. Select the goods and make out the bill. Verify the calculations and make journal entry. Place all bills to others with goods sold in Vouchers for Others. No. 23. — April 16. C. E. Hayes has given his check to apply on account. The check is regarded as cash, because it can be converted into cash at once by presenting it at the bank. Examine the check carefully to see that it is properly dated, filled out, and signed. Make proper journal entry. Determine the debit by rule 3, page 10; determine the credit by rule 11, page 25. Place the check in your Cash Drawer and count it as part of your cash. A check is an order written by a depositor, requesting the bank in which he has money deposited to pay a certain amount to some person named, or to his order, upon presentation of the check. The bank will require the person named to be identified, if he is not personally known, and will also require him to indorse the check; that is, write his name across the back at the left end of the check about one inch from the top. No. 24.— April 16. SECOND REPORT. From your journal find out how much cash has been received since the first report was made out, April 4, and wTrite it opposite Cash Received. Find the amount of cash paid out during the same space of time, and place it opposite Ca:>h Paid Out. Add the cash received to the cash on hand shown in the first report*, and subtract the cash paid out from this amount. The remainder wall be the amount of cash on hand; but $5000 of the cash on hand is in the Commercial Bank, as shown by the stub of your check book. Write this $5000 opposite Cash in Bank, subtract from the cash on hand, and the remainder will be the amount in the cash drawer, which should agree with the actual currency in yotur Cash Drawer. 58 MODERN ILLUSTRATIVE BOOKKEEPING. Find the amount of merchandise sold since the first report; also notes issued by the business. The latter will be found by taking the credits of Bills Payable in your jom-nal, which should correspond with the bills payable in your envelope entitled ' ' Bills Payable File." Examine your vouchers to see that they are correct in every respect. Hand the report, with your joiu-nal, Cash Paid Out, and \"ouchers for Others, to your teacher. No. 25. — April 17. Give George C. Gary a check for $300, to apply on account. Open your check book and fill out the stub as shown in the following form of check book stub. The stub is the original entry of this transaction, and should be filled out before the check. Form of Check Stub Filled Out. r)ppn<:itfd OiC,^2^^ , -r^ ,goj_ No.-Z^ Date UJ^Z^tgo. Order of yO^-T:^'^^^ For}. a^ ^.^ Amount of Bill, $. Discount jS $. Amount of Check, $ . Deposited . /po J'a CP c? ^a o CO ^^ ao 00 Fill out the check according to form given below. (Your place here.) ■ ^ ^ ^ < /-r, y^^ r/w/m?'€ii /^^^^^;;^^^^/ig^fe;^ /^- — <^ -/.^'r:^TV^r ^^^ 2--^^-^. £^_ 7^^^^.^.^^^^.-^^^,^^::/^^..^ / e>—o ' . X^C^^V^^^^^^^g^^^z^/. In filling out a check be sure to couinience writing the uniount of dollars at the extreme left-hand end, as shown in model, and fill up the blank space after the amount with a waved line. Failure to observe these instructions inav render the maker of a check liable, in case the check should bt raised by MODERN ILLUSTRATIVE BOOKKEEPING. 59 all}- dishonest person into whose hands it might happen to fall. Sign the check in the same manner in which you wrote J. M. Hastings' name upon the signature card. You wdll notice that the above check is made payable to order. When a check is so written, the holder is compelled to indorse it before obtaining money thereon, or before transferring it to another person. If a check is made payable to bearer, it is transferable upon deliver}^ without indorsement. INIost banks require all checks to be indorsed before they will cash them. This is not necessary if the check is pavable to bearer, but such practice affords a means of identification should any dispute arise as to who obtaine-1 the money. Remove the check from the check book and place it in Cash Paid Out. Subtract the amount of the check from the amount in the bank, and bring down the balance. Geo. C. Cary will present this check at the bank, and when the bank pays it, the check will be charged to J. M. Hastings' account and deducted from the deposit he has made. In order to make the check book agree with the bank account, you must subtract all checks when given and add all deposits when made. Errors in the check book are very common, and it wdll necessitate the utmost care on your part to prevent their occurrence. No. 26. — April 19. This order calls for a sale of merchandise to T. W. Bowen & Co., on account. Select the goods to fill the order, checking each item on the order as filled. Make out the bill and verify your calculations. Make proper journal entry. Place the goods and bill in Vouchers for Others. File the order. No. 27. — April 20. This check has been received from T. \V. Bowen & Co., to apply on account. This check (No. 27) is in part payment of No. 26. What account should be debited? Why? What account should receive credit? Why? Make proper journal entry and place the check in your Cash Drawer. No. 28. — April 20. Ellis & Rand's note, dated Apr. loth, is due today, and they have sent a check for the amount (No. 28). See that the check is properly filled out, and that the amount named in the check agrees with the amount of the note. Take the note from your Cash Drawer, write Paid across its face, and place it in Vouchers for Others. Place the check in the Cash Drawer and make proper journal entry. Determine the debit by rule 3, page 10; determine the credit by rule 17, page 31. No. 29. — April 20. Write a thirty-day note in favor of Geo. C. Cary for balance due him. Examine the entries in your journal-daybook and be sure that you get the right amount. Make note payable at your office. Journalize the transaction. Determine the debit by rule 12, page 25; determine the credit by rule 16, page 30. Place the note in envelope entitled " Bills Paj-able File," which you will find in your package of Business Forms. No. 30. — April 23. You have purchased merchandise from Grunsfeld Bros, on acc6unt. Compare the bill received and check the items. Store the merchandise. Make proper journal entry and place the bill in the Invoice File. 60 MODERN ILLUSTRATIVE BOOKKEEPING. No. 31. — April 23. Pay Grunsfeld Bros, by check, $200, on account. Fill out the stub of the check and deduct the amount from the balance in bank, as shown on the stub. The following illustration represents the stub of your check book properly filled out to date. Form of Check Stub Filled Out. Date Order of < / p',. 190 Z^^^..^^ For) (J>^^^K7^.^.^.^^ Amount of Hill, $ Discount )t $ Amount of Check, $ Deposited . . igo No. Z, , /^ Date /^^<^<>6^ 2-^^^. igo . Order of fi^C^'<^ Fnr Cy>^^K7^^^^^^^ Amount of Bill, $. Discount 56 $. Amount of Check, S- J'C? iP ^ ^ao ^ ¥/ a c? Za tp ■i'^^O CP a^ 00 00 oc? CO Fill out check in favor of Grunsfeld Bros, for $200. Remove the check from your check book and place it in Cash Paid Out. Make proper entry in your journal-daybook. Determine the debit by rule 12, page 25; determine the credit by rule 6, page 11. Do not omit any of the details of this transaction. No. 32. — April 24. The note (No. 21), in favor of Iv. A. Wright & Co., is due to-day, and you pay it with a check. From your envelope entitled " Bills Payable File " remove the note given ly. A. Wright & Co., dated April 14th. Fill out the stub of your check book, and deduct the amoinit from the balance in bank; then fill out the check, remove it from your check book and place it in your Cash Paid Out. Write Paid^ April 2/, in red ink, across the face of the MODERN ILLUSTRATIVE BOOKKEEPING. 61 note. Place the canceled note in your Voucher File. Make your journal entry. Deter- mine the debit by rule i8, page 31; determine the credit by rule 6, page 11. No. 33. — April 25. Mr. Hastings has purchased merchandise from Bernet & Craft, on account. Compare the merchandise received with the bill and check each of the items. Store the merchandise. Make your journal entry, and place the bill in the Invoice File. No. 34. — April 26. This order calls for a sale of merchandise to H. A. Woodbury, on account. Select the merchandise called for and check the items on the order. Make out the bill and verify your calculations. Make your journal entry, and place the bill and merchandise in the proper receptacle. Place the order in your Voucher File. No. 35. — April 27. J. M. Hastings requires $75 for his own use, and he draws the amount from the business by check. Fill out the stub of your check book, then make the check and deduct the amount from the balance in the bank, as shown on the stub of your check book. Remove the check and place it in Cash Paid Out. Make your journal entry. Determine the debit by rule 14, page 28; determine the credit by rule 6, page 11. When mone}^ is drawn for private use, the check should be made payable to the proprietor's name. If the cash were drawn for use in the business, the check should read, Pay to the order of Cash. No. 36. — April 28. This order calls for a sale of merchandise to T. W. Bowen & Co., on account. Make the bill for order (No. 36), selecting the goods from the Store Room and check- ing each item on the order. Verify your calculations and make the proper journal entry. No. 37.- — -April 30. Pay drayage bill (No. 37) with check. Fill out the stub, write the check, and deduct the amount from the bank balance. (This transaction is similar to No. 42, page 27.) Place the check in Cash Paid Out. No. 38. — April 30. T. W. Bowen & Co. have given their note (No. 38) to apply on account. Determine the debit by rule 15, page 29; determine the credit by rule 11, page 25. Place the note in Cash Drawer. No. 39. — April 30. Mr. Hastings has sold merchandise to H. A. Woodbury. Fill order (No. 39) from your Store Room, checking each item- from the order. Make the bill and verify your calculations. Make the proper journal entry, and place the bill and the merchandise in Vouchers for Others. Place the order in your Voucher File. No. 40. — April 30. You may draw a check to your own order for the amount of your salary. No. 41. — April 30. Take from yotir Cash Drawer all currency and all checks made payable to the order of J. M. Hastings. I^eave the notes payable to his order in the Cash Drawer. They are not cash. Indorse the checks, by writing across the back, about one 62 MODERN ILLUSTRATIVE BOOKKEEPING. and one-half inches down from the left end of the check, Pay to the order of Commercial Bank, J. M. Hastings, by (Student's Name), Atty. (See form below.) Form of Check, Indorsed. Form of Deposit Ticket. Commercial Bank ^^^ZA^^yi^.^^_ 190^ Take a blank deposit ticket and write opposite the word Currency the amount of bills in your Cash Drawer, and under Checks write the amount of each individual check separately on the deposit ticket. The accompanying illustration represents a deposit ticket properly filled out. The items are different from those on your deposit ticket. MODERN ILLUSTRATIVE BOOKKEEPING. 63 Place the currency, checks and deposit ticket in your bank pass book, and present to the teller, or to 5^our teacher if no bank is used in connection with the work. See that the proper amount is entered in the bank pass book, and add this amount to the balance in the Commercial Bank, as shown by the stub of your check book. Leave your bank pass book at the bank to be written up. No. 42.— April 30. THIRD REPORT. Prepare your report blank, showing cash received, cash paid out, cash on hand in the Commercial Bank, merchandise sold, and such other results as are called for on the report blank. Hand the report, together with your vouchers and journal-daybook, to your teacher. No. 43. — April 30. Draw a check on the Commercial Bank, in favor of your teacher, for the amount of your bank balance, and give the check to him. POSTING. In 3^our ledger, at the top of page i, write J. M. Hastings; 15 lines below write Merchandise . At the top of page 2 write Expense^ and 15 lines below write Loss and Gain. These accounts make a section of the ledger containing all the business accounts (see page 35), or accounts showing losses or gains; the Toss and Gain account, where these gains and losses are gathered under one head (see page 40); and the Proprietor, who receives the gain from the business or sustains the loss, should there be one. On page 3 of your ledger, at the top, write Cash; 18 lines below write Chas. E. Hayes; and 15 lines below this write Ellis & Rand. At the top of page 4 write T. W. Bowen & Co.; 15 lines below write H. A. Woodbiwy ; and 15 lines below this write Bills Receivable . These accounts make a section of your ledger containing accounts of finance (see page 36), which show in their balances resources to the business (see page 37). In large business houses accounts with persons owing the business are generally kept in a separate ledger, called the "Customers' Ledger" or "Accounts Receivable Ledger." At the top of page 5 write Hatheway & Reynolds; 15 lines below write Smith & Dorothy; and 15 lines below this write Geo. C. Cary. At the top of page 6 write L. A. Wright & Co.; 15 lines below write Grunsf eld Bros.; 15 lines below this write Be met & Croft; at the top of page 7 write Bills Payable. This third section of your ledger will contain all accounts of finance, which show in their balances a liability to the business. In business it is, of coTorse, not practicable to write the names of all ledger accounts before posting, and they are opened in the ledger in the order in which they appear in the journal; but separate sections of the ledger should be taken for each class of accounts. Post your jomnal entries (see directions, page 13). Check back your postings (see directions, page 26). Take a trial balance of your ledger balances. If the trial balance is correct, take an inventory of your merchandise from the cards found in your Store Room. You should have on hand the following: 305 brls. apples; 200 brls. flour; 25 bu. barley; 675 bu. corn; 800 bu. oats; 1025 bu. potatoes. Find the value of these goods, using the latest cost price as shown by your invoices. Make statements according to forms on pages 35 and 37. Close your ledger. 64 MODERN ILLUSTRATIVE BOOKKEEPING. STATEMENTS OF CUSTOMERS' ACCOUNTS. An important feature of any bookkeeper's work is that attention to customers' accounts which insures prompt payment of bills as they fall due. In order to call the attention of customers to the fact that payment is desired, many business houses send a statement whenever a bill is due; r.^., if John Smith & Co. bought merchandise billed at $165, Jan. loth, at ten days, then on Jan. 20th, or perhaps a day or two later, a statement like the following would be sent him. OLIO -^-~ J STiVFESfENT. tVour place here.) 7.^^^ 2- ^ M' ^^..^^^-C^.^^-T^^.-Z^^ ~^3„y-J. 2^. fj ACCOUNT With ^ ■/Z^22. /^^-^g^ K-'T^^^^ /6c In the ordinary course of business, however, it is a more common practice to send each customer, at the first of the month, a statement showing the debit balance of his account up to date, whether this balance is due or not, thus calling his attention to his indebted- ness and enabling him to compare the statement with your account in his ledger, and note any difference which may appear between his books and your own. A competent bookkeeper will have his statements ready to send out the first of the month as most of them can be prepared considerably in advance of that date. Customers' statements are prepared entirely from the ledger accounts of customers, and of course the posting must be completed before the statements can be made out. You may now prepare statements of accounts for all customers who owe you a lialance. MODERN ILLUSTRATIVE BOOKKEEPING. 65 Turn to Chas. B. Hayes' account in your ledger, and from that accoimt prepare a statement like the following form. These are not your debit amounts. s -TAT e: ivi e: N T y^Z^^l^y /. 190 (Your place here.^ ^__^ ~^^^^^ In Account with J^ ^^ HA^TDNOSp 140 Elm Street. /^.^^^ ^^ TO MDSE. A^.-r^ ■■? (y / / c? /^ / A^4^'r ■ r^ -S,-^ / / ry.,^^^ (p- . ■? ^:^^-^■■^^t:.^^ Zc '-^^^^^-^ .sz. ^■^C'-T'Z^ aCci^-'C^, (^ o i^ ^ z y Z/ t^J^ /. f7 Z0 C o IP zC o ri^ £> '^ Zc> i^iTd^ -Kj" ^f i^S 6f Th<> C'asli Book. — Cash transactions will be numerous in almost any business, and from this fact it has been found advisable to take the Cash account from the ledger and place it in a book called the " Cash Book," which contains on its left-hand page all cash debits, with the name of the account to be credited in the left-hand explanation space, and in the right-hand explanation space a brief description of the transaction. The amount is entered in the left-hand money column. All items of cash paid out or cash credits are entered on the right-hand page of the cash book, with the name of the account to be debited in the left-hand explanation space, and a brief description of the transaction in the right-hand explanation space. The amount is entered in the left-hand money column. Since the debit of the cash book shows all cash received, and the credit all cash paid MODERN ILLUSTRATIVE BOOKKEEPING. 69 out, it is evident that the difference between the two sides of the cash book should show at any time the amount of cash on hand. It is unnecessary to keep a Cash account in the ledger, although some bookkeepers do so, carrying the total of the left-hand page to the debit side of Cash, and the total of the right-hand page to the credit side of Cash in the ledger. fr i^^ez- J /J 0..-<^:>^^^..^^^^^^,d..^^ 2^7r -^i>f^Z--Z^ ^ . o^^^.^^^^^^Z^ ~vO^'^z-i>z^£^<^'^^<:^£^ '^y'^<=4<:^^^tp^^^^''7-^'i:^-2^ ^z-€>o^ — / 6 £) ^ /z c Z / c^ z f^ '^^ /J J^Z /^ i>Z qjtAjS^^Ji * To be entered in red ink. The cash book should be balanced at frequent intervals. If a considerable amount of business is done in cash, it is well to balance the cash daily. In this and in all following sets, the Cash account will be kept in the cash book only, and not carried into the ledger. Remember the cash book is the Cash account of the ledger, therefore, the balance of the cash book must be carried into the trial balance when that is taken from the ledger. Tlie Sales Book. — It is customary in business to place all sales of merchandise, whether for cash, on account, or for a note, in a book called the "Sales Book." The footing of this book will at any time show the total sales of merchandise to date. This book does away with a long Merchandise account in the ledger, as the footing of the sales 70 MODERN ILLUSTRATIVE BOOKKEEPING. book is carried to the credit of Merchandise in the ledger at the end of each month, or as often as may be desired. The second or right-hand money cohimn of the sales book contains the amounts which are to be charged to the debit of the respective accounts, and all discounts and allowances must be entered in the first, or item, column. Form op Sales Book. / ^ 2^ ^^ z,^-t:^^/ A^ £p^ < "^'-^Zjis^ C- z z. l.£-'iZ^ / 23-^ -;<^^z-c* MODERN ILLUSTRATIVE BOOKKEEPING. 71 WORK FOR THE STUDENT. No. 1. — May I. Being offered a higher salary, and considering that the business affords a better opportunity for advancement, you have accepted a position as bookkeeper for Henry F. Adams, wholesale dealer in Tea, Coffee and Spices, at 246 Main St., your city, at a salary of $75 per month. Mr. Adams will do all the buying and fix all selling prices of the goods, and as he is on the road a large part of the time, will give you a power of attorney similar to the one you received from Mr. Hastings, your former employer. File the power of attorney after filling in the j^roper names in the blank spaces. You will receive all goods, verify the prices, etc., attend to the filling of all orders, and to the delivery of the goods sold, and have full charge of the books of the business. No. 2. — May I . Ask your teacher to assign you a price-list from the numbered lists on pages 100 and loi, and take from your incoming voucher pad the cash required for Henry F. Adams' investment. Make an entry in your journal-daybook, giving a description of the conditions under which the business is begun. Do not extend the amount of cash received in the money column. The following illustrates the form of your journal-daybook entry. /, y^^- /^i ^^<^^'Z^-£..J-^Z^i^'9-i^ It is usually customary in commencing business to write in the journal-daybook a brief statement of the conditions under which the business was commenced, and if it be a partnership, a brief summary of the partners' agreement. This record is made in the journal-daybook, as a matter of convenience only. The amount is not extended in the money column, as this is a cash transaction, but the entry therefor is made in the cash book. Cash Book Eutry. — Enter the amount of cash received in your cash book. The following illustrates the form of the entry, but the amount and explanation are different. -'^.-'7-Z'^ fZ £> O 72 MODERN ILLUSTRATIVE BOOKKEEPING. The investment is entered in the first money column of the debit or left-hand page of the cash book. The left-hand explanation space contains the name of the account to be credited, while the right-hand explanation space contains a brief description of the transaction. The extra vertical column at the left is for the page of the ledger when the item is posted. Place the cash in 3'our Cash Drawer. No. 3. — May i . Pay one month's rent in advance to, and take a receipt from, the Na- tional Real Estate Co., which owns the building at 246 Main Street. Make an entry for this transaction on the credit or right-hand page of the cash book. The following illustrates the form of cash book entry, but the amount is different. f- / i-^ig; -^^-,=^-^2^^- -yyZ'gtyi^ f £^ The left-hand explanation space contains the name of the account to be debited, while the right-hand explanation space gives a brief description of the transaction. All cash received or paid out must be entered in the cash book. No. 4, — May 2. You have purchased of the Upton Coal Co., 5 tons coal at $5.25, amounting to $26.25. This is a cash transaction and the entry will be made on the credit side of the cash book, since cash is paid out. The following shows the form of entry, but the amount is different. z- No. 5. — May 2. You have received an invoice of merchandise from West, Stone & Co., New York. In this series of transactions you will not receive cards to represent merchandise, but will assume that the merchandise has been received, and will check each item on the invoice after verifying the calculations. If found to be correct, O. K. the invoice and place it in your Invoice File. This transaction calls for an entry in the journal (see rule 7, page 12). No. <>. — May 2. Invoice No. 6 has been purchased of 1,. Hennes & Co., New York, by Mr. Adams, who has agreed to give a note at 60 days in payment. Verify the calculations. Mr. Adams' O. K. is on the invoice, which you may place in your Invoice File. Write the note required by the transaction and place it in Bills Payable File. Do not forget to fill out the stub of yotir note book. In this transaction yoti will debit Merchandise in the journal and credit L. I fen ties & Co. for the amount of the invoice, and debit A. Hennes & Co. and credit Bills J\iyable for the amount of the note given them in payment. If T/. Hennes & Co. were not a house from which Mr. Adams was making regular purchases on account, it would be unnecessary to carry this invoice to Iheir personal account, as the journal enlrv, MODERN ILLUSTRATIVE BOOKKEEPING. 73 Mdse., Dr., and Bills Payable. Or., would be sufficient to record the transaction (see No. 54, page 30); but as Mr. Adams is piurchasing of L. Hennes & Co. on account, it is advisable that their account in your ledger should show all transactions made with them, hence this account is carried to their credit in the ledger, and they are immediately debited for the note sent in payment. :N"o. 7. — May 2. You may deposit in the Commercial Bank all yotir cash, except $200, which you will retain in the Cash Drawer. Make out a deposit slip and hand it to the bank teller with the currency and bank pass book. Do not fail to enter the deposit on the stub of your check book. No. 8. — May 3. This invoice of merchandise has been purchased of Shields Bros., City, for cash, and you receive a discount of 2^. Verify the calculations, see that your discount is right, and if the bill is correct make a journal entry debiting Mdse. and crediting Shields Bros. Write a check for the amount called for. See that the stub of your check book is properly filled out before you detach the check from the book. Deduct the amount of the check from your balance in the bank. Place the check in Cash Paid Out, and place the invoice in your Voucher File. This is a cash transaction and should be entered in your cash book. Write on the credit or right-hand side of the cash book the amount, and in the first explanation space, Shields Bros. , which is the name of the account debited. In the second explanation space write ifivoice of May j. No. 9. — May 3. Order No. 9 calls for a sale of merchandise on accotmt. Make out the bill, checking each item on the order as soon as entered on the bill. Verify your calculations and be sure the bill is right. In this month's work all sales of merchandise on account will be entered in the sales book. You will therefore enter the same items and prices on page i of this book. The following is the form of sales book entry; the amounts are different. kJ,/^^- ', (^ a^-z:?:^. 2-/ z 3 // ^6 3^ 4^^ /3 ct Z ^/ All merchandise sold should be entered in the sales book. Fold the order and place it in your Voucher File; place the bill in Vouchers for Others. No. 10. — May 4. You have received an order calling for goods at a cash price, which is 3^ less than your regular credit price. Make out the bill and deduct 3'* discount from the gross amount. Use bill No. 8 in your Voucher File as a model. The net amount of the bill shotild agree with check 74 MODERN ILLUSTRATIVE BOOKKEEPING. No. lo, $6ii.io, which you will receive from F. C. Tennej^ in your Incoming Vouchers. Receipt the bill and place it in A'ouchers for Others. Place the check in ^-our Cash Drawer. Enter the sale in your sales book, one line below your last entry, debiting F. C. Tenney. Place the date in the middle of the line, as in the journal. All gross amounts and discounts appear in the first money column only, net amovmts being carried into the second money column. The following shows the form of your sales book to date, the names and amounts being different. K^,y^^- 'f' (^ , y^;-y'^^-rzyL<'^2^'i:Z''4^^ ^ ^^-^t^iCj, //o. \3 o CP '^ A^ z 'J~ ,.,'O^Z.. the purchase is not debited with the purchase and credited with the payment. Many business houses, however, wish to know just how much business they have done with each customer, and this can only be shown by charging the customer for cash sales the same as for .sales on account. When this is done his ledger account shows at a glance just how nuuh l)usiness he is doing MODERN ILLUSTRATIVE BOOKKEEPING. 75 with the house each month, and this information is usually considered of much more value than the saving of time made by the bookkeeper when he omits to post such items. In this and the following month's work, cash sales, except for occasional small pur- chases made by individuals who are not regular customers, will be entered in the sales book and charged to the persons making them, while the payments will be entered in the cash book and credited to the persons making them. In this way the ledger accounts of all regular customers of the business will show the amount of purchases they have made during the continuance of the business. ^o. 11. — May 4. This order is for merchandise on account. Make out the bill and check the items on the order. Enter the transaction in the sales book and place the order in your Voucher File. Be sure the amount is correct. No. 12. — May 4. This bill is for books and stationery to be used in the office. Verify the calctilations, O. K. the bill, and write a check for the amount. Enter in the cash book. Do not fail to deduct the amount of the check from your bank balance. This is a common error and causes much trouble in balancing the bank account at the end of the month. No. 13. — May 5. This bill is for office furniture and a safe, which Mr. Adams has purchased for permanent use in the business, and an account will be kept in the ledger with " Furniture and Fixtures." Fill out a check for the amount and make the proper entry in the cash book, debiting Furniture and Fixtures instead of Expense. No 14. — May 5. Mr. Adams, has decided to purchase the building and lot at 246 Main St. of the National Real Estate Co. Their price is $12000 cash. Not having this amount on hand, Mr. Adams has arranged with James D. Branson to indorse a note for him so that he may borrow $5000 of the Commercial Bank. The following is the form of note required. (Yoar place here.) J^^^y y^ /.90 V * v"» f^jt»\,c not ^.^ ^j »^ /g^^^-;^-^ -r^> <=><:V~-^^^WL-<^^^ J7^..--f^^^.^-^.^^^/f7, 'aytJ K*v«ncV H Wl«stn*rr.]7B Fulton SlN Y ' ^ - ^ Indorsing a note consists in writing one's name on the back of the note, and the person who thus writes his name becomes responsible for the payment of the note in case the maker fails to make payment when it becomes due. In the case of the note given above, 76 MODERN ILLUSTRATIVE BOOKKEEPING. the note is made payable to the order of the indorser, who writes his name upon the back and gives it to H. F. Adams. Adams takes the note to the bank, receives the money, and will pay the note when due. In case he should fail to do this, then James D. Branson would be called upon to pay it. Write this note, using the model form on page 75, but make it payable at Commercial Bank. Take the note to your teacher, who will indorse it for James D. Branson, if it is correct; then take it to the bank for discount. The note is due Sept. 5th, which is 123 daj^s after May 5th, the date of discount. Bank discount is found by taking the simple interest on the face of the note for the time in days from the date of discount to the date of maturity; therefore, you may find the interest on $5000 at 6 / for 123 days, which is $ixx.xo. Subtract this amount from $5000, and the remainder, $489x.xo, is the net proceeds or amount to be placed to your credit. HOW TO CALCULATE SIMPLE INTEREST AND BANK DISCOUNT. Bank discount is the simple interest on the face of commercial paper for its unexpired time; that is, from the date the paper is discounted to the day upon which it becomes due. In this work the exact nmnber of cays between these two dates will be used in all calculations of bank discount. For instance, a note dated May ist at four months would be due Sept. ist of the same year; but most banks discounting such paper for tho full time would not calculate the interest on its face for fom months (120 days), but would take the exact number of days between May ist and Sept. ist (123 days). This nnist be remembered in all calculations of bank discount. First find the date the note becomes due; next find the number of days to elapse from the day of discount to the day of maturity, and then calculate the simple interest on tlie face of the note for this number of days at the rate of discount given, and you have the bank discount. The method of counting time for discounting notes varies in different banks, and often in the same bank. Some banks count months for the full number of months, and days for the fraction of a mouth; others count the actual number of daj's; while some few count one day more than the actual number of days. If you have no special method of calculating simple interest, you may use the following rule: -Rule.—Firs^, find one-thousandth of the principal, or face of the paper, by removing the decimal point three places to the left, then multiply by the number of days from the date of dis- count to the date of maturity, and divide by 6. The result will be the bank discoiuit or simple interest at 6%. If any other rate than 6fo be required, divide this result by 6, thus obtaining the interest at ifo, and multiply by the rate required. The above rule is based on the following reasoning. The interest on one dollar for i year at 36,1; 36^ " " << " " "2 months " " 6^ " " " " " " 10 daj'S " " i^ " " " " " " I day " " I mill. But I mill is one-thousandth of a dollar; therefore, it is evident, according to this reasoning, that one dollar at 2,^% will double itself in 1000 days. If this is true of one dollar, it is true of any number of dollars, and if we take one-thousandth of any principal, no matter what it may be, we shall have the interest on that principal for one day at 36;. To find the interest for any number of days, it is only necessary to multiply the interest for one day, or one-thousandth of the principal, by the number of days, and we have the interest on that principal for the nmnber of days given at 36;. Dividing this result by 6, we get the result at 6',; dividing it by 4, would give us the interest at 9',; or diviiliug by 9 would give us the interest at 4';', etc. When no rate of interest is mentioned, 6'; is understood. Discount Mcnioi-aiMliiiu. — Take a discount nicmoraiuluni and lill it out properly. Supply the items from Mr. Adams' note. Pin the memorandum and the note together, and hand them with your bank pass book to the l)ank teller, who will place the amount to your credit if you have calculated the discount and the net proceeds correctly. MODERN ILLUSTRATIVE BOOKKEEPING. 77 The following is a form of memorandum which is in use. The name and amounts are not the same as appear in your memorandum. Form op Discount Memorandum. DISCOUNT MEMORANDUM. C-r:^^^ / /O'ff- DlSCOnNTED FOR ^t ^ C-'T^^ h^^^ Face ^ ^ /P-:f^-ff .^^ int. . Total . ni«r fffe/^ 4^^~ rr.,, Proceeds. .2. g7i ^^^^ / ^i^fy -(> Add the amount $4897.50 to the amount now on deposit. Cash Book Entry. — Make an entry on the debit side of the cash book for the face of the note, $5000. The following illustrates the form of your entry. yV^^^:^^ ^JT -^..J^-^, By making an entry on the debit side of the cash book yoit debit Cas/i and credit Bz/ls Payable. 78 MODERN ILLUSTRATIVE BOOKKEEPING. Make an entry on the credit side of the cash book for the amount of the discount, $102.50. The following illustrates the form of your entry. ^ ^jT <=.Z2i^^^i'C'tp-i>c^'z,^^^^ J4<=><.c:^'(jU-^gi-.''9'i.d-^^ / G Z ^£> By making an entry on the credit side of the cash book you credit Cash and debit Disco 2 int. The bank really gave 3^ou only $4897.50, but you can readily see that if the bank had given you $5000, you would have been required to take from the $5000 the sum of $102.50 and pay it to the bank for discount; and this is the principle upon which the cash book entries are made. Rule 19. — DiscousT is debited when it is allowed to other persons, or when it is paid to the bank for cashing a 7iote or draft before it is due. It is evident that the accounts affected by the transaction in the above example are Cash, since cash has been received b}^ the business; Discount, since discount has been allowed the bank for cashing the note 123 days before it is due; and Bills Payable, since Mr. Adams has given a note payable in four months. It is evident that Cash should be debited, since cash has been received (see rule 3), and that Bills Payable should be credited, since a note has been issued (see rule 16). Discount has cost the busi- ness value, since 3'ou have allowed the bank $102.50 for cashing a note before it is due; therefore, Discount .should be debited (see rule 19). If the entries were made in the journal, Cash and Discount would be debited and Bills Payable credited, according to the following form. Cash, 4897-50 Discount 102.50 Bills Payable 5000.00 No. 15. — May 5. You have received from the National Real Estate Company the deed of the building and lot No. 246 Main St. Write a check for the amount called for in the deed. In this transaction real estate has cost the business value, and therefore Real Estate should be debited. The Real Estate account is subject to the same rules as the Merchandise account. A deed is always received when real estate is purchased, since the title to real estate is shown by this document. The document should be recorded as soon as it is received, since the seller of the real estate might dispose of it to another party, giving a second deed, and in such a case the deed first recorded would ]je held, at law, a good title to the property. Rule 20. — Debit Real Est at k when purchased, and for all anwnnts paid for its improvement and permanent repairs. No. 1<>. — May 6. This invoice has been purchased of the E. W'esten Tea & Spice Co. by Mr. Adams. Verify the calculations and file the invoice, making the proper entry in your joinnal. No. 1 7. — May 6. This order is accompanied by a note for $500 to apply on account. Make out the bill and check each item on the order. Enter in tlic sales book as a sale on account, making no mention of the note for $500 received with the order. In \-onr journal make the proper entry for the note. What account sliould be debited ? What account should be credited ? Place the note in your Cash Drawer. MODERN ILLUSTRATIVE BOOKKEEPING. 79 Jfo. 18. — May 8. Take from your Cash Drawer the note received from A. A. Knowles & Co., and prepare a discount memorandum. Calculate the discount on the note from May 8th to the date of maturity (58 days). The discount on $500 for 58 days at 6 >' is $4.x3. (For method of calculating discount, see page 76.) Make a discount memoran- dum and attach it to the note; take the note to the bank teller, and have the net proceeds entered in your bank pass book. Enter the amount on the stub of your check book, as explained in No. 14, and add the amount to your bank balance. Make an entry on the debit side of the cash book for the face of the note ($500), as in transaction No. 14. The following illustrates the form of your entry, though the amount and explanation are different. /;' -^, Make an entry on the credit side of the cash book for the amount of the discount. The following illustrates the form of 3'our entrj', but the amount and explanation are different. /f c^:<^i^l.,<:i-€>ty'-C€yyz.^ CL'■/^tL^c■■■^■^yy7'^^€>^^^ A^r^-z^, y^ A^f In case there is no bank, enter the proceeds in your bank pass book (see model and transaction No. 14, page 77), and place the note in Vouchers for Others. Xo. 10. — May 8. Make out the bill, checking the items on the order, calculations and make the proper entry. Verif}^ your No. 20. — May 8. Take from your Cash Drawer F. C. Tenney's check in your favor, and enter it upon a deposit ticket. Indorse the check properly (see illustration, page 62), place the deposit slip with the check in your bank pass book, and have the amount entered at the bank. Enter the amount on the stub of your check book and add to j'oiu: deposit. Make no entry in the cash book. No. 21.— May 8. FOURTH REPORT. Fill out the report blank, answering the first five questions. Balance your cash book (see model, pages 68 and 69) and see if the amount agrees with your report and also with your bank balance plus the amount in your Cash Drawer, if an3^ Hand in j^our cash book, journal, sales book and also all vouchers for inspection. No. 22. — May 9. The invoice of April 30th received from West, Stone & Co. must be paid to-day, if you desire to take advantage of the 3^0 discount for paj-ment in 10 daj's. Take the invoice from you Invoice File and calculate the discount on the amount, $1693.50, at 3^^, which is $5x.xx. Deduct this amount from $1693.50 and draw a check for the net amount of the bill. On the stub of the check show the amount of the bill and 80 MODERN ILLUSTRATIVE BOOKKEEPING. the discount, as well as the net amount shown by the check itself. You have paid West, Stone & Co. the entire bill of $1693.50, so you nia}^ enter on the credit side of your cash book the following. / 'Cfj se But West, Stone & Co. have allowed jou $50.81 discoimt for paying the bill within 10 days, which is the same as if you had given them $1693.50 in cash and they had counted out $50.81 of this cash and handed it back to a^ou as discount. Bearing this in mind, you will see that on the debit side of the cash book should appear the following entry. ^ f ^/l^,U^^.:A^.:^^C^.^-^C^:^-Z^'^^ ^^ S£> /"/ Merchandise Discount is credited because it has produced value to the business, a bill of $1693.50 being settled for $50.81 less than its face. Rule 21. — Merchandise Discount is credited when it is allowed the business by other persons for the payment of a bill within a certain time. A distinction is made between discount on notes and discount on invoices of merchandise. The former is called "Discount" simply, while the latter is designated as "Merchandise Discount," or "Commercial Discount." The two kinds of discounts are of entirel}- different characters, and should never Ise charged to the same account. In the payment of bills on which commercial (merchandise) discounts are allowed, it is usually customary to have a special column in the cash book in which to enter the discount. No. 2.*5. — May 9. This order calls for your lowest cash discount. Make out a bill at the regular prices, and opposite Terms write. Cash jr'c. Enter the sale in the sales book. Do not deduct the 3'^ discount. You have not yet received your cash; therefore, charge Fletcher Bros, with the full amount, and if the^^ pay the bill within two or three days, allow them the discount, as it is customary to consider such sales the same as cash. Xo. 24. — May id. This purchase has been made of Shields Bros. , City, by Mr. Adams. Verif}^ the calculations, place the invoice on file, and make the proper entry. :No. 25. — May 10. The goods delivered to Fletcher Bros., May gtli, have been paid for, less 3^^ discount allowed for cash. The face of the bill :s $728.50. Three per cent of $728.50 is $2x.xx. The bill has been paid iii full. Make an entry on the debit side of the cash ])ook for the full amount of the bill ($728.50), y^xiimg Fletcher Bros, in the explanation colunui. Make an entry on the credit side of the cash book for the amount of discount, writing Merchandise Discount in the explanation column. This transaction resembles No. 22, but the conditions are reversed. You receive cash and allow merchandise discount, instead of j^aying cash and having merchandise discount allowed yon. Ilulc 22. — Merchandise Discount is debited when alloivcd to other persons for thi hayment of a bill within a certain time. MODERN ILLUSTRATIVE BOOKKEEPING. 81 ]S-o. 26. — May ii. Dickson & Young hand you this amount on acct., $200 in currency. Place the bills in your Cash Drawer, give a receipt, and make the proper entry. No. 27. — May ii. Deposit $200 currency and the check of Fletcher Bros, in Com- mercial Bank. Make a deposit ticket, placing $200 opposite Currency, and the amount of the check opposite Checks. Take the ticket with the cash and the check to the bank, and have the amount placed to j^our credit. Do not forget to add this amount to the balance on deposit, as shown on the stub of your check book. No. 28. — May 12. Make out the bill and check each item from the order. File the order and make the proper entry. Form of Acknowledgment of Remittance. WESTERN office; K^ ^# 334 DEARBORN ST. CHICAGO. I LL ~ 0^ i^ Gentlemen : ^^^ ^ Your favor of y/i C- f PE- ^/i ? is at hand, enclosing T check for $ Z'^^ ., y ^a- ^ ^ ^ ^ / / / C> The following illustrates the first two amounts posted from the credit side of the cash book. Post all credit items in a similar manner. ^ e - / -4 J 3 Z<^ Z^ In the second vertical column at the left of each page of the cash book is placed the page of the ledger account named. Be siu-e that all items from the cash book have been carried to the ledger. Posting from the Sales Book. — The footing of the sales book should be placed to the credit of Merchandise in the ledger, since it indicates the amount of merchandise sold, and each sale entered in the sales book should be posted to the debit of the person to whom the sale was made, with the terms of sale in the explanation space. The ledger 84 MODERN ILLUSTRATIVE BOOKKEEPING. page of this person's account should be placed in the vertical column at the left of the sales book. Add each total column of the sales book, carrying the footing of each page of this book forward to the top of the next page. Rule and foot to May 15th, and carry this amount to the credit of Merchandise account in j-our ledger, writing the ledger page in the folio column of the sales book opposite the footing. The following illustrates the posting of the footing of the sales book. fo- yu^t:Z^ ^.^. 2. ^f^rrj^y The following illustrates the first item of the sales book as posted. (For illustration of second item of sales book, see debit side of F. C. Tenney's account, page 83.) ■ 1^ i>- J 6 ^^■^z::C<:/ f y/a A^i'A^ff In posting from the sales book, the terms of the sales should be carried to the ledger to enable the bookkeeper to make out his statements when due, should he desire to do so. It will be seen that in this set the ledger is made up of postings from three books of Original entrj^ — the journal, cash book and sales book — instead of from a single book — the journal — as in previous sets. Any account in the ledger may contain postings from all three of these books of original entry. In this case the dates will not be consecutive in the date column of the ledger, as each book of original entry is posted entire before another book is taken up. The numbers in the page column of the ledger will refer to different books, but the explanation " C" will show when the cash book is indicated, the terms of sale will indicate the sales book, while "J" may be used to indicate the journal; or the absence of any explanation would indicate that book. TRIAL BALANCE. Take a trial balance of your ledger. (For instructions, .see page 33.) Do not forget to place the balance of cash, as shown by your cash l)ook, on the debit side of your trial balance. This is a common omission. Remember that the cash l)ook is really the Cash account of the ledger, and its balance, like that of any ledger account, must be carried to the trial balance. Present your trial balance to your teacher, and if correct, copy it on the next page of MODERN ILLUSTRATIVE BOOKKEEPING. 85 your trial balance book following your April statement. Do not make a statement of gains and losses, resources and liabilities, as the trial balance is taken at this time merely to show that your posting is correct, and that you understand the posting of the cash book and the sales book. Xo. 34. — May 17. Rice & Pond, of Georgetown, your state, have sent you an order, and kave given you satisf actor}' references. Bill them the goods at regular prices, subject to y< cash discount. This lot of goods must be sent by freight, and you may prepare three shipping receipts like the model receipt which follows. SHIPPING RECEIPT. ^^^ / V- 190. Received from i^jZk (Voar plAce here.) T^^- C^:^.--^?^?-?^:^, BY INTER-STATE TRANSPORTATION COMPANY, The property described below, in apparent good order, except as noted (contents and condition of contents of packatjes unknown), marked, consigned, and destined as indicated below, which said Company agrees to carry to the said destination, if on its. road, other- wise to deliver to another carrier on the route to said destination. It is mutually agreed, in consideration of the freight charged for this service, as to each carrier of all or any of said property, crver all or any portion of said route, to destination, and as to each party at any time interested in all or any of said property, that every service to be performed hereunder shall be subject to all the conditions, whether printed or written, shown or endorsed hereon, and which are hereby agreed to by the shipper and by iiim accepted for himself and assigns as just and reasonable. MARES, CONSIGNS AND DESTINATION. DESCRIPTION OF ARTICLES. WEIGHT SUBJECT TO CORRECTION. f^.^.^^. -.-c^yz^/.y y^S^^ ->S^-2>r7-'^^-7rt-^y.^'/>-^..iy-7^-^ 7r.^ y^^y.yrz>//.. 2 ^<^-=^ ZO^ Zt^ ^ ^ / IP Post to your ledger, opening a C. O. D. account in the section of j^our ledger reserved for accounts receivable. The following is the form of a C. O. D. account. <^ £> - Z/ 5. — May 31. Deposit all cash in your bank. Have your bank book written up, and see that your balance agrees with the ])alance as shown on the stul) of your check book. No. <>(>. — May 31. Prepare your report and hand in all \()ucliers to your teacher for approval. Be sure that no careless work is handed in. Balance your cash l)ook and .see that the cash l^alance as shown by the cash book agrees with the bank balance as shown on the stub of the check book. MODERN ILLUSTRATIVE BOOKKEEPING. 91 Some bookkeepers keep a Cash account in the ledger and carry to the debit side the footing of the left-hand page or pages of the cash book and to the credit side the footing of the right-hand page or pages of the cash book. This is unnecessary, since the balance of the cash book itself will show the same result that this account would show when balanced in the ledger. Keep no Cash account in the ledger, but do not forget to carry the balance of the cash book into the trial balance, the same as if the account were kept in the ledger. Post from all your books to the ledger and check your postings. Be sure that the total of the sales book is carried to the credit of Merchandise. Make out your monthly statement to each customer. Take a trial balance of differences only, and be sure that the balance of cash is entered on the debit side of the trial balance. The following is your inventory of unsold merchandise: 26 hf. chts . Oolong, 1300 lbs., 48^/ 18 " Young Hyson, 1260 lbs., 33'/ 18 " B. Breakfast, loSo lbs.. 31'/ 15 cases Ceylon, 750 lbs.. 35'/ 12 bales Mocha, 1800 lbs.. 23'/ 26 mats Java, 1950 lbs., 225^ 1575 lbs. Maracaibo, 11'/ 650 lbs. Rio, 10'/ 34 boxes W. Pepper, 340 lbs., 23^ 24 " Cinnamon, 240 lbs., 27^ 26 " Cloves, 260 lbs., 14^ 29 " Ginger, 290 lbs., 22'/ no lbs. Nutmegs, 60/ 25 hf . chts. Japan, 1500 lbs., 23 r/' Office furniture and fixtures are valued at ic^ less than cost. Office books, stationery and unexpired insurance are valued at $98.75. Your real estate is valued at cost, as shown by the debit side of your ledger account. Calculate the amount of your inventory, and write the items and amounts in your trial balance book. After you have taken the trial balance, jorepare statements of gains and losses and resources and liabilities, according to instructions below. In making your statement of losses and gains, include Merchandise Discount and Furniture and Fixtures; in making statement of resources and liabilities, always include all inventories of merchandise, furniture and expense items among the resources. FORMS OF LOSS AND G'AIN STATEMENT AND BALANCE SHEET. In the previous work the student has prepared simply a statement of losses and gains and of resources and liabilities. This work was designed to familiarize the student with only the fundamental principles of bookkeeping. Now that the student has taken up the study of practical bookkeeping, we have introduced, instead of the elementary statements, the simplest forms of the accountant's regular loss and gain statement and balance sheet. The forms which we present are those which are universally used by experienced account- ants and auditors. The following illustrations differ in many respects from the forms which have heretofore been pre- sented in text-books on bookkeeping, and we believe that all progressive teachers will welcome this change from the theoretical to the practical. 92 MODERN ILLUSTRATIVE BOOKKEEPING. -■^^^^Sz^^S^^e-t^^^^-^^^^^^jz^^c^.,^^:^;-^:,^^ y^ ^ /■ ^-t.'-^'Zji^^-i^l^iZ^f^z^^e:^ >^ / /(? /^ i:z. i' Z/^^ -^ vjT ^^ f(^4^ff ^Z * To be written in red ink. Analysis of Statement of Losses and Gains. — The loss and gain statement is closed in two sections. The first section represents the gain on merchandise, without taking into account the expenses of the business; the second section contains the expenses of the business, the gain on merchandise discount, and shows the net gain of the business proper. If there are transactions in stocks and bonds, or anything outside of the business, the gain or loss on such transactions should be included in a third section of the loss and gain statement. On the debit side of the first section of the loss and gain statement, we have (i) merchandise on hand at the close of last month; (2) cost of mdse. during the month. These two items are entered in the first column, added, and their sums extended into the second column. In the above instance there was no merchandise on hand at the close of last month, hence there is no amotmt after this item. On the credit side of the loss and gain statement in the first section, we have (3) amount of merchandise sold during the month; (4) merchandise now on hand, as per inventory. ■ The amounts of these two items are entered in the first cohnnn, and their sum extended into the second coluuui. It is evident that the difference between the amount of mer- MODERN ILLUSTRATIVE BOOKKEEPING. 93 i^'-^Z.-^^-^'T^. ^/l J/, y^^- /at ■^^^C^._^ A^ // — ^«^4:e-^-'^;^2-^— •^^k^^^^:2i'^-^C^,^ Z-i^-U^-^-Z^ /z lyyZ'£:^l<£.d^, <==,/y^:^^ 6 A^iP c 2 Z4^0 rC'^ff / A^//.t? / j'^pj j^-r 6s^, which, paid for under expense, has not yet been used; (8) the loss on discoimt; (10) the loss on furniture and fixtures on account of depreciation in value. In the second section of the loss and gain statement, on the credit side, we have (11) the net gain on merchandise, which is written after Gain brought down (that is, this gain is brought down from the first section); and (12) the gain on merchandise discount. The difference between the sum of the debit and the sum of the credit amounts will show the net gain on the business. This gain is written in red ink after No. 13 on the debit side. When the proprietor examines the above statement, he can tell at a glance the amount of merchandise purchased during the month, the amount of sales, the amount on hand, his gain on merchandise, and his net gain on the business proper; and if he has purchased and sold stocks and bonds, bank stock, real estate, or anything of this character, such transactions should be shown in a third section of the loss and gain statement, and the 94 MODERN ILLUSTRATIVE BOOKKEEPING. statement should show the gain on merchandise, the net gain on the business proper, and the net gain or loss on his entire transactions. A business might be paying, and the proprietor still be losing money on account of losses sustained by outside transactions. The profit on merchandise might be suflEcient, and still the business be conducted at a loss, on account of having enormous expenses. For this, and various other reasons, it is absolutely essential that the loss and gain statement should be closed in sections, so that the proprietor may determine at a glance the exact condition of his business. INSTRUCTIONS TO THE STUDENT. How TO Make out Loss and Gain Statement for the Month Ending May 31. The numbers given in the following instructions agree with the numbers given in model statement of losses and gains, pages 92 and 93. 1. Turn to the Merchandise account in your ledger. As this is the beginning of the business, there was no merchandise on hand at the beginning of the month, hence nothing will be written after Merchandise on hand at the close of last month, but you may write these words in your statement of losses and gains (see model, page 92). 2. The sum of the items on the debit side of the Merchandise account in your ledger represents the cost of merchandise during the month. Place the amount after Merchan- dise purchased duri^ig the month (see model.) 3. The sum of the items on the credit side of your Merchandise account represents the amount of merchandise you have sold during the month. Place the amount after Merchandise sales during the jnonth (see model.) 4. Take the amount of your inventory and write it after Merchandise on hand 7ion'. 5. Take the difference between the sum of the items on the debit side and the sum of the items on the credit side of your loss and gain statement, and write the difference, in red ink, after Gain carried down on the debit side of your loss and gain statement in the second column, after which rule up the first section of your loss and gain statement, as per model. 6. Take the amount of cost of expense, as shown by your trial balance, and write it after Expense. 7. Take the amount of expense as shown by inventory, and subtract it from cost of expense. Extend the difference into the second column (see model, page 92). 8. Take the amount of the loss on discount, as shown by your trial balance, and write it after Discount. 9. Depreciation as under : 10. A depreciation of 10/ has been allowed for wear and tear on office furniture. Write the amount of this dejoreciation, which is a loss U) the business, after Furniture and Fixtures, under Depreciation (see model). 1 1 . Bring down the amount of the gain shown in the first section of loss and gain statement, and write it under Gain brought down in the second section of loss and gain statement. 12. Take the gain on merchandise discount, as shown by your trial balance, and write the amount after Mercha?idise Discount. MODERN ILLUSTRATIVE BOOKKEEPING. 95 13. Take the difference between the sum of the items on the debit side and the stun of the items on the credit side of your loss and gain statement, and write the amount, in red ink, after Net Gain. Rule up the second section of your loss and gain statement, as per model. Analysis of Statenieut of Resources aiul Lial)ilities. — In preparing a statement of resources and liabilities, commence with the most available asset. Cash. Write the amounts of cash in safe and in bank separately in the first column. Find the sum of these amounts, and write the sum in the second column. (See model, pages 96 and 97. ) Various kinds of property owned by the btisiness should next be listed under the title, Properties as under: Real estate is listed at its ledger valuation, on the presumption that it is worth at the present time the amount paid for it. Naturally there has been wear and tear, or depreciation, upon office furniture and fixtures. The cost of office furniture and fixtures should be shown in the first column, and under this should be written the amount charged off for depreciation. The difference, or present value of the furniture and fixtures, should be extended into the second column. Goods on hand should be inventoried at their cost price, and the amount written in the second column. If there is anything on hand which was charged to Expense when bought, it should be considered an inventory and listed in the second column. The next title. Sundry trade debtors as wider: should include all amounts owing the business by firms and individuals. The amount of notes we hold should be written after Bills Receivable , and the amount due us on account should be written after Open book accounts co?isidered good. Usually an amount is deducted from Open book accounts as a reserve for bad debts. Open book accounts are also frequently divided into two classes — Open book accounts considered good and Open book accounts cotisidered doubtful. If there are any other assets, they should be enumerated in detail on the debit side of the statement of resources and liabilities. In connection with this statement, it is usually customary to make out a list of all persons owing us and all persons whom we owe. We next proceed to the enumeration of the liabilities. These are written on the credit or right side of the statement. The first title, Sundry trade creditors as under:, should include all persons or firms whom we owe, either by note or on account. The amount that we owe on otir notes should be written after Bills Payable. The amount that we owe on account should be written after Open book accounts. If the business has other liabilities, they should be here enumerated. Find the sum of the liabilities, and write the sum in the right-hand column, drawing one red line, as shown in the model. Next write the amount the proprietor has invested in the business, and from this amount subtract his withdrawal. To the remainder add the net gain from the state- ment of losses and gains, and extend the total to the last column, in red ink, under the title, Present worth of business. Foot and rule up the statement of resources and liabilities, as per model. A balance sheet or statement of resources and liabilities, made out as above, will show in classified form the actual assets and liabilities of the business. The proprietor of the business, in examining such a balance sheet, can tell at a glance the amount of property he has on hand, and the basis of its valuation, the balance sheet showing any amount that has been charged off for depreciation, or anything that has been added on account of the increase in value. All additions and subtractions should be made in the first column, and only the totals, or the differences, extended to the second column. 96 MODERN ILLUSTRATIVE BOOKKEEPING. K i-^^^2-^ 6 c? V r' f ^ .--i^^'e^^^t^^?^-!:?^?^^ ifZ..<^.^€-C'^^z^t;i!U..-i^.- c^^^< ^ 7 ^^ ^--^>^'^S^''S-<'^-^^7:^^ / Z0 C Z O £> 2 Z-^CP j-a /^' 6 / ti^ •3 A^J 2 ^ ^ INSTRUCTIONS TO THE STUDENT. How TO Make out Statement of Resources and Liabilities for Month Ending May 31. 1. Ascertain the amount of cash in the safe or drawer, and write it after Cash in safe. 2. Ascertain from your check book the amount of cash in bank, and write it after Cash in bank. The amounts of cash in bank and in safe shoukl l)e added, and written in the second money coknnn of the statement (see above model). The amount of cash shown by the statement should be the same as that shown on the trial balance. 3. Take the amount of real estate ($12125), as shown by your trial balance, and write it after Real estate, ledger valuation in the second column of your statement (see model form). 4. Take the amounts charged to Furniture and Fixtures, as shown l)y your trial balance ($231), and write it after Furniture and Fixtures in the first monej^ cohnnn of }our statement. 5. A depreciation of \o''< is allowed on furniture and fixtures. Write the amount of depreciation ($23.10) after Less depreciation, and subtract this amount from the amount of furniture and fixtures, and extend the diflference to the second colunni of your statement. MODERN ILLUSTRATIVE BOOKKEEPING. 9? cJ'A /f^- -Q^C'£^i^y^Z.-i^?!^4^ ....^i^^^ £Z..^..,i:-C^?'Z. 7^ j^C 6 £>' /3^3 Z rD ID nS ID CO o ID ID PI PI CO 1— ( ^ ID CO o PI a O CO 03 O ^ VO O W o ID o ID t^ O NO o ID ID ID ID PI O ID O ID i-i P) i-i PI O ID M PI PQ ^ pq o rt o rt o ca M Ph K Ch KPh O >D 1-1 PI O cU MPL, ca s o o u pq o _ IS en v-i i^ cd 03 "i Ph Ph n o be H u u HI be C o MODERN ILLUSTRATIVE BOOKKEEPING. Price I^ist for AIay axd June (Continued). 101 Flour, Northern Star . . . Brl. " Searchlight Pastry . " " Graham Case H. O. Buckwheat ..... " Oatmeal, Pawnee Brl. Quaker R. O Case Sugar, Granulated Brl. Rice Com Doz. Tomatoes " Beans, Lima " 1 Soap, Ivory Box lbs. 300 150 4.08 4.60 4.10 4.5S 2.85 2.90 3-25 3-20 4-35 4-3° 3-49 67/s .85 1.20 .81 7.27 3-54 5.54: 3/ 1. 10 •95 1.07 7.01 4.12 4.56 2.95 3-15 4-25 3-59 .86 1. 19 .82 7.26 4.14 4.54 3.00 3.10 4.20 3-64 6 8 4.16 4.18 4.20 i 4.52 4-50, 448 2.86 2.91 2.96 3.24 3.19 3.14 4.34 4-29 4-24 3-50 3-55 I ! , ^%\ 5Vs sH sH] 6ys 6'^ 1.09 .87 1.08 .96 1. 18 .97 1.06 .83 1.05 7.02 7.25 7-03 4.22 4.46 3.01 9 4.24 4.44 2.87 10 4.26 4.42 2.92 11 12 13 4.28 4.30 4.40 4.38 1 2.97 3.02 3-09i3-23,3-i8 3.13 3-o8 3.60 6H } .88 1. 17 .84 7.24 4.19 3-65 ey2 1.07 .98 1.04 7.04 400 3-51 6% .89 1. 16 .85 7-23 4.28 3-56 5% 1.06 1.03 7.05 4.23 4.18 3-66 •98 1.07 3.61 6^ .90 99 I-I5 4-32 4-36 2.88 3.22 4.32 3-52 .86 7.22 1.02 7.06 .91 1. 14 .87 7.21 Price List for May and June (Continued). Flour, Northern Star . . " Searchlight Pastrj' " Graham H. O. Buckwheat . . . Oatmeal, Pawnee .... Quaker R. O Sugar, Granulated . . . Rice Com Tomatoes Beans, Lima Soap, Ivory Brl. Case Brl. Case Brl. (< Doz. lbs. 300 150 Box 14 15 16 17 18 19 20 21 22 23 24 4-34 4-36 4.38 4.40 4.42 4.44 4.46 4.48 4-5° 4^52 4-54 4.34 4.32 4.30 4.28 4.26 4.24 4.22 4.20 4 18 4.16 4.14 2-93 2.98 3-03 3-o8 2.89 2.94 2.99 3-04 2.80 2.84 2.82 3-17 3.12 3.07 3.02 3.21 3.16 3^ii 3.06 3-3° 3.26 3.28 4.27 4.22 4.17 4.12 4^31 4.26 4.21 4.16 4.40 4.36 4.38 3-57 3-62 3-67 3-72 3-53 3^58 3-63 3.68 3^44 3-48 3-46 5^ 5% ey^ 5X (>% 5^ 6X 5^ sH 5H 5/2 e% 6% 5% 6% 57/s 6){ 5H 6H 6H 6% 6y, 1.04 •92 1.03 •93 1.02 •94 I.OI r95 I.OO .96 •99 I.OI I-I3 1.02 1. 12 1.03 I. II 1.04 1. 10 1.05 1.09 1.06 I.OI •89 •99 .90 •98 •91 •97 •92 •96 -93 •95 7.07 7.19 7.09 7.18 7.10 7.17 7.11 7.16 7.12 7.15 7-13 4.56 4.12 2.83 3^27 4^37 3-47 6H ■97 1.08 •94 7.14 102 MODERN ILLUSTRATIVE BOOKKEEPING. QUESTIONS. 1 . Explain the use of the cash book ? 2. WTiere should cash received be placed? 3. WTiere should cash paid out be placed? 4. ^\'^lat should the difference between the sides of the cash book show? 5. WTi}^ should the cash book be balanced frequenth^? 6. When should it be balanced daily? 7. WTiat ledger account does the cash book enable us to dispense with? 8. How should you show the balance of cash in the trial balance? 9. Explain the use of the sales book. 10. To what accoimt in the ledger, and to which side of the account, should the foot' ing of the sales book be carried ? 11. In which money column of the sales book must all discounts and allowances appear? 12. What should be the first entr}^ in the journal-daybook of an}' business? 13. Why are persons debited from the sales book for merchandise sold them for cash, and then credited from the cash book ? 14. WTiat is meant by indorsing a note? 15. What is bank discount ? 16. For what length of time is bank discount always calculated? 1 7 . How would you proceed to find the time of discount ? 18. What entry should be made on the debit side of the cash book when a bill receiv- able is discounted ? 19. What entry should be made when a bill payable is discounted? 20. What entry should be made on the credit side of the cash book in either case? 21. Define merchandise discount. 22. When is merchandise discount debited? When credited ? 23. To which side of the ledger should amounts on the left-hand side of the cash book be carried? To which side the amounts on the right-hand side? 24. How .should the cash book posting be designated in the ledger? 25. Why should the terms of sale be shown in posting the sales book items to the ledger ? 26. Where should the footing of the sales book appear in the ledger? 27. What is a shipping receipt? Why are these receipts made in triplicate, and what is done with each copy ? 28. What care should be taken in writing a telegram? 29. How should figures be indicated in a telegram ? 30. What is meant by repeating a message ? What is a code ? 31. Describe the method of entering C. O. D. sales in the sales book and in the ledger. 32. How should petty cash sales be entered? 33. In how many sections is the loss and gain statement closed? 34. What does the first section of the loss and gain statement show? 35. What does the second section of the loss and gain statement show? 36. If there are outside speculations, what furlher closing would be necessary? 37. In making a statement of resources and liabilities, where would you find the cash on hand ? MODERN ILLUSTRATIVE BOOKKEEPING. 103 SPECIAL INSTRUCTIONS, The transactions for the month of June call for the handling of drafts, and the business of the month is a continuation of that of the month of May, with the addition of groceries to the tea, coffee and spices dealt in during that period. Jt is thought advisable to give space for a short discussion of the subject of drafts before the student is called upon to handle that form of commercial paper in his vouchers. DRAFTS. A draft is an order from one person or firm to another to pay a certain sum of money, unconditionally, to some person or firm named in the bodj^ of the draft, or to the order of that person or firm. Form op Sight Draft. ^Se^ -^- y /^ Stmmbe^ . Allen i Ca.Statianers Ourago.Hl In the above draft Chas. Rand orders Wm. French to pay to the order of Adams & Baker $300. It is presumed that Wm. French owes Chas. Rand this amount, and that Chas. Rand is indebted to Adams & Baker, and gives them this order on Wm. French in payment of his indebtedness. PARTIES TO A DRAFT. Drawer. — This name is given to the person who writes or draws the draft. In the form of draft given above the drawer is Chas. Rand. Payee. — This name is given to the person or firm to whom the draft is made payable. In the form of draft given the payees are Adams & Baker. Drawee. — This name is given to the person or firm on whom the draft is drawn. In the preceding form Wm. French is the drawee. COURSE OF PROCEDURE WHEN A DRAFT IS DRAWN. Chas. Rand owes Adams & Baker and wishes to pay them $300 on account. Wm. French owes Chas. Rand and is willing to pay to him, or to his order, $300, therefore the 104 MODERN ILLUSTRATIVE BOOKKEEPING. following transaction is carried out : Chas. Rand writes an order, or draws a draft, on Wm. French, requesting him to pay to the order of Adams & Baker $300. The drawer should, in every case, notify the drawee that he has drawn on him; or, better still, notify him in advance that he will draw on him at a certain date, for no person, even though he be a debtor, is obliged to accept or pay a draft drawn on him by a creditor. Having drawn the draft, Rand gives it to Adams & Baker and makes his journal entr}', since the transaction is completed so far as he is concerned. Rand has given Adams & Baker the order, which will be worth $300 to them when presented to Wm. French for payment; therefore, Adams & Baker should be debited $300, the amount they will be paid. This amount, $300, will be paid by French, therefore Frc7ich should be credited the same as if he had paid the amount to Rand instead of to the person Rand designated in the draft. The following is the form of journal entry required in the drawer's books for the above draft. /^^^i^W^^e<:/ >^?=^P^.^C,^^ =.<^ ^^^^^^^^^^Z^.^J^i^.^.''^^^ ^S^^^-^^-^-Z-C^^ , /^v64z^.^,^i--^>' 3 i> e >J'c?<^ Rule 1. — The drawer' s entry when a draft with three parties is drawn, whether it be at sight or a time draft, is Payee, Dr. and Drawee, Cr. Payee's Entry. — The payees, Adams & Baker, receive the draft from Chas. Rand, and they at once take it to Wm. French, or place it in their bank for collection, in which case the bank will take it to French, who pays the $300. In either case Adams & Baker have received cash, $300, and should debit Cash. The draft which produced them the $300 was received from Chas. Rawd, therefore Chas. Rand should l)e credited the same as if he had given them the $300. The following should be the payees' entry on the debit side of their book. Rule 2. — The payee' s entry for a sight draft received should be Cash, Dr. and Drawer, Cr. I>rawee'(s l-^iitiy. — When the draft is presented to Wm. French he examines it and notes that Chas. Rand has requested him to pay ^^300 to the order of Adams & Baker, and if he honors the draft he pays the amoinit, $300, and since he pays this amount on Chas. Rand's order, he delnts Ratid the same as if he had paid the ca.sh direct to him and credits Cash, since he has paid it out. MODERN ILLUSTRATIVE BOOKKEEPING. 105 The following is the drawee' s entry for the above draft on the credit side of his cash book. (Ui.^'i^^z "^^^C^z^^ yY^^^^^-^f -..^^£i^pi'C^a!^^t^^z^..j,it<.---^^^^ J £1 C Rule 3. — Drawee' s entry for a sight draft paid is Drawer, Dr. and Cash, Cr. ExAMPtE. — Edward Martin draws a sight draft on B. W. Hammond, requesting him to pay to the order of Chas. Carter $400, which he does. Write the draft and make the entry of each party to the transaction. Write the draft and the entries on a piece of foolscap paper, and show it to your teacher. Form op Time Draft. ^^^^^^^^ '■/^^uJ^^ ^/^^^_ ^^m^^0me^ 7 65-19 CEMorrifi. Statiouer. Rache^lei; N Tfl In the above draft instead of being payable at sight, it is not payable until 30 days after its date, or July 2. This draft, as soon as received by the payee, Edward Curtis, should be taken to the drawee, D. H. Parsons, who, if he decides to pay it, will write Accepted across the face, with his name. This is generally done in red ink, though the color of the ink is unimportant. In the case of this draft, the drawer's entry will be the same as in the case of the sight draft, for the payee has received value, and should there- fore be debited, while the drawee is to pay the draft when it falls due, and should therefore be credited. The payee, however, instead of receiving cash from the drawee. Parsons, has received a promise to pay in 30 days, for writing the w^ord "Accepted," and signing the name across the face of a draft constitutes at law a promise to pay. A promise to pay is a bill receivable to the holder, therefore his entry should be as follows. U^€:<, £^ £::'-7^ -^ f ^^ f ^k-£..yl^ ^:?!i^^^^^ ~7^l-i:.-^>£-^Z^i^ f ^i^ f ^^ Rule 5. — The di'awee' s ejitry for a time draft is Drawer, Dr. and Bills Payable, Cr. ExAMPivE. — Geo. W. Allen draws a draft on Chas. W. Clinton for $500, at 45 days' sight, in favor of P. Y. Black. Write the draft as accepted by Chas. \\'. Clinton, and make the journal entry of each party to the transaction. The draft is used extensively in business for the purpose of collecting accounts that are past due, and instead of the promissory note in ordinary sales of merchandise. In these cases, the draft is made payable to the order of the drawer, and is generally collected through his bank. The following are forms of sight and time drafts drawn in this manner. Form op Sight Draft. «»««Mwift«wwdJ>w«««wmewKi««>««)«an«ii«i»«imwa«««i«ii W ^ z/^.^ '%oyl^^^^^ ^^^^§^^^^^^^^^^^^^^^^^1^^ i^^ ^i^-'^ir^^- ./:^^_ ^:^^^ C-&/ >/ ,^^^te^g^^r^. '■ayu-y 'C//^^ ^ ^^^.^ '^ yc^i^aj% KmMWi\mM\nmp\imm ^iEsmmmia mim si ?^sm ^^im:? &^ \ f i T <,vs i V a ' MV ! X' ' A-!s ~A =^^^^^^^^^ MODERN ILLUSTRATIVE BOOKKEEPING. 107 Form op Time Draft. Rule G. — T/ie drawer's entry is the same as the payee' s, since he is payee as well as drawer; that is, in the sight draft he will debit Cash a^id credit E. M. Leach, while in the time draft he will debit Bills Receivable and credit E. B. Lacy & Co. ExAMPi.ES. — J. B. Flint, of Rochester, N. Y., draws a draft at sight, in favor of him- self, on A. H. Hines, of Portland, Me., for $250, and deposits it in his bank. Write the draft and the entries of J. B. Flint and A. H. Hines. J. B. Flint of Rochester, N. Y., has drawn a draft for $300, at 30 days' sight, in favor of himself, on J. L. Osborn, of Manchester, N. H. Write the draft, properly accepted, and make the journal entries of J. B. Flint and J. L. Osborn. BANK DRAFT. In business a large proportion of remittances are made bj' means of bank drafts, which are accepted as cash. The following is a form of bank draft. Form of Bank Draft. >^>l tUE z2-22^=.£-^L^^2Z2==r:l_A3i:2i^e^ { # P^^^ -^r£-^ 7 \=?o^.^.,''~/ty- Form of Check. U^^- %g0^"^- f^:^:^-^^/^^^. ^ ;^-^^. ^v /o ^f Emerson Bros, take the above check to the Traders Bank of St. Louis. The bank will charge a small fee for exchange (in this case 50'/), which is included in Emerson Bros.' check, and will make out a draft similar to the form on page 107. Some business houses have these remittance drafts made payable to the order of the person to whom they are to be sent, but the better way is to have the draft made payable to the order of the sender, who will indorse it over to the order of the person to whom it is sent. When this is done, the draft itself, after it has been presented and paid, becomes a perfect receipt for the amount named in its face. In this case, the draft would be accepted as cash by the Eastman Kodak Co., and they would place it as a deposit in their bank in Rochester. This bank would forward the draft to the bank with which it does business in New York, and it would be presented to the Seaboard National Bank of that city, and that bank would pay it and charge it to the Traders Bank of St. Louis. The following shows the draft properly indorsed. MODERN ILLUSTRATIVE BOOKKEEPING. 109 Form of Indorsement. WORK FOR THE STUDENT. In the following exercises it is required that the student write each draft, with such indorsements or acceptance as it should bear, on foolscap, and make his journal and cash book entries on a sheet of joiu-nal paper. If the teacher deems it advisable, he may require the student to make the journal and cash book entries of all parties to these drafts. June i. — Emmons, Hyde & Co., of Chicago, 111., have agreed to accept 3"our draft at sight for $600, favor of E. L. Martin. Write the draft and make the proper entrj^ (see rule I, page 104). June 2. — Geo. C. Chase, Manchester, N. H., has agreed to accept your draft for $275 at 10 daj-s' sight, in favor of Wm. Darling & Co. Write the draft and make the proper entr}^ (see rule i, page 104). June 3. — S. A. Dodge & Co., Millbury, Mass., have accepted your draft for $800 at 60 days after date, in favor of yourself. Write the acceptance and make the proper entry (see riile 6, page 107). June 4. — John Reynolds & Co., St. Louis, Mo., have agreed to accept j-our draft for $250 at sight, in favor of yourself. Place the draft in the bank and receive credit for its face. Write and correctly indorse the draft and make the proper cash book entry (see rule 6, page 107). 110 MODERN ILLUSTRATIVE BOOKKEEPING. June 5. — O. H. Waters, Boston, Mass., has agreed to accept your draft for $1200 at four months after date, favor of yourself. Write the draft and have it discounted at the College Bank and the net proceeds placed to your credit. Alake the proper cash book entry. Prepare a discount slip, treating the draft exactly as you would a four months' note of a similar amount and date. For the above transaction, some bookkeepers would make a journal entry, debiting Bills Receivable (see rule 6, page 107) and crediting O. H. Waters, after which they would make a cash book entry, debiting Cash and crediting Bills Receivable ; also crediting Cash and debiting Discount for the discount. But the journal entry is unnecessary', since the bill receivable does not remain in yoxxr possession. The better method would be to debit Cash for the amount of the draft and credit O. H. Waters in the cash book, writing draft at ^f mos. in the second explanation column of the cash book; then credit Cash and debit Discowit, writing O. H. Waters draft, ^ mos. in the second explanation column on the credit side of the cash book. June 6. — Wm. Parsons & Co., Worcester, Mass., have drawn on you at sight through the College Bank, for $650. You accept the draft, payable at College Bank, where you have a deposit. Write the draft and acceptance and make the proper cash book entry (see rule 3, page 105). June 8. — T. W. Preston, Toledo, Ohio, has drawn a draft on you, dated June 5th, at 30 days after sight, favor of himself, for $200. Accept the draft, payable at your office, and make the proper entry (see rule 5, page 106). June 8. — Ward Bros., El Paso, Texas, who owe you on account, draw a sight draft on Thomas Trajaior & Co., Buffalo, N. Y., in your favor, for $300, and you place the draft in the bank with your daily deposit, receiving credit for its face. Write and indorse the draft and make the proper entry (see rule 2, page 104). June 9. — Fred Kemble & Co., Concord, N. H., owe you on account, and they give you a draft at ten days from date, for $4000, on A. B. Collins, Pittsburg, Pa., to apply on account, which you accept at its face and place in your bank for collection. Write the draft with the proper indorsements, and make the journal entry (see rule 4, page 106). June 10. — You owe Chas. Farnham & Co. $510 on account, and you give them a sight draft on H. A. Bowen, Portsmouth, N. H., for the amount. Write the draft and make the proper entry (see rule i, page 104). June II. — You owe O. D. Byron $240 on account, and in payment you give him a draft on C. P. Larcum, Syracuse, N. Y., at 10 days after date for this amount. He accepts the draft at its face. Write the draft and make the proper entry (see rule i). June 12. — Geo. Farrish & Co., who are indebted to j'ou, indorse over to you a draft drawn by them, in their favor, on Amos Martin, Philadelphia, Pa., for $485, dated June ist, at four months from date, accepted by Martin. You receive the draft and give Far- rish & Co. credit for its face, less discount at 6 ,' for the unexpired time. Write the draft with indorsements and make the proper entry. (Find the due date of the draft, and discount it for the time between June 12th and the due date. ) June 13. — You have in your possession a draft drawn l)y yourself, June 41I1, on J. C. Dennis & Co., Brooklvn, for $915, at 90 days from date, and accepted In J. C. Dennis ^S: MODERN ILLUSTRATIVE BOOKKEEPING. Ill Co. You indorse this acceptance over to J. L. Osborn & Co., who allow you its face, less discount at 6 , for the unexpired time. Write and indorse the draft and make the proper entry. (Find due date and discount for unexpired time.) JUNE^ 14. — You have the draft of S. A. Dodge & Co., received June 3d, discounted at the College Bank, and the net proceeds placed to your credit. Make the proper cash book entry. Hand the journal sheet containing the above entries, and the drafts which you have written, to your teacher for examination. Be sure you understand each transaction before proceeding. NEW BOOKS TO BE USED. In this month's work you will use, in addition to the books already in use, the invoice book and the bill book. Bill Book. — This book contains a Hst and a brief description of all notes which come into the business or which are given by the business. When notes are received or given, the information called for should be vs^itten under the proper headings, as shown in the bill book (see model, page 112). This model contains the proper entries for all notes received and given during the month of May. You may copy the entries found in the model bill book into your bill book exactly as they appear in the model. Your bill book will then show all notes on hand and outstanding at the beginning of the month of June. Invoice Book. — This book is generally made up of the original bills themselves which are pasted in the invoice book, as shown in the model on page 113, and the amount of each invoice is carried into the money column of the invoice book, also shown in the model. WTien bills are received, after they have been O. K.'d, paste them in your invoice book, taking care that the right-hand edges of the bill do not extend into the money column of the invoice book. In order to avoid this, it may be necessary to trim the edges of some of the bills, for invoices coming from different business houses will not be of miifomi size. Paste lightly on the lower edges of the invoice and let them lap over each other, as shown in the model. It will be seen that the money column of the invoice book should contain the amount of all merchandise bought by the business, and therefore the footing of this money column should be the debit of the IMerchandise account. It will no longer be necessary to enter merchandise purchases in the journal, but at the end of the month, or at such periods as may be desired, the footing of the money column of the invoice book should be carried to the debit side of the Merchandise account, and the page of the invoice book carried to the folio column of the ledger, and opposite the footing in the invoice book should be written the ledger page of the Merchandise account. The amount of each bill should be posted directly from the invoice book to the credit of each person or firm from whom the merchandise is purchased, and the page of the account in the ledger should be -uTritten on the invoice itself, as shown in the model on page 113. x i I S S' i u X < < IT TX H E S t 5 112 SEEDS ®^-^^^=i^-. ->.^ - '--_,-^ /, GEHEfiAli Gr;OGEI^S AHD ©OMMISSIOH fflEi^GHAHWS, / / £'^J,£> / a & / ^6 M \'^:=r^^2[^=^^ Xerm'^ Y^ '^ -^--^-'^^ ^ /^ /c:/^^^-^-^^. . ^ -^^^-^ ^~(p ^l/Z^^ INO. / ^ -r iSif ;:^---^ ""* 5"" ""':^^ ""'" ^ -inent of bills, make all notes, checks, drafts and other negotiable paper of the firm, and attend to the management of the store. The gains and losses of the l)usiness are to be shared c(iuall\ . iCacli parliicr is to gi\-e his full time to the business, and H. F. Adams is to draw a salary of $125 per inonili and you a salary of $100 per month. The firm name is to be TL I'\ Adams iS: Co. MODERX ILLUSTRATIVE BOOKKEEPING. 11, Prepare articles of copartnership between the two partners, yourself and H. F. Adams, (see model, page 114). For amount of investment, see H. F. Adams's present worth, statement May 3 1 . Present this copy to your teacher for approval, and make such changes as he may suggest. Copy carefully, in ink, on legal cap, the corrected articles of copart- nership and present to 3*our teacher, who will sign for H. F. Adams. Sign your own name below that of H. F. Adams, and afhx seals. Ask some student, or your teacher, to sign as witness in the left-hand corner opposite the names of yourself and H. F. Adams. In business two copies should be prepared, one for each partner, and a lawyer experienced in partnership affairs should prepare these articles of copartnership. Fold the articles of copartnership twice from bottom to top, and brief them by writing on the outer right-hand corner at the top the following: Articles of Copartnership between H. F. Adams and {^StudcnV s Namc^ Jiuie I, igo— Xo. 68. — June I. Procure from your teacher $200 in cash and check for the balance of 50ur investment, which will be the same as H. F. Adams's present worth at the end of May. Enter the amount in the cash book on first line below the balance for June i , cred- iting yourself for investment. Write a check in favor of H. F. Adams & Co. for the amount of H. F. Adams' s balance in Commercial Bank, as shown by the stub of your check book. Deposit this check -and check received from teacher. You will no longer sign or indorse checks and other nego- tiable paper with your name as attorney, for you are now a member of the firm of H. F. Adams & Co., and have the same right to sign checks and other papers that Mr. Adams has; but, in order that your teacher may be able to identify your work readil}-, j-ou will write your own name under that of H. F. Adams & Co. on all paper you may have occa- sion to indorse or sign. No. 09. — June I. You will pay H. F. Adams's gas bill for the month of May, S7.87. This bill belongs to last month's business, but it has been agreed that such bills as did not appear on the books shall be paid by the new firm when due. Write a check for the amount and place the receipted bill in your Voucher File. Place the check in Cash Paid Out. Make the proper entry in your cash book. , Xo. 70. — June 3. This transaction calls for an invoice of merchandise purchased. Examine the invoice and see that it is correct. If found to be correct, paste the invoice in your invoice book and write the amount of the invoice in the money column of the invoice book (see model, page 113). No journal entry is required for this transaction for, as explained under ' ' Invoice Book, ' ' page 1 1 1 , all postings are made directly from the iiTvoice book. 116 MODERN ILLUSTRATIVE BOOKKEEPING. No. 71. — June 3. This transaction is similar to No. 70 and should be treated in tLe same manner. Examine the invoice and see that it is correct; if so, then paste it in the invoice book and enter the amount in the money column of the invoice book. No. 72. — ^JuNE 4. You now take out a policy of insurance on your stocK of mer- chandise for $3000 at ifc premium. Make a check for the amount in favor of the Equitable Fire Insurance Co. Place it in youi' Cash Paid Out envelope. Place the policy in your Voucher File, and make the proper cash book entry (see transaction No. 30, page 82). No. 73. — June 4. You have outstanding a note in favor of L. Hennes & Co., for $1505, which is due 60 days after date, May 2d. This note will fall due July ist. As you have money in the bank which you do not need to use in your business at present, you may pay this note. It is the custom in business to allow discount for the unexpired time on all notes paid before due. You will therefore take the note from Bills Payable File and calculate the discount on its amount for the time which it still has to run (from June 4th to July ist = 27 days). Subtract the discount, $x.xx,from the amount of the note, and write a check for the balance. Place the check in Cash Paid Out, and write Paid, June 4., 190-, across the face, and place the canceled note in your \"oucher File. This transaction calls for a cash book entry. Credit Cash for the full amount of the note, and debit Cash for the amount of the discount. In your bill book under Wheti and How disposed of place 150^ in the Amount column, Jine / in the Date column, and Discotmted in the Explanation column. Form of Notification of Draft. . Rome, N. Y. , June 1, 190 . Messrs. White, Smith & Perry, 262 Brown St. , Providence, R. I. Gentlemen, -- We have this day drawn upon you at sight, in favor of A. V. Jackson & Co. , for $225. Please honor the draft and oblige Yours truly, Williams & Raymond. W. No. 74. — June 5. You may draw at sight on Rice & Pond, of Georgetown, for $265, which is the amount you owe E. Westen Tea & Spice Co., to balance the account of May 7th. Write the draft, following the model on page 103. Enclose it with a letter of remit- tance properly addressed to V,. Westen Tea «S: Spice Co. (see model, i>age 86). Write a letter to Rice & Pond, notifying them that >'ou liave drawn <>n llieni at siglit for $265, MODERN ILLUSTRATIVE BOOKKEEPING. 117 and request them to honor the draft (see model, page 1 16). Referring to rule i, page 104, make your journal entr}-. Place both letters in your Vouchers for Others. No. 75. — June 5. F. C. Tenney, who lives in your city, has agreed to accept your draft at sight for $90, in favor of C. K. Fox, who also lives in your city. This transaction is similar to No. 74. Write the draft and place it in Vouchers for Others. Make your jotu-nal entry as in No. 74. Why do you make C. K. Fox Dr. ? Why do you make F. C. Temiey Cr. ? No. 70. — June 5. This order has been received from your Mr. Adams, and A. W. McKey agrees to accept a draft at 30 days from the date of the sale. Using the model on page 105 as a form, draw a draft at 30 days for the net amount of the bill, as shown in the right-hand column of your sales book. Do not write Accepted across the face, but take the draft to your teacher, or to the person appointed to attend to such paper, and if correct, he will write Accepted, with the name A. W. McKey, across the face of the draft. When he has done so, place the accepted draft in 3'our Cash Drawer. Make the proper journal entry. What account should be debited, and why? What account should be credited, and why? (See rule 6, page 107.) Make a bill of the goods ordered, checking off each item on the saleman's order. Enter the sales in your sales book, deducting i"*^, and place the bill in your Vouchers for Others. No. 7 7. — June 6. This is also a salesman's order from a citj^ customer, and calls fgr a 3*^ discount for payment by ten-day acceptance. Fill the order, verify your calculations, and enter in your sales book, deducting ^/i. Draw a ten-day draft on F. C. Tenney for the net amount of the bill and take it to your teacher for approval. If the draft is correct, he will accept it for F. C. Tenne5\ Place the draft in your Cash Drawer and make the proper journal entry. This transaction is similar to No. 76. No. 78. — June 6. This invoice has been purchased by Mr. Adams, who has agreed to accept a draft at 10 days, and the draft ready for acceptance accompanies the invoice. See that the invoice is correctly made, and if the amount is right, then write across the face of the draft, in red ink, Accepted, payable at Commercial Bank, with the date, June 6, 1 90-, and sign the name, H. F. Adams & Co. Place the draft thus accepted in your Bills Payable File, after you have entered it in 5'our bill book. Paste the invoice in your invoice book, and at the proper time you will post it from this book to the debit of Merchandise and to the credit of West, Stone & Co. Make a journal entry, debiting West, Stone & Co. for the amount of the acceptance. What account should be credited, and why? (See rule 16, page 30.) Some bookkeepers would post direct from the invoice book to the credit of Bills Payable, but if this is done the ledger will not show how much business you have done with West, Stone & Co., and it is believed this information is worth more than the trifling addition of time required to post to the credit of West, Stone & Co. from the invoice book, and then post back to their debit from the journal. No. 79. — June 7. This order has been taken by Mr. Adams, who has received a check for $600, to apply on account. No receipt is required. Fill the order, checking off each item. Verify 3'our calcula- tions and enter in the sales book. Place the check in your Cash Drawer, and make the proper entry in your cash book. 118 MODERN ILLUSTRATIVE BOOKKEEPIXC. No. SO. — June 7. Deposit in your bank the check received from A. A. Knowles & Co., and have the two acceptances received June 5th and 6th discounted and the net proceeds placed to your credit. Your bank pass book should show a separate entry for each of these acceptances. You may also leave for collection the note of A. W. AIcKej-, which is due June loth. This note should be entered in j-our bank pass book, but the amount should not be extended into the money column. The following is the form of entry to he made in the bank pass book. » June 7 Note, A. W. McKey, $700, See that your notes are properly indorsed and make out a separate discount slip for each of the acceptances. Make cash book entries and entries in your bill book for the two acceptances, but no entry should be made for the note which is left merely for collec- tion. You will be notified when it is paid and the amount will be carried into the monej- column of your pass book. Do not forget to enter the net proceeds of the two acceptances on the stub of your check book. Some banks give a receipt for notes and other paper left for collection, instead of entering short in the pass book. Others enter all such paper in the back part of the pass book. No. .SI. — June 7. REPORT. Make out your report and hand it, with \'ouchers for Others and Cash Paid Out, to your teacher. Do not proceed until this report is returned, approved, unless 5-our teacher so directs. No. S2. — June 8. Pay 3'our bill of June ist, favor of City Mills Co., deducting a discount of 3/. Calculate the discount and make out a check for the balance. Fill out a remittance blank, and place the check and the remittance blank in \^ouchers for Others. Make the proper entries in the cash book. No. s;j. — June 8. This invoice has been received for goods purchased bj'- ]Mr. Adams. A'erify the invoice and paste it in 3'()ur invoice book. No. S4. — June 10. Pay ^-our invoice of June 2d l)y check, less discount, and make the proper entries in your cash book. No. S5. — June 10. This order has been received l)y mail. Make a bill for the merchandise, checking each item as entered on the bill. Draw a draft, as requested, and leave the draft at your bank for collection, having the amount short-extended in your bank pass book. This draft, when accepted, will become a bill receivable. If j-ou should send the draft to Mason & Co. for acceptance, }ou would make no entry at the time, but would await its return from them. Instead of doing this >-ou have placed the draft in the bank for collection, which is the ordinary method of handling- such paper. As Mason «Si Co. lia\e agreed to accept it, yon may debit /)///s J\/i' and credit them, loiter llie draft in your l)ill book. No. S(>. — June i i . This order has l)een handed in !)>■ .Mr. Adams. Make a l:)ill, and do not forget lo c-lu-ek dlT llie items. ]?e sure >()ur calculations are MODERN ILLUSTRATIVE BOOKKEEPIXG. 119 right, after deducting 3^^ discount. Charge Fletcher Bros, only the net amount of the bill entered in the sales book, as you know them and are sure they will pay on receipt of goods. Xo. ST. — JuxE 1 1 . This check has been received in payment of merchandise delivered on the same date to Fletcher Bros. Credit them for the amount of the bill, as shown in yoirr sales book under same date. Xo. ,SS. — JuxE II. This bill is for freight and draj-age on all goods received up to date. You may pay this bill in cash. Place the amount in 3-our Cash Paid Out envelope, and place the receipted bill in 5-our A'oucher File. Xo. 8JI. — JuxE 12. On May 5tli H. F. Adams borrowed from the bank $5000, to pay for the building and lot, ^246 iSIain St., giving a four months' note for the amotmt. As the firm now has several thousand dollars in the bank, for which there is no immediate use, it will be well to pay this note, as discount will be allowed for the unexpired time. The note has 85 days to run, and the discount on $5000 for 85 daj^s is $7x.x3. Make a check for $49xx.x7, take it to the bank teller and receive the canceled note. IMake an entry in the cash book and in yotu note ledger. If no bank is used in connec- tion with these transactions, the note will be found in Bills Paj'able File. Take it from the file and place the check in Cash Paid Out, instead of giving it to the bank teller. Write, Paid, June 12, 190-, across the face of the note, and place it in your \"oucher File. Xo. DO. — JuxE 12. This order has been received through ]\Ir. Adams, together with a check for ^500 to apply on account. Make the bill and enter in the sales book. Credit F. H. Randall cf Co. in the cash book for the amount of the check. Xo. 01. — JuxE 13. This invoice has been purchased by Mr. Adams, who has O. K.'d it. \'erify the calculations and paste the invoice in the invoice book. Xo. 1)2. — jUXE 13. Take from your Cash Drawer $100 in currencj^, and also the checks of Fletcher Bros, and F. H. Randall & Co. Deposit these in the bank, and ask the teller if the interest-bearing note of A. \V. McKe\-, dated May 31st, and left by you for collec- tion, has been paid. It has been paid. Therefore, have him place the note and interest to your credit in the bank pass book. On a slip of paper calculate the interest on this note for 10 da5-s, and add the amount of the interest to the face of the note. This is the amount which should be placed to your credit in the bank pass book. If your interest calculation is correct, the bank clerk will give you credit for the amount of the note, which is its face plus the interest. (If no bank is used, enter the amount 3'ourself.) Add this amount to yom- bank balance on the stub of your check book, and also add the amount of the deposit slip. You have received $701.17 in cash. Of this amount $700 is for bills receivable, the amount of A. W. ISIcKey's note; therefore, Bz7/s Receivable should be credited $700 in the cash book, with the explanation, A. IV. McKef s note 5 31. The remaining $1.17 has been received for interest, and therefore Interest should be credited in the cash book $1.17, with the explanation, on above note. Kiile 28.' — I.XTEREST is credited ivhcn it is allowed to the business by other persons. 120 MODERN ILLUSTRATIVE BOOKKEEPING. X<>. !);>. — June 13. Your acceptance of June 3d is due to-day, and as it was made payable at the bank, it should be charged to yotur account. Take this acceptance from the Bills Payable File, and present it to the bank teller, requesting him to charge it to your account. He will keep the draft and return it to you canceled when your bank book is written up. If 3'ou have no bank, write Paid, June ij, across the face of the draft, and enter it on the credit side of 3'our bank pass book, placing the canceled draft in your Voucher File. Make an entrj^ in 5'our cash book, to show that the acceptance has been paid. What account should be debited? Whj'? In your check book on the stub deduct this amount, $1111.62, from the amount on deposit, as shown by the balance of the stub. Why should this be done ? No. i)4. — June 14. This order has been sent in by Mr. Adams, who is on an out of town trip. Desiring to take advantage of the discount. Rice & Pond have given him their note at four months, with interest, for $1000, to pay the balance of their old account and to apply on this order. They agree to accept a sight draft for the balance of the order, whatever it may be, or will send check on receipt of bill. Fill the order and enter in your sales book, allowing them 3 r discount. . Prepare freight receipts to accompany this invoice. Place the note in 3'our Cash Drawer and make the proper entries in the journal and in the bill book. Do not draw at sight for the balance, but allow it to remain on account. No. 9.5. — June 14. This order is from a new customer and is sent in by Mr. Adams, who vouches for the financial standing of the firm. They ask regular ten-da}' cash discount, and agree to accept a sight draft in ten days. Make the invoice and freight receipts and draw a sight draft, dating it ten days ahead, or June 24th. Write a letter to accompany the bill, informing Varick & Co. that j^ou will draw on them, as requested, in ten days. Enclose invoice, letter and freight receipt in an envelope properly addressed. Place the draft in your Cash Drawer, and two or three days before it becomes due place it in the bank for collection. You will be informed when to do this. Many bookkeepers would not draw the sight draft at this time, but would wait until it became due. If a draft is not drawn at the same time a sale is made, it is ajjt to be overlooked. No. t)<>. — June 14. Pay j-our invoice of June 5th, Cit}' Mills Co., $1266, less y<> discount. Calculate the discount, which will be $3x.x8. Write a check for the amount due. Enclose the check with a remittance blank filled out in a properly addressed envelope, and place in Vouchers for Others. Make the proper entries for the transaction. No. 97. — June 15. This purchase has been made Ijy Mr. Adams, who, wishing to take advantage of the best discount, agrees to pay spot cash or to give a note with interest. Not wishing to pay cash at this time, you may give a note at 15 days, with intere^^t, for the amount of the invoice. Paste the invoice in the invoice book and make entr>- in the note ledger. Place the note in Bills Payable File. No. 9S.— June 15. SHIPMENTS. This letter calls for a shiinucnt of merchandise to another person, to be sold on commission, and such transactions are r.oL al all uncom- mon in l)usiness. When, for any reason, goods are not selling \\cll in any i^arlicnlar locality, it is often good j^olicy to send them to a connnission merchant in some place where there is likely to l)e a better demand for tliem. The connnission dealer sells the goods, and after taking a certain i)er cent for connni.ssion, sends the balance to the person MODERN ILLUSTRATIVE BOOKKEEPING. 121 who shipped the goods. A quantity of goods shipped to be sold on commission is desig- nated as a "shipment." The shipment is entered in the sales book under the title " Shipment to (the name of the commission dealer)." The shipment is charged for the regular cost price of the merchandise, and if any charges have been paid the shipment is also debited for these in the cash book. An account is opened in the ledger with each shipment. If 4; wo or more shipments are sent to the same person or firm, an account is opened with Shipment to iii, Shipment to "^2, and so on, opening a separate account for each ship- ment sent. You maj^ send T. W. Bowen & Co., Dover, a trial shipment of 50 brls. Northern Star and 25 brls. Searchlight. Fill out a shipment blank found in your business forms, alsd a freight receipt, which 3-ou will enclose in an envelope addressed to T. W^. Bowen & Co. The following is a form showing the proper method of entering a shipment in the sales book. 2 £>-i^^. o^-^!:^. 0{f>-r>t7-^z^ -^^^^^et-^ "■T^^Ci:-4>2Z-^-^^i?fT:^>, / ac o^ 2 Z^ / / J'O Rule 24. — Shipments are debited for the cost price of the merchayidise shipped, and for all advance charges paid upon it. Find the cost price from your invoice book. Xo. 1)9. — June 15. You may pay your clerks as follows: R. E. Leavitt, $30; D. J. Allard, $20. As you have not enough money in 3'our Cash Drawer, you may make out a cash check for the amount required, $50. Receive the cash and place it in Cash Paid Out. If there is no bank, present the check to your teacher, who will give you the money. Make the proper entry for the above transaction. When cash is drawn from a bank for use in business, what is known as a cash check should be used. Such a check requires no indorsement. The following is a form of cash check. (Your place here.) ''^^1 "order of -^C^^^^ }/ ^ f/^ ^(^^^y^<2^ f^^J^^ 122 MODERN ILLUSTRATIVE BOOKKEEPING. Xo. lOO. — June 15. REPORT. Make out j-our report and hand it, with Vouchers for Others and Cash Paid Out, to your teacher. Do not proceed until the report is returned, aj^proved, unless 3'our teacher so dii'ects. No. 101. — June 17. This is a mail order and calls for a small lot of tea, to be followed with a larger ^lot of goods, to be sent as soon as you are satisfied as to the reliability of the firm, with whom j'ou have had no dealings thus far. Make out a C. O. D. and enter the, sale in 3'our sales book, as in No. 40, page 88. This is a cash sale, and as such it is entitled to yi discount. Deduct the discount when )^ou enter in the sales book, also upon the bill, which should be for the net amount only. * Xo. 102. — ^JuNE 17. You have received but few orders for Ceylon tea recenth', so you have decided, with Mr. Adams, to make a shipment of 20 cases of this tea, closing out your stock. Send it, wdth 10 mats Java coffee, to T. W. Bowen & Co., of Dover, to be sold on commission. Pa}' freight in advance, $3.60, in currency. Enter the shipment in j^our sales book (T. W. Bowen & Co. ^2), and make the proper entry in j^our cash book for the $3.60 paid as freight. What accotint should l^e debited for this amount? Why? (See No. 98.) Xo. 103. — June 17. This purchase of merchandise has been made by ]Mr. Adams. Paste the invoice in your invoice book after verifying the calculations. No. 10-4. — June 18. Write a check for the amount due Shields Bros., and send it with a remittance blank properly filled out. Make the proper entr\-. Xo. 105. — June iS. This draft has been drawn on j'oti by L. Hennes & Co., and is the amount due for bill of May 24th. You will accept the draft, and place it in 3'our Bills Paj-able File. What account should be debited? Why? (See transaction, No. 78, page 117.) Xo. 10(>. — June 19. The references given bj^ D. W^. Perr}- & Co. having proved satisf actor}-, you may fill their order of June 15th. Do not forget to check each item and make the entry required. Xo. 107. — June 19. This is a return of C. O. D. sent June i6th. Make the proper entry (see No. 47, page 89). Pay 50/' in currency for express charges. Xo. 108. — June 19. Take from your Cash Drawer the note of Rice & Pond received June 14th, and have it discounted and the net proceeds placed to yotir credit. This is a fourth months' interest-bearing note, therefore, on a discount memorandum, write the amount of interest which will be due Oct. 12th, on which date the above note is payable, and add the interest to the face of the note. The interest on $1000 for four months is $20. From Jtme 19th to Oct. 12th, the due date of the note, is 115 days. Calculate the discotint on $1020, the amount due Oct. 12th, for 115 daj-s. This amount is $19.55, which subtract from $1020, and you will have the amount to be placed to your credit in your bank pass book and on the sttib of your check book. In the cash book you have received cash for the note, $1000, and also for tlie interest, $20; therefore, you will have two entries on the debit side of your cash book. \\'hal accotuit should ])q credited for the ^1000? Win? What aecounl should be credited for the $20 interest ? On the credit side of your cash book you should j^lace the amount of discount you have allowed the bank, which is f>iq.^^ (sec ex:un])le May (), page 99). MODERN ILLUSTRATIVE BOOKKEEPING. 123 Xo. 10J>. — June 19. In this transaction Randall & Co. have ordered, goods and sent you a check sufficient to pa}^ the balance of their bill of June 12th, and part of the merchandise ordered in their letter accompanying the check. They are entitled to 3;^ discount on such goods as this check will pay for. At y'c discount, 97'/ will pay for $1.00 worth of goods as invoiced at their regular price, therefore it is evident that $600 will pay for as many dollars' worth as 97;'' is contained in $600. $6oo-^-.97=$6i8.56, and F. H. Randall & Co. should be credited with this amount. Enter %6i8.36 on the debit side of your cash book, and on the credit side enter %i8.s6, the amount of merchandise discount allowed F. H. Randall & Co. Enter the sale as usual in the sales book. Do not deduct 3'^. Xo. 110. — June 20. This account sales has been received, together with a check for the net proceeds. It is the amount you have received for the shipment made June 15th, and shows you how much Bowen & Co. received for the goods, also the amount tliej' paid for freight and their commission. Wliat account should be debited? WTiat account has produced value to the business in this case? Rule 2-5. — Shipments are credited with the net proceeds show7i on the account sales received from the person to whojn the shipvient zvas sent. Place the check in your Cash Drawer, and the account sales in your Voucher File. Xo. 111. — June 20. Take from your Cash Drawer $50 in bills; also the checks of F. H. Randall & Co. and T. W. Bowen & Co. Enter the amounts on a deposit ticket, and take it with the checks and j'our bank pass book to the bank. Make the proper entry on your check book stub. Xo. 112. — June 20. Purchase of merchandise on account by Mr. Adams. Xo. 113. — June 20. Pay Reynolds, Davis & Co's. invoice of June loth, less 2:*, by check. Xo. 11-1. — June 21. This bill is for freight and cartage to date. Write a check for the amount, and place it in Cash Paid Out. Place the receipted bill in your Voucher File. What account should be debited for this amount in your cash book? Xo. 115. — June 21. Mr. Adams has purchased this invoice and has agreed to accept a draft at 30 days for $800, the balance to be paid in four months. Accept the draft which accompanies the invoice, and place it in Bills Payable File. Make the proper entries in your books for the transaction. Xo. 11(>. — June 21. This purchase is on account. Enter as usual. ' X^'o. 117. — June 22. Mr. West, of West, Stone & Co., has called upon you, soliciting orders, and being short of money has agreed to allow you 2,'^ discount on the invoice of May 20th, which is not due until July 19th, if you will accept a ten-day draft. You agree to this proposition, and accept a draft for the amount, less 2^;. Place the draft in Bills Payable File. What account should be credited for the 2<^ discount? Xo. 118. — ^JuNE 22. Smith, Perkins & Co. have decided to retire from business, and have made Mr. Adams an offer of 12 J^'f' discount from regular market quotations for such goods as he can use from stock. This invoice has been selected on the terms indicated. Write the check and note, and enter in cash book, journal and bill book. Place the check in Cash Paid Out and the note in Bills Payable File. 124 MODERN ILLUSTRATIVE BOOKKEEPING. No. 119. — June 24. Take the sight draft on Thos. Varick & Co. from j-our Cash Drawer and enter it on a deposit ticket. Take this ticket, with your bank pa.ss book, to the bank, and ask the teller to enter it to your credit. You drew this draft at the time of sale, but made no entry. Wliat account should be debited, now that you have received credit for the draft at your bank ? WTiat account should be credited ? It is the custom of most banks to place sight drafts to the credit of responsible depositors, when requested, the same as checks. If not paid, they are charged back to the depositor. No. 120. — June 24. REPORT. Make out your report and hand it, with Vouchers for Others and Cash Paid Out, to your teacher. Do not proceed until the report is returned, approved, unless so directed b}' 3^our teacher. No. 121. — June 24. This account sales has been received from T. W. Bowen & Co., who have placed the net proceeds to your credit subject to your sight draft. What account should be debited for this amount ? Why ? What account should be credited ? Make the proper entry in your journal, and place the account sales in your Voucher File. No. 122. — ^JuNE 24. Fletcher Bros., of yoiu" city, have been getting y'r discount for cash, but being short of money at this time, they ask you to take their acceptance at 30 days, with interest at 6^ added, for the amount of the bill, and still allow them the full amount of the discount. Adding 6i interest to the net amount of the bill will give 3'ou, in 30 days, the same amount as if they had paid you cash and you had placed it on interest for that time, so you will accept the proposition and fill the order. Draw a draft at 30 days on Fletcher Bros, for the net amount of the bill, as shown by the sales book, with 30 days' interest at 6i added. Take the draft to your teacher, who wall accept it for Fletcher Bros, if the amount is correct. Enter in your sales book, journal and bill book. No. 12;>. — June 24. The draft on E. Mason & Co., at 10 days, left for collection June loth, has been paid. Have the bank teller enter the amount in your bank pass book. (If you have no bank, enter it yourself.) Make the proper entry in your cash book, and do not fail to add the amount to the balance shown on the stub of your check book. No. 124. — June 24. Draw a draft at sight on T. W. Bowen & Co. for the net pro- ceeds of shipment No. 2, as shown by account sales of Jitne 22d. Enter the amount of this draft on a deposit slip and take it to the bank with your bank pass book. Have the teller give you credit for the amount of the draft (.see No. 123). Enter on tlie stub of your check book. Make the proper cash book entry. No. 125. — June 24. This order is sent in l:)y Mr. Adams, and Varick & Co. agree to accept a draft at four months on receipt of goods. (No discount on this order.) Make freight receipt. No. 12<>. — June 24. This order is sent in by Mr. Adams, antl contains a check for $500, to apply on invoice of the 19th, less y'f, for such part of the bill as this check will pay (see transaction No. 109, page 123). No. 127.— June 25. This acceptance was drawn by A. W. McKey on C. H. Brooks & Co. on June 15th, and was accepted by C. H. Brooks tS:: Co. McKe>- hands Ihc accep- tance over to you; it is not due for 50 days, therefore it is not wortli its face, $500, but the discount on $500 for .50 days should be deducted from the face of the paper in order MODERN ILLUSTRATIVE BOOKKEEPING. 125 to find out what it is really worth to you on June 25th. The discount on $500 from June 25th to the date at which the draft becomes due, August 14th, 50 days, equals $4.17. Deducting $4.17 from $500 leaves $495.83, the net value of the draft June 25th. Credit A. VV. McKey for this amount. What account should be debited for the face of the draft? Why? What account should be credited for $4.17? Why? Make proper entry in biH book. Enter in your journal. Rule 26. — Discount is credited when it is allowed to the business by other persons. No. 128. — June 25. Ship T. W. Bowen & Co. loobrls. N. S. flour, loobrls. Search- light, 20 hf. chests English Breakfast, 24 hf. chests Oolong, 100 doz. C. corn, 100 doz. C. tomatoes, and pay freight in advance by check, $27. Make sales book and cash book entries. No. 129. — ^JuNE 25. Draw at four months from date, on Varick & Co., in favor of E. Westen Tea & Spice Co., for the amount of the bill of the 24th, ^^5 10.04. Send it to E. Westen Tea & Spice Co., to apply on account, less the discount for four months. The draft is not worth $510.04 until it becomes due, four months after date, or Oct. 25th. Calculate the discount for four months, which will be $10.20. The net value of the note at this time, therefore, is $499.84. For what amount should E. Westen Tea & Spice Co. be debited? For what amount should Varick & Co. be credited? What account should be debited for $10.20? Why? Place the draft in Vouchers for Others, and enter in your journal. No. 130. — June 26. On the evening of June 25th a fire resulted in the partial destruc- ■ tion of the building, 1:246 Main St., and the total loss of office furniture. The books were saved; also the cash and the contents of safe. Most of the goods were destroyed. From your books you find that you had on hand the list of goods No. 130. This schedule of goods has been carefully made up from your sales book and invoice book, and is believed to be a correct statement of merchandise on hand at the time of the fire. Fill out the amounts. Sign your own name after that of Mr. Adams. Then hand the schedule to your teacher, who represents the insurance company, and tell him that you present this as your claim for loss by the fire. No. 131. — June 26. This offer requires the consent of the Equitable Insurance Com- pany before it can be accepted, as no adjustment of the loss has been made. Ask your teacher, who represents the insurance company, for permission to accept this offer. He will write Permission is hereby granted to accept this offer, across the face of the letter from Fletcher Bros., and you may make out a bill of sale for the entire lot without itemizing. Place the check (No. 131) in your Cash Drawer, and make the proper entries. No. 132. — June 27. Pay invoice of June 14th favor of Geo. C. Buell & Co., less discount, by check. No. 133.— June 28. Your acceptance of June 18th, favor of L. Hennes & Co., is due to-day. Take this acceptance from Bills Payable File, and proceed exactly as in No. 93. Enter in your cash book, bill book, and check book. Deduct the amount from your bank balance on the stub of your check book. 126 MODERN ILLUSTRATIVE BOOKKEEPING. ~^3^C^^t^^^5-^i^^^z^-Ci>'~ii^^ ,,'^>^vs^^ yyc^'i^-i^/^--^^, .-^^ ^''?^^^-^^iii..tiX---2'^-Z^=^T^ ^:^-<£j3/ ^2^^£Us^^ ■^

zj^ z^yz ^i^ ^c No. 134. — June 30. This draft is in full pajrment of claims against the Equitable Insurance Company, which pays you $5000 on the building- and $3000 on the stock of merchandise. What account should be credited for $5000? What account for $3000? Make the proper entries. No. 135. — June 30. Deposit all checks and cash. Pay your note of June 15th and interest by check. Face of note, $816.55; interest, 15 days, $2.xx. The check is $818. xx. Proceed as in example May 14, page 99. Itiih' 27. — IsTEREST is debited tvhen it is a/towed by the business to ot/ier persons. No. 13G. — June 30. In the journal credit yourself $100 and H. F. Adams ^125 for the amount due for salaries for the month of June. What acc(nuit should be del)ited for $225? No. l.*J7. — June 30. Draw a cash check for $50, and ]iay H. V. TAa\ in ^3o and D. J. Allard $20, salaries due to date. No. 138. — June 30. H. F. Adams hands in this bill (No. 13S) of $87.50 for travel- ing expenses incurred while on the road during '.he month ol" June, which \\v has jxiid MODERN ILLUSTRATIVE BOOKKEEPING. 127 •^-^z-^c-^^^t^. ^ ^y Z^^- /^L yy^C^S?^*^^-€^, -^^^-rZ^c!^^.^ ,i:C^;:-,i>£^€^'^^2^''Z^^i!^-- ^^;72 uT^ ^^ * To be written in red ink. from his own funds. What account should be debited for this amount? What account should be credited ? No. 139. — June 30. Pay freight and cartage bill to date by check. No. 140. — June 30. Make a report and hand it, with Vouchers for Others and Cash Paid Out, to your teacher. Have your bank book written up. Post your transactions from journal, cash book, invoice book and sales book. Check back your postings according to instructions on page 26. Make out your monthlj- state- ment to each customer and take a trial balance. Do not close the cash book, but find the balance in pencil and carry it to the trial balance. directions for making a statement of losses and gains. June 30, 190-. Using the above form as a model, prepare in your trial balance book a statemetit of the gains and losses of the month just closed. The names of the accounts used in the model are those of your June accounts, but the amounts are entirely diflferent, and are used only to show you the exact form of a complete statement. 128 MODERN ILLUSTRATIVE BOOKKEEPING. ""^'^UrS^^^C^ ..-■C-^-Z^^^i^'-TPZ.^^'Z.^^^^ .-'^.^'^'Z^-zy'-e.^^- (f"6 i> t? / .rj-^y The merchandise on hand at the beginning of the month of June, and the amount of the purchases during the month, will be found on the debit side of the Merchandise account in the ledger. The sales of merchandise during the month of June will be found on the credit side of the Merchandise account in the ledger. This amount includes the amount received for insurance. Find the loss, and close the first section of your state- ment of gains and losses, bringing down the loss in the second section. Find the cost of shipment to T. W. Bowen & Co., No. 2, from the debit side of that account in the ledger; find the net proceeds from the credit side. Find the value of real estate at the end of May from the statement of resources and liabilities, Ma}- 31st. The lot on which your building formerly stood is estimated to l)e worth $6doo. The amount received for insurance is shown on the credit side of Real Estate account in your ledger. The amounts of expense and ofhce fixtures will be found on the debit side of those accounts in the ledger. Net proceeds of shipment to T. W. Bowen & Co., No. i, will be found on the credit side of that account in the ledger; the cost on the debit side. The excess of merchandise discount will l)e found by taking the balance of that account, as shown in your trial balance, and the same is true of interest and discount. Write the net loss in red ink, and Cxose the statement of gains and losses. DIRECTIONS FOR MAKING A STATEMENT OF RESOURCES AND LIABILITIES, OR BALANCE SHEET. JliNIC 30, 1 90-. Usijig the alcove form as a model, ])repare in your trial balance book a statement of resources and lial)ilities for the month of June. The nanus used in the model are those MODERN ILLUSTRATIVE BOOKKEEPING. 129 c^^^^^^^-^^^-i^JlJ^ i4^^^ '^'Z^^^^ ^,/ ^^ — 'f' 'y^-J^'g>i>iL^ ~y^^, ,..'^?^-^'^^-^:^2<:^.JZ-^:i^:l,^^;;^2^^-^?^-- Bank, ami had net proceeds placed to your credit. June 5. — Bought of John H. Pray & Co., Boston, net 30, 2 10, 950 yds, Moquette, 892 yds. Body Brussels, 2200 yds. Lining, MODERN ILLUSTRATIVE BOOKKEEPING. 131 June 6. — Paid freight and drayage, $32.10; rent for month of June, $75; books and stationery, $22.50. June 6. — Bought of James Smith & Co., New York, subject to draft at 10 days, 400 yds. Axminster, 525 yds. Velvet, 984 yds. Tapestry Brussels, 2000 yds. Lining. June 7. — Sold Reed & Savage, subject to sight draft, less 3"/, 145 yds. Axminster, 220 yds. Velvet, 484 yds. Tapestry Brussels. Deduct 3'c. June 8. — Sold Knowles Sz. Johnson, on account, net 30, 2 '10, 300 yds. Moquette, 392 yds. Body Brussels, 400 yds. Ingrain, 1200 yds. Lining. June 8. — Drew a sight draft on Reed & Savage for the amount of invoice sold them 7th inst., less 3"^, and had the draft placed to your credit in the City Bank. June 9. — Paid the invoice in favor of J. H. Pray & Co., received June 2, $2768.75, less 2 f . June 10. — F. H. Walling & Co. paid their bill of June 4th, less 2i. June II. — Discounted E. H. Smith & Co's acceptance of June 5th, at the City Bank, and had the net proceeds placed to your credit. June 12. — Paid James Smith & Co's draft of June 6th, at 10 days from date, for $2252.88, less discount for the unexpired time. June 12. — Sold F. H. Walling & Co., on their note at 4 months, with interest, 600 yds. Ingrain, 475 yds. Matting, 1200 yds. Lining, less s'^c June 13. — Bought of John & James Dobson, Philadelphia, net 30, 2/10, 892 yds. Body Brussels, 1225 yds. Tapestry Brussels. June 14. — Bought of Barton Bros., Philadelphia, net 4 mos., 8 '15, 1500 yds. Lino- leum, 1400 yds. Oilcloth. June 15. — Knowles & Johnson sent you, to apply on account, T. H. Sullivan's note in their favor, dated Denver, Colo., May 24, 190-, at 90 days, for $742.28, with interest. Accepted the note and allowed Knowles & Johnson credit for its face and the interest due upon it. June 15. — Paid John H. Pray & Co. invoice of June 5th, less 2^. June 16. — Discounted the Sullivan note, received of Knowles & Johnson, at the City Bank, and had the net proceeds placed to your credit. (This is an interest-bearing note.) June 16. — Sold J. G. Carter «& Co., on acct., net 60, 2/10, 600 yds. Linoleum, 480 yds. Oilcloth. June 17. — Drew for private use, pi 50. June 17. — Paid clerks, $75. June 18. — -Sold E. H. Smith & Co., on their acceptance at 30 days, 212 yds. Axminster, 305 yds. Velvet, 250 yds. Tapestry Brussels. June 18. — Knowles & Johnson paid the balance of their account of June 8th, less 2^ of the entire bill. June 18. — Paid note and interest favor of Barton Bros., due this day, June 20. — Sold E. B. Ailing & Co., net 30, 2 10, 420 yds. Moquette, 280 yds. Body Brussels, 800 yds. Lining. June 21. — Discounted F. H. Walling & Co's note of June 12th, and received cash for the net proceeds. 132 MODERN ILLUSTRATIVE BOOKKEEPING. June 22. — Bought of John H. Pray & Co., Boston, net 60, 3 10, 897 yds. Moquette, 1745 yds. Ingrain, 2400 yds. Lming. June 23.— Bought of James Smith & Co., New York, sight draft in 10 days, 722 j-ds. Axminster, 941 3'ds. Velvet. June 23. — Paid John & James Dobson's invoice of June 13th, less discount. June 24. — Sold Reed & Savage, on their acceptance at 10 days, less 2f?, 400 yds. Moquette, 712 yds. Body Brussels, 1200 5^ds. lyining. Deduct 2^i. June 25. — Bought of John & James Dobson, Philadelphia, 1892 3^ds. Body Brussels, 671 yds. Moquette, 3200 yds. Matting. Gave in p'ayment your note at 4 mos. for one-half the amount of the invoice; the balance on 4 mos. time. June 26. — Sold Knowles & Johnson, net 4 mos., 2/15, 920 yds. lyinoleum, 1220 yds. Oilcloth, 43 5^ds. Axminster. June 27.— Sold F. H. Walhng & Co., net 30, 2 10, 698 yds. Moquette, 792 yds. Body Brussels, 1500 yds. Lining. June 28.— Sold E. B. Alhng & Co., net 30, 2 '10, 390 yds. Moquette, 822 yds. Body Brussels, 975 yds. Tapestry Brussels. June 29. — Paid Barton Bros.' invoice of 14th, less 8,^, June 30. — K. B. Ailing & Co. desired to take advantage of 2'c discount on their pur- chase of June 20th, but being short of money, they sent $1000 to apply on account, with the request that they be allowed discount on their payment. June 30. — Paid clerks, $75. Paid freight bills to date, $68.92. INVENTORY. 310 yds. Moquette, 545 yds. Ingrain, 1600 yds. Lining, 722 5^ds. Axminster, 500 yds. Tapestry Brussels, 678 yds. Body Brussels, 3525 yds. Matting, 700 yds. Oilcloth, 941 yds. Velvet, at cost price; office furniture valued at $225. Cost and Selling Price Lists — ^June Examination, CCST. 1.87' 1.05 .62' ,06% 1.12'^ .66^ 1-37'* Axminster . . . Body Brussels . . Ingrain Ivining Linoleum .... Matting .... Moquette .... Oilcloth .... Tapestry Brussels Velvet 1 2 3 4 5 2.25 2.27 2.26 2.24 2.25 1.50 1.48 1.49 1-52 1.50 .87'' .87' .87' .87' .87 .09 .08 .10 .08' .09' •75 .76 • 74 • 77 • 75 •50 • 52 •51 .48 •49 1.62'' 1.62' 1.66% 1.62' 1.66%- ■45 •43 ■44 .42 .45 .87' .S7' -V •87 .87» I.67'' 1.67' 1.66M 1.62' I.67-' 6 2.28 1.48 .87^^ .09 .73 .50 1.67* •43 .87" 1.66^;, 2.27 1.50 .86 .lo- •75 •52 1.62^ .44 .87- 1.62' 8 2.25 f) 2.30 1-53 1.48 ■87^ .88 .09 .09'^ • 74 •73 •50 •51 i.66=i I.62« •15 ..(ft .87'' .87-^ 1.67' 1.62- 10 2.24 1.50 .87' .09 .76 •49 i.67« ■42 ■87' i.67« MODERN ILLUSTRATIVE BOOKKEEPING. 133 QUESTIONS. 1 . What is a draft and what names are given to its parties ? 2 . What should be the drawer' s entry when a draft with three parties is drawn ? 3. What should be the payee's entry for a sight draft received? 4. What should be the drawee's entry for a sight draft paid? 5. What should be the drawee's entry for a time draft? 6. What is meant by "Accepting" a draft, and what agreement does it constitute? 7. What should be the payee's entry when a time draft has been accepted? 8. What should be the drawee's entry when he accepts a time draft? 9. When drafts are made for the collection of debts to whose order are they generally payable ? 10. What .should be the drawer's entry when such a draft is made if it is a sight draft ? What entry if it is a time draft ? 11. Define a bank draft and explain its use. 12. To whose order should a bank draft be made? 13. How should a bank draft be indorsed ? 14. Explain the use of the invoice book. 15. To what account should the footing of the money column of the invoice book be posted? To which side of the account, and why? 16. Explain the use of the bill book. 17. What are articles of copartnership, and how should they be prepared? 18. When should interest be credited? 19. What is meant by a shipment? 20. For what amormts should Shipments account be debited? 2 1 . For what amounts should Shipments account be credited ? 22. Under what circumstances would a bank receive a sight draft on deposit ? Suppose it were not paid, what would the bank do? 23. When should discount be credited? 24. When should interest be debited ? 134 MODERN ILLUSTRATIVE BOOKKEEPING. COMMISSION, SHIPPING AND GENERAL MERCHANDISING BUSINESS. A large variety of produce and manufactured products is sold through the medium of agents or correspondents, who receive a certain per cent, of the gross sales as their com- mission for handling the goods. Sometimes the price is fixed by the person shipping the goods, but generally it is left to the discretion of the commission merchant, who obtains the highest price possible at the time of sale. Frequently, the commission merchant advances a part of the value of the goods as soon as they are received, in case the goods are not to be sold at once, and the balance is remitted after the sale has been completed. When the goods are perishable, advances are not usually made, but the net proceeds are remitted as soon as the sale is completed. The person who sends the goods to the commission merchant is called the consignor; the commission merchant is designated as the consignee. Many commission merchants also sell merchandise on their own account, and make shipments to others, thus conduct- ing a regular buying, selling and shipping business, in addition to their commission business. Books Kept. — The books to be kept in this business are sales book, account sales register, shipment ledger, cash book, invoice book, journal-daybook, main ledger, and loose leaf consignment ledger. The invoice book and the jovirnal-daybook will be the same as those you have heretofore kept. As but few notes appear in these transactions, the bill book will be dispensed with. It is the custom of most commission houses to enter a description of each lot of goods received in a book called the receiving book, and to open an account with each lot luider an appropriate name in a book called the consignment ledger. Each account contains on its credit side all sales made from the lot of which it is the record, and on its debit side all charges against this lot. When the lot is all sold, an account sales is rendered to the consigTior. By the use of the loose leaf consignment ledger, a description of which follows, the receiving book, consignment ledger and account sales are combined in one, and the book- keeping is greatly simplified. Each consignment should be accompanied by a letter of advice, containing the list of goods, and this letter should be compared with the goods when they are received, and if there is any shortage the consignor should be notified at once. The receiving clerk gen- erally enters the goods on a blotter as they are unloaded from the trucks, and from the blotter the bookkeeper transfers the items to a loose leaf of the consignment ledger (see model, page 135). * '^lH^ Consii^niiK'nt T^odjAcr. — In this business, when goods are received to be sold on commis.sion, the consignment will be entered on a loose sheet of the consigtnncnt ledger, as shown in the illustration on page 135. In the small square at the upper right-hand corner of this loose sheet is writleii the stencil, or i)rivate mark, of this consignment, and every package in the consign men l will be marked with the same stencil. These stencil marks are arbitrary, aiul an>- letter, nvunber, or symbol may be used. In this business the initial kttLT of i1k' consignor and the number of his con.signnient will be used as a stencil uiaik. The loose leaf is now- fastened to its cover and becomes a ])art of the consigmuenl ledger. TIr' amount of freight as shown by the freight bill, which will accompany the goods, should he eutered MODERN ILLUSTRATIVE BOOKKEEPING. 135 Loose Leaf Consignment Ledger. Sale of Mcrchanoise for account of "M^^A^^^^^^ y^^^^^ ^- / *» E. H. Reed & Company, COMMISSION MERCHANTS, INVOICC No. - A^ Tt'ocr place bsre.) INVOICE OATC . g ^ < ^. :^^^%^ (Write your own name here.) f / /r 0-3 3 9.2 ^. /J. ^^y* FRCIGHT, CARTACC, ETC. ADVANCES. r .^f^-^ COMMISSION, ^^ /i> NET PROCEEDS, 3 ^f. 7f ^r5 ^/V 7^' / i? ^ J^^ ^f^ . r^ in the left-hand or debit column of the loose leaf opposite Freight. This may be done at the time the goods are received, or later, when the amount is taken from the cash book. As the goods are sold, the items are entered in the space under Sales on the loose sheet, and the amounts carried to the right-hand or credit column. These amounts should be taken from the sales book, where they will be found in the special column for sales from consignments. The contents of this column should be carried to the consignment ledger at the close of each day. When all the goods which make up the consignment have been sold, the right-hand or credit column is footed and the amount placed at the bottom of the loose leaf. If any sight drafts have been paid or time drafts accepted on account of this consign- ment, the amount should be placed opposite Advances in the debit column of the loose sheet. The commission should now be calculated and also any charges which may be due for cartage, insurance, storage, or other items of expense. In this business these items, except commission, will be combined under the head of "Charges." Enter the amount of commission and of charges in the left-hand or debit column of the loose sheet. The differ- 136 MODERN ILLUSTRATIVE BOOKKEEPING. /^^ ■i^ fA ^ ^^^^zr'/ / NAME AND EXri.A;!ATION. '-2-c^ / - ^'>&^^>i:y'r^i!Z'^i'Z!i>?r V-^.^g^, ^4^ Z"^,- r /^/ o '/^gz::^^^^^ c=<^Z^ii^^^::^ =.^:2^ / 2. jT^ z z sa ''7^z.-^^-f^H'^^■C■■£.^■<^. escRAt. ^^ -2 ^ /-- ^.s'/ 'i? /■ ■-T^ 7 ^ /■/=■'iC^^ / ^ 190 ^ , / ' (Write your own name here.i /Z^ X roue RECEIVED. /^— 2^^>i!:^2^-:?C?^^i.!iikl ^^-^^-c^ /C C-3 FREIGHT, CARTAGE. ETC. ADVANCES. SALES. ^ 2-iP / / 2- ^jr.^<:.,d^, 0^^:^^ /J.^a^. 2^^Zc^-^^^^£,^l^l^..7^/2.^^ COMMISSION, CHAnCES. NET PROCEEDS. / C fi J-/ MODERN ILLUSTRATIVE BOOKKEEPING. 149 The following is an illustration of the sales book with the first charge for July i6th, showing the method of entering sales from consignments and regular merchandise sales together. The check marks show that the amount of merchandise sold from the consign- ment has been transferred to the consignment ledger. Commission Sales Book. July i6, 190-. V V Invoice. CONSTS. Mdse. M-i M-i City Hotel Co. 5 Cases Eggs 2 tubs Butter 2 boxes Lemons a/ c 120 dz. 120 lbs. 30 days .22 .24 4-75 26 28 9 40 80 50 55 20 9 50 64 70 No. 12. — July 17. This invoice has been received from Curtice, Olney & Co. (Enter in your invoice book as usual.) No. 13. — This advice of shipment accompanies goods received from Fischer Flour Com- pany, and incloses a draft at ten days' sight for $300, which you will accept, payable at Traders Bank, and place in Bills Payable File. Enter the shipment on a loose leaf sales sheet, and under Advances write, the amount of the draft, $300. Make a journal entry, debiting Consignments and crediting Bills Pay- able for the amount of the draft, as follows. Consignments Bills Payable Accepted Fischer Floiu- Co's. draft at lo days, on account of goods received to be sold on their account and risk. 300 00 300 00 No. 14. — This order is received from Varick & Co. Take the canned goods from lot W-i — peas, $1.30; corn, $1.10; tomatoes, $1.25; and the balance of the order from your own goods — apples, $3.75"; potatoes, 75^/. (Enter in the sales book, as per model, page 139.) Do not forget the stencil mark. No. 15. — This letter calls for a shipment from you. Make a shipment invoice — apples, $3.50; potatoes, 60^' — and enter in your shipment ledger (see form, page 138) . Pay for insurance, 75^', currency, and enter in the cash book. The following is the form of the shipment ledger as it will appear after this entry has been made, and after the cash paid for insurance has been brought from the Shipment column of the cash book at the close of the day. 150 MODERN ILLUSTRATIVE BOOKKEEPING. Shipment Ledger. Index, Check and Folio. July i6, 190-. IVTHcfa lyEDGER Accounts. Debits. Credits. Folio and Explanation. 1 Date. T. \V. Bowen & Co., ^3, Dover, Shipped June 24, Investment of (Student's name), 17 F. H. Larkin & Co., Northboro, 50 brls. Apples, 3.50 200 bu. Potatoes, dof 175 120 1955 103 62 2058 62 C. 2 Gain C.3 July 16 2058 62 2058 62 295 75 No. IG. — These sales have been made from the blotter, and should be entered in the sales book. The cash should be entered in the cash book (see transaction No. 7). The small cash sale of merchandise, |6, is not entered in your sales book, but charged direct to the credit of Merchandise from the cash book. In every business there will be more or less of these small sales, even though it be strictly wholesale business, for it is quite a common practice among busi- ness houses to send in friends with a request that, as a favor, a small quantity of goods be sold them at wholesale prices, and it is customary for a wholesale house to comply with such a request. If such sales are made from consignments, it is necessary that they be entered in the sales book, but when made from yotxr own goods, it is customary to enter them in the cash book only, and post to Merchandise account direct from that book. If many such sales are occurring, it is well to have a special column for merchandise sales in the cash book. In this business, as there are onh- a few sales of this nature, they will be carried to the General column of the cash book, and Merchandise account credited from that book. Xo. 17. — This invoice is for goods ordered by you July loth, and should be entered in the invoice book as usual. No. 18. — These items should be entered in the cash book, and the item of $55 also entered in the consignment ledger, opposite Charges, on the loose leaf for Fischer Flour Go's, consignment. Write checks for all bills, except the one of $10 for care of horses. Pay this in cash. No. 11). — This check is received with an order from A. W. Noone & Co. Place the check in Cash Drawer and make cash book entry, but carry the order over until the iSth. No. 20.— Deposit checks of W. B. Alden & Co. and A. W. Noone & Co. No. 21. — July 18. Render an account sales to E. Mason & Co., and enclose a New York draft for the amount of the net proceeds. Instructions. — Turn to j^our consignment ledger and see that all sales from this consignment, M-i, have been transferred from the sales book to the second, or sales, column of the loose sheet stenciled M-i in the consignment ledger. Foot this second, or sales, column, and place the amount at the bottom of the page. Find the commission at 5^, and write in the first column of the loose sheet the amount, $/j.j^. Take r/ of the sales for insurance, storage, etc., and place it against the word CJiargcs, under which head insurance, storage, etc., will be kept in the ledger. Subtract the sum of the amounts in the first column from the footing of the second column, and place the difference opposite Net Proceeds in the first column of the loose sheet (see model, page 152). This is the MODERN ILLUSTRATIVE BOOKKEEPING. 151 amount to be sent to E. Mason & Co. This amount is to be sent by New York draft, the cost of which you will pay. Make out a check for the amount of the net proceeds of the consignment plus 25 cents, the cost of the draft. The following is a form of check to be used in the purchase of New York drafts. f/^ ^^^/ /r^ y^/<^ 7 ■am^r^7^^t'?'(^i:k r:^^^^.^^V.--'^^.^.C-^-~y^-77^^^ / iP & ^:^'/urAJ IN COLLEGE CURRENCY. Take this check to the bank and purchase a New York draft, payable to your own order, for the amount of E. Mason & Go's, net proceeds. Indorse the draft over to E. Mason & Co. Enter in your account sales register the information called for in the columns of that book (see pages 140 and 141), taking the amounts from the loose sheet after it is footed. The form on page 152 shows the loose sheet of E. Mason & Co's. consignment No. i as it should appear at the present time. Enter in your cash book, debiting Consignments (Mason & Co's. const. No. i) for the amount of the draft, and Expense for the cost of the draft, 25^/. (If a large number of New York drafts is sent, so that there would be a considerable amount paid for exchange, an account with collection and exchange should be kept, but in this business it is not thought advisable to open such an account, and Expense is debited for the exchange on drafts.) Balance the loose sheet in your consignment ledger. If your work is correct, the columns will foot alike. Remove the loose sheet from the ledger and take an impression of it in the letter book. Place the New York draft and the loose sheet (M-i) in an envelope properly addressed, and place in Vouchers for Others. As the consignment is now closed, and you have sent the net proceeds to the consignor, it is evident that there is no necessity for any record of this lot in your books. If j'our school is not provided with the proper letter press, then the entrj^ in the account sales register will be a sufficient record of the transaction. Some business houses have the draft made payable to the order of the person to whom it is sent, but it is better to make the draft paj-able to your own order and indorse it over to the person to whom it is to be sent, as his indorsement will then be necessary before he can get the cash on the draft, and the indorsement is a receipt for the money. No. 22. — Render an account sales of lot R-i received from Rice & Pond. Fill out the loose sheet in the consignment ledger as in No. 21, and write a check for the amount of the net proceeds. Take a copy of the loose sheet in your letter impression book, and enclose with the check in an envelope, which address to Rice & Pond, and place in Vouchers for Others. (Enter in cash book and account sales register.) 152 MODERN ILLUSTRATIVE BOOKKEEPING. Sale of merchandise for acco UNT OF ^ y/Y^. 'K^ ^==^k- y^-/ (Your state.) «^ E. H. Reed & Company, invoice No. _ _z. COMMISSION MERCHANTS, (Your place here.) iNVOict D*Te ^^^-f:^^^-/^^-^ "^ ^, '°° (Write jroar own name here.) /6> /C /r C-3 / / z RECEIVED. /^— ^S^:'«:^7^-:?C?^^:-ZS!^-^^ / ^ ,'<-<£-d^, i^-^i^-,^^ FREIGHT. CARTAGE, ETC. ADVANCES. 3 -/ /li-J-^ ■^.^tl.— Fill this order, taking 3X flour, $5.25, and Pastry flour, $5.50, from your own merchandise; C. E. peas, $1.30; E. J. peas, $1.50; beans, $1.20, from lot W-i. Draw a draft at 60 days from the date of the bill and present it to your teacher for accept- ance. He will accept the draft for D. W. Perry & Co. Make the proper journal entry, and place the acceptance in the Cash Drawer. MODERN ILLUSTRATIVE BOOKKEEPING. 153 No. 27. — Take order No. 19, A. W. Noone & Co., from your Voucher File and make a bill of the goods called for, taking 20 brls. Redcloud at $4.75 per brl. and 20 brls. Snow- flake at $4.90 per brl. from Fischer Flour Go's, consignment No. i, and 10 brls. apples at fo-75 per brl. from E. Mason & Go's, consignment No. 2. No. 28. — Sales from blotter. Enter in your sales book, and carry such items to the loose sheets in the consignment ledger as belong to the consignment sales. No. 29. — Gashier's payments. Make out checks for the amounts required, and enter in your cash book. Garry all consignment sales from the sales book to the consignment ledger, and all consignment items from the credit side of the cash book to the consignment ledger. No. 30. — July 19. Render an account sales of lot W-i, and place the net proceeds to the credit of the Western New York Preserving Gompany subject to sight draft. In this case no check has been sent for the net proceeds, but an account will be opened with the Western New York Preserving Gompany in your main ledger. Write Placed to credit opposite Net Proceeds on the loose sheet. Remove the loose sheet, take a copy, and send it as usual to the consignor. Enter in your account sales register as usual. The net proceeds should be posted to the ledger from the account sales register. Place in Voucher for Others. No. 31. — This check is received from the Public Market Go., to pay the balance due to the first of July, $244.60. No. 32. — This check is received from G. H. Tucker & Go., to pay the balance due to the first of July, $204.13. It is not necessary to send a receipt for a check, since the check itself when paid by the bank will be canceled and returned to its maker, and thus show that the amount has been paid to the person in whose favor it was made; but it is customary in most business houses to acknowledge the receipt of a check by a letter similar to the one given as a model on page 81. No. 33. — The Traders Bank presents Ghas. Hunter & Go's, draft at sight. Accept it by writing Accepted, July ip, payable at Traders Bank across the face, and give the draft to the Traders Bank, asking them to charge to your account. The bank will deduct the amount of the draft from your balance on deposit, and the draft will come back to you with your own vouchers when your bank pass book is written up. Do not fail to deduct the amoinit of this draft from your balance in the bank, as shown on the stub of your check book, and enter in the cash book, debiting Consignme^its , since it is paid on Hunter's consignment No. i. No. 34. — Sales for the day as per blotter. (Enter in sales book and cash book.) No. 35. — Gashier's payment for the day. (Write the check and enter in your cash book.) No. 36. — This invoice has been received for your order given to the salesman of the house, who has recently called upon you. Garry all sales from consignments to the consignment ledger, and see that cash paid for consignments is placed in the debit column of the consignment for w^hich it was paid. No. 37.— July 20. Ship to J. M. Marsh & Go., Boston, Mass., to be sold on com- mission, 25 bxs. cheese, 2625 lbs., at 12^'; 25 tubs butter, 1500 lbs., at 2\i\ Pay insur- ance, $1.50, in cash. (Enter in shipment ledger and cash book.) 154 MODERN ILLUSTRATIVE BOOKKEEPING. Xo. 38. — Ship looo bu. potatoes at 62 ><',•, and pay for insurance, Si. 25. (Enter in shipment ledger and cash book. ) • No. 39. — Draw at 30 daj^s, on J. M. Marsh & Co., for $300, and place the draft in Traders Bank for collection. Make journal entrj^, crediting Shipments and debiting Bills Receivable , since it is understood that Marsh & Co. will accept the draft; also credit Shipment to J. M. Marsh & Co. in shipment ledger for $300. Make no entry on the stub of the check book. An entry will be made in your bank pass book by the teller at the bank when the draft is collected, and you will then enter it on the stub of the check book. No. 40. — This memorandum of advice accompanies a lot of goods received from the Iowa Packing Co., to be sold on their account and risk. (Enter the goods on a loose sheet, and paste the sheet in the consignment ledger.) No. 41. — Fill this order from Fischer Flour Co's. consignment — Redcloud, $4.75; Snowflake, $4.90. (Enter in the sales book and in the loose leaf consignment ledger.) No. 42. — Sales from blotter. (Enter in sales book, cash book, and consignment ledger. ) No. 43. — Render an account sales of the Fischer Flour Co's. consignment, and send them a check for the net proceeds, less draft for $300 accepted Jul}^ 17th. No. 44. — This invoice is received for goods ordered by you on the 17th. No. 45. — This invoice is received from Russell & Birkett. No. 4G. — Cashier's payments. (Enter in the proper columns of the cash book.) No. 47. — This check is received from the City Hotel Co., for the amount due July ist, less ^. (Enter in the cash book, placing only the net cash received in the General column and the discount in the Merchandise Discount column.) No. 48. — Deposit all cash and checks on hand. Post all books and take a trial balance. Write the pages first in the ledger index, and then open the accounts in your main ledger, as follows, treating the first blank page as page I : Page i , E. H. Reed, Student, Merchandise, each one-third page. Page 2, Expense, Furniture and Fixtures, Real Estate, Commission, each one-fourth page. Page 3, Charges, Horse and Wagon, Office Supplies, Merchandise Discount, each one-fourth page. Page 4, Shipments, Discount, Freight, each one-third page. Page 5, lyoss and Gain, one-half page. Page 6, Theodore Crosby & Co., A. W. Noone & Co., Public Market Co., Geo. H. Tucker & Co., each one-fourth page. Page 7, City Hotel Co., Thomas Varick & Co., E. B. Dean & Co., National Market Co., each one-fourth page. Page 8, D. W. Perry & Co., J. M. Marsh & Co., Bills Receivable, Consignments, each one-fourth page. Page 10, Russell & Birkett, Curtice, Olney & Co., Lutz Bros., Gillette & Hennigan, each one- fourth page. Page 11, Dock & Coal Co., Western New York Preserving Co., Chas. Hunter & Co., Bills Payable, each one-fourth page. INSTRUCTIONS FOR POSTING. In this month's business the posting is somewhat more complicated than in the jirevious work, and it is well to get a clear idea of the books from which the entries in the main ledger are taken, and the manner in which they are posted. The main ledger should be divided into sections, as in the previous month's work, the first containing the partners' MODERN ILLUSTRATIVE BOOKKEEPING. 155 accounts and all accounts showing losses or gains, including an account with shipments and the Loss and Gain account. The account with shipments is really an abstract of the shipment ledger and the Shipments column in the cash book, with perhaps an occasional entry from the journal, in cases where the net proceeds of the shipment have been placed to your credit instead of remitted in cash. The second section, called the customers' ledger, should contain all accounts which are resources to the business, and an account with consignments, which is an abstract of the account sales register and the Consign- ments columns of the cash book and the sales book. The third section should contain all accounts which are liabilities to the business. The items from the Consignments columns of the cash book and the sales book should be carried to the loose sheets in the consignment ledger at the close of each day, as it is necessary that they appear there before an account sales can be rendered to the consignor, and it is also necessary that the items in the Shipments columns of the cash book be carried to the shipment ledger in the same manner, as they must appear there before the final closing of the shipment ledger or the balancing of the cash book. When the amounts from the Shipments columns of the cash book are carried to the shipment ledger, each ship- ment should be closed by writing Loss or Gai7i on the smaller side of the shipment ledger (see model, page 138). Post your journal as usual. POSTING THE CASH BOOK. Debit Side of Cash Book. — Post the General column of the cash book on the debit side as in previous cash books, except that cash sales of merchandise which are charged to individuals are not posted, but checked off both in the cash book and the sales book (see model, page 136). Post the footing of the Merchandise Discount column to the debit of Merchandise Discount in the main ledger. Do not forget to credit each personal account with mer- chandise discount, as well as with the net amount of cash received Tsee model following). W. B. Andrews. Balance 250 Jan. 7 C 2 237 50 1 7 C 2 12 50 Jan. Post the footing of the Shipments column to the credit of Shipments in the main ledger. Credit Side of Cash Book. — Post the General column as in previous work. Post Merchandise Discount to the credit of Merchandise Discount in the main ledger. Do not forget to debit each personal account with the merchandise discount, as well as with the net amount of cash paid out (see model following). H. F. Wood & Bros. Jan. 9 C 9 C 3 3 570 30 Jan. 3 S. B. 600 Post the footing of the Shipments column to the debit of Shipments in the main ledger. Post the footing of Consignments column to the debit of Consignments in the main ledger. Balance the cash book (see model pages 136 and 137). 156 MODERN ILLUSTRATIVE BOOKKEEPING. POSTING THE SALES BOOK. Post as in previous work to the debit side of personal accounts in the ledger, except that cash sales should not be posted to the debit of persons to whom they are made, but checked off as in the cash book (see model, page 139). Post the footing of Sales from Consignments column to the credit of Consignments in the main ledger. Post the footing of the Merchandise column to the credit of Merchandise in the main ledger. POSTING THE SHIPMENT LEDGER. Post the footing of the Merchandise column in the shipment ledger to the debit of Shipments and to the credit of Merchandise in the main ledger (see model, page 138). POSTING THE ACCOUNT SALES REGISTER. Carry the footings of Commission and Charges columns into the Amount Charged to Account column, and opposite these amounts write Comniissio7i and Charges in the Name of Account column. (See model, pages 140 and 141.) Post to the main ledger any amounts which may be in the Amount Charged to Account column to the credit of the names indicated in the Name of Account column of the account sales register, and the total of this column to the debit of Consignments. (See model, pages 140 and 141.) Post the invoice book as usual. Your posting is now completed, but you should check back, to be certain that there are no omissions. Study carefully these directions for posting, and you will have no trouble in taking your trial balance. No. 4t>. — July 23. This check has been received in payment of bill of July i6th, less yi on the part of the sale which was made from your own merchandise. See if the check is for the correct amount, and if so, enter it in j^our cash book, del:)iting Merchan- dise Discount for the amount of the difference between the check and the amotint of the bill shown in your sales book under date of July i6th. No. 50. — This check is in payment of bill of the 17th, less y'c on that part which was taken from your own merchandise. (Enter as in No. 49.) No. 51. — This bill of lading of flour shipped you by the Fischer Flour Co., to be sold on their accoinit and risk, together with the accompanying sight draft for $500 are presented by your bank. Accept the sight draft by writing across the face Accepted, payable at Traders Bank. This is in effect instructing the bank to charge to your account, and of course you must deduct this $500 from the bank balance on the stub of your check book (see No. 33) ; enter also in your cash book, debiting Consignmoils, Fischer No. 2. E^ntcr the goods on a loose sheet in the consignment ledger, w illi lln.' stencil mark F-2, and opposite Adva7iccs, in the debit coltinni, write the amount of the sight draft you have ordered to be paid. No. 51i. — This memorandiun comes with goods received to be sold on accoiuit of Rice & Pond. (Enter the goods on a loose shctt in the consignment ledger.) MODERN ILLUSTRATIVE BOOKKEEPING. 157 No. 5.*?. — Render an account sales to Rice & Pond for consignment No. 2, which is sold out, and send them a check for the net proceeds. Close the consignment in your consignment ledger, and remove the sheet from the book. Enclose the check with it, and place both in Vouchers for Others. Make the proper entry for the check in your cash book. In what column should the amount be placed? Make entry in the account sales register. No. 54:. — This draft is presented to you by the bank for payment. Write Accepted, payable at Traders Bank across the face, as in No. 51, and place it in Cash Paid Out, or give it to the bank teller or to the person appointed to take charge of such paper. (Enter in your cash book, debiting Westerji New York Preserving Co.) No. 55. — Fill this order, taking apples, $3.75 per brl., butter, 24^ per lb. from Mason's consignment No. 2, and XXX flour, $5.25 per brl., XX flour, $5.00 per brl., Pastry flour, $5.50 per brl., from your own merchandise. Do not fail to write the stencil number of the consignment opposite the items in the sales book that are taken from Mason's consign- ment, and enter these amounts on the credit side of the loose sheet in the consignment ledger. No. 56. — These sales are taken from the blotter of the day. Enter in your sales book as usual, and be sure that you place the stencil mark opposite each sale made from a consignment. No. 57. — Cashier's payments for the day. Make out these checks as usual, and enter in your cash book. Be careful in calculating your discounts. No. 58. — July 24. This invoice has been received from the Dock & Coal Co. No. 59. — This check has been received from L,arkin & Co. with an account sales of shipment sent them the 17th. Enter in your cash book, placing the amount in the Ship- ments column; also enter in shipment ledger in credit column (see model, page 138). Close this shipment. No. 60. This check is received in payment of bills of July 17th and i8th, less 3'f on the part of the bills which have been sold from your own merchandise. See that the discount is correctly calculated. Enter in your cash book as usual. (See No. 49.) No. 61. — Take from your Cash Drawer draft on D. W. Perry & Co., at sixty days from July 1 8th, for the amount of their bill of that date, $220.25, and have it discounted at the bank. (Prepare discount slip as usual.) Notice that the draft is not discounted for 60 days, but for the time it has to run. See when it is due; then calculate the discount upon it for the time between July 24th, the present date, and the date upon which it falls due. See that the net proceeds are placed to your credit in your bank pass book, and enter in your cash book and on your check book stub the same as a deposit. What account should be credited? What account should be debited? No. 62. — ThiS memorandum comes with goods received, freight paid, from the West- em New York Preserving Company. (Enter on loose sheet of consignment ledger as usual.) No. 63. — Render an account sales of consignment received from the low^a Packing Company. Their net proceeds should be $136.48. Send them this amount by New York 158 MODERN ILLUSTRATIVE BOOKKEEPING. draft, for which 3'ou will pay 25^/. Make the check for $136.73, amount of draft and exchange, and buy the draft at the bank, giving the check in exchange for it. Have the draft made to your own order, indorse properly, and enclose it with the account sales in an envelope addressed to the Iowa Packing Company. Make the proper entries in your cash book and account sales register (see No. 21). No. 04. — These sales have been made from the blotter. Enter in the sales book and the cash book as usual, and carry to the consignments sheets in the consignment ledger. No. <>."». — Ship to Warren Jordan, New York, to be sold on commission, 150 brls. apples at $2.75, 800 bu. potatoes at ^y/-. (Enter in your shipment ledger.) No. 66. — Cashier's payments for the day. Make out checks and enter properly in the cash book and on the check book stub. No. 67. — July 25. This bill of lading and the accompanying sight draft are pre- sented by the Traders Bank, and the goods mentioned have been received from the Iowa Packing Co., to be sold on their account and risk. Accept the draft, payable at the bank, and place it in Cash Paid Out, or hand it to the teller if there is one. Deduct the amount from your balance on the stub of 3'our check book. Enter in your cash book, and make a record of the receipt of the goods on a consignment sheet in the consignment ledger. No. 68. — Enter this lot received from E. Mason & Co. on a loose sheet of the consignment ledger. (M-3.) No. 69. — Send 500 bu. potatoes at 55^/, and 10 tubs butter at 21^/, to F. H. I^arkin & Co., Northboro, to be sold on commission. Take these goods from your own merchan- dise. (Enter in your shipment ledger.) No. 70. — Render an account sales of E. Mason & Co's. consignment No. 2, and send them the net proceeds by New York draft. Make out a check for the amount of the draft and 50^/ exchange. Givi the check to the bank teller, or person appointed to take charge of such paper, receive the draft, which should be for $465.47, and indorse it to the order of E. Mason & Co. Enter in your cash book and account sales register (see No. 21). This check is for a larger amount than you have on deposit in the bank at this time. "When you present the check in exchange for the draft to be sent to E. Mason & Co., tell your teacher, or the cashier of the bank, that this overdraws your account, but that dur- ing the day you will make a deposit of checks, etc., sufficient to make up the deficiency. Deduct the balance you have on hand from the amount of the check, and write the remainder, in red ink, on the stub of your check book, with the explanation, Overdraft. It is customary for ]janks to allow an occasional overdraft from customers in good standing, and such overdrafts will sometimes occur through mistakes arising from the failure to deiluct a check from the balance .shown on the stub of the cheek book. In such cases the bank generallv notifies tlie drawer of the check that he has overdrawn his account, and requests him to make up the defieienc\-. No. 71. — Order received from D. \V. Perry & Co. Fill order as usual, taking apj)les at $3.50 and butter at 22^/' from H-i; plimis at $1.50 and peaches at $1.75 from \V-2. No. 72. — Sales from blotter. Ivnter in your sales hook, and carry to the consiginnent sheets. Place the cash in your Cash Drawer. Check off cash .sales in the sales book and in the cash book. MODERN ILLUSTRATIVE BOOKKEEPING. 159 No. 73. — Cashier's payments for the day. Make out a check for the bill for build- ing stable, and pay the freight bills in cash. Do not forget to charge each consign- ment and each shipment with its freight bill. This check is also an overdraft, and, like the amount sent to E. Mason & Co., it will be made up in the day's deposits. Add $350 on the stub of the check book to the red ink overdraft, and write the result underneath, in red ink, with the explanation. Over- draft. When you make your deposit at the close of the day, deduct this red ink amount of overdraft from your deposit for the day on the stub of your check book, and write the difference underneath, in black ink, with the explanation. Balance. No. 74. — Deposit checks of National Market Co., Public Market Co., Thos. Varick & Co., F. H. I^arkin & Co. and F. H. Randall & Co. No. 75. — July 26. This invoice has been purchased from Gillette & Hennigan. No. 7(>. — Fill order, taking oranges at $6.00, lemons at $4.75 and pineapples at $1.80 from your own merchandise; plums at $1.50 and cherries at $1.50 from W-2. No. 7 7. — This order is received from G. H. Tucker & Co., and, as per letter, you ma}-' draw a sight draft for the amount of the bill. Fill the order, taking goods from your own merchandise — pineapples, $1.80; lemons, $4.75; cheese, 15^/; ketchup, $2.50. Make out the invoice, and deduct the discount at 3^, since the sale is in effect for cash. Draw the draft and place it in your Cash Drawer for deposit at the close of the day with other drafts and checks received. Enter the amount in your cash book the same as if it were a check, and check off the sales book and the cash book entries the same as in regular cash sales. No. 78. — These are sundry small sales made from your own merchandise and not entered in the sales book, but charged direct to the credit of Merchandise from the cash book. No. 71). — This is a letter from Russell & Birkett, enclosing a draft. Accept this draft and place it in Vouchers for Others. Enter in your journal. No. 80. — This check is in payment of bills of July i6th and 17th. The bills are net. No. 81. — Cashier's payment. Pay freight on Gillette & Hennigan's invoice in cash, $5.60. No. 82,— Deposit sight draft of G. H. Tucker & Co. and check of City Hotel Co, Enter the sight draft on your deposit ticket imder Checks, with the explanation. Sight draft, opposite the amount. It will be received by the bank the same as a check, if the depositor is a responsible person. No. 83. — July 27. Return 10 tubs of butter received from Chas. Hunter & Co., as it is found upon examination to be unfit for your trade. This transaction calls for an entry in your consignment ledger. Under Sales write 10 tubs butter returned, 600 lbs. Write a letter to Hunter & Co., telling them w^hy the goods have been returned. No. 84. — Render an account sales to Rice & Pond for consignment No, 3. Send them a check for the net proceeds. Do not fail to enter in account sales register. 160 MODERN ILLUSTRATIVE BOOKKEEPING. Statement of Losses and Expense Real Estate Furniture and Fixtures Horses and Wagon Office Supplies Freight Discount Gain from the business* Interest due Geo. Ward, partner " A. H. Gray, " Geo. Ward, Yz net gain* A. H. Gray, Yz net gain* cost insurance unexpired cost valued at cost valued at cost valued at cost valued at cost excess of debits no 45 68 1 64 150 25 25 5 115 2 469 32 7200 7050 200 175 275 250 35 30 30 40 52 856 54 13 12 26 71 78 77 25 443 97 221 221 55 469 52 *To be entered in red ink. No. 85. — Sales from blotter. (Enter in your sales book, consignment ledger and cash book.) No. 8G. — Cashier's payments. Pay these amounts in currency, and enter as Expense and Office Supplies in your cash book. No. 87. — This check is for A. W. Noone & Go's, account, item of the iSth inst. See that the amount is correct. No. 88. — This check is from E. B. Dean & Co., in payment of bill of the 17th, less 3^ discount on that part of the bill taken from your own goods. See that the discount is properly calculated and deducted, and enter in your cash book (see No. 49). No. 89. — Render an account sales to Chas. Hunter & Co., and place the net proceeds to their credit (see No. 30). Enter in Packages Returned column of the account sales register the 10 tubs butter returned July 27th. No. DO. — Received account sales of shipment to J. M. Marsh «& Co.; net proceeds have been placed to your credit subject to sight draft. Enter in your journal, debiting /. M. Marsh & Co. and crediting Shipments. Enter in the shipment ledger, as usual, in the credit of the ledger columns. Close the shipment. •No. 1)1. — Received an account sales from W. A. Simonds & Co., New York, with N. Y. draft for your net proceeds. Enter in the cash book as usual, and also in the credit column of the shipment ledger. Close the shipment. MODERN ILLUSTRATIVE BOOKKEEPING. 161 Gains, July 31, 190-. — Shipments Merchandise Mdse. Discount Commission Charges Gain from the business brought received from sales value of unsold cost sales value of unsold cost excess of credits down 2800 1445 75 130 364 215 122 23 4245 4115 75 41 27 38 65 30 33 4461 2747 7208 6844 35 68 47 71 856 54 469 52 469 52 No. 92. — Your acceptance of July 17th, favor Fischer Flour Co., is due this day at Traders Bank. Deduct the amount from your balance, and enter in the cash book. No. 93. — Deposit all cash, checks and N. Y. drafts. Post all your work, being sure to check back before you take a trial balance. Note carefully the following: First. — That you have posted your journal correctly. Second. — That you have posted the footings of Shipments, Consignments and Mer- chandise Discount columns in your cash book to the Shipments, Consignments and Merchandise Discount accounts in the main ledger. Third. — That you have posted the footings of the Merchandise and Consignments columns in your sales book to Merchandise and Consignments accounts in your main ledger. Fourth. — That you have posted the footing of Merchandise column in your shipment ledger to the credit of Merchandise and to the debit of Shipments accounts in your main ledger. Fifth. — That you have posted the footings of Commission and Charges columns in your account sales register to the debit of Consignments and to the credit of Commission and Charges accounts in your main ledger, and all amounts which may appear in the Charged to Account column of that book to the credit of the persons or firms to whom accounts sales have been rendered, and the total to the debit of Consignments. Sixth. — That you have credited each account in the main ledger from the invoice book with the amount of each invoice, and debited Merchandise account for the total. Com. — II 162 MODERN ILLUSTRATIVE BOOKKEEPING. Statement of Resources and Real Estate Expense Ofl&ce Supplies Horses and Wagon Shipments Merchandise Furniture and Fixtures Cash Bills Receivable Accts. Receivable Consignments Geo. Ward A. H. Gray valued at insurance unexpired valued at in bank notes on hand personal debit balances advances made in excess of sales net investment interest Yz net gain present worth net investment interest Yz net gain present worth 2652.00 13.26 2542.00 12.71 7050 45 68 30 250 1445 75 2747 38 200 1795 60 375 3421 48 520 — 17880 2665 26 221 .7§. 2887 2554 71 221 77 2776 5663 — 89 04 48 52 Shipments Account in the Ledscr. — This account is closed like all the business accounts, by writing Gain or Loss on the smaller side of the account, but it is ahva3'S necessary to find from the shipment ledger what goods are as yet unsold. Enter the value of these shipments on the credit side of Shipments account as an inventory. The gain or loss shown when the Shipments account is closed should be the same as the differ- ence between the gains and losses from the shipments, less charges on unsold goods, as shown in the shipment ledger, where each shipment is balanced by writing Gain or Loss on the smaller side in the ledger columns of that book. As made up from the postings, the Shipments account in the ledger should contain on the debit or left-hand side: (a) the footing of Merchandise column from the shipment ledger; (b) the footing of the Shipments column from the credit side of the cash book. On the credit side should be found: (a) the footing of the Shipments column from the debit side of the cash book; (b) any amounts from consignees who have rendered you accounts sales, but have not sent remittances. These amounts will be found in the journal, where the entries have been made covering such transactions. €oiisi<;-nnients Account in the Lodj-er. — Consignments account in the ledger is an account which, when all consignments are disposed of and accounts sales rendered, should exactly balance, for you neither gain nor lose by consignments, your profits from such accounts being shown through Commission and Charges accounts; but consigmnents will very seldom, if ever, be all closed out at any one time. If you have sold parts of several consignments, and not rendered accounts sales of such consignments, you owe the con- MODERN ILLUSTRATIVE BOOKKEEPING. 163 Liabilities, July 31, 190-. Bills Payable Accts. Pa3'able Present Worth* Present Worth brought down notes outstanding personal credit balances 4000 8217 5663 37 52 17880 89 ■ 5663 52 5663 52 *To be entered in red ink. signers for the amotuit sold, and Consignments account balanced will be a liabilitj^; but on the other hand, yoti may have accepted or paid drafts in advance of sale of goods received. In that case, the balance of Consignments account will be a resource, for the consignees owe you for these advances until you have received enough from the sales of consignments to make them up. The balance of Consignments account, therefore, should appear in yotir statement of resources and liabilities as a resource or a liability, as the case may be. Consignments account when posted to the ledger should contain on its debit side the footing of the Consignments colunni from the credit side of the cash book and any debits which may have been posted from the journal. On the credit side should appear the footing of the Consignments column of the sales book. It is found that you have on hand the following goods: 50 brls. Apples, at $3-50 16 bxs. Lemons, at $4.00 94 doz. C. Beans, 1. 00 5 " Oranges, 5.00 7 tubs Butter, 420 lbs. , 21^/ 72 doz. C. Peas, 85^ 27 bxs. Cheese, 2735 lbs., 11?^ 3 brls. S. Pickles, 7.00 72 doz. C. Corn, 1.05 3 J' Sw. Pickles, 9.00 105 brls. 3X Flour, 4-50 489 bu. Potatoes, 62^^ 70 " 2X Flour, 4-25 I doz. Pineapples, 1.20 55 " Pastry Flour, 4-75 133 " C. Tomatoes, 95^ 30 doz. Ketchup, 2.00 164 MODERN ILLUSTRATIVE BOOKKEEPING. It is estimated that the real estate is worth $9700. The premium on the insurance policy is estimated to be worth $45.83. The ofl&ce supplies on hand — paper, envelopes, stamps, etc. — are valued at $35. Furniture and fixtures valued at $225. Horses and wagon valued at $292.50. Unsold shipments have cost you $1253.50, and are valued at that amount, as showTi in your shipment ledger. Make a statement of losses and gains according to the model on pages 160 and 161. The first part of this statement shows the gain arising from the regular transactions of the business, but the partners agreed that the difference between their investments should be settled by giving interest to each partner for his net investment. This interest must be deducted from the gain of the business, as shown in the second part of the model statement. Find the interest on your own investment and on that of E. H. Reed for the time this business has continued, which is 31 days. Enter the amounts of interest on the debit or loss side of your loss and gain statement, as in the model, then credit Reed one-half and yourself one-half of the gain which remains, for these amounts have been deducted from the total gain of the business. Make a statement of resources and liabilities according to the model on pages 162 and 163, supplying the necessary figures from your own books. Close your ledger, making the date July 31st. Do not forget to enter all the inven- tories on the credit side of the accounts to which they belong. Close all the business accounts, writing Loss or Gain, in red ink, on the smaller side, and transfer these closing entries to the Eoss and Gain account. After this has been done, close the Eoss and Gain account by writing GaiJi from the btcsiticss, in red ink, on the smaller side of the account. Foot and rule, and bring this gain from the business over to the opposite side of the Eoss and Gain account. There is due each partner interest at 6'i on his investment for the time it has been in the business (31 days). Calculate this interest; the amount is $3x.x3 on j'our invest- ment and $4x.x9 on Reed's investment. This interest is to come out of the gains of the business, therefore enter it on the debit side of the Eoss and Gain account in the ledger, in red ink, writing E. H. Reed, interest opposite v?/x.x(?, and {St2idc7it) , interest opposite ^jx.xj. Transfer your interest to the credit side of your account in the ledger and Reed's interest to the credit side of his account. Close the second section of the Eoss and Gain account by writing, in red ink, on the debit side, {Stude?it) , net gaiii, with one-half the difference between the two sides of the Eoss and Gain account as it now stands, and also, in red ink, E. H. Reed, net gain, with one-half the difference of the account as it now stands. Balance the Eoss and Gain account, and transfer your own and Reed's gains to the credit side of your respective accounts in the ledger. The following model is the exact form of a Eoss and Gain account corresponding to the statement of losses and gains on pages 160 and 161. This Eoss and Gain account is similar in form to the Eoss and Gain account in your ledger. MODERN ILLUSTRATIVE BOOKKEEPING. 165 Ivoss AND Gain. 1900 July 31 31 Expense Real Estate Furniture and Fixtures Horse and Wagon Office Supplies Freight Discount Gain from business* Geo. Ward, interest* A. H. Gray, " * Geo. Ward, net gain* A. H. Gray, " " * 64 150 25 25 5 115 2 469 856 32 30 40 52 54 July 31 31 Shipments Mdse. Mdse. Discount Commission Charges Gain from business 130 364 215 122 23 33 35 68 47 71 856 54 *July 13 12 221 221 469 26 71 78 77 52 July 469 52 469 52 *To be entered in red ink. QUESTIONS. 1 . Define commission business, and state how a commission merchant receives payment for his services. 2. Define consignor, consignee, consignment. 3. Describe the method of marking goods so that it may be known to what consign- ment they belong. 4. What is the consignment ledger, and what are the advantages of the loose leaf method of keeping accounts with consignments ? 5. Define advances, and state where they should be entered in the consignment ledger. 6. When all the goods of a consignment have been sold and the entries of sales made in the consignment ledger, how should you proceed to close the account in the consign- ment ledger? 7. What extra columns appear in the cash book of this month? 8 . How are merchandise discounts posted ? 9. What items appear in the Shipments column on the debit side of the cash book? On the credit side ? 10. What items should appear in the Consignments column of the cash book? 11. Define a shipment. 12. What is the object of the shipment ledger? 13. What special columns appear in the sales book ? 14. How are sales from consignments indicated in the sales book? 15. Describe the account sales register. What accounts are posted from this book? 16. Of what is the account with shipments in the main ledger an abstract? 17. Where should you post the footing of the Consignments column from the credit side of the cash book? 18. Where should you post the footing of the Sales from Consignments column of the sales book? 19. How should you post the Charged to Account column of the account sales register? 20. What course is generally pursued by banks when an overdraft is made? 2 1 . How should you indicate an overdraft on the stub of your check book ? 166 MODERN ILLUSTRATIVE BOOKKEEPING. WHOLESALE DRY GOODS BUSINESS. Books Kept. — The books which you will keep in this work are the joumal-daj^book, sales book, invoice book, cash book, main ledger, sales ledger, purchase ledger, and bill book. Journal-Daybook. — On the debit side, the journal-daybook is provided with the fol- lowing columns: Accounts Paj-able, General, Bills Receivable. All notes received are entered in the Bills Receivable column. The several items in this column are not posted. The footing of the column is posted to the debit of Bills Receivable in the main ledger. (See Model Journal, page 167.) When a creditor is paid by giving him a note or draft, he should be charged in the column entitled "Accounts Payable." The several items in this column are posted to the debit of the proper accounts in the purchase ledger. The footing of this column is posted to the debit of Accounts Payable in the main ledger. Debit journal entries other than those provided for above are entered in the General column. The several items in this column are posted to the debit of the proper accounts in the main ledger. The footing is not posted. The journal-daybook is provided with the following columns on the credit side: Accounts Receivable, General, Bills Payable. Whenever one of your customers gives you a note or draft on account, he is credited with the amount of the payment in the column entitled "Accounts Receivable." The several items in this column are posted to the credit of the proper accounts in the sales ledger. The footing of this column is posted to the credit of Accounts Receivable in the main ledger. When you issue your note on account the credit entry is made in the Bills Payable column. The footing of this column is posted to the credit of Bills Payable in the main ledger. The several items are not posted. All credit journal entries other than those provided for above are made in the General column. The several items in this column are posted to the credit of the proper accounts in the main ledger. The footing is not posted. Cash Book. — On the debit side the cash book is provided with the following columns: Amount of Invoice, Discount Allowed, Amount Received, Merchandise, Sundry. (See form of Cash Book, pages 168 and 169.) When a customer pays you on account, the amount of the invoice is entered in the column entitled •''Amount of Invoice." If discount is allowed, the amount of the discount is entered in the colunni entitled " Discount Allowed." The amount of cash received is entered in the column entitled "Amount Received." All cash sales of merchandise are entered in the column entitled " Merchandise." Other debit entries are made in the col- umn entitled " Sundry." The several items in the column entitled "Amount of Invoice " are posted to the credit of the proper accounts in the sales ledger. The footing of this column is posted to the credit of Accounts Receivable in the main ledger. The footing of the column entitled " Discount Allowed" is transferred to the credit side of the cash l)ook and posted to the debit of Discount on Sales in the main ledger. Neither the items nor the footing of the column entitled "Amount Received" is posted. The .several items in the Sundry colunm are posted to the credit of the proper accounts in the main ledger. The footing of the column entitled " Merchandise" is posted to the credit of Merchandise Sales in the main ledger. MODERN ILLUSTRATIVE BOOKKEEPING. 167 MoDEiv Journal, August i, 190-. Accts. Pay. 1600 General. 125 50 5 5200 00 120 00 24800 00 25900 00 15 50 3000 GO I30CO 00 600 00 250 00 B. Rec. 3200 00 1725 4390 79001 50 40 40 845 I 20 345 43 a u 20 •4 I,. F. V V Edward Deane ha.s this day been admitted into partnership with Geo. W. Barnes and C. M. Lyon under conditions shown in articles of co- partnership executed on the same date. The investment of each partner and the resources and liabilities of the old firm are shown in the fol- lowing entries, and a new set of books is opened showing the fol- lowing balances. Cash In Traders Bank " safe Mdse. Per inventory Bills Receivable " bill book Accts. Rec. " sales ledger Interest Accrued Furniture Valued at Real Estate " " Horses & Wagons Insurance Accts. Pay. Bills Payable Interest Discount Unexpired Per purchase led- ger Per bill book Accrued On bills rec. Geo. W. Barnes Investment " " " Private CM. Lvon Investment " " ^" Private B. Martin & Co. Note at 4 m. on Bills Pay. acct. 15 Bills Rec. In full to date by D.H.Cross&Co. 4 m. note 22 B. Rec. Dft. at 10 da. for Curtis, Hines & invoice 7/4 Co. 29 R.H.White & Co. Returned Mdse. Pm-chases Accts. Payable, Dr. B. Receivable, Dr. Accts. Receivable, Cr. B. Payable, Cr. Accts. Rec. S45 345 1 1 9 U 20 20 4 U General. Bills Pay. 24500 140 6 20151 18202 600 485 125 1 190 13600 79001 00 50 50 40 10 00 00 12000 00 1600 13 6 50 40 40 168 MODERN ILLUSTRATIVE BOOKKEEPING. Date. L F NAME AND EXPLANATION Amount or Ijrvoic*. Disc, j Allowed | Amovkt RectiTiD, Ukecravdul SvKDtT. / ~/Kja-C^ez- 6 6 / d /P-O / f ^^2 2'i^2 7^ / y^^ 2 ■^4^ z-^^ f / / z / f./.j ^7 v^ /v^ •J--J ■^/^ ^^ / < /2 a 3 6 ^'^yr ^ / 4^/ 2r/-^ sv 6^-s J'/ ^f77 / / tp U -» '7 y^^-e^LiL-^i.-^-^::y£^.■-c!^t.Z ^^ ^ <^/i^;*4- / 7 ^r^^-j- ^^ ^ ^,« /^ =-c:2i.«^ i5*^e — cr^^^z^^^i^, ^~<^ i'-y-iZ^^^^i^ =xi2^ f .^^Z>^^ ^^^ ^ vC? « ~7U£Z^^>gZ-'f'2.^^^ . -rf-ayi:- ^ -^ ^ ■<- * 3J=^7S /ijT ^, 43 yds. Make entry in the cash book, crediting Merchandise in special column. Enter sale in sales book, and extend total into cash column; check the entries as in previous work. No. 8. — This check is in payment of invoice of July i8th, $826.30, less 2,^ discount. Enter on the debit side of the cash book as follows: $826.30 in Amount of Invoice col- umn, amount of discount in Discount Allowed column, and amount of check in Amount Received column. No. O. — Fill out deposit slip, depositing cash, $2000, and checks of L. H. Parker and Geo. M. Walker. Collection, yV^ of Parker's check. Debit Collection and Exchange \vl the cash book. Deduct the collection from the amount on the deposit slip. 174 MODERN ILLUSTRATIVE BOOKKEEPING. No. 10. — August 6. Make your check in favor of Little Falls Woolen Co. for invoice of July 15th, $409, less discount 5'<. Enter on the credit side of the cash book as follows: $4og in Amount of Invoice column, amount of discount in Discount Allowed column, and amount of your check in Amount Paid column. No. 1 1. — This note is received from W. B. Snow, in payment of balance due Aug. ist. Credit W. B. Snow in Accounts Receivable column of the jotirnal. Make entry in the bill book, and write Int. over the number of days in the Time column. No. 12. — Discount Snow's note at the Commercial Bank, and receive credit for the proceeds. Find the interest on $536.88 for the full time, and add it to the face of the note; then find the discount to maturity on that amount. Enter in the Sundry column on both sides of the cash book. Credit Interest and Bills Receivable ; debit Discoiint. Indorse the note in full to the Commercial Bank, and leave it at the bank, having the net proceeds credited in your bank pass book. Add the proceeds to your bank balance on the stub of the check book. If you have no bank, make the entry in jour bank pass book, and place the note in Vouchers for Others. No. 13. — This is what is known as a shipper's order. Bill the goods in the usual way, as follows: 4 pes. Talbot flannel, 44, 40, 45, 47 yds. 2 pes. storm serge, 48, 42 3-ds. 4 pes. corduroy, 40^, 49, 47^, 39 yds. 2 pes. surah silk, 43^, 463^ yds. We find that the box of goods weighs 200 lbs. Fill out a freight receipt and have the freight agent sign it. Make a sight draft in favor of the Union National Bank for the amount of your bill, pin it to the bill of lading, and send it to the Union National Bank. (Place in Vouchers for Others.) For various reasons, it is often desirable to make the collection of the purchase price before the goods are delivered to the customer. Such shipments by express are sent C. O. D., and by freight, subject to shipper's order. It is customary to collect in this manner when the credit of the customer is limited, or has not been fully investigated. No. 14. — Invoice, Burke, FitzSimons, Hone & Co. Check the items, O. K. the bill, and paste it in the invoice book. Note the terms. No. 15. — This check is in payment of invoice of July 28th, $550, less 2I! discount. (Enter as in No. 8.) No. 10. — Mr. Taylor wishes some money for his private use. Give him $200 in cash, and charge it to his private accoimt. (Cash book, Simdry colunui. ) No. 17. — Pay freight to date, $46.25, in cash. (Cash book. Sundry cohunn.) No. IS. — August 8. This check is in full of accotuit to Aug. ist. No. 11>. — Deposit cash, $685, and checks on hand. Bank charges $2.00 for collection. Deduct amount of collection on the deposit ticket, and enter in the cash book. No. 20.— Pay Sibley, Lindsay & Curr Co. for in\-'oico of July 2Sth, $3200. Deduct 5'^ discount, and write a check for the net amount. No. lil. — August 10. Cash sales. Perkins & Bro\\ni, 50 doz. Torchon lace. 40 gross smoked pearl buttons. Carroll & Marsh, i piece whipcord, 50 yds. i piece plain I'reiich i)oi)lin, 40 yds. MODERN ILLUSTRATIVE BOOKKEEPING. 175 Strong & Carlisle (check), 3 pieces black Venetian cloth, 36, 38, 40 yds. 2 pes. broad- cloth, 55, 59 yds. No. 22. — August ii. Check received for invoice of July 15th, $122.44, less i^ discount. No. 23. — Two pieces, 43 and 38 yds., of the French crepon received from Burke, FitzSimons, Hone & Co. on the 6th inst. are found to be damaged. Return the two pieces to them, billing at cost price. Write a letter and enclose the bill. Bnter in the journal, debiting Burke, FitzSimons, Hone & Co. in Accounts Payable column, and crediting Merchandise Purchases in the General column. In this set merchandise returned by us will be credited to the Merchandise Purchases account, and goods returned to us charged to Merchandise Sales account. Sometimes it is desirable to open additional accounts; as. Merchandise Returned to Us and Merchan- dise Returned by Us. No. 2-4. — August 12. This note is received on account. (Bills Receivable and Accounts Receivable columns in journal.) No. 25. — Pay, by check, invoice of Gimbel Bros,, July 15th, $1250, less i^. (Enter as in No. 10.) No. 26. — Cash sales. National Emporium, 5 pes. wash silk, 475^, 49 J^, 53, 54, 46 J^ yds. 2 pes. cashmere, 41, 39 yds. Sherman & Co., 2 pes. French crepon, 43, 37 yds. 6 pes. ::248 velveteen, 40, 45, 36, 38, 45, 46 yds. No. 27. — August 13. Wamsutta Mills stock is selling to-day at $105 per share. The company has decided to purchase ten shares as an investment. Give a check for the amount of the stock, and place the stock certificate in the envelope for incoming vouchers. (Debit Wamsutta Mills Stock in Sundry column of cash book.) No. 28. — Check received in payment of invoice of July 20th, $1540, less Vc discount. No. 29. — The bank has collected your draft of the ist inst. on W. O. Harrison, $750. Collection charges, 75'/'. Credit W. O. Harrison in the cash book for the full amount of the draft, and debit Collection and Exchange. Add the proceeds to your bank balance. No. 30. — August 14. This check is for note and interest due to-day. Consult your bill book and mark the note paid. Credit Interest for the amount of interest paid. No. 31. — Salesmen's orders. Bill the first three orders G'J 10 days, 5^ 30 days; make the terms on Roberts' invoice net cash. Ship as follows: Thompson & Bulkeley, Easton, 6 pes. Fruit of lyoom sheeting, 58, 60, 55, 64, 66, 58 yds. 8 pes. Monument cotton, 54, 58, 68, 62, 55, 65, 63, 60 yds. 50 doz. Coates thread. 5 pes. wash silk, 48^, ^o^i, 52, 48^^, 55 yds. James H. Wood & Son., Newton, 6 pes. pique muslin, 68^, 66, 74, 75, 71, 70^^ yds, 4 pes. broadcloth, 57, 65, 66, 51 yds. 2 pes. Creton plaid, 40, 42 yds. 25 doz. torchon lace. Brown & Wilson, Troy, 5 pes. sateen, 48^, 47^, 50, 46^, 50 yds. 5 pes. Crown lining, 52, 58, 53, 55, 57 yds. 25 doz. Coates thread. C. H. Roberts, Westboro, 3 pes. kersey, 54 in., 45, 48, 43 yds. - 20 gross smoked pearl buttons. 176 MODERN ILLUSTRATIVE BOOKKEEPING. Xo. 32. — This invoice is for merchandise purchased of the Little Falls Woolen Co. Check the items, O. K. the bill, and paste it in the invoice book. Note the terms. Xo. 33. — Mr. Wood withdraws $225 cash. Charge to his private account. No. 34. — Paj^ Sibley, Lindsay & Curr Co., by check, for invoice of July 14th, $904.85, less i^ discount. Xo. 35. — Deposit cash, $200, and all checks. Collection, $1.75. Xo. 36. — August 15. Pay cash for office supplies, stamps, etc., $18.60. Clerk hire, $70. (Charge clerk hire to Salaries & Help.) Xo. 37. — Invoice of merchandise from Sibley, Lindsay & Curr Co. (See instructions for No. 32.) Xo. 38. — This check is for the net amount of invoice of July i6th. Xo. 39. — Make your check in favor of Little Falls Woolen Co., for invoice of July 29th, $300, less 2fc discount. Xo. 40. — August 17. This remittance is for proceeds of the draft of the 6th inst. on Ingham & Case, sent to the Union National Bank for collection. Charges for collection, 50^'. (Credit Ingham & Case for the full amount, and debit Collection and Exchange for the collection.) Xo. 41. — Cash sales. Geo. M. Walker, City, 50 gross smoked pearl buttons, i piece Duchess satin, 48 yds. H. W. Johnson & Son, City, i piece plain French poplin, 50 yds. i piece Oxford gray homespun, 48 yds. Xo. 42. — Pay freight in cash, $68.45. Xo. 43. — August 18. Check received for note and interest due to-day. Consult bill book, and enter as in No. 30. Xo. 44. — Invoice of merchandise purchased from Granite Mills. (See instructions for No. 32.) Xo. 45. — This check is received on account. (No discount.) Xo. 40. — Deposit all checks and drafts. Collection, $2.00. Xo. 47. — Draw $100 in cash on your own private account. Xo. 48. — Remit Burke, FitzSimons, Hone & Co. check in payment of invoice of July 22d, $2837.90, less V'^ discoimt. Xo. 49. — AuGUvST 19. Pay freight in cash, $10.50. X'^o. 50. — W. O. Harrison is unable to settle his accotmt at present, and il has been decided to take his note, with interest, for the balance due from him, $932.12. (Enter in Bills Receivable and Accounts Receivable columns of the journal.) Xo. 51. — Pay cash for 1 ton hay and 5 l)u. oats for stable, $13.50. (Debit Expense, Sundry column of cash book.) Xo. 52. — August 20. Bill this order as follows; terms, 2',i 10 days, 1% 30 days. 8 pes. denim, 38^^, 39, 41 1^, 46, 35, 373/^, 35, 42 yds. 7 i^cs. sateen, 48, 45, 463^, 50, 49^^, 515^, 49 yds. 5 pes. sheeting, 60, 62, 65, 55, 59 yds. 8 pes. Crown lining. 52, 55, 54. 56, 60, 51, 58, 50 yds. 4 pes. Duchess satin, 48^, 49J^, 52, 50 yds. 4 im:s. blue llannel, 50, 48, 49, 54 yds. 10 gross Inittons. MODERN ILLUSTRATIVE BOOKKEEPING. 177 No. 53. — Bill this order as follows; terms, 2^ 10 days, ifc 30 days. 5 pes. denim, 38^ , 41, 42, 37^, 43 yds. 4 pes. blue flamiel, 51, 47, 553^, 465^ yds. 3 pes. cashmere, 39, 41, 42 yds. 8 pes. Fruit of Loom sheeting, 58, 60, 60, 61, 57, 63, 65, 55 yds. 7 pes. pique muslin, 68, 72, 75, 70, 65, 68, 70 yds. Xo. 5-4. — Give Sibley, Lindsay & Curr Co. your note at 20 days (no interest), $2500. (Enter in Accounts Payable and Bills Paj-able columns of the journal.) No. 55. — Pay Granite Mills, by check, for invoice of July 2 ist, $904.85, less 5I? discount. Xo. 56. — Purchase of merchandise from Gimbel Bros. (See instructions for No. 32.) Xo. 57. — August 21. One piece of kersey, 46^^ yds., received on the 20th inst. from Gimbel Bros., is damaged. Return it, and render your bill for the same at cost price. (Enter as in No. 23.) Xo. 58. — This check is from Warren & Co., to prepay their note of $325, less discount to maturity. Make entry in the Sundry column of the cash book. ^lark the note prepaid in the bill book. (Ti^hii Discou7it.) X'o. 59.— Salesman's orders. Bill as follows; terms, 25^ 10 days, i^ 30 days. Brown & Wilson, Troy, 2 pes. Talbot flannel, 45, 42^ yds. 2 pes. whipcord, 40^, 43^ yds. 5 pes. Monument cotton, 58, 63, 65, 60, 62 yds. 6 pes. denim, 38, 43, 37, 44, 40, 36 yds. Sibley & Co., Gardner, 2^? 10 days, li 30 days, 6 pes. Fruit of Loom sheeting, 60, 63, 55' 58- 65, 61 yds. 2 pes. corduroy, 40, 34^ yds. 2 pes. black Venetian cloth, 38, 335^ yds. 50 doz. Coates thread. B. C. Wiley, Waverly, 6'i 10 days, 5^/ 30 days, 3 pes. Oxford gray homespun, 48, 50, 51^ yds. 4 pes. cashmere, 36, 38^, 42, 43 ^^ yds. 7 pes. Crown lining, 50, 54, 58, 52, 55. 51. 57 yds. 6 pes. sateen, 45, 50, 49, 53, 48, 49 yds. 50 doz. lace. Xo. 60. — August 22. Check received for invoice of July 21st, $466.42, less 5^. Xo. 61. — Pay freight in cash, $24.87. Xo. 62. — August 24. Note on account. (Enter in journal.) Xo. 63. — Draw a sight draft on Brown & Wilson for invoice of July 15th, $504.11. Indorse the draft as in No. 2, and place in Vouchers for Others or leave at the bank for collection. Xo. 6-4. — Make your check in favor of Little Falls Woolen Co., in full for note and interest due to-day. Write them a letter and enclose the check. Xo. 65. — Remit Gimbel Bros, check for invoice of July 29th, $1293.80, less 5^ discount. Xo. 66. — August 25. Salesman's orders. Carlton, Sons & Co., Dansville, 2'b 10 days, I'c 30 days, 2 pes. broadcloth, 60, 58 3-ds. 4 pes. Creton plaid, 37, 39^, 41, 38 yds. 5 pes. sateen, 47, 51, 48, 49, 46 yds. 3 pes. black Venetian cloth, 48^, 35^, 34 yds. 100 gross buttons. L. H. Parker, Lima, 30 days net, 2 pes. whipcord, 40, 42 yds. 6 pes. Fruit of Loom sheeting, 56, 64, 58, 62, 59, 62 yds. 5 pes. Monument cotton, 58, 59, 57, 62, 60 yds, 8 pes. pique muslin, 70, 72, 65, 75, 69, 73, 66, 68 yds. i piece broadcloth, 60 yds. W. B. Snow, Akron, 2< 10 days, i^ 30 days, 6 pes. wash silk, 47%^, 48, 46 J^, 49, 53^, 55 yds. 3 pes. surah silk, 471^, 493/, 52 yds. 3 pes. corduroy, 36, 38, 37 yds. 6 pes. Crown lining, 52, 56%, 55 J^, 57, 50, 54 yds. Com. — 12 178 MODERN ILLUSTRATIVE BOOKKEEPING. Levy & Garson, Somersworth, 6'' lo days, s^r 30 days, 90 gross buttons. 40 doz. thread. 2 pes. plain Frei.^^x ^jopiin, 48, 42 j^ds. i piece kersey, 40 yds. No. <>7. — Invoice of merchandise purchased of Sible5^ Lindsay & Curr Co. No. HH. — August 26. Discount Chase's note received on the 24th inst. Indorse tlie note in full to the Commercial Bank, and leave it at the bank, having the net proceeds credited in your bank pass book. Add the proceeds to your bank balance on the stub of the check book. (Behit Discount) Xo. GO.— Remit Gimbel Bros, your note at 30 daj^s for $2000, to apply on accomit. (No interest.) Xo. 70. — Purchase of merchandise from Little Falls Woolen Co. Xo. 71. — August 28. Receive credit at the bank for draft on Brown & Wilson, $504.11, left for collection Aug. 24tli. Collection charges, 50^^ Add the proceeds to your bank balance. Credit Brown & Wilson; debit Collection aiid Exchange . Xo. 72. — Fill the following telephone order received from Harris & Smith, City. Terms, 2^ 10 days, \< 30 days. 4 pes. Talbot flannel, 44, 45^, 45, 43 yds. 3 pes. velveteen, 36, 32, 38 J^ yds. 2 pes. unbleached cotton, 60, 62 yds. 3 pes. Fruit of Loom sheeting, 61, 60^ 6o>^ 3'ds. 25 gross smoked pearl buttons. Xo. 7.3. — August 30. Carlton, Sons & Co., Dansville, return, for credit, the goods as per their bill. When returned goods have been duly accepted, it is customary to send what is called a credit memorandum. Send Carlton, Sons & Co. a credit memorandum for these goods. (Enter in General and Accounts Receivable columns of journal.) Form of Credit Memorandum. New York, Aug. 19, 1900. Memorandum of Amount placed to the CREDIT Of Taylor, Wood & Co. By The H. B. CLAFLIN CO. pes. Blk. Cashmere, 90 yds. . 75 67 50 A credit memorcinduin is usually printed in red. No. 74. — This check is received on account. No. 75. — Cash sale. W. \\. Dennis & Co., City (check), i piece storm serge, 48 yds. 4 pes. velveteen, 38, 36, 37, 39 yds. 2 pes. French crcpon, 40, 3^ yds. 2 pes. cashmere, 41, 37 yds. I piece surah silk, 4S yds. 3 i-)cs. wash silk, 49, 56, 45 yds. MODERN ILLUSTRATIVE BOOKKEEPING. 179 No. 70.— Deposit all checks. Collection, $1.50. No. 77. — August 31. Pay freight, $12.82, by check. No. 78. — Pay cash for horse-shoeing and repairs on wagon, $5.43. (Debit Expense. ~) No. 79. — Pay Judson' s salary for August, $1 50, by check. ( Debit Traveling Expetises. ) No. 80. — Pay clerk hire, $114.50, in cash. (Debit Salaries & Help.) No. 81. — (Student) draws by check on private account, $100. THE BALANCE LEDGER. In this month's work you will use what is known as the balance ledger for the posting of accounts receivable and accounts payable. The following is a form of this ledger. WARNER, Deforest & co., Amsterdam, N. Y. Date. Descrip- tion. July I BaL 9 S. B 14 18 20 20 21 26 ' Terms. Fol. Debit. Balance. Credit. Date Fol. J I 812 70 1 ' 812 70 July 10 12 5r»' 10 ds. 7 215 70 -' - 215 70 19 14 2/10 Net 30 9 168 70 4 ^ 210 25 21 14 . (( ( t II 415 60 ^ 168 70 23 16 Net 60 ds. 12 388 70 " 415 60 28 18 2/10 12 412 10 6 * 412 10 30 18 Cash i,^ 210 25 ?< Net 30 ds. 14 160 40 549 10 Explanation. c c c c Note 4 inos. Int, C The first column at the left is the ordinary Date column. The narrow column follow- ing, marked " Description," indicates the book from which the posting is taken. In the Terms column following should be written the terms of sale. The Folio column shows the page of the book indicated in the Description column. The Debit column follows. In the center of the ledger page is a column for balances. Next to this comes the Credit column, followed by the Date and Folio columns, and an Explanation column, which may contain the letters indicating the book from which the credit posting is made; or, if it be a purchase, this column may contain the terms, or in fact any description the entry may make advisable. The balance of the account, when a trial balance is taken, should be placed in the Balance column at the center of the page. The Debit and Credit columns opposite each other will show readily when any particular bill has been paid, and in case a bill is paid in full, instead of ruling the ledger account, it is better to write a small figure opposite each of the accounts which balance (see model above). In this way a mere glance at a ledger account shows what bills remain unpaid, and frequently saves a large amount of work in taking the balance of that account. This form of ledger is largely in use in business houses which keep a large number of personal accounts, as it enables the bookkeeper to make a statement of any personal account with very little extra labor. 180 MODERN ILLUSTRATIVE BOOKKEEPING. DIRECTIONS FOR POSTING. In this month's transactions you have three ledgers — the main ledger, the sales ledger, and the purchase ledger. In the main ledger, under the head of Accounts Receivable, you have an abstract of the sales ledger, and under the head of Accounts Payable, you have an abstract of the purchase ledger. POSTING THE JOURNAL. The journal, in this month's transactions, contains special columns on the debit side for Accounts Payable and Bills Receivable. Post the footing of Accounts Payable column on the debit side of the journal to the debit of Accounts Payable in the main ledger. Post the footing of Bills Receivable column on the debit side of the journal to the debit of Bills Receivable in the main ledger. Check off each bill receivable in the Folio column of the journal, as all these items are posted at once when the footing of the column is carried to the debit of Bills Receivable in the main ledger. Post each individual account on the debit side of the journal to the person or firm named in the purchase ledger. The total debit of accounts in the purchase ledger will agree with the footing of Accounts Payable column of the journal. Post all accounts found in the General column on the debit side of the journal as in the ordinary posting of the journal in previous sets. These accounts will be found in the main ledger. The credit side of the journal contains special columns for Accounts Receivable and Bills Payable. The footing of the Accounts Receivable column is posted to the credit of Accounts Receivable in the main ledger. The footing of the Bills Payable column is posted to the credit of Bills Payable in the main ledger. Check off each bill payable in the Folio column of the journal, as all these items are posted at once when the footing of the cohnnn is carried to the credit of Bills Payable in the main ledger. Post each individual account to the person or firm named in the sales ledger. The total credit footing of the sales ledger will agree with the footing of Accounts Receivable column of the journal. The accounts found in the General colunni are posted as usual. Carry into the General column of your journal the footings of Accounts Payable and Bills Receivable columns on the debit side, and foot the General column. Carry into the General column the footings of Accounts Receivable and Bills Payable columns on the credit side, and foot the General column. The del)it and credit footings should ot course be alike. POSTING THE SALES BOOK. Post from your sales book all items sold on account to the debit of the proper accounts in the sales ledger. Post the total footing of the last colunni of the sales Ijook to the credit of Merchandise Sales and to the debit of Accounts Receivable in the main ledger. POSTING 1 HE CASH BOOK, The cash book contains, on the del)it side, special columns as follows: Amount of Invoice, Discount Allowed, Amount Received, Merchaiulise, Sundry. MODERN ILLUSTRATIVE BOOKKEEPING. 181 When a customer pays cash on account, the amount of the bill settled is placed in the Amoiuit of Invoice column; whatever discount is allowed upon it is placed in the Discount Allowed column; the net amount of the check, or of cash received, is placed in the Amount Received column. The Merchandise column contains all cash sales of mer- chandise, and the Sundry column contains such accounts as are not otherwise classified. In posting, the amounts in the Amount of Invoice column are carried to the credit of the accounts named in the sales ledger, and at the end of the month the footing of this column is carried into the Sundry column of the cash book and posted to the credit of Accounts Receivable in the main ledger. At the end of the month the footing of the Discount Allowed column is carried to the opposite side of the cash book into the Sundry column, and from that place it is posted to the debit of Discount on Sales in the main ledger. The Amount Received column is not posted, but should be footed, and its footing added to the Discount Allowed column should equal the footing of the Amount of Invoice column. The footing of the Merchandise column should be carried into the Sundry column and posted to the credit of Merchandise Sales in the main ledger. The amounts in the Sundry column should be posted in the usual manner to the accounts named in the main ledger. The credit side of the cash book contains special columns as follows: Amount of Invoice, Discount Allowed, Amount Paid, Collection and Exchange, Sundry. When you pay for a purchase, the face of the bill is placed in the Amount of Invoice column; whatever discount was allowed you in the Discount Allowed column; the net amount of the check in the Amount Paid column. All other. amounts, except Col- lection and Exchange, are placed in the Sundry column. In posting, each amount in the Amount of Invoice column is carried to the debit of the account named in the purchase ledger, and at the end of the month the total footing of the Amount of Invoice column is carried into the Sundry column, and thence posted to the debit of Accounts Paj-able in the main ledger. The footing of the Discount Allowed column is carried to the opposite side of the cash book into the Sundry column, and thence posted to the credit of Discount on Pur- chases in the main ledger. The footing of the Amount Paid column is not to be posted, but should be added to the footing of the Discount Allowed column, and their sum should equal the footing of the Amount of Invoice column. The Collection and Exchange column should be footed, the amount carried into the Sundry column, and thence posted to Collection and Exchange in the main ledger. The items in the Sundry column should be posted to the accounts named in the main ledger.. ■ POSTING THE INVOICE BOOK. The invoice book should be posted as usual, the items being carried to the credit of the accounts named in the purchase ledger, and the total footing of the book carried to the debit of Merchandise Purchases and to the credit of Accounts Payable in the main ledger. Having posted 5'our books, check back each item, and be sure that you have posted the footings of the special columns in the journal to the accounts named in the main ledger. See that you have posted the special columns of the cash book to the accounts named in 182 MODERN ILLUSTRATIVE BOOKKEEPING. Inventories, August 31, 190-. Resources. Merchandise. 47 pes. Amoskea<; Denim, 1919' yds. .10 24 " Black Venetian, 860' 1. 10 1 28 " Blue Flannel, 1403' .20 1 15 " Broadcloth, 904 3-25 16 " Creton Plaid, 66o^ .11 174 " Crown Lining, 9425- .06 24 " Corduroy, 856' .60 34 " Cashmere, 1410 .48 235 doz. Coates Thread, .37 K 25 pes. Duchess Satin, 1255 1.65 266 " F. of L. Sheeting, 15954' .07 16 " French Crepon, 598 1.50 33 " 54-in. Kersey, 1519' •99 ^ 125 " Monument Cotton, 7482-^ .05^ 17 " Ox. Gray Homespun, 855' .90 37 " Plain French Poplin, 1665^ .92 179 " Pique Muslin, 12529 .12'^ 82 " Sateen, 4027 .08 625 gross Smoked Pearl Buttons, • •50 41 pes. Surah Silk, 2105 •44 34 " Storm Serge, 1570 .60 90 " Talbot Flannel, 3979' •23 540 doz. Torchon Lace, .60 32 pes. Velveteen, 1180^ .24 31 " Whipcord, 1310' .80 76 " Vv'ashSilk, Furniture & fix., cost, Depreciation, Horses, wagons and harnesses, cost, 3954' •45 2600 26 750 2574 Depreciation, 7 50 742 50 Insurance, 267 5-^ Real estate, 12250 Wamsutta Mills Stock, 1 1153 Rent due on flat, 100 Interest (accrued), 12 75 Liability. Interest (accrued). 171 67 the main ledger, and that each item in the Sundry cohimn has been posted to the account named. See that the footing of the last column of the sales book has been carried to the credit of Merchandise Sales and to the debit of Accounts Receivalile in the main ledger, and that the footing of the invoice lx)ok has been carried to thedel)it of Merchandise Pur- chases and to the credit of Accounts Payable in the main ledger. Foot your cash lx)ok and write the balance, in red ink, on the credit side. See that the amount in the bank agrees with your check book balance, and the amount in the safe agrees with the cash in your Cash Drawer. Make a statement of the balances of accounts in the sales ledger, and see (hat the footing is the same as the Ijalance of Accounts Receivable in the main leilger. MODERN ILLUSTRATIVE BOOKKEEPING. 183 Make a statement of the balances in the purchase ledger, and see that the footing is the same as the balance of Accounts Payable in the main ledger. Take a trial balance of the main ledger, and in this trial balance include the balance of cash, as shown by your cash book. Present your trial balance to your teacher for examination. It is desired to make a statement of losses and gains, in order to determine whether the business is being so conducted as to yield a satisfactory profit. The inventory of unsold merchandise has been taken, and it is found that you have on hand the list of merchandise given on page 182. The furniture and fixtures of the business, which cost $2600, have depreciated i^ in value. The horses, wagons and harnesses, w^hich cost $750, show an equal depreciation. The unexpired policies of insurance are estimated to be worth $267.50, while real estate has advanced in value, so that it is estimated to be worth $12250. Wamsutta Mills stock is now selling at 1 15. There is due for rent on your real estate $100. Interest accrued on bills receivable, $12.75. Interest due on bills paj^able, $171.67. Find the value of your unsold merchandise and all other property, and make a state- ment of losses and gains according to the following model. In the third section of the model statement of losses and gains, after the gain from business has been shown as usual in the first two sections, we have on the credit side the items of real estate, Wamsutta Mills stock, and rent, which have no connection with the dry goods business. Add the gain from these items to the gain from the business brought down, and close this section of the loss and gain statement, by writing, in red ink, on the opposite side: Total gain from partnership carried down. Foot and rule this section and bring down the total gain from partnership on the opposite side. In the fourth section of this statement we have the items of interest and salaries on the debit side. The interest due the partners is found as follows: H. W. Taylor invested, August ist, $15800, and is entitled to interest on this amount for 31 days, $8x.x3. He also has in the business a private balance of $400. The interest on this amount for 31 days is $2.x7, making a total credit interest of $8x.xo. Against this amount Taylor is charged with interest on a withdrawal of $200, under date of August 6th. The interest on $200 for 25 days, the time he had it out from the business, is 8x52^, and this amount deducted from $83.70 leaves a credit interest balance of $8x.x7, which you will write opposite the name of H. W. Taylor in the third section of the loss and gain statement. The following shows the statement of H. W. Taylor's interest account. H. W. Taylor. Interest on withdrawal of Aug. 6, |2oo, 25 days, * Balance, Cr., * To be wTitten in red ink. 83 82|87 83 70 Interest, 31 days, on investment, $15800, Interest, 31 days, on private "r, $400, 81 2 83 63 07^ 70 184 MODERN ILLUSTRATIVE BOOKKEEPING. Statement of Losses and Mdse. on hand at close of July, " purchased during August, Less goods returned, Freight, Gain on mdse. carried down. Interest due on bills payable, " " " receivable, Less credit balance of Int. o/c in ledger, Discount, Salaries and Help, Discount on Sales, Traveling Expenses, Expense, Collection & Exchange, Insurance, cost, " unexpired, Depreciation as under: Furniture, Horses, wagons and harnesses. Gain from business carried down, 165.50 15.20 Total gain of partnership carried down, Interest due partners as under : A. B. Dane, C. E. Freedman, G. H. Irving, Salaries due partners as under: A. B. Dane, C. E. Freedman, G. H. Irving, Each partner's net gain as under: A. B. Dane, C. E. Freedman, G. H. Irving, 22480 3200 25680 225 150 112 240 220 72 65 8 125 150 175 264 78 264 77 264 77 00 75 30 20 30 20 10 25454 25 125 1950 27530 75 12 12 38 10 12 1 40 175' 210 50 3251 329 45 7 45 20 25 7 1089 92 2239 ; 82 1389 1389 145 450 794 1389 92 92 60 32 92 *To be written in red ink. C. F. Wood invested $23911.94. This amount has been in llie l)nsiness 31 daj'.-^, and he is entitled to 31 days' interest, $ixx.x5. He also had in the bnsiness a balance of $550 due him on his private account, which is entitled to interest for 31 days, amoiniting to $2.x4, making- a total interest credit due C. F. Wood of $i2x.x9. On August 14th, Wood drew from the business $225, and he is charged with interest on this amount for the time he took it from the business, or 17 days, which is 6x'/'. Deducting this amount from $126.39, C. F. Wood's interest credit, we have $i2x.x5, the lialance of interest due C. F. Wood. Write this amoiuit in the third section of the loss and gain statement against the name o'^ C. F. Wood. MODERN ILLUSTRATIVE BOOKKEEPING. 185 Gains, August 31, 190-. Mdse. sales during August, Less goods returned, Mdse. on hand, a:j per inventory, Gain on mdse. brought down, Discount on purchases, Gain from business brought down. Real Estate, Wamsutta Mills Stock, Rent, Total gain from partnership brought down. increase in value of flat, due from flat. The following shows the statement of C. F. Wood's interest account. C. F. Wood. Interest on withdrawal, Aug. 14, $225, 17 days, * Balance, Cr., 125 126 7560 240 1 80 So 1 i 7320 20210 27530 12 Interest, 31 days, on investment, 64! $23911.94, 75 Interest, 31 days, on private c/c, $550, 39 1950 289 2239 1089 150 50 100 1389 1389 1389 12 12 70 82 92 92^ 92 92 123 2 55 84 126 39 186 MODERN ILLUSTRATIVE BOOKKEEPING. You invested $2500, and should be credited with 31 days' interest on this amount. $ix.x2;' but you drew from the business, August i8th, $100, and the interest on this amount for 13 days is 2x^-, which deducted from $12.92 leaves you a credit balance of interest amounting to $ix.xo, which you wdll place opposite your own name in the third section of the loss and gain statement. The following shows the statement of your own interest account. Interest on withdrawal of Aug. iS, |ico, 13 days, * Balance, Cr., *To be written in red ink. Student. 12 22 92 12 Interest, 31 ds.,on investment, $2500.00, 12 12 92 92 CLOSING THE LOSS AND GAIN ACCOUNTS. Close all accounts which indicate losses or gains in the main ledger, bj' writing, in red ink. Loss or Gain on the smaller side, and transfer to the Loss and Gain account. Close the Toss and Gain account, by writing Balance carried down, in red ink, on the smaller side. Rule and foot the account. Transfer the balance to the opposite side of the Loss and Gain account, writing Brought down in the explanation colmnn. On the debit side of the Loss and Gain account wTite, in red ink, H. \V. Taylor's interest, C. F. Wood's interest, and your own interest, taking the amounts from the fourth section of the statement of losses and gains. Also write, in red ink, H. W. Tay- lor's salary, C. F. Wood's salary, and your own salar^^ taking the amoun,ts from the fourth section of the statement of losses and gains. Also in red ink, H. W. Taylor's gain, C. F. Wood's gain, and your own gain, taking the amounts from the fourth section of the loss and gain statement. This should close the Loss and Gain account. Transfer the interest, salary, and loss and gain of each partner to his pri\-ate account in the main ledger, writing each item in black ink. Close these private accounts, by writing Balance, in red ink, on the debit side. Foot, rule, and bring down each balance on the opposite side of the account. Present your books to your teacher for inspection. MODERN ILLUSTRATIVE BOOKKEEPING. 187 WORK FOR THE STUDENT. September i, 190-. No. 82. — Sept. i. This check is in payment of note dated June ist, with interest, (see bill book). Take the note from your Cash Drawer, and if the interest is correct, mark the note paid, and place it in Vouchers for Others. (Enter as in No. 30.) No. 83. — Salesman's orders. Jas. H. Wood & Son, Newton, 2'i 10 ds., i5« 30 ds., 6 pes. F. of L. sheeting, 58, 65, 61, 57, 59, 63^ yds. 3 pes. corduroy, 39, 36, 2>Wx yds. 7 pes. pique muslin, 72, 69, 71, 75, 65, 68, 70 yds. 4 pes. blue flannel, 48^, 50, 52, 51 yds. 50 doz. lace, i piece whipcord, 42 yds. Thompson & Bulkeley, Easton, 6^ 10 ds., 5^ 30 ds., 3 pes. black Venetian, 37, 40, 36 yds. 8 pes. Am. denim, 40, 44, 37, 39, 42, 45, 35, 46 yds. 3 pes. kersey, 44, \bVx, 45% yds. 4 pes. French crepon, 36, 40, 42, 38 yds. 5 pes. blue flannel, 55, 46, 48, 51, 47 yds. 6 pes. wash silk, 51^2, 5o3^, 46 J^, 45/^, 54, 53 yds. 50 doz. C. thread. Sibley & Co., Gardner, 2'<' 10 ds., li 30 ds., 4 pes. Ox. gray homespun, 48, 47, 55, 503^ yds. 8 pes. unb. cotton, 60, 65, 57, 58, 62, 64, 57, 61 yds. 7 pes. C. lining, 52, 56, 55. 53 > 54) 60, 50 yds. 2 pes. Duchess satin, 48, 58^ yds. 50 gross S. P. buttons. 25 doz. lace. 5 pes. surah silk, 51, 53^. 45. 52, 51 J^ yds. No. 84. — Sept. i. Send Judson, the traveling salesman, as per his request, check for $75 for traveling expenses. No. 85. — Sept. 2. Received cash for rent of flat, ^74 Center St., August and Sep- tember, $200. (Credit J^e?it) No. 86. — Check received from Levy & Garson for invoice of August 25th, less 6'i. No. 87. — Invoice of merchandise purchased from Burke, FitzSimons, Hone & Co. No. 88. — Pay invoice Burke, FitzSimons, Hone & Co., due to-day, as follows: Deduct from the amount of the invoice the charge for goods returned on Aug. nth, as per ledger, and from this amount deduct ifo, as per terms of bill. Write a check for the net amount. No. 89. — Sept. 3. Ingham & Case owe a small balance which has been running a long time, and it is not advisable to sell them more goods on account. Bill the order as follows: 3 pes. black Venetian, 39^, 36%, 36 yds. 50 gross buttons. 2 pes. broad- cloth, 54, 58 3'ds. I piece plain French poplin, 50 yds. Prepare bill of lading, the box weighing 175 lbs. when ready for shipment, and have the freight agent sign it. Make a sight draft, allowing 6;^ discount from the amount of the invoice. Deduct the discount on the invoice, and enter the net amount only in the sales book. Send the draft and bill of lading to Union National Bank, Elmira, for collection. No. 90. — Bill this order as follows; terms, 30 days net, 2 pes. kersey, 45, 55 yds. 3 pes. storm serge, 55, 45, 50 yds. 6 pes. velveteen, 40, 38, 42, 39, 45, 44 yds. 3 pes. surah silk, 60, 41, 49 yds. 5 pes. wash silk, 52, 48^, 47^, 49/^, 50^ yds. 100 doz. thread. No. 91. — Check to apply on account. No. 92. — Sept 5. Cash sale. Weston & Hill, City, (check) 3 pes. cashmere, 42, 37. 39 yds. 40 doz. torchon lace. 3 pes. French crepon, 35, 38, 45 yds. i piece whip- cord, 40 yds. No. 93. — Deposit all checks. Bank charges for collection, 75^/. 188 MODERN ILLUSTRATIVE BOOKKEEPING. No. f)4. — Bill this order as follows; terms, 6^? lo ds., 5^? 30 ds. i piece kersey, 40 yds. 2 pes. black Venetian, 37, 33 37ds. i piece broadcloth, 70 yds. 40 doz. thread. Xo. 9,1. — Sept. 6. Purchase of merchandise from Burke, FitzSimons, Hone & Co. No. 9(>. — Pay Little Falls Woolen Co., by check, for invoice of Aug. 12th, $163.22, less i^. No. 97. — This check is on account. No. 98. — Sept. 7. Check in full for invoice of July 25th. No. 99. — Salesman's orders. B. C. Wiley, Waverly, 2'^ 10 ds., I'c 30 ds., 5 pes. wash silk, 45, 53, 491^, 541^, 50 yds. 6 pes. sateen, 45, 49, 50^, 47^, 48, 47 yds. 2 pes. corduroy, 35, 40 yds. 5 pes. C. lining, 56, 60, 51, 53, 50 yds. 2 pes. black Venetian, 35 > 38^ yds. I piece broadcloth, 64 j'ds. 4 pes. Talbot flannel, 40, 48, 44, 43^ yds. Carlton, Sons & Co., Dansville, die 10 ds., 5^^ 30 ds., 8 pes. F. of ly. sheeting, 62, 65, 68, 55, 58, 53, 60, 62 yds. 7 pes. M. cotton, 65, 58, 55, 63, 59, 60, 50 yds. 3 pes. Talbot flannel, 421^, 45^, 43 yds. 8 pes. C. lining, 49, 50, 60, 54, 53, 51, 55, 57 yds. 5 pes. pique muslin, 75, 72, 68, 66, 71 yds. 6 pes. Am. denim, 41, 43, 38, 45, 35, 50 yds. 2 pes. blue flannel, 48, 52 yds. 4 pes. velveteen, 37, 39, 36, 35 yds. Iv. H. Parker, lyima, dfc 10 ds., 5,^ 30 ds., 3 pes. storm serge, 44, 47^, 48^ yds. 5 pes. velveteen, 39, 36^, 38^, 40, 30^ yds. 4 pes. kersey, 48, 44, 45, 465^ yds. 3 pes. surah silk, 45, 54, 41 yds. 50 doz. Coates thread. No. 100. — Return to Burke, FitzSimons, Hone & Co., Boston, i piece broadcloth, 62^ yds., I piece Oxford gray homespun, 51 yds., received on last invoice, as they are somewhat damaged. Bill the goods at cost price, and charge in the journal. No. 101. — Check for note due to-day. (See No. 82.) No. 1 02. — Sept. 8. Invoice of merchandise purchased from Sible}^ Lindsay & Curr Co. No. 10;5. — Write check, favor of Sibley, Lindsay & Curr Co., for note due to-morrow. Take the note from Bills Payable File and mark it paid. No. 104. — Sept. 9. Mr. Taylor draws $200 from the business by check. No. 105. — Note to apply on account. No. 10(>. — Received notice from your bank that the draft of 3d inst. on Ingham & Case has been paid. Collection, 70'/. (Do not forget to debit Collection & Exchange for collection.) No. 107. — Sept. 10. L. H. Parke*r, Lima, returns for credit, by agreement at time of order, the three pieces of storm serge and the three pieces of surah silk sold him on the 7th inst. Send L. H. Parker a credit memorandum for the amount. Kntcr in the journal. No. 1<)S. — Mr. Wood draws, by check, on private account, $250. No. 109. — Sept. 12. Cash sales. T. D. Winch, City, 2 pes. Duchess satin, 49, 53 yds. I piece cashmere, 40 yds. Allen & Co., City, 2 pes. Ox. gray homespun, 47^, 54 >^ yds. i piece French crepon, 40 yds. No. 1 10. — Deposit $300 currency and all checks. Collection charges, $1.25. No. 1 1 1. — In reply to a letter from Sibley, Lindsay & Ciur Co., asking for a settle- ment of their invoice of July 31st, make out a clicck for the amount, $4484.23, and mail it to them. MODERN ILLUSTRATIVE BOOKKEEPING. 189 No. 112. — Ingham & Case have paid no attention to letters from Mr. Taylor regarding the settlement of their account. You will now make a sight draft on Ingham & Case for $66.35. Leave it at the Commercial Bank for collection. Remember to indorse the draft properly. Write in pencil, under their account in the ledger, Sight draft, Sept. 12. No. 113. — Sept. 13. Check for invoice of Sept. 5th, less 6^. No. 114. — Pay cash for stamps and office supplies, $10.00. No. 115. — Check to apply on account. No. 116. — Sept. 14. Draw on your own private account, $150.00, by check. No. 117. — Purchase of merchandise from Gimbel Bros. No. 118. — Salesman's orders. J. G. Smith, Ottawa, 6f^ 10 ds., 5,^ 30 ds., 5 pes. surah silk, 50, 60, 46, 48, 40 yds. 5 pes. wash silk, 60, 45, 49, 48, 52 yds. 3 pes. Duchess satin, 47, 51, 52 yds. 7 pes. velveteen, 48, 36, 29, 33, 38, 37, 33 yds. 5 pes. storm serge, 50, 49, 45, 44, 56 yds. 3 pes. Ox. gray homespun, 44, 52, 54 yds. Lewis \V. Chase, Jackson, 2^0 10 ds., i^ 30 ds., 5 pes. Creton plaid, 36, 42, 44, 41, 39 yds. 8 pes. M. cotton, 60, 62, 55, 65, 68, 49, 70, 53 yds. 7 pes. F. of D. sheeting, 62, 64, 59, 57, 65, 55, 58 yds. 4 pes. sateen, 46, 52, 50, 48 yds. 3 pes. Talbot flannel, 48, 40, 45 yds. 8 pes. C. lining, 54, 51, 60, 50, 55, 53, 52, 56 yds. 4 pes. French crepon, 42, 36, 38, 37 yds. 50 doz. Coates thread. Levy & Garson, Somersworth, 2i 10 ds., i^ 30 ds., 3 pes. plain French poplin, 48, 53, 49 yds. 5 pes. Talbot flannel, 40, 46, 44, 50, 42 yds. 2 pes. whipcord, 42, 38 yds. 6 pes. corduroy, 39, 32, 37, 40, 33, 41 yds. 80 doz. torchon lace. 150 gross S. P. buttons. No. 119. — Pay Granite Mills, by check, for invoice due to-day, less i^. No. 120. — Return to Gimbel Bros, i piece, 32 yds., French crepon. (Enter in journal, billing at cost price.) No. 121. — Sept. 16. Cash sales. E. H. Marcy & Co., 2 pes. Duchess satin, 47 5^, 52^ yds. 2 pes. Ox. gray homespun, 47, 53 yds. Wallace Bros, (check), i piece whipcord, 50 yds. i piece surah silk, 48 yds. i piece storm serge, 48 yds. 50 doz. torchon lace. No. 122. — Pay cash, salaries and help, $75. No. 123. — Paj' freight in cash, $30. No. 1 24. — Sept. i 7 . This check is for note and interest due to-day. (Credit Interest. ) No. 125. — Deposit all checks. Collection, $2.00. No. 126. — The bank informed you, at time of above deposit, that your draft of the 12th inst. on Ingham & Case has been returned unpaid. No reason assigned. Write in lead-pencil, under their account in your ledger, g> 7, draft returned. No. 127. — Sept. 19. Invoice of merchandise purchased of Little Falls Woolen Co. No. 128. — Pay rent for September, $300, by check. No. 129. — Sept. 20. You have outstanding an interest-bearing note, due to-day, and the bank has agreed to renew one-half of the amount for 10 days. Make your note at 10 days (with interest), in favor of the Commercial Bank, $5000. Receive credit for the face of the note. Enter in the bill book, and add to yoiu: deposit on stub of the check book. 190 MODERN ILLUSTRATIVE BOOKKEEPING. No. 130. — Write a check, in favor of the Commercial Bank, in full for the old note as above and four months' interest. This is your first " renewal," and you should study the transaction carefully. No. J 31. — Check to apply on account. No. 132. — Sept. 21. Note received on account. No. 133. — Discount the note received from L. \V. Chase, and receive credit for the proceeds. No. 134. — Salesman's orders. James H. Wood & Son, Newton, 2^? lo ds., i^, 30 ds., 3 pes. surah silk, 48, 51, 53 yds. 25 doz. Coates thread, i piece plain French poplin, 45 yds- 5 pes. C. Hning, 50, 60, 54, 51, 53 yds. 2 pes. Talbot flannel, 44, 45 yds. 2 pes. corduro}', 37, 38 yds. Thompson & Bulkeley, Kaston, ^''< 10 ds., ^ 30 ds., 4 pes. blue flannel, 45, 54, 50, 51 yds. 2 pes. Creton plaid, 44, 36 yds. 5 pes. P. F. poplin, 40, 48, 50, 47, 40 yds. 6 pes. pique muslin, 68, 75, 67, 70, 74, 66 yds. 3 pes. sateen, 49, 50, 47 yds. 2 pes. velveteen, 37, 36 yds. Sibley & Co., Gardner, i piece broadcloth, 60 yds. 5 pes. M. cotton, 55, 58, 65, 62, 60 3'ds. 2 pes. black Venetian, 36, 34 j^ds. 6 pes. pique muslin, 68, 75, 70, 73, 69, 67 yds. 5 pes. sateen, 48, 51, 49, 52, 50 3^ds. i piece storm serge, 45 yds. Brown & Wilson, Troy, 7 pes. Am. denim, 35, 38, 42, 45, 37, 43, 40 3^ds. 3 pes. cash- mere, 44, 36, 42 yds. 2 pes. Duchess satin, 49, 52 3'ds. 6 pes. F. of L. sheeting, 58, 55, 70, 52, 56, 68 yds. 5 pes. C. hning, 52, 55, 54, 50, 56 yds. 50 gross S. P. buttons. No. 135. — Sept. 22. Check received on account. No. 13(>. — Deposit the two checks on hand. Collection, 75^/. No. 137. — Sept. 23. Mr. Taylor draws cash, $50, on private account. No. 138. — Check to apply on account. No. 13J). — Merchandise purchased of Sibley, lyindsay & Curr Co. No. 140. — Invoice of mdse. purchased of Burke, FitzSimons, Hone & Co. No. 141. — Sept. 24. Pay freight in cash, $75.28. No. 143. — Check for invoice of 14th inst., less d'c discount. No. 143. — Pay Burke, FitzSimons, Hone & Co., by check, for invoice of Aug. 31st., less yL No. 144. — Sept. 26. Bill this order as follows; terms, 2"^ 10 ds., I'V. 30 ds. 5 pes. velveteen, 37, 35, 40, 38, 36 yds. 3 pes. A. denim, 42, 39, 41 yds. 2 pes. blue flannel, 53, 48 yds. 3 pes. black Venetian, 39, 35, 38 yds. i piece Duchess satin, 50 yds. 4 pes. pique muslin, 68, 72, 65, 69 yds. No. 145. — Give Gimbel Bros, cheek for note due yesterday. When notes or other obligations mature on Sunday, it is custoniar}- to pay thciii the followim; day. No. 146. — Check in payment of invoice of i4lh inst., less 2io. No. 147. — Sept. 27. Bill this order as follows; terms, 6/ 10 days, 5'r 30 days. 6 pes. F. of Iv. sheeting, 58, 62, 65, 60, 55, 60 yds. 6 pes. M. cotton, 62, 5S, 65, 60, 62, 61 yds. 2 pes. plain French poplin, 45, 47 yds. 2 \>q.s. corduroy, 35, 3S >(ls. 100 gre)ss S. P. buttons. 50 doz. Coates thread. 50 doz. torchon lace. No. 148. — Check for $5000. By consent of the partners, Mr. Ta)lor has arranged to borrow the sinn of five thousand dollars of Mr. Darius D. Miner, giving him llie note MODERN ILLUSTRATIVE BOOKKEEPING. 191 of the Company, paj'able ' on demand, and secured by first mortgage on the flat at II74 Center St. Make a note favor of Darius D. Miner, payable on demand, with interest, 6/1. Enter in cash book and record in bill book. No. 149. — Deposit all checks. Collection and exchange, $2.00. No. 150. — Sept. 28. Pay grain and feed bills in cash, $16.75. No. 151. — Pay cash for salaries and help, $100. No. 152. — Pay cash for telephone service, $15. No. 153. — Sept. 30. Draw cash for your own private use, $40. No. 154. — Pay, by check, note and interest due at bank to-day. No. 155. — Pay Judson one month's salary by check, $150. Post all books (see directions, page 180). Check back, after which take a trial balance. Make a statement of losses and gains and of resources and liabilities (see models, pages lii^ and 185 and 192 and 193). Close your ledger and present your books to your teacher. Inventories, Sept. 30, 190-. Merchandise. 23 pes. Amos. Denim, 22 " Blk. Venetian, 16 " Blue Flannel, 13 " Broadcloth, 18 " Creton Plaid, 134 " Crown Lining, 20 " Corduro}', 33 " Cashmere, 470 doz. Coates Tliread, 16 pes. Duchess Satin, 233 " P. of L. Sheeting, 19 " French Crepon, 36 " Kersey, 91 " Mon. Cotton, 23 " O. G. Homespun, 30 " PI. F. Poplin, 151 " Pique Muslin, 69 " Sateen, 425 gro. S. P. Buttons, 34 pes. Surah Silk, 30 " Storm Serge, 73 " Talbot Fla'nnel, 245 doz. Torchon Lace, 9 pes. Velveteen, 26 " Whipcord, 71 " Wash Silk, 10 shares Wamsutta Mills Stock, Insurance premium (unexpired), Horses, wagons and harnesses, Furniture and fixtures. Real estate. 937'^ 777' 804-^ 1385' 742' 7380- 703 1372' 796^ 13969 718 1648 5438-^ 1152' 1328^ 10571 3393' 1761 1352 3229' 311' 1098^ 3702^ 10 1. 10 .20 3-25 .11 .06 .60 .48. .37>^ 1.65 .07 1.50 •98^ .90 •95 .osyz •50 .44 .60 •23 .60 .24 .80 .45 1 150 260 735 2550 12200 192 MODERN ILLUSTRATIVE BOOKKEEPING. Statement of Resources and Property as under: Cash, Merchandise, Furniture, Horses, Wagons & Harnesses, Real Estate, Wamsutta Mills Stock, Book accounts considered good as under: Accounts Receivable, Bills Receivable, Other resoiurces as under: Interest, Insurance, Rent, in safe 150.00 " bank 9600.00 as per inventory valued at as per sales ledger " " bill book due on bills receivable unexpired due on flat 1 9750 ' 20210 12 1 2475 693 12 150 1050 46328 9545 4782 40 25 14327 30 250 90 25 370 61026 12 2^ 02 A. B. Dane, a t ( ( ( 1 ( C. E. Freed man, G. H. Irving, Proof. stock account private ^'f balance 800.00 withdrew 200.00 salary interest on investment net gain stock account private '^r balance 745-oo withdrew 150.00 salary interest on investment net gain stock account private ^fc balance salary interest on investment net gain withdrew 1 14460 600 125 1 72 264 30 78 1062 13400 595 150 65 20 264 77 1074 1795 125 175 \ 8 1 264 98 77 573 15U 75 88 422 32214 oS 87 92 MODERN ILLUSTRATIVE BOOKKEEPING. 193 IvIABILlTlKS, SEPTEMBKR 30, 190-. Book accounts due others as under: Accounts Paj-able, Bills Payable, Other liabilities as under: Interest, * Present Worth, Present Worth, *To be written in red ink. as per pm-chase ledger " " bill book due on bills payable 7068 21577 32 28 28645 60 165 50 32214 92 61026 02 Proof. 32214 92 32214 92 Com. — 13 194 MODERN ILLUSTRATIVE BOOKKEEPING. Price Lists for I. 2. 3- 4- 5- 6. 7- 8. 9- lO. II. 12. 13- 14. 15- 16. 17- 18. 19- 20. 21. 22. 23- 24. 25- 26. Amoskeag Denim . . . . Blk. Venetian Blue Flannel Broadcloth Creton Plaid C. Lining Cashmere Coates Thread Duchess Satin Fruit of Loom Sheeting . . French Crepon Kersey, 54 in Monum't Unblchd. Cotton Oxford Gray Homespun . . Plain French Poplin . . . Pique Muslin Smoked Pearl Buttons . . Surah Silk Sateen Storm Serge, Navy Blue . . Talbot Flannel Torchon Lace Velveteen (248) Whipcord Wash Silk Corduroy 1 2 3 •13 4 6 7 8 yd. .12^ •25 .24-' .23-' .24 .14 .23^ *( 1-25 1^37 1.24 1.36 1.23 1-35 1.22 1^34 •37 .24-^ .36^ •25 .26 •25^ •35-^ .26 4^13 4.01 4.14 4.02 4^15 4-03 4,16 4.04 .12' .l27/s .12'* .T.2% .121 .12^ .12H •^iy% 7' t 7' 1% VA 1% VA ^y% .60 •58 .62 •56 .64 •54 .66 ■52 doz. ■ 55 •54 ■36 ■53 ■37 •52 •35 •51 yd. 2.00 1-95 1.90 1. 98 1.96 1.94 1.92 1.88 ( ( 8-^ 8' 9' 83 9' 9^ 10 • t ( t 1-75 1.77 ^■73 1.79 1. 71 1.81 1.69 1.83 ( ( i^i5 1. 16 1-34 1. 17 1^33 1. 18 ^•35 1. 19 1 ( 6'^ 6>^ 6' 6^ 6^ 6>^ 6^ 5?^ ( I 1. 00 1.05 1. 10 1.02 1.04 1.06 1.08 1. 12 i i 1.20 1. 18 1.22 1. 16 1.24 1. 14 1.26 1. 12 ( < .15^ .15^ ■ 14'' •15' .I4' .14' .13' .16' gro. •75 •77 •73 •79 •71 .81 .69 •83 yd. .48 •50 .46 •52 •44 ■ 54 .42 ■56 ( ( .lO^ .lo' .10^* .10% .io>^ .10^ .io>^ 9% ( ( .75 •73 .77 • 71 •79 .69 .81 .67 " .27 .28 •39 .29 .38 •30 •37 •31 doz. •65 .70 •75 .80 .66 •71 .76 •67 yd. •35 •25 •34 .26 •33 .27 •32 .28 ( i 1. 10 1.05 1. 00 •95 1.09 1.04 ■99 i.oS H •50 .60 •51 •59 •52 ■58 •53 •57 n •75 ■ 74 •63 ■73 .64 .72 •65 •71 9 .14-^ 1. 21 •35 4.17 •13% m .68 •38 1.86 TO- 1.67 1.32 sys 1. 14 1.24 •13' •71 .40 9>^ .83 •36 • 72 •31 1.03 ■ 54 .66 10 •23 ^•33 .26- 4-05 .13* 8' •50 •50 1.84 7' 1.85 1.20 5' 1. 16 1. 10 .i6« •85 .58 9^ •65 ■32 ■ 77 .29 .98 ■56 MODERN ILLUSTRATIVE BOOKKEEPING. 195 August and September. 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 I. •15 .22'2 .I5-' .22 .21^ .16 .16- .21 • 17 .20'^ .i7'^ .20 .18 .19^ .18^ 2. 1.20 1.32 1. 19 i^3i 1. 18 1.30 1.17 1.29 1. 16 1.28 1^15 1.27 1. 14 1.26 ^•i3 3- •34- .27 •34 .27- .28 •33"^ •33 .28'^ .32- •29 •32 .29-= •31^ •30 •31 4- 4.1S 4.06 4.19 4.07 4.20 4.08 4.21 4.09 4.22 4.10 4^23 4.11 4.24 4.X2 4^25 5- •13/8 ■^y •13/8 •13' .11^8 ■ IT-'A .11^ .11' ■iiys .11^ .11^ .10% .I03 ■loys .10' 6. 8' 8H s^A 8'^ 9% 9'A 9' 93 9H 9A 9' ■ loYs .10' .loys .lo^ 7- .70 •59 .61 •57 •63 •55 •65 •53 .67 •51 .69 •73 •72 •74 • 71 8. •39 •49 .40 .48 .41 •47 .42 .46 •43 •45 •44 .40 •38 •39 .42 9- 1.82 1.80 1.78 1.76 1^75 1.74 1.72 1.70 1.68 1.62 1.64 1.56 1.58 1.66 1.60 lO. .10^ 7' .11' 8' .11- 8'^ .11^ 83 93 9' 9' .lo' .I03 .10^ 73 II. 1.65 1.76 1.74 1.78 1.72 1.80 1.70 1.82 1.68 1.84 1.66 1.62 1.63 1.61 1.64 12. I-3I 1. 21 1.30 1.22 1.29 1.23 1.28 1.24 1.27 1-25 1.26 1.30 1.32 1^31 1.28 13- 5H 5'^ 5/8 5^ 7H 7H 7' 73 7^8 ' 7/8 7' SH 8' 8/8 8'^ 14. 1. 18 1.20 1.22 1.24 1-25 1.26 1.28 1.30 1.32 1.38 1.36 1.44 1.42 1^34 1.40 15- 1.22 1.08 1.24 1.06 1.26 1.04 1.28 1.02 1.30 1. 21 1.29 1.23 1.27 1-25 1.05 16. •13' .16' .123 .15^ .12-2 •15^ .12' •15' • 14' • 14-^ .14-^ .133 •13' •13'^ .16' 17- •73 .87 •71 .89 •69 •91 •67- •93 •65 •74 .66 .72 .68 .70 .90 18. ■47 ■57 •45 •55 •43 •53 .41 •51 .60 •39 •38 •37 •63 .61 .62 19- 9' 9'A 9Vs 9'^ 8^ s% 83 8' S/s 8/s 8- 7Vs 7"- 7H f 20. .76 .66 .78 .68 .80 .70 .82 .72 •63 .84 •85 .86 .60 .62 .61 21. •35 •00 •34 .26 .41 •25 .42 .24 •43 •39 •34 •29 •43 •37 .28 22. .68 •73 .78 .69 •74 •79 .81 •87 .82 .86 .83 .85 .84 .72 .69 23- ■30 •36 •50 •37 •49 •38 .48 •39 •47 .40 .46 .41 •45 .42 •44 24. 1.07 1.02 •97 1.06 I.OI .96 •94 .88 •93 .89 •92 .90 •9^ 1.03 1.06 25- •55 •49 •35 .48 •36 • 47 •37 •46 •38 •45 •39 •44 .40 •43 .41 26. .67 .69 .68 .76 .61 •77 .60 •78 •59 •63 .68 •73 •59 .65 .74 196 MODERN ILLUSTRATIVE BOOKKEEPING. QUESTIONS. 1. AAHiat special columns appear at the left of the journal-day book page? Wliar special columns at the right of the journal-day book page ? 2. Explain the posting of the items and the totals of these columns. 3. Explain the uses of Amount of Invoice, Discount Allowed, and Amount Received or Amount Paid columns of the cash book. 4. How are C. O. D. sales shipped by freight? 5. If you desired to return a part of merchandise purchased, how would j-ou notify the seller so as to receive credit for the amount returned ? 6. What is a credit memorandum ? 7. Explain the balance ledger used in the August and September work, and state its advantages. 8. What account in the main ledger is an abstract of the sales ledger? 9. What account in the main ledger is an abstract of the purchase ledger? 10. To what accounts in the main ledger should the footing of the last column of the sales book be posted ? To what book should the ' ' on account ' ' items of the sales book be posted ? 11. Explain the posting of the items and the totalof the invoice book. 12. In the statement of losses and gains, what accounts appear that have no connec- tion with the dry goods business ? 13. Why should a special section of the statement be given to such accounts as Real Estate, Wamsutta Mills Stock, and Rent? 14. How would a gain or a loss on real estate be likely to occur? 15. When would a gain appear on such an account as Wamsutta Mills Stock? WTien a loss? 16. Explain the method of finding the interest due a partner. 17. Explain the method of closing the Eoss and Gain account in the main ledger. 18. Explain how each partner's interest and salary would be shown on his private account. 19. How would you close the private account of each partner? 20. Explain the method of proving the present worth of the statement of resources and liabilities by means of partners' stock and private accounts. MODERN ILLUSTRATIVE BOOKKEEPING. 197 SINGLE ENTRY. Single entry books differ from those used in double entry bookkeeping chiefly in the fact that a single entry ledger contains only accounts with persons, all property accounts being omitted. The principle of equal debits and credits, belonging to double entry, is not a part of single entry bookkeeping, and consequently no equality exists between the debit and credit sides of the ledger, and no trial balance can be taken of a single entry ledger. An account with cash should be kept in the cash book, as in double entrj^ bookkeeping, and by means of a bill book it is easy to keep a record of bills receivable and bills payable. An account with merchandise may be kept by the use of an invoice, or purchase, book and a sales book. A well arranged set of single entry books, correctly kept, will show as complete a record of the business as will a set of books kept by double entry; but it will not be in as compact form, and will require more work on the part of the bookkeeper. The following transactions are designed to illustrate the method of keeping the books of a modern, up-to-date retail grocery business, at first bj^ means of single entry books, after which will be shown the method of changing from single entry to double entry, con- tinuing the business by double entry, and incidentally showing the use of the card S3'stem of ledger bookkeeping. In order that a complete record of the business may be obtained bj- single entry book- keeping, the books used will be as follows: journal, cash book, abstract sales book, purchase book, bill book, general ledger, and card ledger, using the card system only for customers' accounts. For an elementary set in single entry, requiring a less complete record of the business, see Appendix. Journal. This book contains such debits and credits as may occur outside of the cash book and the sales sheets, which make up the abstract sales book, and in it are kept such matters of record as would appear in the ordinary double entry journal. The form on page 198 illustrates the journal. Sales Sheets. When sales of merchandise on account are made, in most modem grocery stores sales sheets, or tickets, are used, and by means of carbon paper are written in duplicate by the salesman as he takes the order verbally or from an order book. The form on page 199 illustrates the sales sheet. The original and duplicate sales sheets are sent to the office to have the prices O. K'd. The original is retained by the bookkeeper, and the duplicate is sent with the goods when delivered, so that the customer receives a complete bill with each lot of goods purchased, and there is little chance for mistakes, or for a dispute, when the weekl)^ or monthly bill is rendered. The bookkeeper should enter the amount of each sales sheet upon his abstract sales sheet for the day. The form on page 200 illustrates a daily abstract sales sheet, in which the name of each customer is given. 198 MODERN ILLUSTRATIVE BOOKKEEPING. a / /a^- ■f. J.:?. Z / / £> =^ ^ -2:^k-ji^^, ^C7^2^:i^^:-<'^ .2^^ / ^^ g^^S-i^-^-^Z--^^ /^ 2 MODERN ILLUSTRATIVE BOOKKEEPING. 199 2 Z / -^€^/z^^^^^ ^s^CJ^^'l^^^^/ y^^ V^/ /2-^^ (P^ 2'Z>^z-c^^^C<:^z2^i ■J^ 62 / / aAJJ Z2 ^2 Sales for Cash. 6J/2 / Z 2¥ A^r\z-f yrf. 7/= Total Daily. /// Z- 2-i? / ^ / / / / / ^ / fj 3 / Total Weekly. Vf Total Monthly. In the series of transactions follow-ing, the daily abstract sales sheet will be used according to the form on page 200, and the abstract sales book will contain only totals, as shown in the above form. It is evident that the sum of the footings of the Sales for Cash and the Sales on Account columns of the abstract sales book will at any time show the total sales of merchandise to date. Purchase Book. This book is an abstract of the invoices of merchandise purchased in the regular course of business, and where the ordinary invoice book is kept, it would, of course, be unnecessary to keep the ptuchase book, since all the material of the purchase book and also the items of these purchases would be found in the invoice book. Many bookkeepers, however, keep a purchase book, and file the invoices loose, instead of pasting them into a book, and in this series of transactions, since no invoices are received by the student, it is necessary to keep an abstract of these invoices, hence the ptuchase book, which contains colums for the date of the invoice, the ledger folio, the name of the person or firm from whom the goods were bought, the terms of payment, the due date, the date of payment, the amount of the invoice, the discount, and the amount paid. It is evident that the footing of the Amount of Invoice column in the purchase book will, at any time, show the amount of merchandise purchased, and this amount, less the footing of the Discount column, will be the net cost of merchandise at any date. The total footing of the columns of the abstract sales book will show the amount odf merchan- dise sold at any time. To this amoiuit add the inventory of merchandise tmsold, and the difference between this sum and the net cost of merchandise will show the gain or loss. The form on page 202 illustrates the purchase book. Cash Book. This book does not differ materially from the cash book kept in double entry. The left-hand page contains a record of all cash received, and the right-hand page a record of all cash paid out; also a special column for merchandise discount allowed on 202 MODERN ILLUSTRATIVE BOOKKEEPING. PURCHASE BOOK. Datk or TirvoiCL NAME AND WHEN PAID ||A«oi.»T o» 1- /fa- y'^t'-z^ / J- 7 7 /^ 2j 2J 2r 3tP ^^ / ^■s/.-:^!>i.^^p^^ V Oc^ / 2 ^ ^ a^ .y^^^^T/-: ;?'t=3i=i^^22:*5^z^ '-,=^ ■Lil^C-.Z Oc^ ^ 2/- Ji! 7 9tP ,r2 z 7^' '/J- ^2r7j 621:? 6/ 4^4^2 J '7 ^sr/ /2^f7t? /■i^^2\ ^ 2/J /4^2S ^6 Cc /6^ ^^ ^2Z 7J- / 2 ¥6, J.^J'OJ ■^/^ JV2/2 rf bills paid within the specified date. When such accounts are posted, two debit entries should be made on the personal account affected, one for the merchandise discount, and one for the net amount paid, thus canceling the amount of the invoice (see instructions for posting merchandise discount, page 138). It is not necessary in a single entr^- cash book to write the name of the account affected by the transaction, except when it is a personal account, as only accounts with persons are kept in the ledger, and only that part of the cash book which affects personal accounts will be posted to the ledger. The form on pages 204 and 205 illustrates the cash book. Ciistomors' Statenu'iits. In most grocery establishments, where modern methods are in use, the items from the sales sheets are not posted to the ledger account of the customer, but instead are posted directly from the sales sheets to a monthly statement sheet, which at the end of the week or month is handed, or mailed, to the customer, and the totals only of these sheets are posted to his account in the ledger. When a statement sheet is handed in with cash to make payment of the account, the sheet is receipted and returned to the customer, who receives credit in the ledger for the amount of his ])ayincnt in the regular posting from the cash book, where the payment should be entered when made. The postings to the statement sheets should be made at the end of eacli day before the sales sheets of that day are filed away for reference. MODERN ILLUSTRATIVE BOOKKEEPING. 203 The following form illustrates a customer's statement sheet. MONTHLY STATEMENT. Thos. E. Sears, GROCER, Liberty Building, Main St. East. 14, 18 and 20 Lake Avenue, Plymouth Avenue, cor. Spring St. Rochester, N. 7., y^^/-: /„ \90 SnlA^n C^0^.r2...^.y I a^. / 2. cSz^^-^i^ V Z ■ f z o ^ / 2. /J- / /.s Z-c - 2-^ 3S 2-r /2- cS^a-^ 3^ 3^ 2-^ // yC^-z!^-:^ /^ ^ ^-2-7'Z^ -:A^a^^>i^^^ / -c^^Zy,-^<^^-7^^ 1 Oca/paff'nn —(^/-/^■y^.^^'T^'^^t^^^. 9?«r^^r^ ^ / ^-J^^T^^^^^ /^^y~^^ %iing (^ /., ^Ji/^^. / - J -J'-'y-//^-/.^ -/£-/. -■•2/-; ? /at, - ^ i^^t^-.d^y' //Z ^ 4^ Summer St., 2 pkgs. rolled oats at i2]4^i'/'; i lamp chinuiey, 10/; 1 brl. N. S. flour, $5.75. No. <>. — Edward Austin, 10 lbs. tul) butler at 24'/; i 11). M. »S: J. coffee, 32'/; 5 lbs. lard at 12'/; i broom, 35/; 10 lbs. G. sugar, at 6^/; 3 lbs. codfish at 15'/. MODERN ILLUSTRATIVE BOOKKEEPING. 211 No. 7. — Mrs. A. Waldron, i brl. apples, $2.25; 10 lbs. lard at i2f ; 10 lbs. sugar at bYzi; 2 lbs. Rio coffee at 20^'; i lb. Y. H. tea, 50/. No. 8. — C. H. Stratton, Elm House, 10 bu. potatoes at 55'/; i hf. cht., 50 lbs., B. B. tea at 50'/; i bale, 125 lbs., M. »& J. coffee at 3o/'; 5 doz. S. F. eggs at 22^''-; i case Germea, 36 pkgs., $4.50; I brl. oatmeal, $4.75; i bx. prunes, 50 lbs., $6. No. 9.— Chas. A. Dodge, ^57 Chestnut St., i lb. E. B. tea, 60'/; i lb. M. & J. coffee, 32'/; 6 lemons, 18^/; 12 S. F. eggs, 24''/; i brl. flour, $5.75; 5 lbs. lard at 12'/. No. 10. — P. J. McGuire, Cottage Hotel, i gal. vinegar, 25^/; i brl. N. S. flour, $5.75; 5 lbs. butter at 24^/; 2 cans C. milk at isf; i bottle O. oil, 75^/; i bunch celery, 15'/; i can chicken, 40^/. Cash sales for the da^^, $214.12. Do not forget to make proper entries on a daily abstract sales sheet, and also in the abstract sales book. Received cash as follows: Mrs. F. Gilford, $21.39; P. J. McGuire, $50; Wm. Harper, $18.49; Mrs. Wm. Hanson, $20; merchandise sales, per cash tickets, $214.12. Deposited $550. In this set you will not have a check book, as checks are not given, but you may keep an account with the bank on the page preceding Cash in your cash book. Head this page, Account with City Bank. Write the date the same as in the cash book; in the first expla- nation space write Deposit; in the second explanation space. Currency; in the first money column the amount, $SS^- When you give a check, write the date, the name of the party to whom the check is given in the first explanation space, for what given in the second explanation space, and carry the amount into the right-hand money column. The differ- ence at any time between the right-hand money column and the left-hand money column will show the amount of cash in bank. Paid cash as follows: (Checks) Hackett Bros., invoice of Oct. ist, less 25? (enter merchandise discount on credit side of cash book, in first column, and net amount of bill in second column); E. J. Dunn Grocery Co., invoice of Oct ist, less ^'i . (Currency) Gray Bros., invoice of even date, $3.20; merchandise purchased from market w^agons, $11.20; salaries, Stuart, $12; Canfield, $12; Marsh, $20; freight, $3.42. Balance your cash book, and bring down the amount the same as in double entry. October 15, 190-. Bought of Park & Tilford, New York, net 2 mos., 3 10, merchandise as per invoice, $287.90. Bought of S. S. Pierce & Co., Boston, net 2 mos., 2 10, merchandise as per invoice, $468.32. Purchased of St. lyouis Milling Co., St. Louis, net 4 mos., 5 10, merchandise as per invoice, $450. Piurchased of Gray Bros., City, for cash, 50 heads cabbage at 4^'; i bu. turnips, 45^/; 80 brls. apples at $2. Purchased of Trent Commission Co., City, for cash, 4 tubs C. butter, 200 lbs, at i-jih, 10 baskets late peaches at 65^/. 9 212 MODERN ILLUSTRATIVE BOOKKEEPING. The following sales slips have been handed in bj- the salesmen. No. 1. — C. H. Stratton, Elm House, i pail mackerel, 20 lbs., $4.25; i tub lard, 60 lbs., at lof; I doz. tomato ketchup, $2.25; 6 doz. S. F. eggs at 22'/; 4 sacks pastry flour at $1.50; I brl. N. S. flour, $5.50. Xo. 2. — Mrs. S. T. Worthen, i brl. apples, $2.50; i bu. potatoes, 60''; 5 lbs. butter at 25'/; 12 S. F. eggs, 24'/; i lb. M. & J. coffee, 32'/. Xo. 3. — Mr. Wm. Harper, 20 lbs. G. sugar at 6^^/; 10 lbs. lard at 12'r, 3 cans corn at lof ; I lb. E. B. tea, 60'/; 4 lbs. raisins at 15/; i broom, 35'/. No. 4. — E. ly. Corey, i brl. flour, $5.75; 10 lbs. tub butter at 24'/-; Yo lb. pepper at 40'/; I box sardines, 35'/; 12 pickles, 15'/. No. 5. — P. J. McGuire, Cottage Hotel, i case. 36 cans, tomatoes at 8''-; i case, 36 cans, corn at 8'/; i tub lard, 40 lbs., at ii^/; i brl., 212 lbs., sugar at 6'/; 3 doz. lemons at 25^/. No. (>.— E. B. Woods, I brl. apples, $2.50; i lb. E. B. tea, 60'/; i lb. M. & J. coffee, 32^/; 5 lbs. print butter at 30 /■; i clothesline, 30'/. No. 7. — Chas. A. Dodge, 20 lbs. tub butter at 24'/-; i bu. potatoes, 6of; i sack pastry flour, $1.50; I gal. M. syrup, $1.25; i jug, 15:/-. iS'^o. 8. — Mrs. F. Gilford, i bu. potatoes, 60'/; 2 pkgs. shredded wheat biscuit at 12^'/; ID lbs. tub butter at 24/; i ham, 12 lbs., at 12^/; 12 S. F. eggs, 25'/. No. 1).— Mrs. A. Waldron, i brl. N. S. flour, $5.75; 5 lbs. tub butter at 24'/-; i lb. E. B. tea, 60/; I broom, 35/; i pkg. gelatine, i^'h, i pkg. Cream of Wheat, 15/. No. 10.— Edward Austin, 12 S. F. eggs, 25'/; i brl. apples, $2.25; i bu. potatoes, 6of) I can sahnon, 24'/; i bottle O. oil, 35'/; i head lettuce, 5'/. No. 1 1. — Mrs. Wm. Hanson, i brl. N. S. flour, $5.75; i bu. potatoes, 60/; 20 lbs. G. sugar at 6^'/; li cht., 18 lbs., Y. H. tea at 45'/. No. 12.— A. B. Ryder, i brl. N. S. flour, $5.75; i bu. potatoes, 60'/; i brl. apples, $2.25; I bottle ketchup, 22;'; i qt. beans, lo^''; i lb. pork, 12^';'; 3 cans peaches, 50'; 5 lbs. coffee at 30/; 10 lbs. G. sugar at 6^^'/; i bx. gelatine, 15'/; 12 oranges, 35'/. No. 5. — C. H. Stratton, Elm House, i tul) lard, 54 lbs., at 10^ ; 20 lbs. print butter at 23^/; 10 doz. S. F. eggs at 24^; i case Germea, 36 pkgs., at i2%<:; 12 bxs. sardines at 25'/; I bx. lemons, $4.50; i brl. pastry flour, $6; i ham, 24 lbs., at i2I\ No. 8. — Mrs. Wm. Hanson, i Ijrl. N. S. flour, $5.75; 25 lbs. oatmeal al ^<' \ i pail mackerel, 10 lbs., $2.25; i brl. api:)les, $2.50; 20 lbs. G. sugar at 6>j'/; 5 gals. K. oil at ly/. No. i). — Edward Austin, 12 S. F. eggs, 26'/; 5 lbs. E. B. tea al 50','; 10 ll)s. tub butter at 22'/'-; I bx. mustard, 15'/; 2 cans corn at 10/. MODERN ILLUSTRATIVE BOOKKEEPING. 215 No. 10. — Mrs. A. Waldron, 3 lbs. print butter at 26^'; i sack pastry flour, $1.50; i ham, 12 lbs., at 12^^/; 10 lbs. G. sugar at 6^^/; i gal. molasses, 40^''; i lb. baking powder, 50^'. No. 11. — Mrs. F. Gilford, 5 gals. K. oil at 13/; i brl. apples, $2.75; 5 lbs. coffee at 3o/'; I lamp, 35'/; i broom, 30/; J^ gr. matches, 25^/. No. 12. — Chas. A. Dodge, 12 S. F. eggs, 26^; i lb. coffee, 32^/; i brl. apples, $2.50. I wash tub, $1.10; I lb. chocolate, 30'/. Cash sales for the day, $216.48. Received cash as follows: P. J. McGuire, $50; Mrs. A. Waldron, $10; merchandise sales, per cash tickets, $216.48. Deposited $150. Paid cash as follows: (Checks) Williams & Andrews, invoice of even date, $86.32; 5 tons coal, $25. (Currency) salaries, Canfield, $12; Stuart, $10: Marsh, $20; country produce, $16.42; freight, $6.88. Gave S. S. Pierce & Co., Boston, your note at 20 days, dated Oct. 25th, with interest, for amount of invoice of Oct. 15th, less 2^. (Enter in journal and bill book.) Balance your cash book. POSTING, You may now post your books. Remember that in single entry you post only such transactions as affect personal accounts, and that only personal accounts appear in either the general or the card ledger. The card ledger debits will be taken entirely from the statement sheets of the ledgerette file. Remove these statements from the file, and post only the totals to the corresponding cards of the card ledger, placing the date of each sales sheet in the explanation space (see model ledger card, page 207). The card ledger credits will be found on the debit side of the cash book and in the journal. Turn to your cash book and post all cash debits which have been received from persons whose names appear in the card ledger (see form, page 204). Place a check mark against each name in the cash book. Turn to your journal and post any items which may affect customers' accounts, placing a check mark against each item to indicate posting. Your own account and the accounts with those business houses of whom you purchase goods, and all other personal accounts, except those with customers, will be found in the general ledger, and the postings to these accounts will be made from the journal, the purchase book, and the cash book. Open accounts in ^'our general ledger as follows, allowing one-third page to each account: Page i, j^our own account. Page 2, Adams & Hackland, Hackett Bros., E. J. Dunn Grocer}^ Co. Page 3, American Sugar Refining Co., S. M. Crockett & Co., Park & Tilford. Page 4, S. S. Pierce & Co., St. Louis Mining Co., F. H. Leggett & Co. Page 5, Cobb, Bates & Yerxa. Post from the purchase book the amount of each on account invoice to the credit of the account named; then post from the journal and the cash book such items as should be carried to these accounts. Place check mark against each cash item. Having completed your posting, make an abstract of your card ledger, showing the amount due from each customer. From your bill book find the notes receivable in your possession, and from your cash book find the amount of cash on hand. 216 MODERN ILLUSTRATIVE BOOKKEEPING. From your general ledger find the amounts due your creditors, and from your bill book find the notes j'ou have outstanding. Your inventory shows the following results. Merchandise on hand, valued at $4400.63, Ofiice safe, etc., " " 125.00. From the above data prepare a statement of resources and liabilities, according to the following model. Statement of Resources and Liabilities. Resources. Cash, balance on hand, Merchandise, per inventory, Office safe and fixtures, Accounts receivable, per card ledger, as under: Mrs. S. T. Worthen, A. B. Rvder, C. H. Stratton, Mrs. Wm. Hanson, Wm. Harper, Edward Austin, Edward L. Corey, Mrs. A. Waldron, P. J. McGuire, Mrs. Fred Gilford, E. B. Woods, Chas. A. Dodge. Notes receivable, per biU'book, Liabilities. Accounts payable, per general ledger as under: Adams & Hackland, American Sugar Refining Co., Park & Tilford, S. S. Pierce & Co., F. H. Leggett&Co., Cobb, Bates & Yerxa, Notes payable, per bill book. Present Worth,* % ■ • ■-- Find the net gain or the net loss according to the form given below, Proprietor's Statement. (Student), invested withdrew net investment present worth net lubfi* l. ■ 1 $. .■ MODERN ILLUSTRATIVE BOOKKEEPING. 217 CONTINUATION OF OCTOBER BUSINESS The business of the past month has shown a small loss, but as the sales are increasing, you have decided to continue the business and take a partner, J. M. Marsh, your present delivery clerk, and to add a department of meats, fish and poultry to your grocery business. J. M. Marsh invests as follows: Note in his favor, dated Sept. 4th, at four months from date, signed by Charles A. I^awrence, indorsed by E. W. Lynch. Face of note, $942.68; discount for unexpired time, $ ; net value of note, $ . Note in his favor, dated Sept. 19th, at four months, with interest, signed by George M. Kelly, indorsed by Wm. H. Kelly & Co. Face of note, $622.85; interest due on note to date, $ ; value of note and interest, $ . Horse, wagon, and harness, now used for delivering goods, valued at $250. Cash, sufficient to make his investment equal your own worth, as shown by your statement of Oct. 31st. Draw up articles of copartnership, showing investments of each partner, and containing the following conditions. (Student) shall act as bookkeeper and cashier, and shall have general charge of the inside management of the store; shall receive all cash, sign all notes, checks, and other negotiable paper of the firm, and attend to the purchase of all groceries. J. M. Marsh shall have charge of the delivery of goods, the taking of orders, wdth such assistance as may be necessary, and shall attend to the buying of all country produce and provisions. Bach partner shall give his entire time to the business, and shall be entitled to draw, for living expenses, cash not to exceed $100 per month, or its equivalent in goods from the store at cost. The profits and losses of the business shall be divided equally at the end of each year, or at such period as the books may be closed. Make a bill of sale, disposing of your entire resources to the firm of (Student) & Marsh, subject to- the payment of your liabilities, as shown by your statement of Oct. 31st, the consideration being the two notes, horse, wagon, harness, and cash invested by Marsh. It has been decided to keep the books by double entry from this date. No new books will be required. INSTRUCTIONS FOR CHANGING FROM SINGLE TO DOUBLE ENTRY, Turn to your statement of resources and liabilities. Open an account with Merchan- dise, carrying to the debit side the amount of your inventory. Open an account w'ith Furniture & Fixtures, carrying to the debit side the value of the safe and furniture. Open an account wdth Bills Receivable , carrying to the debit side the amount of C. H. Stratton's note. Open an account with Bills Payable, placing on the credit side the total amount of notes outstanding. Enter the loss, as shown by the statement of your own account, Oct. 31st, on the debit side of your ledger account, with the explanation. Net Loss, in red ink. Close the account, and bring down your present worth to the credit side, under date of Nov. ist. Take a trial balance, including the balance of cash, as shown in j'our cash book, and the balances of customers' accounts, as shown in your card ledger; the debits and credits 218 MODERN ILLUSTRATIVE BOOKKEEPING. should be equal. Your books are now read}' to be kept by double entrj- in the following transactions. The footing of the Amount of Invoice column of the purchase book should be posted to the debit of Merchandise at the end of the month, as it contains all purchases of mer- chandise. The footing of the Monthly Sales column of the abstract sales book should be posted to the credit of Merchandise, as it contains all the sales of merchandise. In your cash book you should enter in the first space the name of the account affected, and in the second space the explanation, as in the cash book of July, pages 136 and 137. In the journal proceed as in double entry journal, pages 6 and 7. Make a journal entry, showing the conditions of the partnership, and debit and credit such accounts as are affected by these transactions. You are now read)' to proceed with the work of November. WORK FOR THE STUDENT. November i, 190-. Engage Geo. Carter as meat cutter, at $15 per week, and Willis Holt as driver and order clerk, at $15 i:)er week. Purchased of Armour & Co., Chicago, 3ods., 2 10, dressed meat, as per invoice, $132.21. Purchased of Swift & Co. , Chicago, 30 ds. , 2 10, beef, mutton and lard, as per invoice, $142.38. Bought of Gray Bros., City, for cash, 5 tubs butter, 212^^ lbs., at 2o;/-; 2 bxs. cheese, 104 lbs., at \\'l\ Bought of E. J. Dunn Grocery Co., Cit}-, 4 mos., 5 10, 2 hf. chts. Japan tea, 120 lbs., at 25'/; 2 hf. chts. E. B. tea, 120 lbs., at 32^/; 2 bales Mocha coffee, 300 lbs., at 25^'; 2 mats Java coffee, 150 lbs., at 26'/; i pail cinnamon, 25 lbs., at 2^1 . Purchased of M. S. Newton & Sons, Boston, 30 ds., 2 10, fish, as per invoice, $18.39. Bought country produce from market wagons, for cash, $18.44. The following sales slips have been handed in by the salesmen. No. 1. — Chas. A. Dodge, 8 lbs. rib roast at 16;'; 20 lbs. G. sugar at 6J^(. ,• 12 lemons, 25'/; I brl. Graham flour, $5.25; i bx. macaroni, 35f ; i bottle Worcestershire, 40'/. No. 2. — Thomas B. Tucker, Tucker's Tavern, 10 lbs. porterhouse at 22'/; 6 lbs. lamb chops at 16/; 22 lbs. ham at 12'/; 6 do/.. S. F. eggs at 25'/; 12 lbs. fish at 10'.'; 5 bu. potatoes at 60;/; i case Germea, 36 pkgs., at 12'/. No. 8. — Mrs. Fred Gilford, 7 lbs. pork roast at 12/; 20 lbs. tub butter at 24^-; i sack Graham flour, $1.25; % lb. cinnamon at 50'/; V2 bu. beans at $3; i bottle T. ketchup, 22'/-. No. 4. — E. B. Woods, 12 lbs. turkey at iS '; i (jt. oysters, 4o;''; i can Java coffee, 10 lbs., at 30^/; I gal. molasses, 50;'; i lb. cocoa, 55'/; 3 doz. S. F. eggs at 28'/. No. t>. — Mrs. Wm. Hanson, i tub l)tilter, 42 lbs., at 22c'; 4 do/. S. F. eggs at 28'/; 8 i"bs. pork roast at \^. — Wm. Harper, 7 lbs. land) at 16'; 5 Im. potatoes at 60' ; 1 sack Graham Hour, $1.25; I gal. maple syrup, $1.25; 5 ll)s. i)riiit butter at 28'/; i bottle capers, 30'/-. MODERN ILLUSTRATIVE BOOKKEEPING. 219 No. 7. — E. L. Corey, 8 lbs. corned beef at 12^/; 20 lbs. tub butter at 24^-; i sack pastry flour, $1.50; I bx., 12 lbs., prunes, at 12'r, i lb. baking powder, 50^/; i lid. cabbage, lo/-. Xo. 8. — James B. Longle}-, Star Restaurant, 10 lbs. sirloin steak at iS';''; 12 lbs. porter- house steak at 20'/; i ham, 24 lbs., at iif; 6 doz. S. F. eggs at 25';'; i doz. T. ketchup, $2,25; I doz. Crown olives, $3; 18 lbs. turkey at 16 f. No. 9. — A. B. Ryder, 6 lbs. veal roast at 18'/; i qt. oysters, 40'/; 3 bu. potatoes at 6oi; 20 lbs. G. sugar at 6^'/; i sack buckwheat flour, $1; i gal. maple syrup, $1.25; i lb. baking powder, 5o/'. No. 10. — C. H. Stratton, 20 lbs. sirloin steak at I5''/,- 12 lbs. porterhouse at i2>5'l'\ i bottle extract vanilla, 40'/; 2 pkgs. shredded wheat, 25f-; I broom, 35^/. No. 3. — Mrs. Wm. Hanson, 6 lbs. pork chops at 12'/; 8 lbs. round steak at i^C; 12 lbs. sirloin roast at 15^/; 11 J^ lbs. pork roast at 12'/; i brl. pastry floiu", $6; 3 doz. bananas at 2o7; I gal. vinegar, 25^'-. No. 4. — Mrs. S. T. Worthen, 8 lbs. sirloin roast at 20^/; % brl. G. flour, $2.75; 12 S. F. eggs, 28'/'; 2 lbs. cheese at 16'/; i 5-lb. can Java coffee, $1.50; 12 lemons, 25^-, . No. 5. — Edward Austin, 2 lbs. round steak at 16'/; 8 lbs. corned beef at i2'.'-; i hd. cabbage, lof; i bu. potatoes, 6o':/-; % cht. E. B. tea, 15 lbs., at ss'/; i bottle T. ketchup, 24^/; 12 eggs, 28^/. « No. 6. — Mrs. A. Waldron, 8 lbs. lamb roast at 16'/; 20 lbs. G. sugar at 6J4>/; 5 lbs. tub butter at 25'/'; i brl. Graham flour, $5.25; i gal. pickles, 50^/; 2 pkgs. shredded wheat, 25^'. No. 7. — Chas. A. Dodge, 9 lbs. turkey at 16/; 2 qts. cranberries at lo'/'; i bu. potatoes, 6o/-; 12 case eggs, 22'/; i box cigars, $5.50; i gal. vinegar, 25^/. No. 8. — James B. I^ongley, i sack buckwheat flour, $1.50; i gal. M. syrup, $1.25; 5 gals. S. pickles at 40^/; i brl. K. oil, 42 gals., at ih/; 20 lbs. chicken at 14^/; 28 lbs. rib roast at 14^/; 16 lbs. pork roast at iv/; 15 lbs. sirloin roast at 15'/; 17 lbs. porterhouse at i8r/-. No. 9. — Mrs. F. Gilford, g^ lbs. turkey at ib'l; i qt. oysters, 40'/; 20 lbs. G. sugar at 6%'l-; I bu. potatoes, 60^/; i lb. baking powder, 50/; 12 oranges, 35/. No. 10. — P. J. McGuire, 10 lbs. sirloin roast at 16'/; 20 lbs. rib roast at i^f; 10 lbs. pork roast at 12'/; 16 lbs. turkey at i67; i hv\. N. S. flour, $5.50; i l)rl. pastry flour, $5.75; I doz. T. ketchup, $2; 6 doz. oranges at 25^/. No. 11. — E. B. Woods, 11^ lbs. sirloin roast at 16:'; 5 bu. E. R. potatoes at 55'.'; i brl. apples, $2.75; 10 11)S. lard at 121^'/; 20 lbs. G. sugar at 6^'/; i bottle bluing, lof-, ^ brl. G. flour at $5.50. No. lii. — Thomas B. Tucker, 12 doz. S. F. eggs at 26/; 15 lbs. sirloin steak at 16/; I brl. N. S. flour, $5.50; i brl. pastry flour, $5.75; i brl. oatmeal, $5.25; i sack buck- wheat, $1.50; 5 gals. M. syrup at $1.15. MODERN ILLUSTRATIVE BOOKKEEPING. 221 No. 13. — C. H. Stratton, 22 lbs. porterhouse at 18^/; 31 lbs. beef, sirloin, at i^f; 26 lbs. lamb at 15'/; 12 lbs. pork chops at 10^/; 10 bu. potatoes at ^^'t) i mat Java coflfee, 75 lbs., at 28'/; 48 lbs. butter at 2^'l-; 30 doz. case eggs at iSf. Cash sales for the day, $388.74. Received cash as follows: A. B. Ryder, October account, $38.30; Mrs. S. T. Worthen, on account, $15; P. J. McGuire, balance of September account, $19.34; 1"- B. Tucker, on account, $30; merchandise sales per cash tickets, $388.74. Had the note of E. W. Lawrence discounted at the City Bank, and received credit for the net proceeds. Face of note, $942.68; discount, $ ; aiuount credited, $ . Deposited $300. Paid cash as follows: (Checks) Cobb, Bates & Yerxa, draft at sight for invoice of Oct. 29th; Park & Tilford, invoice of Oct. 29th, less 2^) F. H. Leggett & Co., invoice of Oct. 29th, less 3.^; Armour & Co., invoice of Nov. ist, less 2<; Swift & Co., invoice of Nov. ist, less 2fc; M. S. Newton & Sons, invoice of Nov. ist, less 2^'; bay horse, $125 (debit Horse, Wagoji & Harness account); delivery wagon, $100. (Currency) merchan- dise from market wagons, $28.65; cleaning windows, $1.25; board of horse, $5; harness, $31; freight, $1.96; salaries, Canfield, $12; Stuart, $12; Carter, $15; Holt, $15. Receiv-ed of C. H. Stratton his note at 60 ds., with interest added, to settle October account. Amount of account, $266.09; interest, 60 ds., $ ; face of note, $ . Returned to E. J. Dunn Grocery Co., i bale Mocha coffee, 150 lbs., at 25'/. Too much of this kind was ordered. Balance your cash book. November 15, 190-. Purchased of Armour & Co., Chicago, net 30, 2 10, invoice amounting to $116.20. Purchased of Swift & Co., Chicago, net 60, 3 10, invoice amounting to $178.95. Bought of M. S. Newton & Sons, Boston, net 30, 2 10, invoice amounting to $28.44. Bought of S. S. Pierce & Co., Boston, 60 ds., 3/10, invoice amounting to $246.39. Purchased of Park & Tilford, New York, net 30, 2 10, invoice amounting to $63.44. Bought of Cobb, Bates & Yerxa, Boston, acceptance 30 ds. from date, invoice amount- ing to $213.42. Bought merchandise from market wagons, for cash, $63.42. The following sales slips have been handed in by the salesmen. No. 1. — C. H. Stratton, i brl. G. sugar, 217 lbs., at 6/'; i brl. N. S. flour, $5.50; i brl. pastry flour, $5.75; i bx. oranges, $4.75; 20 doz. S. F. eggs at 25^/; 20 lbs. fresh fish at 11^'; 12 lbs. sirloin steak at i^^'/; 12 S. F. eggs, 28'/-; i brl. apples, $2.75; i bottle T. ketchup, 24'. ; i lamp, 4O0. No. 6. — Thomas B. Tucker, i tub butter, 42^^ lbs., at 22'.'; i cheese, 28^2 lbs., at 12%4-, I case C. tomatoes, 36 cans, at 8^/; i case C. corn, 36 cans, at 8'/; i case C. peas, 36 cans, at i2%^'/'; 12 S. F. eggs, 28^/; I bx. dried peaches, 10 lbs., at i^f!-\ ]4. gf- matches, 25'.'-. No. 9. — Mrs. A. Waldron, 9^ lbs. turkey at 16/; 10 lbs. lard at 12 J^^/; i gal. vinegar, 25'/-; I lb. E. B. tea, 6of; 1 qt. pickles, 15'/; 2 lbs. raisins at i^f. No. 10. — P. J. McGuire, i tub butter, 43 J^ lbs., at 22.; i tub lard, 48 lbs., at 11^/; 22^ lbs. rib roast at 14'/; 11^2 lbs. pork roast at 10/; 8 lbs. sirloin steak at 15'/; i case eggs, 30 doz., at 20:'; i doz. C. tomatoes, $1. No. 11. — E. B. Woods, 7^ lbs. chicken at 15^/; 15 lbs. tub butter at 22^; 3 lbs. raisins at 15^'; 2 lbs. citron at 207'; 2 lbs. dried currants at 125^^/; 8 lbs. beef at 8^/. No. 13. — Mrs. F. Gilford, 4^ lbs. chicken at 15'; i sack buckwheat flour, $1.25; i gal. M. sjaup, $1.25; 5 lbs. lard at 12^'/; i bx. dried apricots, 5 lbs., at 20 ; 2 pkgs. shredded wheat, 25^'. Cash sales for the day, $362.28. Received cash as follows: E. B. Woods, balance of account; Mrs. A. Waldron, on account, $20; E. L. Corey, to balance October account; C. A. Dodge, to balance October account; James B. Eongley, on account, $25; merchandise sales, per cash tickets, $362.28. Had C. H. Stratton's note of Oct. 15th discounted at the City Bank, and net proceeds placed to credit. Face of note, $212.40; interest, 123 ds., $ ; discount, 92 ds., $ ; net proceeds, $ . Deposited, $400. Paid cash as follows: (Checks) Adams & Hackland, on account, $200; E. J. Dunn Grocery Co., invoice of Nov. ist., less 5'' (deduct $37.50, amount of goods returned); note in favor of S. S. Pierce & Co., due Nov. 14th, with interest; face of note, $458.95; interest, $ ; Armour & Co., invoice of Nov. 8th, less 2':; American Sugar Refining Co., invoice of Nov. 8th, less i<; insuring stock of groceries and fixtures one year from date; policy, $3500; premium, r;. (Currency) purchases from market wagons, $63.42; shoeing horse, $1.25; board of horses, $10; salaries, Canficld, $12; Stuart, $12; Holt, $15; Carter, $15; telegrams and telephone sen-ice, $1.87; freight, $17.42. J. M. Marsh drew cash for private use, $60. (Student) drew cash for private use, $50. Received of P. J. McGuire his note at 90 ds., with interest, to apjily on October account. Accepted Cobb, Bates & Yerxa's draft at 30 ds. for the amount of their invoice received this da}^ Balance your cash book. MODERN ILLUSTRATIVE BOOKKEEPING. 223 November 22, 190-. Bought of Gray Bros., Cit}', 60 ds., 3 10, 92 lbs. turkey at i4'/-; 56 lbs. chicken at i2}4'. No. 8. — E. E. Corey, 2 lbs. sirloin steak at 16 '; 5% lbs. veal roast at 18/; i l)x. dried prunes, 10 lbs., at 15: ; i brl. apples, $2.75; i lb. chocolate, 40/-. No. 9. — T. B. Tucker, 25 doz. S. F. eggs at 24:'; 20 bu. E. R. potatoes at 50'/; 40 hds. lettuce at 2 ; i case Cream of Wheat, 36 pkgs., at 125^'/; 425^ lbs. beef, sirloin, at 15^/; I hf. cht. E. B. tea, 50 lbs., at 60;'; i mat Java coffee, 75 lbs., at 28'/. No. 10. — James B. Longley, i mat Rio coffee, 75 lbs., at 15/; i hf. cht. Japan tea, 50 lbs., at 2,5'/", 2 gal. oysters at $1.25; i tub butter, 40^^ lbs., at 22/; 28 lbs. fresh fish at 12^/; 12 doz. case eggs at 18^/. No. 11. — E. B. Woods, I qt. oysters, 4o;''; 6 lbs. pork loin at I2j^9^'; 10 lbs. lard at 12}^ f/'; I lamp, 65^/; i lb. chocolate, 40/; i lb. baking powder, 50'/. No. 12. — Edward Austin, 8^4 lbs. corned beef at 12:/; i hd. cabbage, 10'/; 5 gals. K. oil at 13'/; 12 S. F. eggs, 28/; 12 oranges, 35'/; i 5-lb. can Java coffee, $1.50. Cash sales for the day, $422. 16. Received cash as follows: Mrs. S. T. Worthen, balance of October account; Mrs. Wm. Hanson, $25, to apply on account; Wm. Harper, to balance October account: E. Austin, to balance October account; T. B. Tucker, $50, to apply on account; merchandise sales, per cash tickets, $422.16. 224 MODERN ILLUSTRATIVE BOOKKEEPING. Discounted at the City Bank G. M. Kelly's note, dated Sept. 19th, at 4 months, with interest. Face of note, $622.85; interest, $ : discount, S ; net proceeds placed to credit, $ . Deposited $400. Paid cash as follows: (Checks) Hackett Bros., invoice of Xov. 8th, less 2^(; S. M. Crockett & Co., invoice of Nov. 8th, less s'?; Swift & Co., invoice of Xov. 8th, less i"<'. (Currency) board of horses, $10; railroad mileage ticket, 500 miles, $10; salaries, Can- field, $12; Stuart, $12; Holt, $15; Carter, $15; freight, $1.45; purchases from market wagons, $46.28. Gave S. S. Pierce & Co. our note at 60 ds., with interest, to paj' invoices of Oct. 29th and Nov. 15th, less 3<. Balance your cash book. November 29, 190-. Purchased of Cobb, Bates & Yerxa, acceptance 30 ds., merchandise invoiced at $182.77. Bought of Armour & Co., Chicago, net 30, 2 10, invoice amounting to ^83.49. Purchased of Swift & Co., Chicago, net 30, 2 10, invoice amounting to $87.96. Bought of M. S. Newton & Sons, Boston, net 30, 2 10, merchandise invoiced at $28.42. Bought of S. S. Pierce & Co., Boston, net 60, 3 10, invoice amounting to $63.14. Purchased merchandise from market wagons, for cash, $62.46. The following sales slips have been handed in by the salesmen. No. 1. — Mrs. S. T. Worthen, 2% lbs. sirloin steak at i6f; i lb. ceylon tea, 80,'; 12 oranges, 35'/'; i broom, 30/'; 2 lbs. raisins at 15'/. No. 2. — A. B. Rj'der, i bx. cigars, $5.50; i brl. pastry flour, $6; 12 oranges, 35'/; S% lbs. lamb roast at 16/; 15 lbs. G. sugar at 6%ital stock of the company is disposed of by su])Scription, or otherwise. A certain amount, prescribed by the statute, must l)e subscribed before the corporation is permitted to do business. After such stock lias been sul)scri])ed for, and such payment of the suliscription made as is required by the statute, a meeting of the subscribers is called, officers are chosen, and Ijy-laws are made. A record of these proceedings is filed with the secretary of state, and a certificate is issued l)y him to tiie effect tlial {\w corporation is fully organ- ized and authorized to do business under the- laws of the state. The organization of a corporation recjuires a thorough knowledge of the statutes of the state under whicli it is organized, and no attempt to do l)usiness sliould l)e made initil the statute reqtiiremcnts have been fully met and the cor])oration organized under legal tlirectit)n. It is always MODERN ILLUSTRATIVE BOOKKEEPING. 229 economy to secuie the services of a lawyer familiar with corporation affairs in effecting such an organization and in conducting all operations of the corporation that are required to compl}' with the laws of the state in which it is organized. CERTIFICATES OF STOCK. Certificates of stock are issued to subscribers as soon as their subscriptions are paid, and these stock certificates are transferable, either wholly or in part, at will, unless a subscriber be indebted to the corporation, in which case they cannot be transferred with- out the consent of a majoritj^ of the stockholders. INCREASE OR DIMINUTION OF CAPITAL STOCK. In most states the capital stock of a corporation may be increased or diminished by a vote of the stockholders holding a majority of the stock, but all statutes set a limit to the amount of increase, and in no case can the stock be decreased to an amount less than the liabilities of the corporation, and such amount of increase or decrease of capital stock must be filed with the secretary of state when this increase or decrease is voted. LIABILITY OF STOCKHOLDERS. In general, the individual liability of a stockholder ceases when he has paid the amount of his stock subscription, provided the capital stock subscribed has already been paid, but if any remains unpaid, the stockholders who have paid their subscriptions are also indi- vidually hable for the amount of the unpaid stock; and in some cases, notably national banks, the subscribers to stock are liable for double the amount of their subscriptions. LOSSES AND GAINS OF A CORPORATION. The losses and gains of a corporation are found through the Loss and Gain account, the same as in any other business, but from this account the}^ are carried to a Surplus account, which contains on its credit side the gain of the business, or on its debit side the loss of the business. The Surplus account is allowed to remain open until a dividend is declared, when Dividend is credited and Surplus debited for the amount of the dividend. DIVIDENDS. The division of profits among the stockholders of a corporation is made by means of a dividend, which is seldom the full amount of the gain, as it is desirable to create a surplus which may be drawn upon as required. Corporations aim to declare regular dividends of a fixed per cent at stated periods, so that their stock may form a desirable investment to capitalists. It is evident that in dull and unprosperous periods of business there may be no profits to divide. It is customary, therefore, to leave in the surplus sufiicient funds to provide for a dividend, even though there be no profits in a time of business depression. Sometimes the Loss and Gain account is closed by declaring a dividend for a certain anicunt at the time the gain is ascertained, placing this amount to the debit of Loss and Gain, at the same time debiting Loss and Gain with surphis for the balance of gain, and transferring these amounts from the Loss and Gain accoimt to the Dividend and Surplus accounts respective!}-, but the first method is preferable. TREASURY STOCK. Sometimes onl}^ a part of the capital stock is subscribed for before business is com- menced, and the balance is retained with a view to selling it at a later period, either to 230 MODERN ILLUSTRATIVE BOOKKEEPING. provide money for running expenses or to make extensions of business; this unsold stock is known as "treasury stock." Or, it ma}' be found that the entire capital stock has been used for machinery, materials, etc., and in this case sometimes the stockholders, instead of increasing capital stock to get money to carry on the business, donate a pro rata amount of stock to the treasury, and this s£ock is sold to secure funds as required. WATERED STOCK. Watering stock consists in issuing shares without an}' equivalent addition to the cash capital of the corporation. These shares are distributed among the stockholders, generally for speculative purposes. When this watered stock is issued as a stock dividend, it is generally done by debiting Loss and Gaiji for the amount of the issue. THE BOOKS OF A CORPORATION. The ordinary books of account for conducting a corporation business will be precisely the same as those of a private business, since the transactions will not differ, but a number of auxiliary books are required to show the operations connected with the corporate affairs of the business. These comprise the minute book, subscription book, stock certificate book, transfer book, dividend book, and stock ledger. Miuute Book. This book should contain a record of all the meetings of the stock- holders and the board of directors, and is generally kept by the secretary of the corporation. No special form of keeping this book is required, as it is simply a record of the proceed- ings, and its form is immaterial, provided it contains an accurate report of the proceedings of all the meetings. Subsc-riptioii and Instalment Book. This book contains a list of the subscribers to the stock with the number and the par value of the shares subscribed for by each, and it paid for in instalments, a separate space for each instalment. The following form illustrates the instalment subscription book. Instalment Subscription Book. Subscribed. Paid Instalments of 25 Per Cent. Bach. Date. u ■^ ^^ TRANSFERRED BY r^j^^-^47,..^yA TO C^.^^^^ ^ 5or Palue Keccineb i,_t^do hereby assign and transfer to y^^y-TT-K y^t-t^ .' ^ ^-r^^-^^^t^ Shares of the Capital Stock . 2o? / . OF /^r ' a7 \^ y / ^^T-TP.'^^ ^^^^T^^-r^i^^..-^ "J^/^/mu 234 MODERN ILLUSTRATIVE BOOKKEEPING. OPENING THE BOOKS OF A CORPORATION. If the corporation is an entirel}" new business, it is a simple matter to open its books, as shown in the following propositions. Proposition. James Brown, William Harper, Charles Edwards, Maurice Chane}- and William Upton have formed the American Motor-Carriage Company, with a capital stock of one hundred thousand dollars, of which Brown, Harper and Edwards have subscribed $30000 each, and Chaney and Upton $5000 each. The minute book would show the pro- ceedings of such meetings as had been held, and as soon as all the stock is subscribed for the following journal entry should be made. Subscription, 100000.00 Capital Stock, 100000.00 This journal entry should be posted to the general ledger. Suppose these stock subscriptions are to be paid in two instalments, one due Jan. ist and the other due Feb. ist. When the first of these instalments is paid, it is evident that the cash book of the corporation should contain a debit entry of $50,000, and that Siib- scriptio7i should be credited for this amount, since it was from subscription that the cash was received. Entry. CASH, DR. 190-. Jan. I Subscription, instalment No. i, 50000.00 And this amount being posted to the general ledger will cancel half the Subscription account. If the company commences business without collecting the balance of the capital Stock, its books for purchase of material, sale of goods, payment of expenses, etc., will be precisely the same as if it were an ordinary partnership. When the second instalment is paid, there will be another entry of CASH, DR. 190-. Feb. I Subscription, instalment No. 2, 50000.00 And this being posted to the general ledger will balance the Subscription account, showing that it is all paid in. The stock will now be issued, and from the stub of the stock cer- tificate book will be posted to the stock ledger $30000 each to the credit of Brown, Harper and Edwards, and $5000 each to the credit of Chaney and Upton — $100000 in all — which agrees with the amount of the capital stock in the general ledger. The books are now opened, and the business may proceed. Proposition. Jan. i, 190-. The Silver Lake Ice Company has been incorporated with a cash capital of $37500, distributed as follows: Edward F. Martin, 100 shares; Geo. Martin, 100 shares; Fred Martin, 50 shares; Geo. Allen, 5 shares; Wm. Ryan, 50 shares; David Ryan, 70 shares, at a par value of $100 each. The stock is paid for in four equal assessments of 250$ each, dated Jan. ist, Feb. ist, July ist and July 20th. Make a journal entry to open the books and the four cash book entries required, sujiposing all instalments are paid when due. What names and amounts would ajipear in >our stock ledger when the stock is issued ? MODERN ILLUSTRATIVE BOOKKEEPING. 235 TO CLOSE THE BOOKS OF A BUSINESS ALREADY IN OPERATION, AND REOPEN AS A STOCK COMPANY. Proposition. The firm of Warren & Carson have been engaged in the manufacture of furniture, and they propose to continue business as The Warren & Carson Manufacturing Company, with a capital stock of $100000, the stock to be divided as follows: W. A. Warren to receive 500 shares and E. B. Carson 250 shares. C. M. Harris has subscribed for 50 shares; D. J. Jones, 50 shares; D. E. lycavitt, 50 shares; and 100 shares are kept as treasury stock, to be disposed of for the benefit of the business when so voted by the directors. The resources and liabilities of the firm of Warren & Carson as as follows: RESOURCES. Real Estate, $20000. Cash, 7500. Merchandise, 49800. Unfinished Goods, 24200. Raw Material, ' 38700. Bills Receivable, 22690.50 Accounts Receivable, 41987.50 Total, $204878.00 LIABILITIES. Mortgage on real estate, $15000.00 Bills Payable, 46965.50 Accounts Payable, 72912.50 $134878.00 Warren's net worth. 46664.75 Carson's net worth. 23335-25 Total, $204878.00 If it is desired to open a new set of books, as is generally the case when a corporation is formed, it is necessary first to close the old books, which should be done by making a journal entry as follows: Warren & Carson Fiu-niture Co., 204878.00 Real Estate 20000.00 Cash, 7500.00 Merchandise, 49800.00 Unfinished Goods, 24200.00 Raw Material, 38700.00 Bills Receivable, 22690.50 Accounts Receivable, 41987.50 Posting this entry will balance all resource accounts. Then should follow the journal entry of Mortgages Payable, 15000.00 Bills Payable, 46965.50 Accounts Payable, 72912.50 W. A. Warren, 46664.75 E. B. Carson, 23335.25 The Warren & Carson Furniture Co., 204878.00 236 MODERN ILLUSTRATIVE BOOKKEEPING. Posting this entry will close all liability accounts, the partners' accounts, and also balance The Warren & Carson Furniture Co. account, and close the books of the old business. To open corporation books, as in the case of a new corporation, the capital stock, $100000, must appear on the credit side of the general ledger. The amount of the resources of the old business must appear as debit balances, and the habilities as credit balances. The names of Warren and Carson must not appear in the general ledger of the corporation, as their worth at closing has been absorbed by the capital stock. Make the following journal entry. Subscription, 15000.00 Treasury Stock, 10000.00 Real Estate, 20000.00 Cash, 7500.00 Unfinished Goods, 24200.00 Merchandise, . 49800.00 Raw Material, 38700.00 Bills Receivable, • 22690.50 Accounts Receivable, 41987.50 Good Will, 5000.00 Mortgages Payable, 15000.00 Bills Payable, 46965.50 Accounts Payable, 72912.50 Capital Stock, 100000.00 Referring to the statement of resources and liabilities of Warren & Carson, it will be seen that the actual difference between the resources and liabilities of that firm is $70000. For this amount W. A. Warren has received $50000 worth of the capital stock in the new corporation, and E. B. Carson has received $25000 worth, a total of $75000, or $5000 more than the actual difference between the resources and liabilities of their firm. It maj' be very justly assumed that the good will of the old business was worth this amount, and thus Good Will should be debited for $5000 of the stock, or the word ' ' franchise ' ' may be used, if preferred. The remaining $25000 of the $100000 capital stock is balanced by the debit of Subscription, $15000, and Treasury Stock, $10000. Post this journal entry to the main ledger of the new books, and the books of the corporation are correctly opened. When this entry has been made, Warren should receive $50000 worth of stock certifi- cates and Carson $25000 worth of stock certificates, since their worth in the individual partnership business has been absorbed in the capital stock of the corporation. When the subscriptions of the new stockholders, Harris, Jones and Lcavitt, are paid, an entry of Cash, Dr., $15000, and Subscription, Cr., $15000, will be made, and stock issued to Harris, Jones and lycavitt to the amount of $5000 each, making a total of $90000 on the credit side of the stock ledger. This leaves a difference of $10000 between the stock ledger credits and the credit of Capital Stock in the main ledger. But there is treasury stock yet to be sold, amounting to $10000, and whenever this is sold, Cash will be debited and Treasziry Stock credited, thus canceling the Treasury Stock account, while capital stock will be issued to the purchasers, and the amounts entered in the stock ledger, thus completing the $100000 necessary to make it agree with the Capital Stock account in the inain ledger. MODERN ILLUSTRATIVE BOOKKEEPING. 287 TO CONTINUE THE BOOKS OF A PRIVATE OR ORDINARY PARTNERSHIP BUSINESS AS THE BOOKS OF A CORPORATION. In tke proposition just advanced and explained, let us suppose that the corporation does not care to go to the expense of purchasing new books, but desires to make such entries as will continue the books of the private partnership as corporation books. Exam- ining the journal entry on page 236, it will be seen that the accounts showing the resources and liabilities of the private business are not changed after they have been closed in the books of the partnership and transferred to the books of the corporation; therefore, no entries of these accounts are necessary, as they will have the same balances, whether the business be a partnership or a corporation. To change the books from a partnership to a corporation, make the following entry in the journal. W, A. Warren, . 46664.75 E. B. Carson, 23335.25 Subscription, 15000. Treasury Stock, loooo. Good Will, 5000. Capital Stock, 100000.00 Post this entry to the main ledger, and j-ou have the books correctly opened. The stock ledger, of course, will be opened exactly as in the first jDroposition, since the conditions are not changed. The capital stock is made up of the surplus of resources over liabilities (which is shown by the net worth of W. A. Warren and E. B. Carson, $70000); of subscription, $15000; of treasury stock, $10000; and of the good will, or franchise, estimated to be worth $5000. The above journal entry will balance the per- sonal accounts of Warren & Carson, and also show the amount of subscription due, the treasury stock on hand, and the value of the good will, or franchise, while Warren & Carson will receive credit on the stock ledger for $75000 worth of capital stock, leaving the remaining $25000 to be credited to the proper persons when the subscription is paid and the treasury stock disj^osed of. A VOUCHER SYSTEM OF ACCOUNTS. Within the past few years there has been a great advance in the systematizing of accounts, and in the proper distribution of the various items of expenditure. This system- atic accounting originated in the books of railroad companies, and the interstate commerce act, requiring a uniform system of bookkeeping by all the railroad companies of the United States, has done much to secure a uniform and scientific system of accounts among these great corporations; and it is perhaps in the books of railroad companies and other large corporations, which can afford to pay accountants of high ability, that the voucher system of accounts is seen in its highest stage of development. It is, however, easily adaptable to any business, and possesses many advantages, which will readily be seen when it is applied. The work for the student in the month of December will shov\ the voucher system of accounts as applied to the books ot a corporation engaged in the manufacture of high grade shoes. 238 MODERN ILLUSTRATIVE BOOKKEEPING. It is not claimed that the transactions afford a completely scientific exposition of shoe manufacturing accounts, the object being rather to show the voucher system, but in the collection of data the books of some of the largest shoe and leather houses in Rochester, N. Y., and Lynn, Brockton, and Boston, Mass., have been freely consulted. The following form illustrates the voucher to be attached to a bill of leather received from Cutler & Porter, of Springfield, Mass., purchased on 4 months' time with 5'c dis- cou.nt for cash. VOUCHER IMO. 2654 Jq Cutler & Porter j^^ Springfield, Mass. . . THE W. J. Hilton Shoe Co. A\anufacturers of Terms Net 4ra. , 5:^' cash BOOTS AND SHOES. ACCOUNT. DATE. Materials Nov. 3 Materials as per invoice 1896 94 75 84 1801 5fo 91 i 1 1 1 Extension and distribution cert Prices Receipt of Goods ified by Bookkeeper. Approved h y Buyer. It, a ^^ ^ c^cy / Rec. Clerk. Manager. Received 190 of The W. J. HILTON SHOE CO., Eighteen hundred one and 91-100 --------- dollars in full settlement of account as above. ^ 1801.91 PLEASE DATE, SIGN, AND RETURN PROMPTLY. The voucher should be pinned, or pasted, to the original bill alter il has hccu certified by the bookkeeper, the buyer, and the receiving clerk, or ac least b}'^ the bookkeeper, and then invoice and voucher together should be presented to the president or the manager for his approval, after which an abstract of the voucher should be entered in the voucher register (see pages 246 and 247), which will show in the When Due colinnn the date upon which each bill should be paid. When due, 01 a day or two earlier, the vouchers should be detached from tlie invoices, and the bookkeeper should calculate the discount, if any, to MODERN ILLUSTRATIVE BOOKKEEPING. 283 which each invoice is entitled, and deduct it on the voucher, so that the net amount due will appear in its second money column, after which the voucher should be presented to the treasurer, who should make out a check for the amount due, and the check should be enclosed wdth the voucher and sent to the person of whom the invoice was purchased. The voucher is an abstract of the original bill, and on the back, under " Charged To/' is shown the business account, or accounts, to which it is charged. (See model below.) I CD CV2 O CD CD O CO ■■ 3 : O O OJ x: u 3 O > U (D -P U O u -i jy tc u:! ■g a fa/3 (U ggSp^p^K-rpHtnoopHpH OJ 'X 'A § (U to o !£ O The following form illustrates a voucher check, and it will be noted that even if the voucher is not returned, as requested, the check itself is a full receipt for the payment of said voucher. Form of Voucher Check. No... 2 ^.^^ rir-^.^ j.^^ (Yoiir place here.) ^cff'V/ns^'t^ai ma/miy •A> 9'' --;^^Z---2Z-'2>«>;?-5S-2 ^?-z-,2- i:x^-zi^>C-#^,.<2-<2^ #^^~ In case a number of bills have been purchased from one house, and it is desired to send the pajnnent all at one time, the bookkeeper should not attach vouchers to invoiced when received, but should have the invoices verified and file them without the vouchers. When it is desired to pay these invoices, prepare a single voucher to cover the entire number of invoices paid; for examj^le, invoices received of Gould & Lincoln, Boston, as follows: Nov. ist, net, $275.85; Nov. 20, 2« 10 ds., $345.85; Nov. 30, 2'"^ 10 ds., $400. It is desired to pay these bills Dec. 5th. The following voucher would be prepared. 240 MODERN ILLUSTRATIVE BOOKKEEPING. VOUCHER NO Yq Gould & Lincoln j-^j. Bos ton Terms : Form of Voucher. 2678 . THE W.J. Hilton Shoe Co. Manufacturers of BOOTS AND SHOES. ACCOUNT. DATE. Materials Oct. 1 Net 345 400 85 275 85 Mchy. 20 2-10 ds. i i 30 2- 10 ds. 2,"^ discount 74 5 14 85 92 730 J1006 93 78 Extension and distribution certi Prices ' fied by Bookkeeper. Approved by Jy^ i a Buyer. Rec. Clbrk. ■^::>\^^^^>^ ^ Receipt of Goods t Manager. Received 190 Ten hundred six and 78-100 - in full settlement of account as above. ,t 1006. 78 , of The W. J. HILTON SHOE CO., '..."...".."...." ...~....I....~.-~....Z....~. Dollars, PLEASE DATE, SIGN, AND RETURN PROMPTLY. Z < . o 00 co C\2 o 3 O O CD CD O CO o o c •1-1 I — I P o o CN2 O <«■ CD o C\2 C\2 6 2 o o C3 LO LO 1 00 00 LO LO t- -^J- o c\2 l^- . . . h- , , . Q o o u. Plh J^ W .4 O 1 MODERN ILLUSTRATIVE BOOKKEEPING. 241 Freight bills and other accounts of like nature would generally be paid in this manner, although some bookkeepers would prepare a separate voucher for each invoice. This, however, is requiring an unnecessary amount of work. Many business houses pay all invoices received from the first to the loth on the loth, all invoices received from the loth to the 2oth on the 20th, all invoices received from the 20th to the 30th on the first of each month, and regard these as cash payments; and their customers, if notified of this method of payment, generally do not object to receiving such payments and allowing cash dis- counts. Many business houses have a check prepared as a part of the voucher, and the voucher and check are sent as one to the creditor, thus ensuring the return of the voucher, as it must pass through the bank with the check, which is not detachable. A'ouelier Keg'ister. This is the distinctive book of the voucher system of accounts, and by its use it is possible to dispense entirely with accounts payable, since the total amount of Vouchers Payable Credit column, as shown in the register, will show the total credits which would be carried to accounts paj^able in the ordinary form of bookkeeping, while the total amount of \^ouchers Payable Debit column will show the debits that would be carried to accounts payable. Of course the difference between the footings of Vouchers Payable Credit and Vouchers Payable Debit columns should show at any time the amount of vouchers unpaid, which will be the accounts payable of the business, and these can readily be proved b)- comparing with the actual vouchers on file. As soon as a bill has been examined, a voucher should be made out and certified by the proper parties, after which the distribution of the items to the proper accounts should be made on the back of the voucher; and from this distribution should be made the entries in the voucher register, where as many columns may be provided as the business may require, and these columns may be classified so as to show whether the items of cost were incurred in the first cost, manufacturing expenses, selling expenses, or such other divis- ions of the business as may be found advisable. The advantages of such divisions of the expenses of a business cannot be overesti- mated, as it will be seen by a little study of the register that b}^ the use of the footings of the various columns and the output or product of the business; that is, the number of shoes manufactured in a given period, an approximate cost of almost any department of the work may be obtained. For instance, suppose there were on hand at beginning $10000 worth of leather, and at closing there is on hand $8000 worth, then $10000 minus $8000, or $2000, plus the footing of the I^eather column in the voucher register, divided by the number of shoes made in December, will give the average cost per shoe for leather during that month. The same ma)' be applied to the expense of selling, of manufacturing, etc. These divisions of expense will corres^Dond with the divisions of the Loss and Gain account, as shown in the statement of losses and gains at the end of the year. When a voucher is paid, the asual entry is made on tne credit side of the cash book, with the exception that in the left-hand explanation space snould be written Voiic/ier, with its number, inscead of the name of the account payable settled i^see form of cash book, pages 246 and 247). Com. — 16 242 MODERN ILLUSTRATIVE BOOKKEEPING. SHOE MANUFACTURING BUSINESS. TheW. J. Hilton Shoe Company was organized as a stock company Jan. i, 1895. ^^s capital stock of $200000 is held as follows: W. J. Hilton, $85000; E. M. Hilton, $40000; E. C. Wardner, $35000; Geo. Lacy, $10000; James Daniels, $9000; R. H. Merriam, $1000; and $20000 of stock remains in the treasur}-. The president of the corporation is W. J. Hilton; vice-president, E. C. Wardner; sec- retary, R. H. ^Merriam; treasurer. E. M. Hilton; general manager, Geo. Lacy. The members of the board of directors are W. J. Hilton, E. M. Hilton, James Daniels, R. H. Merriam, and Geo. L,acy. The salary of the president is $2000; of the treasurer, $1000; of the secretary, $1000; of the general manager, $3000. R. H. Merriam, the secretary, is also the auditor of the books. (Student) will act as head bookkeeper. WORK FOR THE STUDENT. The trial balance taken Nov. 30, 190-, shows the following balances in the general ledger. You may enter these balances, except Cash, in 3'our general ledger. Allow one- third page to each account, except Merchandise Sales, which should have one-half page space. Make the date of entry Dec. i, 190-, and write Balance in the explanation space. Enter the cash balance, $17582.78, in your cash book on the debit side. Trial Balance, November 30, 19c- Capital Stock, Treasury Stock, Good Will, Surplus, Reserve for Bad Debts, Undivided Profits, Interest & Discount, Taxes, Discount on Purchase*i, Discount on Sales, Merchandise Sales, Merchandise Returned, Bills Receivable, Accounts Receivable. Vouchers Pavable. Bills Payable, Real Estate, Collection & Exchange, Machinery & Tools, Furniture & Fixtures, Cash (ill bank ), Materials, 20000.00 30000.00 126.17 823.37 8853.89 2685.40 4895.00 44.008.00 73742.50 448. 2(- 60280.10 3580.40 I75S2.78 224375.60 200000. CO 20860.00 1470.00 1425.10 6831.26 422189.85 ,"^0620.00 I 3500. CO MODERN ILLUSTRATIVE BOOKKEEPING. ?43 I^abor, 139993-75 Freight, 3835 -60 Foremen's Salaries, 4580.CX) Lasts & Patterns, 12589.60 Mill Supplies, • 4940.00 Fuel, Light & Oil, 3547- 5° Royalties, 6371.20 Salesmen's Salaries, 10468.70 Salesmen's Expenses, 6521.60 Office Help, 3543-38 Officers' Salaries, 6416.67 Expense, 1385.40 Repairs, 1125.00 Office Supplies, 185.40 696905.21 696905.21 The accounts receivable are as follows: Hub Shoe Co., Boston, Nov. 25th, net 30, 2/10, 2786.45 Dodge & Rice, Boston, Aug. 4th, 4 mos., 4210.00 Pond & Eaton, Boston, Nov. 3d, net 30, 1782.45 Providence Boot & Shoe Co., Providence, R. I., Oct. 5th, net 60, 1242.50 E. F. Woods & Co., Providence, R. I., Nov. 24th, net 30, 2 10, 1446.00 Sam Stone & Co., Danbury, Conn., Nov. 20th, net 30, 2 10, 798.50 Geo. H. Deane & Co., Hartford, Conn., Nov. 28th, net 30, 2/10, 1342.75 New Haven Trading Co., New Haven, Conn., Nov. 27th, 5- 10, 2836.70 E. M. Lyons & Co., New Haven, Conn., Oct. 30th, net 30, 628.50 Bay State Shoe Co., Worcester, Mass., Nov. 25th, 3 15, * 3245.50 Marsh, Fielding Co., Chicago, Nov. loth, 2/30, 4697.50 Quaker Shoe Co. , Philadelphia, Nov. 15th, 3 '30, 6255.75 Hamilton, Brown Shoe Co., St. Louis, Mo., Oct. 5th, sight draft 60 ds., 4875.20 Pittsburg Furnishing Co., Pittsburg, Pa., Nov. 20th, 2 15, 4219.70 Rich, Lantz & Harris, Cleveland, O., Oct. 3d, 90 ds. net, 3640.50 In 5'our customers' ledger open accounts with each of the above firms, allowing one- fourth page to each name, and enter on the debit side the date, terms, and amount due from each firm. See that the total of these debit footings equals the amount of Accounte Receivable, as shown in your general ledger. In your envelope entitled ' ' Vouchers Payable ' ' 3'ou will find invoices from other persons, which make up vouchers payable, as shown on the credit side of that account in your general ledger. Retaove these invoices from your envelope, and prepare a voucher for each invoice according to models on pages 238 and 239. No. 2780. — J. Russell & Co. On the back of the voucher charge $247.75 to ^Machin- ery & Tools; the balance of the bill to Mill Supplies. Attach the voucher to the invoice, and place both in Vouchers Payable envelope. No. 2781. — On the back of this voucher charge the full amount of the bill to Materials. No. 2782. — Charge $462 of this bill to Real Estate and $25 to Repairs, writing Repairs on one of the blank lines at the bottom of the voucher. 244 MODERN ILLUSTRATIVE BOOKKEEPING. Ko. 2783. — Charge the full amount to Materials. No. 278-4. — Enter the full amount under Machinery & Tools. Xos. 2785, 2780. — Enter the full amount of each invoice wider Materials. No. 2787. — Charge to Machinery & Tools. No. 2788. — Charge to Materials. Xo. 2780. — Charge to Furniture & Fixtures. Enter the above vouchers in your voucher register, as shown in model, pages 246 and 247, carrjang each amount to the proper column, as shown in the distribution on the backs of the vouchers, and the totals to \^ouchers Payable Cr. column. Those accounts which have no special columns should be entered under Miscellaneous Accounts. See that the footing of Vouchers Payable Cr. column in your voucher register agrees with the credit of Vouchers Payable in your general ledger. Foot and rule Vouchers Payable Cr. column, and also each column of distribution and the Miscellaneous Accounts column, and see that the total of these columns equals the footing of Vouchers Payable Cr. column. These amounts have already been posted, and should not be included in the December posting. In your stock ledger open accounts as follows: W. J. Hilton, credit, 850 shares, $85000; E. M. Hilton, credit, 400 shares, $40000; E. C. Wardner, credit, 350 shares, $35000; Geo. Lacy, credit, 100 shares, $10000; James Daniels, credit, 90 shares, $9000; R. H. Merriam, credit, 10 shares, $1000. Write the number of shares to the credit of each person in the explanation space of the stock ledger. The stock certificates would, of course, be already issued, but in order to show how this would be done, you may fill out certificates for the proper amount of stock to each person in your stock certificate book, dating the certificates Jan. i, 1895. Hand these certificates to- your teacher for approval, after which place them in Vouchers for Others. Books Kept. The books to be kept in this business are the journal-daybook, cash book, sales book, voucher register and bill book. Journal-daybook. The following form illustrates the journal-daybook. It does net differ materially from that of August and September. November 29, 190-. General. Bills Rec. I..F. Accts. Rec. General. i 1260 26 26 855 2432 82«7 14 12 S6 B. Receivable Note at 90 ds. , with int. Interest added, to pay invoice, Sam Stone & Co. 10 20. (1 Reserve for Bad Debts To bal. personal "< and B. Rec. note of Iv. & Co. Eastman & Co. B. Receivable Note at 60 ds. to 1)al. <'jr Parker Bros. to Nov. i. Bills Receivable, Dr. Accts Receival)le, Cr. S42 840 1 2432 50 12 68 12 420 4II4 64 3287 4114 62 4547 4547 26 1 MODERN ILLUSTRATIVE BOOKKEEPING. 245 Cash Book. The cash book is iUustrated on pages 246 and 247, and does not differ materially from that of August and September. Sales Book. The sales book contains one special column for cash sales; otherwise it is similar to the ordinary sales book of May. The following form illustrates the sales book. November i, 190-. I,.F. 67 Ward & Hiland, Boston, 10 cases, J91, 360 prs. ID " J76, 360 " Priest Bros., City, 12 prs., i+91 12 " 576 Net 60, 3/ 10 3.00 2.50 Cash 3.00 2.50 Cash. 36 30 Items. loSo 900 Total oil Acct. I9S0 Voucher Register. The voucher register is illustrated on pages 246 and 247. Bill Book. The bill book does not differ from that previously used. VOUCHERS. Xo. A. — In an envelope marked ' ' Cash Drawer " you will find tht following notes and drafts, which constitute tlie Bills Receivable balance of the main ledger. Take these notes and drafts from your envelope, and enter them on the bills receivable side of your bill book. Xo. 233. — Date, Sept. loth; time, 90 days; amount, $895; maker, Providence Boot & Shoe Compan}-, Providence, R. I. K'o. 234. — Date, Sept. 15th; time, 4 months; amount, $1245.75; rnaker, Quaker Shoe Company, Philadelphia. No. 235. — Date, Oct. 20th; time, 2 months; amount, $754.25; maker, E. F. Woods & Co., Providence, R. I. No. 23G. — Date, Nov. 15th; time, 30 days; amount, $2000; maker, Hub Shoe Com- pany, Boston. See that the footing of the Amount column in your bill book agrees with the balance of Bills Receivable account in your main ledger. Enter the following notes outstanding on the bills payable side of 5'our bill book, and see that the footing of the Amount column agrees with the balance of Bills Payable account in your main ledger. These notes will be presented when due. No. 174. — Date, Nov. ist, in favor of E. J. Leonard, for money borrowed, payable at office on demand, with interest, $5000. No. 175. — Date, Nov. loth, in favor of the Commercial Bank, for money borrowed, payable at the Commercial Bank in 30 days, $3500. No. 176. — Date, Nov. 20th, in favor of the Commercial Bank, for money borrowed, payable at the Commercial Bank in 30 days, $5000. Procure from your teacher check for cash balance, $17582.78, and deposit in bank. 246 MODERN ILLUSTRATIVE BOOKKEEPINa Cash, Dr. Date. I,. F. Xamk and Explanation. Accounts Receivable, Cr. Discount on Sales, Dr. Net Cash Mdse. Received. Sales. 19c-. Nov. I 2 3 3 4 4 5 5 6 6 6 4' 4' Balance in bank Geo. H. Deane & Co., inv. 10, 20 Mdse. Sales New Haven Trading Co., inv. 10/25 Bills Rec, Bay State Shoe Co., disc. 60 ds. Mdse. Sales Dodge & Rice, inv. 10/26 Providence Boot & Shoe Co., on «<; Marsh, Fielding Co., inv. ii/l Bills Pa}-., note 4 ni. disc. Mdse. Sales Accounts Rec, Cr. Mdse. Sales, Cr. Discount on Sales, Dr. Balance 786 1268 942 500 I9S8 40 70 80 75 65 15 25 iS 73 37 85 13942 770 1243 1500 923 500 1988 4200 327 1 26 67 33 95 75 49 132 126 68 60 14 75 5486 327 49 59 95 25396 45 Nov. T 1670S 35 In the rooms of a shoe factory each operative has a pass book, on which he is debited for all work received, and credited for the same when it is handed back finished. These pass books are collected weeklv, and from them is made out the pay roll, which is, or should be, certified by the foremen of the various rooms. The name of each operative is entered on a book in charge of the paymaster, or book- keeper, if the bookkeeper makes up the pay roll, and from the cash he takes the amount called for oppo- site each name, and places the amount in an envelope marked with the name of the operative and the amount enclosed. These envelopes are placed in a box and handed to the foreman of each room, who VOUCHKR riVRTICrtAJtS OF IN-l'OICR. VorcnER Date OF Entry. Plant. No. Date. AMOrKT, VorciiERS Pav.. Cr. Terms. WnrN Pl'E. Amohnt. Vovcm.RS Pav.. Dr. Paid. In Favor of. EXFEANATION. Rc.ll Esl-ilc Mchy. and Tools. Fur. ondFixt. 2649 Oct. I Oct. I 654 30 Cash 5; Oct. I 654 3'^ Oct. I r. L. Marcy Salary and Expense 2650 1 I 576 40 4* i« I 576 40 I J. W. Evans •• 2651 3 Sept. 25 1200 Net4in.,5/Io Oct. 5 1200 5 Whiicomb Lumber Co. For new storehouse 1200 2652 3 Oct. I 276 21 30 ds., 2/C 3 276 21 J J. RussoU & Co. Hardware, etc. •5° 2653 3 2 431 62 Cash 2 43' 62 2 National Welt Co, Royalties 2654 5 3 1896 75 Ktt4ai.,5,c 3 1896 75 5 Culler &. Porter Leather 2555 5 5 3600 50 Cash 5 3600 50 5 ray Roll 2656 5 5 64 48 " 5 64 48 5 City Carting Co. I'rt. for week 2657 7 4 148 64 30 ds., 2/10 ■7 Boston Last Co. Lasts and ralterus 2658 8 8 250 5r; Cash 8 250 8 E. A. Conway Co. Coal 2659 10 10 114 68 Cash 10 114 68 10 McKay, S. M. Co Royalties 2G60 12 10 62 45 60 ds., 2/10 22 O'Ncil Oil Co. Oil and Waste 2661 12 12 3268 50 Cash 12 3268 50 ray Roll 2562 14 10 36 21 5SCash 14 36 21 City Gas Co. Cos aiij Fixtures 20 2663 14 II 28>|8 78 N*:t4m.,5'io SI- Collieson Bros. Leather 2664 M IVtty Cash I'or cash drawer, JI35 2665 ■5 '5 62 9' Cash Nov. 'S 62 91 City Carting Co. Krt \o date 2666 '5 12 645 28 30 ds. M \'iirick Hiirdware Co. Roofing, etc. 245 28 200 — 6} SO 16187 71 1445 28 35» 82 50 — — -- ' ' MODERN ILLUSTRATIVE BOOKKEEPING. 247 Cash, Cr. Vouchers Discount ou CoUect'n & Date. I,. K. Name and Explanation. Payable, Dr. Purchases, Cr. Cash Paid. Exchange, Dr. 190-. Nov. I Voucher ^$2749 654 30 654 30 I =2750 576 40 57^^ 40 2 " =2753 431 62 431 62 2 ColL & Exch., on deposits 75 S Voucher :;2752 275 21 5 52 270 69 S ColL & Exch., ou deposits I 25 4 Discount, Bay State Shoe Co. note 15 S Voucher 22751 1200 60 1 1 140 5 =2754 1896 75 94 84 1801 91 5 ::2755 3600 50 1 3600 50 5 ::2756 64 48 64 48 6 Coll. & Exch., on deposits 3 50 6 Discount, note at 4 in. 43 70 6 v' Petty Cash, per P. C. Vouchers Pa^-able, Discount on Purchases, Coll. & Exch., B. Dr. Cr. Dr. 84 5 50 8700 26 160 36 • 5 5^ Balance,* 16708 35 ! 25396 45 ■""To be written in red ink. distributes them to the operatives. No receipts are called for from the operatives, though in small fac- tories, where only a few employes are to be paid, sometimes each operative is required to sign his name to the pay roll, acknowledging the receipt of the amount opposite his name. A few companies pay their help entirely by check, and the check, of course, acts as a receipt; but in nearly all large establish- ments, where a great many employees are to be paid, the weekly pay roll is made up as above stated. REGISTER. DISTRIBUTION Ftrst Cost, MANUFACrORING EXPENSES. Sellino Expenses. MiscELLANEoim Accounts. I..F. MaleiUIs. labor. Frei'gbL ForemeH. Lasts and rat. Mill Supplies. Fuel. Light and Oil. Royalties. Salesmen's Salaries. Salesmen's Expenses. Office Help. Name of Account. AMOUNt, 1896 289S 87 75 78 50 2862 3"3 17 50 64 62 48 91 83 S3 148 64 76 12 37 21 45 230 50 431 114 68 450 350 204 226 30 40 72 72 * Expense. Officere" Ra1an«s Expense Office SappUes 1 1 50 583 16 12 1 33 21 05 43Sjl o,( 5975 67 137 39 166 I4S 64 126 16 yM 545 30 800 430 70 144 : 662 04 • " 248 MODERN ILLUSTRATIVE BOOKKEEPING. Xo. 1. — Dec. I. This check is from Sam Stone & Co., paying invoice of Nov. 2olh. Enter the check in ^-onr cash book, crediting 5*. Stone & Co. for the full amoimt and debiting Cash and Mercha^idise Discount, as in August cash book (see pages i68 and 169). All merchandise discounts will be handled in this manner in the following transactions. Xo. 2. — Dec. I. This is the regular weekly pay roll. It has been made up by the foremen of the various rooms, whose names are attached. Number this voucher 2"/ go, and prepare a voucher to accompany it on a regular voucher form. On the back of the voucher charge to L,abor account, Foremen's Salaries, Office Help, and Officers' Salaries, as shown on the pay roll. Make out a check to the order of Pay Roll for the amount called for. Procure the money, and place it in Cash Paid Out. Enter this voucher. No. 2790, in yovcc voucher register, carrying the amount into Vouchers Paj-able Cr. and into Vouchers Payable Dr. columns, since it is paid the same day it is issued, and making the proper distribution in the special columns. In your cash book credit Cash for the amount of the voucher, and in the explanation space write Voucher No. 2'/po. No further explanation is required in the cash book, since a reference to the voucher register will give full particulars. Write all voucher numbers in red ink. No. 3. — Dec. I. Invoice, J. H. Steele & Co. This bill is for office supplies, and as it is a small bill, with no discount allowance, you may enter it on a voucher and make out a check for the amount; attach it to the voucher, and hand the voucher and the check to your teacher, who will return the voucher properly receipted at some later date. On the back of the voucher charge to Office Supplies. Enter in your voucher register Vc 2ypi, placing the name of the account, "Office Supplies," in the Miscellaneous Accounts column. Enter the amount of the voucher in both Vouchers Payable Cr. and Vouchers Payable Dr. columns, since it is paid the same day it is issued. Enter on the credit side of your cash book Dec. i, Voucher No. 2jg)i, and write the amount, $2^.10, in both Vouchers Payable and Cash Paid columns. No. 4. — Dec. I. Salesman's order from Dodge & Rice. Enter in 5-our sales book. Place the bill in Vouchers for Others and the order in 3'our Voucher File, as in previous sets. SeIvWng Price List for December. No. 76, Goodj^ear Welt, per pair, $2.50 No. 91, Patent Calf, " " 3.00 No. 83, Russia Calf, " " 2.25 No. 84, Tan Calf, " " 2.25 No. 72, Heavy Walking Shoe, " " 3.25 No.. 94, Kangaroo, " " 2.00 No. 64, Eadies' Han/:1 Made French Kid, " " 3.50 No. 66, " " " Patent Calf, " " 3-50 No. 68, " Dongola Kid, " " 2.50 AH goods are sold Ijy case of 36 pairs each. The above prices are subject to discounts, as agreed upon by the salesmen. All sales- men's orders call for the goods bj^ nunil)er. Do not make mistakes in filling out your bills, or in making entries in the sales book. No. .*>. — Dec. I. Pay Voucher No. 2780. Take the \(,)uelier from your A'ouchers Payable envelope, detach it from the bill, make out a check for the net amount, and hand MODERN ILLUSTRATIVE BOOKKEEPING. 249 voucher and check to your teacher. Enter the amount in the debit cohimn of the voucher register, with the date of payment, as well as in the cash book. In paying the vouchers of this set, after making the proper entries in the voucher register and the cash book, you will, in all cases, hand the voucher and the check to your teacher, or to such person as he may designate to receive them. They will be returned to you at some later period, and j^ou may then place them in your Vouchers Paid File. No. 6. — Dec. I . It is necessary to have some ready cash for small items paid from day to day, and these items will be recorded in what is known as the petty cash book. This is a branch of the regular cash book, and its debit side will be made up entirely of checks drawn for petty cash, while its credit side will be made up of various small items. By the use of this book the main cash book is more easily audited, since its credit side will be made up entirely of checks. Form of Voucher. To Cash Voucher no. Dr. 34 26 THE . . W. J. Hilton Shoe Co, Terms : Manufacturers of BOOTS AND SHOES. Petty cash 25 I hereby certify that the above liability was con- tracted for the W. J. Hilton Shoe Co., and that the goods have been received. Rec. Clerk. Prices correct. Buyer. Distribution and calculations correct and vouchers entered. Bookkeeper. Approved for payment. Gen. Manager. Received . 190 , of The W. J. HILTON SHOE CO., - _ Dollars, in full settlement of account as above. $ --- _ PLEASE DATE. SIGN, AND RETURN PROMPTLY. 250 MODERN ILLUSTRATIVE BOOKKEEPING. Under a voucher system of bookkeeping, cash for the petty cash book should be obtained by a voucher order from the manager. Whenever cash is to be balanced, the footing of Sundries column in the petty cash book should be transferred to the credit side of the main cash book into Cash Paid colunui, with the explanation, Petty Cash, per P. C. B., and a check mark placed in the ledger folio column, to show that these items have been posted from the petty cash book. The form on page 249 illustrates a petty cash voucher. No distribution is required, as the distribution will be determined bj- the entries in the petty cash book itself. A cash check should be written for the amount. The cash should be handed to the bookkeeper. Voucher No. 2792 is an order signed by the manager. Enter in your voucher register, but do not extend the amount (see similar entry in model voucher register, pages 246 and 247) . Make out a cash check for the amount. Place the voucher in your Receipted \^oucher File. Take the check to the bank, or to your teacher, and get the money, which place in 3^our Petty Cash Draw^er. This transaction requires no cash book entry, as no cash has left the business; it is simply taken from the bank and placed in the Petty Cash Drawer for future use. Enter the amount of the check in the Dr. column of your pettj- cash book. The following form illustrates the petty cash book. Petty Cash Book. Petty Cash. Dr. Cr. Date. I..F. Explanation. Cash Rec'd. Accts. Rec. Expense. Sundries. Nov. I 3 4 4 5 5 6 8 8 9 10 12 Check Office Supplies, stamps & postals Washing windows Soap & towels Telephone charges, October W. U. Tel. Co., October charges W. G. Allen & Co., protest fees Check C. M. Carter & Co., overpaid Scrubbing floors Office Supplies, 500 stamped envelopes Wallace Bros., protest fees Accts. Rec, Dr. Expense, Dr. 30 25 3 I 2 00 00 50 2 5 7 6 75 75 75 45 50 1 10 6 23 50 50 6 50 50 23 20 20 15 Balance,* Balance, 30 — II 30 55 55 Nov. II *To be written in red ink. >fo. 7. — Dec. 3. Salesman's order, Hamilton, Brown Shoe Co. (See instructions for No. 4.; Telegraphic order, E. F. Woods & Co. (Enter in sales book. ) Voucher No. 2793. This bill is for salesman's salary- and expenses for November. Make out a voucher, charging to Salesmen's Salaries and Salesmen's Expenses. Make out a check for the amount, and enter in voucher register and cash book. No. S. — Dec. 3. No. J).— Dec. -\. MODERN ILLUSTRATIVE BOOKKEEPING. 251 Xo. lO. — Dec. 3. Voucher No. 2794. (Proceed exactly as in No. 9.) Xo. 11. — Dec. 3. Invoice, F. C. Perkins, voucher No. 2795. Make out a voucher for this bill, attach it to the bill, and enter in your voucher register. Place the voucher and the bill in your Invoice File. Write Mill Supplies in Miscellaneous Accounts column of your voucher register. Xo. 12. — Dec. 3. Invoice, Gas & Electric Co., voucher No. 2796. (See instructions for No. II.) Charge to Expense in distribution. Xo. 13. — Dec. 3. Invoice, E. A. Conway Coal Co., voucher No. 2797. Proceed as in No. II, and charge to Fuel, Light and Oil. Xo. 14. — Dec. 3. Invoice, Western Leather Co., voucher No. 2798. Charge to Materials. Xo. 15. — Dec. 3. Deposit check of Sam Stone & Co.; collection, 75'/. Pa}^ vouchers Nos. 2796, 2797, 2781 and 2785 by check. Take the vouchers from your A'oucher File, make out a check for each amount, and hand vouchers and checks to j'our teacher, or to the person designated. INIake the proper entries in j-our cash book and in ^-our voucher register. Xo. 10. — Dec. 3. Enter each item in your petty cash book, debiting Expense for the amounts. (See form of pettj' cash book, page 250.) Xo. 17. — Dec. 3. This check is received from Pond & Eaton. Enter on the debit side of the cash book; the amount is net. Xo. 18. — Dec. 4. Leave for collection at the Commercial Bank the note of the Provi- dence Boot & Shoe Co. Make the proper indorsement, and enter short in 3'our bank pass book. Xo. 19. — Dec. 4. Invoice, J. Russell & Co., voucher No. 2799. Make out voucher and attach to the bill; also make out check for the amount of the bill. Enter in 3-our ^•oucher register, and hand bill, voucher and check to your teacher. Charge to Mill Supplies. Xo. 20. — Dec. 4. Salesman's order. Marsh, Fielding Co. Xo. 21. — Dec. 5. This check is received from the Providence Boot & Shoe Co., to appl}^ on account. Xo. 22. — Dec, 5. Draw, at sight, on Hamilton, Brown Shoe Co., St. Louis, for $4875.20, and deposit this draft with the checks of Pond & Eaton and Providence Boot & Shoe Co. in the Commercial Bank. Receive credit for the sight draft, as well as for the checks. Enter the amount of the draft on the debit side of your cash book, and add to 5^our bank balance. Pay for collection $6.75. Deduct this amount from the deposit on the deposit ticket, and enter on the credit side of your cash book in Collection & Exchange column. Xo. 23. — Dec. 5. Telegraphic order from Dodge & Rice. (Enter in sales book.) Xo. 24. — Dec. 5. Pay vouchers Nos. 2788 and 2789. Make out the checks and hand with vouchers to 3'our teacher. Enter amounts in voucher register and cash book. Xo. 25. — Dec. 5. Invoice, Chas. Koss »& Bro., voucher No. 2S00. Charge to Materials. Xo. 26. — Dec. 5. Statement of United Shoe Machinery Co., voucher No. 2S01, for roj-alties during November. The machines register 7014 pairs at 4''- per pair. Make out a check for this amount. Charge to Roj-alties. 252 MODERN ILLUSTRATIVE BOOKKEEPING. No. 27. — Dec. 5. Invoice, A. D. Jackson Saddlery Co., voucher No. 2802. Make out a check for this voucher, less 5^, in payment of the invoice. Charge to Materials. This check is an overdraft (see Nos. 70 and 73, pages 158 and 159). Xo. 28. — Dec. 6. Invoice, Parr}^ Bros., No. 2803. Charge to Real Estate. Xo. 2t). — Dec. 6. Invoice, Cutler & Porter, No. 2804. Charge to Materials. No. 30. — Dec. 6. Salesman's order, Geo. H. Deane & Co. No. 31. — Dec. 6. Cash sale, J. T. Ferris, i case ^']6 at $2.50 per pair. Enter the sale in the sales book, carrying the amount into the Cash column. Place a check mark in the ledger folio column, to show that no debit posting is made from the sales book. Enter in the cash book on the debit side, in Merchandise Sales column, checking the entry, to show that no credit posting is made from the cash book. By this entry Cash is debited and Merchandise Sales credited for each cash sale. No. 32. — Dec. 6. Enter in 3'our petty cash book. (Debit Office Supplies for the stamps. ) No. 33.— Dec. 7. Invoice, F. A. Walsh & Co., No. 2805. Charge $145. 10 to Mate- rials, and $125 to Machinery. No. 34. — Dec. 7. Salesman's order. Rich, I^antz & Harris. No. 35. — Dec. 7. Salesman's order. New Haven Trading Co. No. 36. — Dec. 7. Dodge & Rice pay their bill of Aug. 4th, due Dec. 4th, by sending a check for one-half the amount and their note at 10 daj^s, with interest added, for the balance. A letter of explanation accompanies the check and note. Debit Cash in the cash book, and in the journal debit Bills Receivable and credit Dodge & Rice and Interest. No. 37. — Dec. 7. Check received from the Hub Shoe Co., less 2^. No. 38. — Dec. 8. Draw, at sight, on E. M. Lyons & Co. for the amount of balance due, $628.50. Place the draft in your bank for collection, together with a deposit of cash, $90, and the checks of Dodge & Rice and the Hub Shoe Co. Collection, $5.50. Do not forget to deduct the amount of collection on the deposit ticket, and to make proper entry in the cash book. Notify E. M. Eyons & Co. by letter that j'ou have drawn on them. No. 39. — Dec. 8. Pay roll, No. 2806. This is the regular weekly pay roll. Make a voucher, draw the check, and j^lace the cash in Cash Paid Out. (Enter in voucher register and cash book.) No. 40. — Dec. 8. Invoice, Diebold Safe Co., No. 2807. Draw a check for the amount and make proper entries in the cash book and the voucher register. Charge to Furniture & Fixtures. No. 41. — Dec. 8. Salesman's order, E. F. Woods & Co. No. 42. — Dec. 8. Cash sale (check), W. M. Lee & Co., i case each 266 at $3.50 and II94 at $2.00. (See instructions for No. 31.) No. 43. — Dec. 8. Check received from Pittsburg Furnishing Co., less 2t. No. 44. — Dec. 8. Check received from New Haven Trading Co., less 2'"/. No. 45, — Dec. 10. Invoice, Western Leather Co., No. 2808. Charge to Materials. No. 4«. — Dec. 10. Invoice, Chas. Koss & Bro., No. 2809. " Charge to Materials. No. 47. — Dec. 10. Check received from Geo. H. Deane ^S: Co. MODERN ILLUSTRATIVE BOOKKEEPING. 253 No. 48. — Dec. lo. Deposit checks of W. M. Lee & Co., Pittsburg Furnishing Co., New Haven Trading Co., and Geo. H. Deane & Co. Collection, $8.25. No. 49. — Dec. 10. Note favor of Commercial Bank for $3500, due this da}-, has beei? charged to your account. Make the proper entrj- in your cash book, and deduct the amount from the balance in the check book. No. 50. — Dec. 10. Pa}- vouchers Nos. 2795, 2783, 2782 and 2798. No. 51. — Dec. II. Invoice, Collieson Bros., No. 2810. Charge to Materials. No. 52. — Dec. 11. Salesman's order, Bay State Shoe Co. No. 52a. — Dec. 11. W. J. Hilton has sold to James Daniels 25 shares of his stock, and given him a transfer, and R. H. Merriam has sold his $1000 worth of stock to the same person. Enter in the transfer book, and post to the stock ledger, debiting the seller and cred- iting the purchaser of stock in each case for the number of shares purchased at par value. These transactions affect only the stock books. Cancel the old stock certificates of W. J. Hilton and R. H. Merriam, and issue a new certificate to W. J. Hilton for the amount of stock he now holds; also issue a new certificate to James Daniels for 35 shares of stock. No. 53. — Dec. 12. Invoice, O'Neil Oil & Paint Co., No. 2811. Charge to Fuel, Light and Oil. No. 54. — Dec. 12. Cash sale, Jones & Allis, 18 pairs each i.']6 at $2.50, ^83 at $2.25, t:84at$2.25, ^94 at $2. No. ^^. — Dec. 12. Check, Dodge & Rice, in payment of invoice of Dec. ist. No. 56. — Dec. 12. Note of the Providence Boot & Shoe Co., due Dec. 9th, has been protested for non-payment, and the note returned to you by the bank. The protest fees are $2.50, which }-ou will pay in cash from the Petty Cash Drawer. Place the amount in Cash Paid Out. Charge the same to the Providence Boot & Shoe Co. in the Accounts Receivable column of the petty cash book, and post direct to their account in the customers' ledger. No entry is required for the note, since it was merely left for collection. Write to the Providence Boot & Shoe Co., requesting an explanation of the fact that their note has been allowed to go to protest. No. 57. — Dec. 12. Deposit check of Dodge & Rice; collection, $3.90. Pay vouchers Nos. 2784, 2800 and 2811. No. 58. — Dec. 13. Voucher No. 2812, $25, for petty cash. Enter in voucher register and petty cash book. Make a cash check for the amount. Obtain the cash and place it in your Petty Cash Drawer (see transaction No. 6). (No distribution.) No. 50. — Dec. 13. Invoice, A. D. Jackson Saddlery Co., No. 2813. Make a check for this voucher, and enter in voucher register and cash book. Charge to Materials. No. GO. — Dec. 13. Letter from Hamilton, Brown Shoe Co., St. Louis, ordering goods at special price. You will accept their offer by wire and make out the invoice. Enter in the sales book, with terms ic^ cash. No. 01. — Dec. 13. Letter enclosing check and interest-bearing note from the Bay State Shoe Co., in settlement of invoice of Nov. 25th. Enter the amount of the check and the merchandise discount, 3 r of the full amount, in the cash book, crediting Bay State Shoe Co. for the total. Enter the note in the journal, crediting Bay State Shoe Co. for the amount of same. 254 MODERN ILLUSTRATIVE BOOKKEEPING. JJo- 62. — Dec. 14. Cash sale, Chas. D. Pomeroy, i case S64 at $3.50. No. 63. — Dec. 14. Pay vouchers Nos. 2803 and 2804. No. 64. — Dec. 14. You have received check for $2000, to pay note of the Hub Shoe Co., due to-morrow. Take the note from j^our Cash Drawer, write Paid across the face, and place it in Vouchers for Others. No. 65. — Dec. 14. Place in the bank, for collection, E. F. Woods & Co's note, due the 20th; also Dodge & Rice's note, due this day. Have the Quaker Shoe Co's note, due Jan. 15th, discounted, and the net proceeds placed to your credit; also have the amount of Dodge & Rice's note placed to your credit. Have E. F. Woods & Co's note entered short in your bank pass book. Add the proceeds of notes placed to your credit to your bank balance on the stub of j-our check book, and make the proper cash book entries. When notes already due are placed in the bank for collection, it is customary, if the depositor is in good standing, to give him credit for the amo^mt due at the time of deposit, if he so requests. Deposit cash, $288, and the checks of Eay State Shoe Co. and Hub Shoe Co. Collec- tion, $4.00. No. 66. — Dec. 15. Invoice, B. S. Green Co., No. 2814. Charge to Materials. No. 67. — Dec. 15. Pay roll. No. 2815. No. 68. — Dec. 15. Salesman's order, Sam Stone & Co. No. 61). — Dec. 15. Check, Rich, Eantz & Harris. This accotmt of Oct. 3d is not due until Jan. ist, but the firm, having the ready money, have discounted their bill for the time it has yet to run (19 days) at 6', , and sent j'ou a check for the balance. See if the discount is correct, and if so, enter as usual in your cash book. No. 70. — Dec. 15 No. 7 1. — Dec. 15 No. 72. — Dec. 15 Dec. 3d. No. 73. — Dec. 15 Xo. 74. — Dec. 15 Check, E. F. Woods & Co., in payment of invoice of Dec. 3d. Check, Marsh, Fielding Co., in settlement of invoice of Nov. loth. Check, Hamilton, Brown Shoe Co., in payment of invoice of Pay voucher No. 2805. Pay petty cash items. (Debit Office Supplies for the postal cards. ) The bank has notified you that your draft on E. INI. Lyons & Co. has been protested for non-payment, and you pay the protest fees, $1.50, in cash from your petty cash drawer, debiting E. M. Lyons & Co. (see transaction No. 56). No. 75. — Dec. 17. Invoice, H. M. Sciple & Co., No. 2816. Charge to Machinery & Tools. No. 7(». — Dec. 17. Salesman's order, Pond 6c IvUon. >-,,. 77. — Dec. 17. Check, Dodge 6c Rice, in settlement of invoice of Dec. ^Ih, less 2'r. ^K>. 7H.— Dec. 17. This letter from E. M. Lyons & Co. explains thai by mistake your draft on them was iK-rmitted to go to i)rotest. They enclose a cliLck tor ihe amount of the draft and the protest fees. luiler in the cash book, crediting /:". M. Lyons & Co. Deposit this check, together with all the other checks in your possession (6). Collec- tion and exchange, $13.50. MODERN ILLUSTRATIVE BOOKKEEPING. 255 No. 79. — Dec. 17. I^etter from Providence Boot & Shoe Co. This letter announces the failure of the Providence Boot & Shoe Co., and contains an offer of 6o'i cash in full payment of all indebtedness. Write a letter to them, expressing your regret at their failure, and accepting their ofFer of 60'/ on a dollar for your book claim and their note protested the 12th. No. 80. — Dec. 18. Sale, sample lot, to E. B. Lewis & Co. Send them three pairs of each number, except 272, which is not in stock. No. 81. — Dec. 18. Check, Geo. H. Deane & Co., in payment of invoice of Dec. 6th. No. 82. — Dec. 18. Pa)- vouchers Nos. 2808 and 2809. No. 83.— Dec. 19. Invoice, J. H. Steele & Co., No. 2817. Charge to Mill Supplies. No. 84. — Dec. 19. Invoice, F. A. Walsh & Co., No. 2818. Charge to Materials. No. 85. — Dec. 19. Salesman's order, Pittsburg Furnishing Co. No. 86. — Dec. 19. Check, Quaker Shoe Co., in settlement of invoice of Nov. 15th. No. 87. — Dec. 19. Petty cash book entries. (Debit OJjce Supplies for the pencils.) No. 88. — Dec. 20. Invoice, Boston Last Co. , No. 2819. Charge to Lasts and Patterns. No. 89. — Dec. 20. Cash sale, R. S. Sherwood & Co., 6 pairs each ^76 at $2.50, ::9i at $3.00, #83 at $2.25, IS4 at $2.25. No. 90.— Dec. 20. Order from Bay State Shoe Co. No. 91. — Dec. 20. Letter and check from New Haven Trading Co. This transaction is similar in principle to No. 109, page 123 (see explanation). No. 92. — Dec. 20. Deposit $60 cash and all checks on hand (3). Collection, $8.90. No. 93. — Dec. 20. Your note, due this day, favor of Commercial Bank, has been charged to your account. Enter in your cash book, and deduct the amount from the balance on the stub of your check book. No. 94. — Dec. 21. Invoice, Western Leather Co., No. 2820. Charge to Materials. No. 95. — Dec. 21. Salesman's order. Hub Shoe Co. No. 96.— Dec. 21. Check, E. F. Woods & Co., in payment of bill of Dec. 8th. No. 97. — Dec. 22. Paj' roll, No. 2821. No. 98. — Dec. 22. Cash sale, Hudson & Foster, 9 pairs each '64 at $3.50, ::66 at $3.50, i|68 at $2.50. No. 99. — Dec. 24. Invoice, Chas. Koss & Bro., No. 2822. Charge to Materials. No. 100. — Dec. 24. Salesman's order. Empire Shoe Co. No. 101. — Dec. 24. Check, Providence Boot & Shoe Co. This amount is sent in full payment of the bill of Oct. 5th, as shown by the account of the Providence Boot & Shoe Co. in your customers' ledger, $1042.50, and their note protested Dec. 12th, $895. The check is for Go't of these two amounts. Enter in the cash book, crediting Providence Boot & Shoe Co. for $625.50 and Bills Receivable for $537. You have lost 40"^ of the note, $358; also 40"^ of the Providence Boot & Shoe Co's bill of Oct. 5th, $417; also a charge of $2.50 against the Providence Boot & Shoe Co. made when their note was protested. Losses from bad debts are provided for by a Reserve for Bad Debts account, which is credited at the end of each j^ear with a certain proportion of the profits of the business, and charged with such losses as may 256 MODERN ILLUSTRATIVE BOOKKEEPING. occur during the 3-ear. Therefore, in your journal make an entry, debiting Reserve for Bad Debts for the total loss, and crediting Providence Boot & Shoe Co. for the loss on the book claim plus the protest fees, and Bills Receivable for the loss on the note. No. 102. — Dec. 24. Paj- vouchers Nos. 2786, 2787 and 2810. Xo. 103. — Dec. 24. Dej)osit cash, $85.50, and the two checks on hand. Collection, $2.25. The note of E. F. Woods & Co. ($754.25), which was left for collection, has been paid. Have the amount placed to your credit in your bank pass book. (Enter in cash book.) No. 104. — Dec. 26. Invoice, J. Russell & Co., No. 2823. Charge to Mill Supplies. No. 10.">. — Dec. 26. Invoice, Collieson Bros., No. 2824. Charge to Materials. No. 10(>. — Dec. 26. Salesman's order, The John Warner Co. No. 107. — Dec. 26. Salesman's order, Quaker Shoe Co. No. lOJS. — Dec. 26. Order from Pittsburg Furnishing Co. No. lot). — Dec. 26. Check, E. F. Woods & Co., in paj^ment of invoice of Nov. 24th. No. 110. — Dec. 26. Check, Sam Stone & Co., in settlement of bill of Dec. 15th. No. 111. — Dec. 26. Check, Hamilton, Brown Shoe Co., in paj'ment of invoice of Dec. 13th. No. 112. — Dec. 27. Invoice, Cutler & Porter, No. 2825. Charge to Materials. No. 113. — Dec. 27. Salesman's order, Sam Stone & Co. No. 1 14. — Dec. 27. Check, Rich, lyantz & Harris, in payment of invoice of Dec. 7th. No. 115. — Dec. 27. Check, New Haven Trading Co. This check is in paj-ment of the balance of the New Haven Trading Co's bill of Dec. 7tli. The}- deduct I'V, as it is paid 50 days before the account is due. You will allow the deduction. No. 1 16. — Dec. 27. Pay voucher No. 2818. No. 117. — Dec. 28. Cash sale, B. F. Howe & Co., 9 pairs each 272 at $3.25, ::94 at $2. No. 117a. — Dec. 28. Memorandum of goods returned. The Hub Shoe Co. have returned 10 cases of ^83, invoiced Dec. 21st, as they already have a large stock of this number on hand, and have arranged with our salesman to ha\-e us take them back. Debit Mercha7idise Returned and credit Hzib Shoe Co. in the journal. No. 118. — Dec. 28. Pay voucher No. 2817. No. 110. — Dec. 28. Deposit cash, $47.25, and all the checks on hand (5). Collec- tion, $8.00. No. 120.— Dec. 29. Pay roll. No. 2826. No. 121. — Dec. 29. Salesman's order, E. M. Lyons & Co. No. 122. — Dec. 29. Telegraphic order, Rich, Lantz & Harris. No. 123.— Dec. 29. Check, Bay State Shoe Co. The Bay State Shoe Co. ha\-e made a mistake of one dollar in their calculations, and have overpaid you this amount. Write them a letter, notifying tlKin of the oxerpaymcnt. Credit Bay Stale Shoe Co. in the cash l)ook for the payment of the invoice of Dec. nth, with the correct discount, $86.13, ''i"<^^ ^^^'^ "<-*l- amount of cash. $2784.87. l-udenieath MODERN ILLUSTRATIVE BOOKKEEPING. 257 this entry, credit Bay State Shoe Co. for the $i overpaid, writing the amount in the Accounts Receivable and the Cash columns. There are two methods of treating overpayments. Some business houses always return a check or ciurency for the overpayment, but if it is a customer who has an open account, a more common method is simply to credit the customer for the amount overpaid, as in the above instance. No. 124. — Dec. 29. Pay voucher No. 2820. Xo. 125. — Dec. 29. Pett}' cash items. (Debit Office Sicpplies for the postal cards.; No. 12G. — Dec. 31. Salesman's order, Marsh, Fielding Co. No. 127. — Dec. 31. Cash sale, W. P. Hoyt & Co., 3 pairs each §76 at $2.50, l-s^i at $3.00, 1:83 at $2.25, i:84 at $2.25. No. 128. — Dec. 31. Pay voucher No. 2S22. No. 120. — Dec. 31. Bill from City Carting Co., No. 2827, freight and cartage for the month of December. Charge to Freight. Make out a check for the amount of the bill. NO. 130. — Dec. 31. Memorandum of goods returned. The Empire Shoe Co. have returned two cases of ^72, invoiced Dec. 24th, as the goods are imperfect. Allow the claim. No. 131. — Dec. 31. Invoice, Mead, Mason & Co., No. 2828. Charge to Repairs. Make out a check for the amount of the bill. No. 132. — Dec. 31. Deposit cash, $30, and the check of the Bay State Shoe Co. Collection, $2.75. No. 133. — Dec. 31. You may allow 25'f of the cost of lasts and patterns, 12^,^ of the cost of machinery, and lOr of the cost of furniture and fixtures for depreciation. Make a journal entry, debiting Depreciation for the full amount, and crediting Furniture & Fixtures, Lasts & Patterns, and Machinery , each for its respective amount. Bookkeepers differ in their treatments of such accounts as Machinery, Furniture & Fixtures, and Lasts & Patterns. The practice is far too common, of considering the balances of such accounts as resources, without any regard to the fact that they do depreciate in value. Such a practice is most inac- curate, for, while it may be argued that such property has cost the amount of its debit, and, being on hand and kept in repair, is a resource for this amount, still it is well known that machinery deteriorates rapidly when r'ln at the high speed of our modern factories, and the inventive genius of American mechanics makes it constantly necessar}- to throw aside comparatively new machinerv- and replace it with the latest product of invention. Perhaps the most common method of handling such accovmts is to take an inventory at the end of each 5-ear, but unless great care is taken, machinery is frequently overvalued, and it is better to keep a regular Depreciation account in the general ledger, and charge this account a certain percentage of such accounts at the end of each year tlirough a journal entry. When this is done, the balances of these accounts will of course represent their actual value, and may be entered as resources in the statement at the end of the year. The percentage should be large enough to allow for wear and tear of machinerv, and such shrinkage in value of other accounts as experience has shown will result from the nature of the business; and no attempt should be made to show fictitious gains, through making a smaller allowance for depreciation than the nature of the business will warrant. Transfer the footing of the Sundries column of your petty cash book to the credit side of the main cash book, writing the total amount in the Cash Paid column, with the expla- nation. Petty Cash, per P. C. B., and place a check mark in the ledger folio column, as these items wall be posted to the debit of the various accounts from the petty cash book, and are only transferred to the main cash book in order that the balance of cash may be shown on that book. Balance your cash book. Post all books, and take a trial balance. Com. — 17 258 MODERN ILLUSTRATIVE •[BOOKKEEPING. DIRECTIONS FOR POSTING. .Tournal. Carry the totals of Bills Receivable and Accounts Receivable columns inio the General columns (see model, page 244). Post each item in the General columns to the account named in the general ledger, and post each item in the Accounts Receivable column to the credit of the proper account in the customer's ledger, as in August and September. Check back, to see that your posting is correct. Cash Book. On the debit side, post the footing of Accounts Receivable column to the credit of Accounts Receivable in the general ledger, and the items in this column to Statement op Losses and First cost of Mdse. Sales, as under: Materials Labor Mdse. Returned Discount on Sales Freight Balance carried down * Manufacturing expenses, as under: Foremen's Salaries Royalties ^liil Supplies Fuel, Light & Oil Depreciation, IMachinery " Furniture & Fixtures " Lasts & Patterns Repairs Taxes Balance carried down * Selling Expenses, as inider: Salesmen's Salaries " Expenses Office Help Office Supplies u Balance carried down '•■ General Expenses, as under: Officers' Salaries Interest & Discount Collection & Exchange Expense t Net Gain * cost on hand cost on hand cost on hand *Tobe written in red ink. 215503 17 I325I7 20 4228 75 7964 90 3863 90 364077 79731 — 443809 4S96 5472 68 4792.00 1 680.50 4III 50 3407-30 327.90 3079 40 5875-00 345-50 2850.00 9070 1260 50 1 742 52. 28632 51098 — 79731 10240 ! 6217 25 1 3268 50 214.00 31-50 182 50 19908 31190 51098 7o<.)o 215 40 405 17 1242 30 8862 22327 — 31 190 92 53 58 95. 53 25 70 87 S3 70 tThe items which make up the Expense account are not taken from any particular branch of the business, and .some bookkeepers would divide this account so as to give part of it to manufacturing expenses, part to selling expenses, and part to general expenses, but in this series of tran.s.'iciions it has been considered advi-sable to carry the whole account to general expenses. MODERN ILLUSTRATIVE BOOKKEEPING. 259 the credit of the persons named in the customers' ledger. Post the footing of Discount on Sales column to the debit of Discount on Sales in the general ledger. Carry the footing of Merchandise Sales column into the Net Cash Received column, and post the amount to the credit of Merchandise Sales in the general ledger (see form, pages 246 and 247). Post all items other than accounts receivable as may appear in the Net Cash Received column >to the accounts named in the general ledger. On the credit side, post the footing of Vouchers Payable column to the debit of Vouchers Payable in the general ledger. Post the footing of Discount on Purchases column to the credit of Discount on Purchases in the general ledger. Carry the footnig of Collection Gains, Dec. 31, 190-: Mdse. Sales Manufactured goods on hand Materials " " Disc, on Purchases Balance brought down Balance brought down Balance brought down 398245 22148 1 694 1 6473 75 70 80 20 443809 443809 79731 45 53" 79731 53 51098 95 51098 31190 31 190 95. 70' 70 and Exchange column into the Cash Paid column, and post the amount to the debit of Collection and Exchange in the general ledger. Post all items not found in these special columns to their respective accounts in the general ledger from the Cash Paid column of the cash book, and be sure to place the ledger page in the folio column. 260 MODERN ILLUSTRATIVE BOOKKEEPING. Statement of Resources and Cash in bank " in petty cash drawer Property as under: Materials and goods in process, per inventory Manufactured goods, " " Office SuppHes, Mill Supplies, Fuel, Light & Oil, Lasts & Patterns Furniture & Fixtures Real Estate, valued at cost IMachinery & Tools Book accounts as under: Accts. Receivable, per customers' ledger Bills Receivable, per bill book Good Will, valued at cost Treasury Stock, valued at par I39I4 50 12 i5_ 13926 22148 70 1 694 1 80 31 50 680 50 327 90 82 10 40 2565 30 50906 60548 50786 27516 40 6400 33916 30000 20000 260083 10 50 40 65 Petty Cash Book. Post the footing of Accounts Receivable column to the debit of Accounts Receivable, the footing of Expense column to the debit of Expense, and the items in Sundries column to the debit of the accounts named. Sales Book. Post the total of On Account column to the debit of Accounts Receiv- able and to the credit of Merchandise Sales in the general ledger. Post the items in this column to the debit of the proper accounts in the customers' ledger. Do not post Cash Sales column, as these sales are posted from the cash book. See that the footing of the Cash Sales column in the sales book agrees with the footing of the Merchandise Sales column on the debit sidfe of the cash book. A'oucher Register. Foot the Vouchers Payable Cr. column, and post this footing to the credit of Vouchers Payable in the general ledger. Foot each coltnnn under ' ' Distribu- tion," and post these footings to the debit of the accounts named in the general ledger; also post the items in the Miscellaneous Accounts column to the debit of the accounts named in the general ledger. See that the sum of the footings of the distribution columns and the Miscellaneous accounts column equals the footing of Vouchers Payable Cr. coltimn. Make statements of losses and gains and resources and liabilities, using models on pages 258, 259, 260, 261. Materials and goods in process, valued at $9600.75. Manufactured goods on hand, valued at $17600. , Real estate, valued at cost. Mill sttpiDlies, valued at $640.29. Fuel, light and oil, valued at $468.10. Office supplies, valued at $40.50. DIRECTIONS FOR CLOSING THE LEDGER. In a manufacturing business, it is customary to close all accounts which contribute to the cost of merchandise into Merchandise Sales account, iIku close that account into Loss and Gain, instead of clcjsing each account into Loss and Gain, as in an ordinary business. Yoti may, therefore, close accounts as follows: MODERN ILLUSTRATIVE BOOKKEEPING. 261 lyiABiLiTiEs, Dec. 31, 1 89-. Book accounts owed as under: Vouchers Payable, per voucher register Bills Payable, per bill book Capital Stock Surplus Reserve for Bad Debts Undivided Profits Profits per statement of Losses & Gains 12229 15000 37 27229 200000 9450 426 648 22327 37 75 80 90 83 260083 65 Close Discount on Purchases, by entering an amount equal to the balance of the account on the debit side, in red ink, with the explanation, Jl/atcrials; foot and ritle, and transfer the amount to Materials account, with the explanation, Discount on Purchases. Enter the inventory of materials and goods in' process on the credit side of IMaterials account, in red ink, then close, by writing, in red ink, on the smaller side, Merchandise Sales, and transfer to Merchandise Sales account, with the explanation, Materials. Close Discount on Sales, Merchandise Returned, Labor, and Freight accounts in the same manner, and transfer to the Merchandise Sales account. Close this accoimt, writing Balance, in red ink, on the smaller side; foot, rule, and bring down the balance on the opposite side. Close Foremen's Salaries, Royalties, Mill Supplies, Fuel, Light and Oil, Depreciation, Repairs, and Taxes accounts into Merchandise Sales account. Transfer to that account, and again close, footing, ruling, and bringing down the balance as before. Do not forget to add the inventories to their respective accounts, and to carry the amounts below the rttling on the debit side. Close Salesmen's Salaries, Salesmen's Expenses, Ofhce Help, and Office Sup- plies accounts into Merchandise Sales account. Transfer and close the third and final section of the Merchandise Sales account, by entering on the credit side, in red ink, the inventory of manufactured goods on hand; on the debit side of the account, in red ink, write the balance, with the explanation, Gain, and transfer the amount to Loss and Gain account, as usual. Close Officers' Salaries, Interest and Discount, Collection and Exchange, and Expense accounts as in previous sets, and transfer to Loss and Gain account. Close Loss and Gain account, by writing, in red ink, on the debit side, Balance, and bring down this amount. Hand in yotir books for inspection. Additional Entries. No. 134. — Jan. 5. At a meeting of the stockholders, held Jan. ist, the old officers and board of directors were re-elected. It was voted to declare a dividend of ic? on the stock issued, amounting to $18000; to carry 5'r, amounting to $gooo, into the Surplus account; to lay aside $4000 as a reserve for bad debts; and to carry the balance of the 262 MODERN ILLUSTRATIVE BOOKKEEPING. profits into Undivided Profits account. It was furthermore voted to sell the treasury stock on hand at such prices as could be realized in open market, and to appl}- the pro- ceeds to the extension of the business. In accordance with the first vote mentioned, above, make an entry in j'our journal, debiting Loss and Gain, and crediting Dividend, Siirplns, Reserve for Bad Debts, and Undivided Profits. No. 135. — Jan. 6. Pay each stockholder's dividend, writing checks for the amounts due. Enter in ^-our cash book, debiting Dividend for the full amount. No. 136. — Jan. 7. The treasury stock has been sold, W. J. Harlan purchasing 100 shares at $135, and Mrs. E. M. Hilton purchasing 100 shares at $133. Checks for these amounts are received. Enter in your cash book, crediting Treasury Stock for the par value of the 200 shares, and crediting Premium for the amount received in excess of the par value. Post these cash book and journal entries. Open accounts with Dividend and Premium in the general ledger. If your work is correct. Loss and Gain, Dividend, and Treasury- Stock accounts in yotir general ledger should balance. Open accounts with \\'. J. Harlan and Mrs. E. M. Hilton in 3-our stock ledger, issue the stock certificates called for, and post to their credit. Take a proof trial balance (see model, page 47), and hand in all of your books for examination. QUESTIONS. 1. Define a joint stock company, and show its advantages over a partnership. 2. What is the liability of a stockholder in the ordinar}' joint stock compan}-. What is his liability in a limited joint stock company? 3. What is a corporation, and what is the liabilit}- of its stockholders? 4. Describe the organization of a corjDoration. 5. Define surplus, dividend, treasury stock. 6. What are the special books required to show the corporate transactions of a business? 7. Describe the stock ledger. With what account in the general ledger should its balance agree? 8. Describe the method of using a voucher in the voucher system of accounts. 9. By the use of the voucher register, what accounts may be omitted from the ledger? 10. How would you find from your voucher register the balance of vouchers payable? 11. Show the advantages of a systematic division of expenses, as shown in the special columns of the voucher register. 12. When vo'uchers are paid, what entry should be made in the cash ])ook? 13. What is the object of the petty cash book? Of what is its debit comprised? 14. Describe the Reserve for Bad Debts account, and show what its debits and crctlils will comprise. 15. Explain the use of Depreciation account, and show its advantages. MODERN ILLUSTRATIVE BOOKKEEPING. 263 APPENDIX, SINGLE ENTRY. In single entry bookkeeping the ledger contains only accounts with persons, and con- sequently only such entries as affect personal accounts should appear in a single entry journal; and since there is no equality of debits and credits in single entry bookkeeping, the journal entries will, in most cases, contain only a single debit or credit. The following is a model of a single entry journal, showing the records which would be made by single entry bookkeeping for the transactions shown in your model journal- daybook on pages 6 and 7. Model Single Entry Journal-Daybook. January i, 190-. A. H. Harper, Commenced this daj- the Flour and Grain business, investing $2,000 in cash. J. B. Allen, Sold him on account 50 brls. Flour, A. H. Harper, Drew cash for private use. J. Grant & Co., Bought of them on account 600 bu. Oats, J. B. Allen, Received of him cash on account. 15 J. Grant & Co., Paid invoice Jan. 8th in cash. 25 J. B. Allen, Sold him on account 50 brls. Flour, Cr. 3000 ting Dr. 225 4-50 Dr. 50 Cr. 198 •33 Cr. 100 Dr. 198 Dr. 237 4-75 50 It will be seen, by comparison, that all records of transactions which do not affect personal accounts have been omitted from the single entry journal-daybook; but a cash book should be kept, which may be the same in form as a double entry cash book, or it may be kept like the following model, which records the cash transactions of the model journal-daybook on pages 6 and 7. 264 MODERN ILLUSTRATIVE BOOKKEEPING. 1 90-. Model Single Entry Cash Book. Cash. Dr. Cr. Jan. Feb. 4 6 13 15 31 31 Invested, Paid Bot. of A. H. Roe & Co., Sold W. D. Leach, A. H. Harper, Received of J. B. Allen, Paid J. Grant & Co., Paid Balance on hand * Balance by A. H. Harper rent for January' 200 brls. Flour 100 " drew for private use on acct. invoice i 8 salaries to date on hand 3-90 4-50 3000 450 100 75 780 50 60 2387 3550 3550 2387 * To be written in red ink. A record of notes issued and of notes received should be kept in a bill book similar to the ordinary double entry bill book, and these records, with an inventory taken in the usual manner, will enable the bookkeeper to prepare a statement at any time showing the resources and liabilities, the present worth, and the net gain of the business. Copy on a sheet of journal paper the journal and cash book models. There will be space on one side of the journal sheet for both models. Take a half sheet of ledger paper and post the journal entries the same as in double entry, opening the personal accounts required — A. H. Harper, J. B. Allen, and J. Grant & Co. The cash book shows the amount of cash on hand, $2387. The inventor}^ of inisold merchandise, if taken Jan. 31st, would show the following goods on hand: 350 brls. flour, valued at $4 per brl.; 300 bu. oats at 33:'/' per bu.; 300 bu. rye at 57'.' per bu. The bill book, if kept, would show a note for $338, in favor of the business, signed by A. B. Frye; and the following notes outstanding — one in favor of Garland & Co. for ^5571, and one in favor of B. W. Keene for $820. The ledger shows that J. B. Allen owes $362.50. From the foregoing data it will be easy to prepare a statement of resources and liabil- ities according to the following model. Statement of Resources and L,iabilities, Jan. 31, 190-. Cash Bills Receivable Merchandise J. B. Allen Bills Payable Present Worth* on hand, per C. B. B. B. value " inventory owes on account notes outstanding, per B. B. Resources. $. $. $■ Liabilities. *To be written in red ink. Having foiuid the present worth of A. H. Harper, as above, a comparison of his jircscnt worth, Jan. 31, 190-, with the amount of his investment Jan. 1, 190-, will show his .tjain or I0.SS, the same as in double entry bookkeeping. Find A. H. Harper's net gain according to the following model. MODERN ILLUSTRATIVE BOOKKEEPING. 265 Statement of A. H. Harper's Gain. A. H. Harper's present worth Jan. 31, 190- " " " investment " i, 190- " " " net gain* 3366 3000 50 366 50 i Write the statement of resources and liabilities and the net gain on the first blank page of your journal. Carry the net gain to the credit side of A. H. Harper's account in your ledger, the same as in double entry, and hand the journal with your ledger to your teacher for approval. It is thought the foregoing illustrations will prove sufl&cient to enable the student to perform the work required in the following series of transactions, using the single entry journal-daybook, cash book and bill book as records of the business. If A. H. Harper should desire to change his books from single entry to double entry, he should open an account in his ledger with Cash, carrying to its debit side the amount on hand, $2j8j; also with Bills Receivable, carrying to its debit side $338; with INIerchan- dise, carrying to its debit side the amount of the inventor}^ $i6jo; and with Bills Payable, entering on its credit side the amount of the outstanding notes, $i3gi. After your papers are approved, make the above entries in the ledger, and take a trial balance, which should give you the following result. A. H. Harper Cash Bills Receivable Merchandise Bills Pavable J. B. Alien 2387 338 1670 00 00 00 3366 362 50 1391 4757 50 4757 50 00 50 You may assume that under date of Jan. ist, the present year, 3'ou have commenced the retail furniture business wdth the following investment. A stock of furniture, valued at $1968.75; office furniture, fixtiu'es and books, valued at $300; cash in the City National Bank, $1245.50. Enter in the journal and in the cash book. Use the first column of your journal for items, and the second column for the debit or credit amount. The following is a form to show your journal entry. Jas. B. Houghton, Commenced the Furniture business, investing as follows: Cash in bank, per C. B. Furniture, valued at Office fumitvire & fixtures Cr. 460 1500 250 2210 Jan. I . — Bought of the Grand Rapids Furniture Co. , Grand Rapids, Mich. , on account, 30 days, furniture as per invoice, $1468.20. (Enter in the journal.) Paid freight on the above invoice, $62.25. (Enter in cash book only.) 266 MODERN ILLUSTRATIVE BOOKKEEPING. Jan. 2. — Sold Wni. M. Rand, on account, i parlor set, $65; 6 dining chairs at $2; I extension table, $15. (Enter in the journal, carrying each item into the first money column.) Jan. 3. — Sold sundry items for cash, as per cash drawer, $104.50. (Enter in cash book only.) Jan. 4. — Sold Thomas W. Parsons, on account, 12 dining chairs at $1.50; 6 kitchen chairs at 75^/; i kitchen table, $2.50. Sold E. M. Wardner, on account, i oak bedroom set, $55; 2 ash bedroom sets at $15; I leather couch, $45. Jan. 5. — Bought of E. M. Farmer & Co., Detroit, merchandise as per invoice, $550. Gave them in payment your note at 30 days for $250; the balance on account, terms 4 mos. , less 5^? 10 days. Credit Fanner & Co. for the full amount, and debit them for the note. Enter the note in the bill book, the same as in double entry. Paid freight on the above invoice, $27.50. Jan. 6. — Paid one month's rent, $60; also paid insurance premium, $30, Vt of insur- ance policy for $3000 on 3'our stock of furniture. Sold Thomas Hunter, for cash, 24 cane seated chairs at 75'/'; 3 settees at $2.25. (Enter in cash book only.) Sold Emma B. Sheridan, on account, 12 ash bedroom sets at $25; 12 cotton mattresses at $6; 4 dining tables at $12; 24 dining chairs at $1.50. Received cash, $150, to apply on account. (Debit in the journal for the full amount and credit for cash; also enter cash in the cash book.) Balance your cash in the cash book, writing the balance, in red ink, in the smaller column. Foot, rule, and bring down the balance to commence the next week. In actual business the cash should be balanced daily, but in this series of transactions you will balance the cash at the end of each week. Your balance at the end of this week should be $1345. Jan. 8. — Sold C. H. Stratton, Elm House, 6 hair mattresses at $25; 2 oak bedroom sets at $40; I parlor set, $125; 2 French plate mirrors at $15. Paid Grand Rapids Furniture Co., on account, $500. (Enter in journal and in cash book.) Sold sundry items for cash, as per cash drawer, $46.50. Jan. 9. — Sold Wm. M. Rand, on account, 2 oak bedroom sets at $45; 1 cherry bed- room set, $35; 2 hair mattresses at $30; i cotton mattress, $6. Received cash on account, $100. (See third transaction under Jan. 6.) Jan. id. — Bought of E. F. Higgins & Co., Michigan City, Ind., furniture as per invoice, $498.75. Paid freight on above invoice, $24.93. Jan. II. — Paid cash for books and stationery, $7.50, and for a horse and a delivery wagon, $275. Jan. 12. — Sold Mrs. Edward Leary, on account, 6 ash l)edroom sets at $20; i exten- sion dining table, $12; 12 cane dining chairs at $1. Received cash to apply on account, $44. Sold sundry items for cash, as per cash drawer, $28.75. MODERN ILLUSTRATIVE BOOKKEEPING. 267 Jan. 13. — Received of T. W. Parsons cash in full of account, $25. (Journal and cash book.) Sold Edward Strang, on account, i cotton velour covered couch, $18; i Morris chair, $12.50; 4 librarj^ chairs at $6.50; i library table, $30. Paid for clerk hire, two weeks' salary, $30. Balance your cash book, and bring down the amount, as on Jan. 6th. Jan. 15. — Received of C. H. Stratton his note at 60 days, to pay invoice of the 8th inst. (Enter in journal and bill book.) Paid the balance of E. M. Farmer & Go's invoice of the 5th inst., $300, less s< oi the full invoice for payment in 10 daj^s. Discount, $27.50; cash paid, $272.50. Enter the full amount in the journal; only the net amount in the cash book. Use the following form. 15 E. M. Farmer & Co., Paid to balance their invoice of Jan. 5th, cash 5', discount on invoice of $550 Dr. 300 272 50 27 50 Cash sales of merchandise, as per cash drawer, $48.50. Jan. 16. — Bought of the Grand Rapids Furniture Co. merchandise invoiced at $1262.75. Paid freight on above invoice, $63.13. Sold Thomas W. Parsons, on account, i oak bedroom set, $75; i parlor set, raw silk, $120; I library loiinge, $18. Jan. 17. — Paid for advertising, $12. Paid for shoeing horse, $1.25. Sold Richard Vose, on account, i parlor set, $110; i library table, $20; 4 library chairs at $6; I screen, $5.50. Jan. 17. — Cash sales of merchandise, as per cash drawer, $38.75. Jan. 18. — Bought of E. M. Farmer & Co., Detroit, net 4 mos., 5'? 10 days, furniture invoiced at $490.50. Paid freight on above invoice, $24.50. Jan. 19. — Bought of J. D. Lansing & Bros., on account, 90 days, 5^? 10 days, furni- ture invoiced at $633.25. Paid freight on above invoice' $31.66. Sold Morris Chaney, on account, i plate glass beveled mirror, $22.50; i leather library' chair, $25; 4 jardiniere stands at $1.25. Cash sales of merchandise, as per cash drawer, $47.75. Jan. 20. — Sold H. M. Preston, on account, i parlor set, plush, $75: i oak bedroom set, $45; I pillar extension table, $12; six dining chairs at $1.50. Bought of Phillips Chair Co., Phillipsburg, Ind., net 4 mos., 5'? 10 daj-s, furniture as per invoice, $244.75. Paid freight on above invoice, $12.24. Paid for hay and oats, $7.50; clerk hire, $20; postage and express charges, $2.50. Cash sales of merchandise, as per cash drawer, $69.87. Sold Hunter & Allison, on account, 50 cane seated chairs at $1; 50 school desks, indi- vidual lock, at $3.75; I teacher's desk, $12.50. Balance your cash, as on Jan. 6th and 13th. 268 MODERN ILLUSTRATIVE BOOKKEEPING. Jan. 22. — Received of E. M. Wardner, to balance account of Jan. 4th, cash, $30, and his note at 30 daj-s, with interest, $100. (Enter note in bill book.) Received of Mrs. E. Leary, $15, to apply on account. Cash sales of merchandise, as per cash drawer, $62. Received of Edward Strang $50, to apply on account. Sold Emma Sheridan i parlor set, silk brocatel, $75; 2 card tables at $2.50, 2 mirrors at $3. Jan. 23. — Hunter & Allison returned 10 cane seated chairs at $1. Bought of E. F. Higgins & Co. furniture as per invoice, $235.75. Paid freight on above invoice, $11.75. Jan. 24. — Accepted E. F. Higgins & Co's draft at 30 days for amount of invoice of Jan. loth, $498.75. (Journal and bill book.) Sold C. H. Stratton & Co., on account, 5 oak bedroom sets at $35; i carved sideboard, $80; 6 card tables at $3. Jan. 25. — Had C. H. Stratton' s note of Jan. 15th discounted at the bank and received cash for the proceeds. Face of note, $385; discount, 50 days. (Enter the net proceeds in cash book and mark the note paid in bill book.) Sold E. M. Wardner, on account, i hbrary desk, $60; i revolving book case, $22.50; I revolving chair, $8. Bought of the Phillips Chair Co. merchandise as per invoice, $192.85. Paid freight on above invoice, $9.65. Jan. 26. — Paid Lansing & Bros, for invoice of the 19th, less 5V. (Journal and cash book.) Cash sales of merchandise, as per cash drawer, $84.60. Jan. 27. — Received of Hunter & Allison, to balance account of the 20th, cash, $40, and their note at 4 mos., with interest. Sold Edward Strang, on account, 6 dining chairs at $2.50; i pillar extension table, $18; I writing table, $6.50. Received on account, $50. Balance your cash book. Jan. 29. — Sold Richard Vose, on account, i Morris chair, leather, $20; i rattan rocker, $7.50. Received $50, to apply on account. Returned to the Phillips Chair Co. 24 cane seated chairs at $1; 6 rockers at $2. These goods were not as ordered. Cash sales of merchandise, as per cash drawer, $91.40. Jan. 30.— Paid PhilHps Chair Co. for invoice of Jan. 20th, less 5"^, $232.51. (Journal and cash liook.) Bought of Lansing & Bros., 4 mos., 5;. 10 days, merchandise as per invoice, $498.70, freight prepaid. Received of H. M. Preston, on account, $75. Sold Morris Chaney, on account, i office desk, roll top, $40; i office chair, $6.50. Jan. 31. — Paid clerk hire to date, $30. Cash sales, as per cash drawer, $62.87. Sold Mrs. E. Leary i parlor set, $55; i beveled mirror, $6.50. Received cash to apply on account, $25. MODERN ILLUSTRATIVE BOOKKEEPING. 269 After entering the preceding transactions in your journal and cash book, balance j'our cash book, and hand it with the journal to your teacher for inspection before posting. After your journal and cash book have been approved, post from the journal to your ledger. Since there is no equality of debits and credits in the journal, of course no trial balance can be taken. Your in\entory shows merchandise on hand, valued at $5040.75; horse and delivery wagon, valued at $275; office furniture, fixtures and books, valued at $275; 11 months' unexpired premium on insurance policy, valued at $27.50. Find from your ledger the amounts due from personal accounts; from your bill book, the value of notes on hand, also the notes outstanding. From your ledger find the balances due from you to other firms, and using the model on page 264, prepare a statement of resources and liabilities. Your present worth should be $3799.32. Compare this with your investment, and find your gain or loss for the month's work. LEGAL FORMS. PARTNERSHIP AGREEMENT. Articles of agreement, made the first day of July, 190-, between Emerson W. Benton and Chas. M. Pelton, both of the city and count}' of Worcester, and state of Massachusetts, witnesseth as follows: First. The parties above named have agreed to become copartners together, and by these presents do agree to become partners under the firm name of E. \V. Benton & Co., for the purpose of carrying on a commission, shipping and general merchandising business, in the said citj- of Worcester and state of Massachusetts, from the date of this agreement until such time as the partnership may be legally dissolved. Second. The said Emerson W. Benton, of the first part, shall contribute the resources of his late business located at ^242 South St., as shown by bill of sale executed under even date, less his liabilities, which are to be assumed by the new firm and paid as they become due, making a net investment of Seven Thousand Four Hundred Dollars ($7400). The said Chas. M. Pelton, of the second part, shall contribute cash, $4000, and a shipment of merchandise now in the hands of Geo. M. Howe & Co., of Boston, Mass., invoiced at $2685.75, making a total investment of Six Thousand Six Hundred Eighty-five Dollars and Seventy-five Cents ($6685.75.) Thh'd. During the continuance of this agreement, the said Emerson W. Benton and the said Chas. M. Pelton shall each give his entire time to the business in which they, by this agreement, become partners. Fourth. Each partner shall receive interest upon his net investment at the rate of six per cent., the said interest to be deducted from the profits of the business. Fifth. The gains and losses of the business shall be divided equally between the partners, E. W. Benton and C. ]\I. Pelton. Sixth. The said E. W. Benton shall attend to the buying and selling of goods and the general management of the store, while the said C. M. Pelton shall ha\-e full charge of the books, and shall sign all checks and other negotiable paper of the firm. Ix WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals in duplicate the day and 5'ear first above written. Emerson W. Benton. Charles M. Pelton. Signed, sealed and delivered in the presence of G. E. French. DISSOLUTION OF PARTNERSHIP. m case of a dissolution of partnershijD, it is cuslonuu y to send a notice of such dissolu- tion, with the conditions attending it, to each person with whom the firm has had dealings, and also to publish this notice in the newspapers of the city or town in which llie fnni lias conducted its business. In case of special agreement between the partners regarding the indebtedness of any person, such as occurs in regard to the shipment to T. W. Bowen & Co. ;it the close of June, the party interested should receive a special notice of such agrceniL'nt signed ])y both partners. 270 MODERN ILLUSTRATIVE BOOKKEEPING 271 NOTICE OF DISSOLUTION OF PARTNERSHIP. You are hereb,y notified that the copartnership heretofore existing between H. F. Adams and E. C. Mills under the firm name of H. F. Adams & Co., at Albany, N. Y., is this day dissolved. Accounts due the firm are to be paid to H. F. Adams, and all claims against the firm should be presented to him for payment when due. Dated Albany, N. Y., June 30, 190-. H. F. Adams. E. C. Mills. BILL OF SALE. Know all mKN by these presents, that I, E. H. Reed, of the city of Worcester, county of Worcester, and state of Massachusetts, of the first part, in consideration of the sum of $6955 to me in hand paid by E. H. Reed & Co., of the county and state aforesaid, parties of the second part, the receipt of which is hereby acknowledged, have bargained and sold, and by these presents do grant and convey unto the said parties of the second part all of the resources of my late business conducted at if3i2 South St., as follows: real estate, valued at $9500; merchandise, as per schedule, valued at $916.55; horses and wagon, valued at $325; furniture and fixtures, valued at $250; also the following balances of accounts due, as per ledger: Theodore Crosby & Co., $129.33; A- W. Noone & Co., $528.44; Public Market Co., $244.60; Geo. H. Tucker & Co., $204.13; City Hotel Co., $250.45; a total of $12348.50; on condition that the said firm of E. H. Reed & Co. shall assume the liabilities of the late business of E. H. Reed, as follows: note in favor of Fischer Flour Co., $845.27, dated June i6th at 30 days, and the following balances of accounts, as per ledger; Russell & Birkett, $426.45; Curtice, Olney & Co., $1326.40; I^utz Bros., $714.50; Gillette & Hennigan, $541.20; a total of $3853.82. To HAVE AND TO HOLD the Same unto the said parties of the second part and their legal representatives forever. In WITNESS WHEREOF, I have hereunto set my hand and seal this i6th day of July, in the year oi our Lord one thousand nine hundred and . E. H. Reed. ARTICLES OF COPARTNERSHIP. Articles of copartnership, made this first day of August, 190-, between Mason E. Decker and Thomas J. Sullivan, of the firm of Decker & Sullivan, of the first part, and Wm. B. Jennings, of the second part, all of the city of Rochester, county of Monroe, and state of New York, witnesseth as follows: The parties hereunto, having mutual confidence in each other, do this day form with each other a copartnership, under the firm name of Decker, Sullivan & Co., for the purpose of conducting a wholesale dry goods business at,::242 E. Main St., Rochester, N. Y., under the following terms and conditions, to commence at the date above mentioned and to continue for five years, or until dissolved by mutual agreement. First. The said parties of the first part shall contribute the resources of their late business, located at #242 E. Main St., as per bill of sale executed under even date here- with, less the liabilities, which are to be paid by the new firm, making a net investment of Forty Thousand Six Hundred Sixty-one Dollars and Ninet3'-four Cents ($40661.94), 272 , MODERN ILLUSTRATIVE BOOKKEEPING. each partner's share of said investment, being shown by his account in the ledger of Decker & SulHvan. The said part}- of the second part shall invest Twenty-five Hundred Dollars ($2500) cash. Secojid. At all times during the continuance of their copartnership each partner shall give his full time, and use his best endeavors, and to the utmost of his power exert him- self for the joint interest, profit, benefit, and advantage of the copartnership. Third. Mason L. Decker shall receive a salary of One Hundred Fifty Dollars (S150) per month, Thomas J. Sullivan shall receive a salary of One Hundred Twent}--five Dollars ($125) per month, and Wm. B. Jennings shall receive a salary of One Hundred Seventy- five Dollars ($175) per month. These salaries may be drawn from the funds of the busi- ness on the first day of each month. Fourth. At the close of each year, or at such date as the books may be closed, each, partner shall be charged with interest at six per cent, on such sums as he may have with- drawn from the business for his personal use from the date such sums were drawn unti. the date of the closing of the books, and each partner shall receive six per cent, interest on his investment for the same period of time. It is agreed between the parties aforesaid that no member of the firm shall draw to exceed Two Hundred Fifty Dollars ($250) per month for his personal use. In witness whereof, the parties hereto have hereunto set their hands and seals in duplicate the day and year first above written. Mason L. Decker. Thomas J. Sullivan. Wm. B. Jennings. Signed, sealed and delivered in | the presence of ) Chas. J. Foster. INDEX. Abstract sales book, 200. " " sheet, 200, Acceptance, 105. Account sales, 150, 152- 1. i» register, 140. Accounts, classes of, 35. " of business, 35. of finance, 36. paj'able, 171. " receivable, 171. Acknowledgment of remittance, 81. Analyses of statements, 92, 95. Appendix, 263. Articles of copartnership, 114, 270, 271. Balance ledger, 179. Bank account, method of opening, 54. " discount, 76. draft, 107. signature card, 54. Bill book. III, 112, 169. Bill of sale, 271. Bills payable, 30. " receivable, 28. Blotter, sales from, 147. Bookkeeping, definition, 5. Books of a corporation, 230. (( (< Card ledger, 206, Carpet business, wholesale, 130. Cash, 10, II- Cash account, 19, 41. Cash book, 68, 136, 137, 166, 168, 201, 204, 245, 246. Cash book, single entry, 204, 264. Cash check, 121. Cash sales, 150, 200. Certificates of stock, 229. Changing from single to double entry, 217, 265. Check book stub, 55, 58, 60. Checking from journal to ledger, 26. Checks, 55, 58, 108, 121, 151. Circular letter, 145. Closing accounts, 42, 1S6. Closing of ledger, 260. C. O. D. sales, 88. Commission sales book, 139. Commission, Shipping and General Merchandising busmess, 134. Consignment ledger, 134, 1 35- Consignments account, 162. Com. — 18 Corporations, 227. Credit memorandum, 178. Customers' statements, 202. Deposit ticket, 55, 62. Depreciation account, 257. Discount, bank, 76-78. " memorandum, 77. " merchandise, 80, Dividend book, 233. " check, 233. Dividends, 229. Double entry, 1-196, 227-262. Drafts, 103-107. " bank, 107. " sight, 103, 106. " time, 105, 107. Dry Goods business, 166. Errors in trial balances, 34. Examination, 130. Exercises in discount, 98. " in drafts, 109. Expense account, 43. Figures in the cents column, 5c. Flour, Grain and Produce business, 49. Furniture business, 265. Gain, net, how found, 36, 265. Grocery business, wholesale, 114. Increase or diminution of capital stock, 220. Indexing, 143. Indorsements, 32, 62, 75, 109, 173. Instructions for changing from single to double entry, 217. Instructions to student, 4, 49, 94, io3- Interest and discount, 76. Introductory, 3. Inventories, 35, 63, 91, 132, 163, 170, 182, 191. 216 225. Invoice, 51. Invoice book, iii, 113, 169. Joint stock companies, 227. Jovurnal, 197, 198. Journal-daybook, 5, 6, 143, 166, 167, I97. 19S: 2^4 263. Journal-daybook, single entry, 197, 263. Journalizing, 10. 273 INDEX, Ledger, 5, 8, 40. " card, 207. Ledgerette, 204. IvCgal forms, 270. Letter impression book, 141, 142. Letter of remittance, 86. Liability of stockholders, 227, 229. Loss and Gain account, 43, 44, 165. Losses and gains of a corporation, 229. Loss, net, how found, 36. Main ledger, 134, 169. Memorandum of credit, 178. Merchandise account, 26, 42. " discount, 80. Minute book, 230. Modol ledger closed, 40. Monthly statements, 64, 65. Notes, 28, 30, 75. " discounted, 77, 98. Notice of dissolution, 271. Notification of draft, 116. Opening of ledger accounts, 13, 25, 63, 82, 154. Opening the books of a corporation, 234. Organization of a corporation, 228. Overpayments, 256. Partnership, 114. " agreement, 114, 270, 271. " dissolution, notice of, 271. " dissolution of, 270. Partners' interest, 164, 183-186. Pass book entry, 118. Per.sonal accounts, 23. Petty cash book, 250. Po.sting, directions for, 13, 25, 63, 82, 154, 155, 156, 180, 215, 225, 258. Power of attorney, 49. Price lists, 66, 100, 132, 194. Proof of trial balance, 47. Proprietor's account, 45. " statement, 216. Purchase book, 201. " ledger, 169. Questions, 20, 39, 46, 66, 102, 133, 165, 196, 226. Real estate, 78. Receipts, 153. Remittance letter, 86. Reports, 53, 57, 63, 79, 82, 89, 90, 118, 122, 124, 127. Reserve for Had Debts account, 255. Rules for journalizing, special: Bills Payable, 30, 31. " Receivable, 29, 31. Cash, 10, II. Discount, 78, 125. Drafts, 104, 107. Expense, 11. Interest, 119, 126. Merchandise, 12, 28. " discount, 80. Personal accounts, 23, 24, 25. Proprietor, 11, 28. Real estate, 78. Shipments, 121, 123. Rules, general, 10, 23. Sales book, 69, 70, 139, 140, 169, 245. " ledger, 169. " sheets, 197, 199. Selling price list, December, 248. Shipment ledger, 138, 140, 150. Shipments, 120, 121. Shipments account, 162. Shipping receipt, 85. Shoe Manufacturing business, 242. Single entry, 5, 197, 263. " cash book, 204, 264. " journal, 19S, 263. Statements of customers' accounts, 64, 65. Statements of interest accounts, 183, 185, 186. Statements of losses and gains, 35, 92, 126, 160, 184, 258, 264. Statements of resoiu-ces and liabilities, 37, 98, 128. 162, 192, 216, 260, 264. Stock certificate book, 231, 233. Stock ledger, 231. Subscription and instalment l)ook, 230. Tea, Coffee, and Spice business, 68. Telegram, 86, 87. Test ledgers, 48. To the student, 4. Transfer Ijooks, 231. Treasury stock, 229. Trial balances, 18, 33, 84, 265. Trusts, 228. "Voucher, 238, 249. " check, 239. " register, 241, 246. " system of accounts, 237. Watered stock, 230. Work for the .student, 5, 10, 22, 27, 50, 71, 109, n^ 144, 170, 187, 208, 218, 242, 264. UNIVERSITY OF CALIFORNIA BERKELEY LIBRARY THIS BOOK IS DUE ON THE LAST DATE STAMPED BELOW Books not returned on time are subject to a fine of 50c per volume after the third dav overdue, increasing to $1.00 per volume after the sixth day. Books not in demand may be renewed if application is made before expiration of loan period. YD 24616 tfFSC3S. lo