r- o uj 'xirj THE LIBRARY OF THE UNIVERSITY OF CALIFORNIA HENRY RAND HATFIELD MEMORIAL COLLECTION PRESENTED BY FRIENDS IN THE ACCOUNTING PROFESSION GOODYEAR'S HIGHER ACCOUNTING A reference book for Accountants and Commercial Teachers A text book for Students in Advanced Accounting Methods by- SAMUEL H. GOODYEAR, A. M. Author of the Goodyear Commercial Series AND- LLOYD E. GOODYEAR, Master of Accounts Author of Goodyear's Bank Accounting SECOND EDITION 1909 GOODYEAR-MARSHALL PUBLISHING COMPANY CEDAR RAPIDS, IOWA Copyrighted 1907 GOODYEAR-MARSHALL PUBLISHING COMPANY no 7 Introduction. In preparing this work the authors have had in mind three classes : i. Business men and accountants who want a reference book in specialized accounting methods, rather more technical and scientific than the usual bookkeeping texts. 2. Teachers who want a text in advanced accounting from which supplementary work can be chosen for their graduating pupils who are preparing for special lines of business. 3 The class of commercial teachers — rapidly increasing — who want a carefully developed course of higher text book accounting for advanced work, that dispenses with the voucher and laboratory methods that are used successfully in initiatory accounting study. We have consulted successful accountants and business managers freely and have spared neither time nor pains in the effort to produce a manual of accounting that would represent modern methods which could be safely followed by bookkeepers and teachers in the special lines of accounting introduced. M513271 CONTENTS. Commission Accounting - Page 3 Real Estate Titles - - - - "22 Real Estate and Insurance Accounting - " 29 Practical Banking - - - - 41 Corporation Accounting - 58 Factory Accounting - - - - " 69 Railway Accounting - - - - "91 Wholesale Accounting - - - - "113 Commission Accounting. A Commission Merchant is one who buys or sells merchandise for others in specified quantities called Shipments or Consignments, receiving for his compensation a certain agreed percentage of the cost of the goods purchased or of the gross proceeds of the goods sold. In large cities there are many commission firms that are thus engaged in buying and sell- ing consignments of goods, mostly farm and dairy products, grain, live stock, etc., for persons who live at a distance. Commission houses, as a rule, also buy and sell goods on their own account. The terms Shipment and Consignment are thus distinguished: When you send goods to another to be sold on your own account, the goods are spoken of in your office as a Shipment. Goods received by you from another, to be sold on his account, are referred to in your office as a Consignment. Invoice of Shipment, This is an itemized statement of goods that are shipped to a commission firm to be sold on account and risk of the owner. It should be sent by mail to the consignee at the time the goods are shipped, giving the quantities in the shipment, the method of shipment, the amount of transportation charges paid and unpaid. Usually the prices of the articles are not given, since the goods are not sold to the consignee, but are merely delivered to him to be sold for the owner. A Model Invoice of Shipment, a& Below please find invoice of Merchandise sent yo Freight prepaid $ *7" — risk of — L agabfag&^ri&efciiag^. UNPAID $_. _TO BE SOLD ON ACCOUNT AND Consignors .^Jt^^^^^^^y >f~oo ^-t^y /^Jrf^Js^ts JToo. r& ^y " i Account Sales. This is an itemized account, rendered by the consignee, or Commission Merchant, to the shipper or owner of the goods, at the time when the goods in a given shipment have been sold. It shows all sales and charges and the net proceeds, or difference between the total sales and total charges. HIGHER ACCOUNTING Standard Form of Account Sales. From For Merchandise Received Consignment No Folio l/'d' C s C^---< ^C^^^Z^7-^ / .Clerk. foo SOQ SALES -^>-fsl/ /JtZSiJs. 6> ^fo CHARGES Freight $ Drayage $ /o >f£g_^ Storage $ 7^£ Inspection $ Insurance $ K ~ '° Commission $ /l/ Other Charges $ Total Charges Net Proceeds Special Records Required. The commission merchant needs special records to show the ownership of the merchandise he sells, and the outlays he makes for each consignment and the amount received from it. Left Folio of Commission Sales Ledger. Consignment No. 1 STUDENT 6 CO. 190— Sep. 10 15 Ledg. Fol. Received per B. C. Railway, freight prepaid, 500 bu. Barley 500 bu. Corn Drayage Insurance Storage Commission Student & Co.— Proceeds credited 10 7 14 40 70 80 32 527 90 10 560 COMMISSION A Receiving Book is required, giving in tabulated form for ready reference all essential facts pertaining to each consignment, before it is placed on sale. Form of Receiving Book. Date Consignor and Address ARTICLES CARRIER Freight Unpaid Gross Weight Folio 190- Dec. 10 Crescent Mills Akron 600 Sks. Flour Invoiced at $1.55 B. C. R. R. 18 30000 C. S. 1 10 C. C. Smith 50 Brls. Cranberries B. C. R. R. 13 90 7500 c. s. Fairfax 1 A Commission Sales Ledger is used for keeping itemized accounts with the different con- signments received. These accounts are kept in different ways, but in every case the amounts received for consignments are entered as credits and the charges and proceeds of consignments are entered as debits. The left folio of a consignment account on page 4, and the right folio below illustrate one of the most common forms of a consignment ledger. When the goods arrive, they are compared with the invoice of shipment, and a memoran- dum entry is made on the debit side of the account. If freight and other charges are paid, an entry is made in the cash book debiting the consignment. When sales are made, they are entered in the general sales book. Debits from the cash book and credits from the gen- eral sales book are posted to the commission sales ledger, like other posting, except that all entries are itemized. When all the goods belonging to a consignment have been sold, the commission and other charges, if any, are entered and the net proceeds, or the difference between the total charges and total sales, is entered on the debit side, as shown in the form, and the consignment is closed. In "Const. No. 1," the net proceeds is credited to the account of the consignor. When this is done, an account with the consignor should be opened in the ledger, and the net proceeds should be posted to the credit of this account. When a trial balance is taken, the unbalanced consignments should be included, the same as regular ledger accounts. Right Folio of Commission Sales Ledger. COLLEGE, CITY. 190- Sep. S. B. Fol. 500 bu. Barley 500 bu. Corn .62 .50 310 250 560 HIGHER ACCOUNTING LOOSE LEAF ACCOUNTING. The rapid expansion of business in all lines has compelled accountants to devise new methods adapted to the new conditions. Loose sheets instead of bound books afford many opportunities for saving time by means of carbon duplicating, letterpress copying, and self- indexing of ledger account sheets. In no department of business can the loose leaf method be used to better advantage than in commission accounting. Loose Leaf Account Sales. The account sales sheet illustrated on page 7, is a modern form for loose leaf accounting that dispenses with the receiving book and the commission sales ledger. These sheets are arranged in a pad for carbon duplicates. The original account sale is made on the white sheet and a carbon copy is made on the yellow sheet. The latter is punched for binding on a sales binder. The yellow sheet contains every entry that would be required in the receiving book and the commission sales ledger. The Account Sales Register. In the commission business the repeated credits of such titles as Storage, Insurance, Com- mission, etc., call for a register with special columns for all titles belonging to a commission sale, so that these separate items may be combined and carried to the ledger accounts in totals, thereby omitting a large percentage of the ledger entries. The Account Sales Register illustrated on pages 1 o and 1 1 affords a short method of handling the general accounts that pertain to a commission business. A single line across the two folios is devoted to the various charges and credits that belong to a consignment. After these various amounts are copied on the register, the duplicate account sales sheet can be filed on the binder, for reference if any item is required at a later date. If the account sales is cor- rect and all amounts have been carried correctly to the register, the total of the entries in cash book credits and ledger credits will equal the amount in total sales column. The student will observe the method of securing the total of Cash Credits. The footings of the columns "Freight Cr.," "Other Cr.," "Cash Advances Cr.," "Proceeds Rem. Cr.," are carried in the col- umn, "Total Cash Cr.," and are there added and brought down in total for posting. The Led- ger Credit columns are each added and brought down for posting. The additions can be proven by adding the total of "Cash Credits" and the several amounts in "Ledger Credits," the sum being equal to "Total Sales Dr." In posting from the account sales register, Total Sales will go to the debit of "Consign- ment Sales," Total Cash Cr. will go the credit of "Consignment Cash," Storage, Insurance, and Commission will each have ledger credits, Other Cr. will go to "Sundry Charges," and Pro- ceeds Credited will go to the credit of "Dealers' Ledger." Each consignor who has proceeds credited will have an account in the dealers' ledger and will have credit for his net proceeds. The General Sales Book. When a merchant makes sales from consignment goods and also from his own merchan- dise, he will need special columns in the general sales book for these different classes of mer- chandise. In this set two ledgers are used, a general ledger for all general accounts of the business, and a dealers' ledger for all accounts with persons from whom we buy on account, to whom we sell on account, and from whom we receive consignments and credit the net proceeds. In a very large business the dealers' ledger could be subdivided into three side ledgers, pur- chase ledger, sales ledger, and consignors' ledger, but the use of three side ledgers would re- quire two additional special columns in the cash book. The general sales book, as represented on page 9, has special columns for consignment sales and merchandise sales, and other columns for amounts sold to dealers on account and for cash sales. If sales are made and notes are received inpayment, the amounts can be extended to the dealers' column and Bills Receivable account can be entered in the dealers' ledger, rep- resenting amounts due from dealers on their written promise instead of their verbal promise. COMMISSION Model Loose Leaf Account Sales. Consignment No. <%> HIGHER ACCOUNTING In posting from the general sales book, each dealer will be debited for amount of sales to him on account, and three entries for the totals will be required in the general ledger, the title "Dealers' Ledger" being debited for the total of dealers' column, "Consignment Sales" being credited for the total of Consignments column, and "Merchandise" being credited for the total Mdse. column. Cash has already been debited for the cash sales. The Purchase Book. The purchase book, used for recording the commission merchants' own purchases of mer- chandise, illustrated below, requires special columns for purchases from dealers on account and for cash purchases. In order to reduce the space required for Merchandise account in the ledger, it is good ac counting to carry all outlays of cash for merchandise charges to the purchase book, so that they may be included in one total debit of Merchandise for the given period. In posting from the purchase book, each dealer will be credited for amount of purchase from him on account, and two entries for the totals will be required in the general ledger, "Merchandise" being debited for the total of the purchases and "Dealers' Ledger" being credited for the total of dealers' column. Cash has already been credited for cash outlays for merchan- dise. PURCHASE BOOK=Commission. Date. L$gA fost Mark FROM WHOM PURCHASED-IUias Extensions Dealers Cash cx^g-^/ a l>VS^7t^^ ^J^^^J 3v ^JL*~&t ^y^<^ ^o /^-,iL^-^6^~4L^ ,s2t? / */ V j_£ d = ±£&2 Bi &u£ £+-*-nJ 2^c r* £± '\ 2-7 O / / yy Jo a n -^JLa .2.2. UjJ o ~i£^-i>~--™^^-^^ . *£-* >yC I o^ ^h^^L^J ^JL~A ^^^£^ \J / /3 q JJ=UJJk / 2. o 4 / o M & t> u 3-47 T GENERAL SALES BOOK— Commission /*r Post Mark TO WHOM SOLD-Items Consignments Mdse. Dealers' Cash g^t^ 7/ -££ / J-Zt up u-^Jry.z^^v^ Afi ,/ ^7 r r^ ^£J^ S3^,s^. 2 LL> , ?o o ^ W » * &^~>-nJ /// / /v -yy /Z^/3^ (Z ^/^^-tM &-6*4 "- 73 I /J/90 y tf a <-JjL* >?t-J. /lt*zzz+~.2 f / O O ^-r^Cf ^ ^^ ^f^^rgr-Q 3 o 2 s -/ s L j /; . : &4-0 tC^y- t-^pr-a-^ ,2* {3 / _XA \s 3 o y Jjtt Jtj. rt ¥00 JLcc, O^Z. X% 4 3».&«J>s (U^-.tJ J"i 10* -f.--a.Jix. '~*~*j ^Lui I *>- 1^ ¥ zL / 04 r r t -% 3 3ol l /¥7 f «■* YZ- 3r> >-c y Wi ££!& 9- 10 HIGHER ACCOUNTING ACCOUNT SALES Ifo- c^fe- // / X 6 Z I Total Sales Dr. £lf 4- 3^L«fa r* // _ZJ 5 f* / vj> v-6 \Tc 7 o 6 iLLo. s:& // JLl lJ -7- -TT $/*/ r*/s .r/ 1/0 3 * 1- t±A 2 6\ WJJJJM'. y/r-j g The Commission Cash Book. The cash book, illustrated below and on page 1 I, has a special column on the debit side for credits of dealers, and special columns on the credit side for debits of dealers and for consign- ment payments. In posting from the debit side of the cash book, each dealer will be credited for amount re- Dr. COMMISSION /^V— Date L.F Credit Titles Oeneral Dealers Balance ~J^ -fa <^L*?^2^^>^, sJc^/^^s- ^ y vjT^? & # / dZ&i^y^f^ s^ J?^-^,^^^-^ >'/ y Jc // / 9 f> ^ o ^Ssr^^^c^ /TJ> ^^ f *S O fc»-^^-^-^-^T— -«e-<2 — J/-&—n^0k re -2 £6A r M Proceeds Credited /*/ fft ^ ^. Voo \fh £~^t^ . SZ*&r-*~r^ CS^^^s ^33^^^a^i=^^ Jk^z € 3t-*x^s^. <£Z-f-J?$7&L **-~*v-ez-2', C = 2&&adLd£&az .\C- Post JUsrk ,L ceived from him on account, and in the general ledger one entry will be required, crediting "Dealers' Ledger'* for the total of Dealers' column. In posting from the credit side of the cash book, each dealer will be debited for the amount paid him on account, and two entries will be required in the general ledger, "Dealers' Ledger" being debited for the total of Dealers col- umn and "Consignment Cash" being debited for the total of Consignment column. CASH Cr. // <^-^r-^ rA^U_S ^^^-*t~. 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K <• 1 "> N 1> K S r*j s WESTERN AVENUE C. RAILWAY 26 HIGHER ACCOUNTING Folio 2 Daily Register of Date Filed Line GRANTOR GRANTEE Kind of Instrument Considera- Date of Instrument Year Month Day Year Month Day 1900 Feb. 1 1 United States B. C. Railway Grant 1900 Jan. 1 1901 Mar. 1 2 B. C. Railway- College Invest. Co. War. Deed 12,000 1901 Feb. 28 1902 Mar. 1 3 College Invest. Co. Asa R. Andrews... War. Deed ... 10,000 1902 Feb. 20 1902 June 15 4 College Invest. Co. Carl C. Barton War. Deed 12,000 1902 June 12 1902 July 20 5 College Invest. Co. Martin V. Bernis.. War. Deed 15,000 1902 July 18 1902 Sept. 15 6 College Invest. Co George C. Buckley War. Deed 17,500 1902 Sept. 14 1902 Nov. 12 7 College Invest. Co. Arthur M. Butler. _ War. Deed 18,000 1902 Nov. 10 1903 Jan. 5 8 College Invest. Co. Andrew V. Cornish War. Deed 20,000 1903 Jan. 4 1903 Feb. 21 9 College Invest. Co. Edward E. Drew.. War. Deed 20,000 1903 Feb. 20 1903 May 13 10 College Invest. Co. Austin R. Edwards War. Deed 21,000 1903 May 12 1903 July 2 11 College Invest. Co. John G. French... War. Deed 22,500 1903 July 1 1903 Nov. 21 12 College Invest. Co. Orton E. Grant War. Deed 23,000 1903 Nov. 20 1904 Jan. 22 13 College Invest. Co. Roger R. Hartman. War. Deed 20.500 1904 Jan. 20 1904 July 16 14 College Invest. Co. Charles R. Morton. War. Deed 19,500 ... 1904 July 15 1906 Jan. 8 15 Asa R. Andrews... Andrew A. Minor. _ War. Deed 3,000 1906 Jan. 7 1906 Jan. 8 16 Andrew A. Minor. . Asa R. Andrews ... Mortgage . 2 000 1906 Jan. 7 1906 July Aug. 30 17 Asa R. Andrews.. Andrew A. Minor.. Release Mortg. 1906 July ?S 1906 25 18 B. C. Railway Henry C. Preston. _ War. Deed 3,000 1906 Aug. 24 1906 Aug. 25 19 Henry C. Preston.. B. C. Railway Mortgage 2,500 1906 Aug. 24 1906 Sept. 2 20 Asa R. Andrews... John G. Lane War. Deed 1,000 1906 Sept. 1 1906 Sept 15 21 Asa R. Andrews... George Martin War. Deed 1,250 1906 Sept. 14 1906 Sept. 15 22 George Martin Aas R. Andrews... Mortgage 1,000 ._. 1906 Sept. 14 1907 Jan. 15 23 B. C. Railway Henry C. Preston. . Release Mortg. 2,500 1907 Jan. 14 1907 Jan. 22 24 Henry C. Preston.. College Invest. Co. War. Deed 2,000 1907 Jan. 21 1907 Jan. 25 25 Loomis Bros. Mechanic's L'n 500 ... 1907 Jan. 24 Town Lot Index to Transfers. Block No. 34, College City. 2 2 2 2 2 N/ 3 1 2 2 2 3 2 21 22 __ 1 > CH 1 2 2 2 3 2 SV 3 1 2 3 2 2 2 2 2 N7 3 1 2 3 20 25 2 2 2 2 2 2 1 C l A 1 2 3 15 16 17 sy 8 2 2 2 2 2 2 1 2 3 15 16 17 - Township 80 North Range 6 West Land Index to Register of Transfers. N. E. % 2 1 1 1 iH S. E. % 2 2 2 2_ 23 CI V 1 18 19 to S. W. % 2 2 2 2 2 1 18 19 23 24 n. w. y< 2 z 1 REAL ESTATE TITLES 27 Real E,state Transfers. Folio 2 Where Recorded j TOWN DESCRIPTION FOLIO Book Page A B C C C C C D D D D D E E L L M L M L L M M L N 92 101 215 575 615 750 820 125 212 375 515 727 215 750 595 596 210 650 300 670 680 325 410 820 134 College City. College City. College City. College City. College City College City. College City. College City. College City. College City. College City. College City. College City. College City. College City. College City. College City. College City. College City. Section 1, township 80 north' range 6 west. S. W. X section 1, township 80 north, range 6 west. Blocks 8, 9, 31,34, 35, 48, original plat S. W. X> section 1-80-6. Blocks 25, 27, 29, 47, original plat S. W. X> section 1-80-6. Blocks 20, 22, 24, 46, original plat S. W. X. section 1-80-6. Blocks 13, 15, 17, 45, original plat S. W. X> section 1-80-6. Blocks 10, 12, 44, original plat S. W. X, section 1-80 6. Blocks 3, 32, 43, original plat S. W. X. section 1-80 6. Blocks 30, 33, 36, 37, original plat S. W. X. section 1-80-6. Blocks 19, 26, 28, 38, original plat S. W. X, section 1-80-6. Blocks 18, 21, 23, 39, original plat S. W Blocks 7, 14, 16, 40, original plat S. W. Blocks 5, 11, 41, original plat S. W. X. Blocks 2, 4, 42, original plat S. W. S. % lot 10, block 34, original plat. S. % lot 10, block 34, original plat. S. % lot 10, block 34, original plat. S. X N. W. X- section 1, T. 80 N., R. 6 west. S. X N. W. X- section 1, T. 80 N., R.6 west. N. % lot 10, block 34, original plat. N. y 3 lot 9, block 34, original plat. N. % lot 9, block 34, orig nal plat. S. X N. W. X. section 1, T. 80 N., R. 6 west. S. W. X N. W. X- section 1, T. 80 N., R. 6 west. *N. % lot 10, block 34, original plat. (♦Balance due for material and labor on dwelling.) /+. %, X, section 1 80-6. X, section 1-80-6. , section 1-80 6. section 1-80-6. Abstract of Title. S. 2=3 of Lot 10. Block 34, College City, any County and State. Grantor United States B. C. Railway College Invest. Co Asa R. Andrews ... Andrew A. Miner . Asa R. Andrews... Grantee B.C. Railway College Invest. Co Asa R. Andrews Andrew A. Minor . Asa R. Andrews Andrew A. Minor . Date of Inst. 1900 1901 1902 1906 1906 1906 Jan. Feb. Feb. Jan. Jan. July Date of Filing 1900 1901 1902 1906 1906 1906 Feb. Mar. Mar. Jan. Jan. July Where Record^ 92 101 215 595 596 210 Inst. Grant War. Deed War. Deed War. Deed Mortgage Release... REMARKS All of S. 1, T. 80 N., R. 6 west. S. W. %, S. 1, T. 80 N.. R. 6 west Blks. 32. 34. 36, 48, original plat of S. W. % S. 1, T. 80 N., R. 6 west. S. % lot 10, blk. 34, orig. plat. S. % lot 10, blk. 34, orig. plat. S. % lot 10, blk. 34, orig. plat. State of | County J After a careful examination of the books of the Recorder of Deeds and Mortgages, the Judgment Docket of the Circuit Court for the past ten years, the Probate Records, Mechanic's Liens and Records of Tax Sales, all of said county, I find the matter above noted, and none other records that appear to affect the title of the premises described above. The Student, Dated Aug. 15, 1906. Abstracter. 28 HIGHER ACCOUNTING Real Estate Transfers. All contracts relating to the transfer of real estate are made in writing and under seal, and all such contracts are placed on record, being copied in full at the recorder's office of the county and state in which the property is located. By selecting and grouping together from these records all of the transfers pertaining to a given piece of property, we may have a complete history of the ownership of that property. The essential facts of such a history, grouped together in a sys- tematic manner, are called an "Abstract of Title." An abstract of title may be made without consulting the recorder's copies of the various transfers, by keeping the Register of Real Estate Transfers. The transfer entries relating to a given property are readily found by means of an index book, which groups together the num- bers of the page and line of the transfer book where each entry is made that relates to the property. It will be readily seen that a correct abstract of title is a very essential factor in the transfer of real estate. The model transfer register on pages 26 and 27 gives all of the transfers pertaining to the forty-eight blocks of College City, and shows the ownership of each block. The model index to transfers on page 26 illustrates the method of grouping the transfers pertaining to a given property. Two horizontal lines are assigned to each third of a lot, con- stituting a business lot of twenty feet. The index book to land transfers will have horizontal lines for indexing quarter-quarter sections of 40 acres, and smaller divisions may be provided for on the same plan if smaller parcels of land are transferred. The model abstract of title on page 27 gives all of the records that affect the title to the center one-third and the south one-third of lot 10, block 34. Exercise in Making Abstracts of Title. The student may make an abstract of title, giving all transfers recorded and indexed in the model forms, for each of the following properties : — 1. The north third of lot 9, block 34. 2. The north third of lot 10, block 34. 3. The southeast quarter of the northwest quarter of section 1, township 80 north, range 6 west. 4. The southwest quarter of the northwest quarter of section 1, township 80 north, range west. 1 2 3 4 5 6 / 8 9 10 11 12 Questions on Real Estate Titles and Abstracts. How is land originally divided by U. S. surveyors ? What is a base line? A principal meridian? What is a township ? How many sections in a township ? How are they numbered ? How are parts of a section described ? How is town or city property described? How are properties numbered for convenience in locating stores, residences, etc. ? What public officer has charge of the records showing the ownership of property ? What form of contract is used in transferring real property ? What is an abstract of title ? How made ? Should an abstract of title be made whenever real estate is transferred ? Describe the books kept by an abstracter. REAL ESTATE AND INSURANCE 29 Real Estate and Insurance Accounting. The transactions and records pertaining to the buying, selling and renting of real estate, and the writing of fire insurance, belong to two distinct lines of business, but in a majority of cases, except in the larger cities, these two lines are combined, and a scheme of accounting is required that makes provision for both. The Card System for keeping special records, side ledgers, and other memoranda, and Bound Books for the general accounts and historical records will be found especially adapted to such a business. Loose card records are of special value when such records are to be classified and when- the classification changes with the transactions. Loose cards for ledger accounts with persons are very convenient, because they can be easily assorted for indexing, and closed accounts can be removed and filed away, leaving in the current ledger only open or live accounts. Card records will be used for recording and classifying properties for rent and for sale, for recording expiration dates of insurance policies, and for ledger accounts with tenants and with parties for whom we rent and sell properties. Bound books will be used for policy register, cash journal, bill book, and general ledger. The Card Cabinet. The record cards are kept most conveniently in a cabinet or box, with a separate apart- ment for each variety of records required. A cabinet, like the one illustrated on page 30, with six apartments, will be convenient for filing and classifying the different cards required in this line of accounting. Apartment No. 1 contains the cards used in recording properties for rent. The blank cards are kept back of the number guides. When a property is entered for rent, a record of the same is made on one of the renting cards, and the card is filed back of the guide card that has the same monthly rate. After a property has been rented, the renting card is removed from the classified list of properties for rent and the card is filed back of the blank cards in the same apartment. Apartment No. 2 contains cards for recording insurance policies issued, each card having the expiration month printed above the upper margin of the card. -***These insurance cards are classified by placing together all that have the same expiration month, the written cards being placed in front of the blank cards in the same apartment. Apartment No. 3 contains ledger cards for accounts with tenants. The blank cards are kept together back of the alphabetical guide cards. As soon as a property is entered, a ledger account with the tenant is opened on one of the cards, see page 3 1 , after which the account is indexed by placing it back of the guide card corresponding to the initial letter of the Surname. When a tenant's lease expires or is cancelled and his account is balanced, his account card is removed from the current accounts in Apartment No. 3, and is filed in the same apartment, back of the blank cards, making a special division called "Transfer Accounts." In a business where these transfer accounts are likely to be wanted again, another set of alphabetical guide cards would be used for indexing the transfer accounts for ready reference. Apartment No. 4 contains the cards used in recording properties for sale. The blank cards are kept back of the number guides. When a property is entered for sale, a record of the same is made on one of the selling cards, and the card is filed back of the proper guide card. After a property has been sold, the selling card is removed from the classified list, and is filed back of the blank cards in the same apartment. Apartment No. 5 contains ledger cards for accounts with regular customers for whom we buy and sell and rent properties. These card accounts are used as a side ledger, the total of the debits on the several ledger cards being equal to the debits of Customers' account in the general ledger, and likewise the total of the credits in the ledger cards being equal to the credits of Customers' account. The blank cards are kept back of the alphabetical guides, and as the accounts are opened they are indexed as already explained in Apartment No. 3. These ledger cards are ruled on both sides, so that the account may be carried from one side to the other, filling both sides of the card before being forwarded to a new card. The first card assigned to a given account 30 HIGHER ACCOUNTING will be marked No. i, the second No. 2, card No. 1 being filed among the transfer cards after No. 2 has been opened. Apartment No. 6 has a set of alphabetical guides and is used for transferring ledger cards from Apartment No. 5, when accounts are closed or when cards are filled and the accounts are forwarded to new cards. The transfer cards are indexed in Apartment No. 6 for convenient reference if they should be required at any time. If a closed account that has been filed in the transfer apartment, is again opened, it is taken from the transfer apartment and placed in the current accounts. Card Cabinet for Record and Ledger Cards. Form 1— Model Renting Card (Before the Property Has Been Rented) RENTING PROPERTIES / Term 9 $ / Cs P er r "° n tri To Whom Rented Lease Expires Insured for how much $ Insured In what Company cJLt^^L-^^ sj^t-**—^. Insurance Expires -JbJ!L, T0 JL. A. c dc 4ggg ^ -~ -^ - ^ fatty /S^t^-^i £eJ *£L ^JZ_ .. /£&£*. j- *V 2.— *J~~& *S -Z*^L-e— »<--«>/' ^L^tA^C^ Bet Date ~^% v; 6~£Zu -*££&. Price $ •& >^- yGZ-c-c^^-^-a^^^assession 'Fronts J-Z'tf s* Kind of Bldg v>£w^ ^JC*-*-*/ f^rts yN 0j _Rc ^ Size of Bldg. J2 ^> x /.loft. Cost $.2 o g> o — in 19*?/ ■ Lot ^/ x / */- g ft. to .2 o ft. paved alley CONVENIENCES HOT AND COLO WATER Heated by Street paved with OPEN OB ENCLOSED PLUMB." BATH SEWER Interior finish, etc. LAUNDRY AND TUBS GAS FIXTURES, GAS RANGE- Rental per mo. Lease Exp. Tax Insurance $ O O — $ /& O O FUEL GAS AND PIPES ELECTRIC WIRES AND FIXT- Incombrances $ @ % due @ f due CEMENT CELLAR. FLOOR-VArf CEMENT SIDEWALK &**- Es't'd value of land Abstract or guaranteed title -Y«s- Yes Saleboard No Exclusive Agency-N«— Exchange for - ' - " A Owner* <.^ When a property is sold, the selling card describing the property should be removed from the selling list, a memorandum of the sale should be written across the card, like Form 5, and the card should be filed back of the selling list, for reference if required at a later date. Form 5— Model Selling Card Cancelled. Date No. and St. J~ £—*JT O *J- •Z/t-*-~-r*-~t£y Price $ 3 Kind of Bid Size of Bldg^? tt */3. a ft. Cost$JZ ofoSp — CONVENIENCES HOT AND COLD WATER OPEN OR ENCLOSED PLUMB. BATH SEWCR ■ LAUNDRY AND TUBS GAS FIXTURES, GAS RANGE- FUEL GAS AND PIPES ELECTRIC WIRES AND FIXT.' CEMENT CELLAR FLOOB-'V-^-e/ CEMENT SIDEWALK -¥ee- Saleboard No ExclusW&^Agenjj REAL ESTATE AND INSURANCE 33 The Customer's Ledger Card. The debits and credits for customers' accounts are posted from the cash book when the entries are there checked. Other debits for insurance are posted direct from the Policy Regis- ter. All entries should be itemized, so that statements may be drawn from the ledger accounts without referring back to the records. Customers' accounts should be balanced whenever re- mittances are sent and statements rendered. Form 6 — Model Customer's Ledger Card. ££4Ed£Zzxu^ £*e* J- >=pn^( J~o/ dL-U*- a* J yS 'i 3 , -JTo £ ^&*cz£ a * T f*/» &+™> o- n ;/1L~z& ^^^ 4- / / S f o r i j~ Xi 7- */*J!c_ £Z*iZZs7?Z^ri^- ff 6 f±jr Policy Expiration Card. The insurance agent will fill out a policy record card for each policy issued, selecting a blank card with the proper expiration month, after which it should be filed in the cabinet in a group with other cards having the same expiration month. This classification of insurance cards enables the agent to watch the maturities of policies and arrange for renewals at the proper time. A policy for #500 insurance in the College Insurance Co., In favor of A. R. Andrews on his office building at 501 First Avenue and expiring July 5, 1906, will have a policy expiration card like the following : Form 7— Model Policy Expiration Card. For the method of filing this card, see instructions for Apartment No. 2, on page 2Q. July / Policy No. 2 c £ / Location ~ Company ^^Z^^^sJ^t^ ^Amount ^T^__ Premium i_£~~& 3 Form 34 HIGHER ACCOUNTING Practice in Real Estate and Insurance Bookkeeping. The following historical memoranda of transactions will give material for bookkeeping drill in the accounting methods already explained and illustrated. The card records and the practice in assorting and classifying the different cards can not well be carried out in a short individual practice like this. The student will make all required entries in the cash book, policy register, general ledger, and customers' ledger and tenants' ledger cards, omitting all other card records and all busi- ness forms. For model cash book and policy register, see pages 36 and 37. Historical Memoranda. Jan. 1, 1906. Began business as Real Estate and Insurance Agent with cash on hand, #300. Paid cash for office rent one month, $25. Insured the following properties in the College Insurance Company: — For J. C. Inman, two story, shingle roof, frame dwelling, No. 219 Center Ave., for #1000 for one year, at a premium of one per cent, on account. (In this and subsequent records enter the commission in Commission column. Rate 20 per cent on new risks, 1 5 per cent on renewals,) For H. A. Sumner, three story, gravel roof, brick store room, Nos. 48-50 Commercial Ave., for #2000, for one year at 1 y 2 per cent premium, on account. For G. C. Story, stock of dry goods in the two story, tin roof, brick building, No. 96 Commercial Ave., for #1600 for one year, at i}{ per cent premium, receiving cash. Rented dwelling house, No. 216 Fifth Street, belonging to J. C. Inman, to Henry Parton, for six months at #18 per month, receiving cash for one month in advance. (Fill out tenant's ledger card showing date and amount of all rents to maturity. Open customer's ledger card for J. C. Inman.) Rented Store Room No. 48 Commercial Ave., belonging to H. A. Sumner, to Jones & Turner for one year at $60 per month, receiving cash for one month in advance. Jan. 2. Rented store room No. 52 Commercial Ave., belonging to C. A. Masters, to Smith & Carson, for one year at $45 per month, receiving cash for two months in advance. Insured the following properties in the Commercial Insurance Company: — For C. A. Masters, three story, gravel roof, brick store room, Nos. 52 and 54 Commercial Ave., for one year for $3000 at 1 ^ per cent, on account. For Smith & Carson, stock of boots and shoes in the above described store room, for one year for #igoo at 1 y^ per cent, receiving cash. Insured the following properties in the College Insurance Company : — For H. A. Sumner, two story, tin roof, frame dwelling, No. 457 Poplar Ave., for two years for #1400 at 1^ per cent, on account. For Jones & Turner, stock of clothing in three story, gravel roof, brick store room, No. 48 Commercial Ave., for #1500 for one year at 1^ per cent, receiving cash. Rented store room No. 54 Commercial Ave., belonging to C. A. Masters, to Farson & Lee for six months at $50 per month, receiving cash for one month in advance. Paid cash for repairs on 216 Fifth Street, belonging to J. C. Inman, #5.25. Rented dwelling No. 219 Center Ave., belonging to J. C. Inman, to H. E. Wilson, for one year at #22.50 per month, receiving cash for one month in advance. Paid cash for office supplies for the business, #8.50. REAL ESTATE AND INSURANCE 35 Jan. 3. Paid cash for water rent on 52 Commercial Ave., belonging to C. A. Masters, #2.50. Received cash for notary fees, #2.25. Sold lot and dwelling Nos. 216, 218, and 220 Fourteenth Street, belonging to C. J. Brown, to Herman Long, for $1750, receiving cash $750, and a note at one year fjr $1000, the note and mortgage on the property securing it being written in favor of C. J. Bro va. By contract, the commission on this sale is $80. Forwarded the note and mortgage to Brown with a report of the sale, showing net balance in his favor, which enter in cash book to his credit to be re- mitted later. Rented store room No. 1 5 Commercial Ave., belonging to C. J. Brown, to Hiram Preston for one year at $47.50 per month, receiving cash for two months in advance. Paid cash for repairs on last named property, $25. Insured the following properties in the Commercial Insurance Company: — For Herman Long, one story, shingle roof, frame dwelling, No. 2 1 8 Fourteenth Street, for one year for $1000 at 1 per cent, receiving cash. For C. J. Brown, two story, gravel roof, brick building, Nos. 1 5 and 1 7 Commercial Ave., for one year for $2000 at 1 }4 per cent, on account. Insured the following properties in the College Insurance Company: — For C. J. Brown, two story, gravel roof, brick building, Nos. 15 and 17 Commercial Ave., for one year for $1500 at 1% per cent, on account. For M. P. Long, two story, shingle roof, brick dwelling, No. 916 Twelfth Street, for two years for $750 at 1 ^ per cent, receiving cash. Paid cash for advertising properties for rent, $12.50. Rented store room No. 1 7 Commercial Ave., belonging to C. J. Brown, to J. R. Sanders for six months at $40 per month, receiving cash for one month in advance. Jan. 31. Transferred C. J. Brown's premium debits to his account from the policy register and posted his entries from the cash book, charged him five per cent commission on rents collected, and rendered statement of his account, remitting draft less exchange 25 cents for the balance due. Transferred all other premium debits from the policy register to the customers' accounts. Transferred the totals of Premiums and Commission from the policy registers to the cash book, debiting and crediting the proper titles and remitting a bank draft to each insurance com- pany for the balance due. Post all entries to the general ledger, balance cash, and take a trial balance of general ledger and cash balance. Take a list of balances of your customers' ledger cards, and compare it with customer's account in the general ledger. Feb. 1. Collected cash of Henry Parton for second month's rent, $18. Rented office rooms 1 and 2, second floor of building Nos. 48 and 50 Commercial Ave., belonging to H. A. Sumner, to John G. Furlong, for three months for $16 per month, receiving cash for one month. Paid cash for electric light for office, $2.50. Insured the following properties in the Commercial Insurance Company: — For G. C. Story, stock of dry goods in the two story, tin roof, brick building, No. 96 Com- mercial Ave., for $1000 for one year at 1^ per cent, receiving cash. For Jones & Turner stock of clothing in the three story, gravel roof, brick building, No. 48 Commercial Ave., for $2000 for one year at i}4 per cent, receiving cash. Collected cash of Jones & Turner for second month's rent, $60. Received cash for notary fees, $1.50. Debit Folio of Cash Journal. Cash Dr. /^-g ate & CREDITOR TITLES General J? ^ ' -3^-*>™^^™s ^ ^U ^T^ZS 24r$i 2£ ^ (^U^^T-**-^- -/^t^- 1/ f*^ZU->,. J_A y/ U.Sl-**- -rvi^!^-* -Jlr>~»s^u.^T ^7 i? JL (^ZSth^tfiej ,. ^C»*^£>ig f£ Q\A^m^ ^-A4^±X v^r> ^/y^ 2^L^j2. &£7. 7??^,^^>^/ ^fs^u- <£*-i^™ w vJ^ _/.^-«X^>,^^^ „ .3^gz^>!^~, / y-y. J'a l/ "9t^lsC-4-^d^C^r7is /3 h J>-/* Debit Folio of Policy Register. Register of Policies and Renewals New Rene* No. No. Name and Residence of Assured Amount of Policy Risk Commences Year Risk Expires / .J^C^dr?7^?o^tsi^?-z^ / ' /4*/ i (L^Mr-A3--^L^^-^c^^z^ /cftfV /7r / . 3 ip ? _ 3 /ft/ r -36— ? J /&- Credit Folio of Cash Journal Cash Cr. ^Date DEBTOR TITLES Customers Expense Advertising General / <~^C^. -~#2L*»*^~/ ^bz^> J?. Jkn^> \Jkz^rn-*i^t^. ^£Lj&^*-*^/*2 / 6 -w& y ^-^j/6-^-^>^-^^/ -^^^-i<6-^^. SJ5, ^ ^hz^n^^^^-^' ^T2. £™' 2 ^o l ~-/2t^**--^-2^. ^ 1- / foe (o 'O o DRAFT REGISTER Drafts Drawn on the Central Bank <6-oXjC > 2?« <£o UrtL^^ A^-tJ^ Jc J-^dj&_ n. cT vT 6 X^- C/t/VA^WC*0 J/, M^aJU^ 3J~o 3J-6 \5~fY 3.0 rfc 7J~ 1 1 — "hlaAs. rlA out-. J~o CERTIFIED CHECKS ptkaUji^s Lv.-Jl*^o-<_ji_s C — . «_^c-o ' -^ >^ cCCOuj ,\^~Lyiyo^AM WMjwuu GL^-.<*M^ ■^aZc: -&lLcz fc^viXirn^ ■3*-*- lAre^~^> }Jr ' hn.. l^^Jak ■Jb l^Ula. XXjuJ oUjuT^ C*Lv~9-iijj_ COLLECTION u Ho. 7 4 3 cLis. 5~o o _ — •s5~0 O Z3 Q*My 7 / Sao s3 te ^3 ■Szs - - 3Z S3 3o 4*1 / >H.. SVlCbV 4 4 .// v/~o 4 o o J-6-T J*"o o 7-r- 2 S~ 7J~ BOOK oko^VC- M X~±c^ -XUJU^ 'f— *-/ '8 o_ft a 7vT78' 4/ 62. 50 HIGHER ACCOUNTING DEPOSITORS' >L-~*^ 3U <8o£m~~u^- fy a^y, •*-, t? |— — — — — CA^^' 2*i O^IS. \i , 17 — 1 fc 1 s- ?° re 3*5 7' / S~0o vTo ftfOt "-1 It 7-r rr ^o^ 3.^ %T£rf >7?7 7>« ¥» sy CL^*£~~JL 3 Xf y-r *7 7J- IJJ- / LfS- 2S vT6 vTo ZLOl T* J{tn*Jxiu^PkCff*ju *f- IfX 7^ /f X 7-*- ro //f oj- ttf •2vT ' .?■* r-p -Vavmyg, C ,r / oo / CO Xlf .5-0 1 Xf ^« ^jty^hCl^eAxj, L fs- S~o 32 s • 3XS 3 »- 7J~ 7^ 2.XS- 7. t ZL/S ■vTo a. IS •S~o *-t ^ 6f 37 3.5-6 S-o ■J~OJ> 6/" ®T~'$- 7 ftfoo /foo /zS / 2.3 Xoo IH-JS- <-/<*-£(: K«m/ (o Kfl> II fc vTo 1/ lo <6~i> jlxt 3T Y II X? •3 *^ 6j "7 f O 1 v?/ (o tH«.^ 4 I? Q&^^t^f, >H-c^. y. i y - c5U^-eC~-y ~>ll «^. r. 1 7 - <-L^Juu>~~ JrGJtCUj^ •±*-t<^ a~L~~^, CA^jU — J^jLcLa. f&^p.-^XLuJ-A.'' *'; i ' '1 - ' '* c "^fcjr ZrGA_£UJo, ■o^f-^C &-^L^^y xjt Xo llo 1 1 o /■T9- I o /Co Uf. *7 a. 3.0 •Sx(, lie 110 /It \T~o S. Sy- 7s>~ _£ 2.0 / 13 >-7 IU-3 ^-7 ' / ¥¥ ?/ Xr S7s ^ts- -To '7/1 AT-o S./X 2, *-V /■i'i.1 ■&. Bank Statement you. i i+yj-j 3,7 *** ¥-% A ^i-7 a Yoo foo "So o 00 1 On a tfvu-L fi iSvL Win G I3QQ 1103- \OJh JlVf +t r£ tL Jss& 3 oJ' y, &£. / n oo o fo yf >33 i f J 4S~6 3-^>-o-o fyfo yo vo o S'o o 2 'jjLAjSJ. id ■ LLpL l&Jt XI iLLiA 3-tVJ -fJ ' 3 1 LjjLL, U y-? t vi 3 St b-l V fo W- 3~-o-o--v ty.r<> UZg, ua yo o o IriS it! Vtt, i Yi »' LL££± 3 Qj'/ H I 7 6 '4- 3yro -yiSjj. yo op fJ Vnll+ YX SJ Y3 if A-tfL A3 VTFTa U gan, dated Jan. 3.. due in two months, #325. Proceeds included on his deposit ticket, #324.75, dis- count 25c. For H. Jennings, note his favor, signed by S. Smith, dated Feb. 12, due in 30 days, #800. Proceeds cash #793.47, discount #6.53. For Lee & Avery, note their favor, signed by Austin & Smith, Vinton, dated Feb. 5, due in 30 days, #750, Proceeds cash #748.27, dis- count 73c, expense of collecting #1. (Credit Collection.) Forwarded to First N. B., Vinton, to collect for us. Received for collection: For James Sumner, note signed by D. A. Minot, indorsed by James Dougall, dated Feb. 3, due in one month, #265. For H. Heald, note signed by R. H. Stacey, indorsed by M. Powers, dated Feb. 3, due in one month, #500. For J. Graves, his draft at 4 days, dated Mar. 4, on Stacey & Stevens, Chicago, #400. For J. Ryan, his sight draft on Lane & Co., Cedar Falls, #275. [Forwarded this draft to the Com. B., of Cedar Falls, to collect for us.] For Chase & Smith, their sight draft on Ladd & Co., Chicago, for #175. [Forwarded the two Chicago drafts to the Third N. B., Chicago, for collection and returns.] The following checks on local banks have been received as cash, less collection charges, and we have forvvarded them to the banks named, for collection: H. Parton's check No. 29, drawn on the Com. B., Vinton, dated Mar. 4, for #176.50, indorsed by C. Jennings, and identi- fied by C. Matter; J. C. Lee's check No. 193, drawn on the Union N. B., of Mt. Vernon, dated March 2, for #200, indorsed by J. D. Atwood. Collections deducted from these checks, #1.50. Paid cash for coal for heating office, #19. Paid bookkeeper's salary, #20. Paid cash for 20 shares ofB. C. R. stock @ 105, #2,100. Received the following deposits this day per tickets: E. C. James #229.50, James York #1 16.95, Myron Taft #228.35, Howard & Payne #119.25, C. Matter #356.50, Chase & Smith #56.50, Lee & Avery #298.75, J. D. Atwood #595, J. Ryan #200, M. Mason $137.75, Charles Jones #2 1 2.50, for which we gave our Certificate of Deposit No. 1. Paid depositors' checks per checks filed: M. Mason #32.25, #29.75, #1 3.75, #59- 2 55 J- D Atwood #129.50, #28.75, #16.75, #29.25; J. Ryan #125; Lee & Avery #228.75; C. Matter #28.75, # 10 . # 2 9-64; Howard & Payne #52.25, #66.80; E. C. James #100; Myron Taft #116.50. The cash on hand at the close of the day amounts to #13,375.13. Received the following for co'lection: For H. Turner, note dated Feb. 17, time 15 days, signed by George Strand, for #275; For J. C. Jones, his sight draft on T. C. Roberts, Clear Lake, dated to-day, #195.50. Forwarded Jones's draft to Union Bank of Clear Lake to collect for us. PRACTICAL BANKING S3 Received from 1st N. B., Toledo, their draft No. 926 on Union N. B., New York, dated Mar. 5, for $374.50, being the amount of Miner's check sent them, 4th inst., less their charges 50 cents. (Credit 1st N. B., Toledo, with $375, and debit Collection with 50 cents.) Received from Clinton Co. Bank their draft No. 291, on Fourth N. B., Chicago, dated Mar. 5, for $599.25, for Col. No. 3, less exchange, and we have this day written a certificate of de- posit favor H. C. Cusey for the proceeds, $598.50, reserving the remainder for our collection fee. Collection No. 4 paid to-day, and a certificate of deposit favor Sumner has been written for the proceeds, $264.25 . . . .Collection No. 5 paid to day, and a certificate of deposit written favor H. Heald for the proceeds, $498.75. Discount No. 3 paid to-day. . . .Sold 10 shares B. C. R. Stock for cash @ 125, $1,250. Received from Com. Bank, Vinton, their draft No. 615, on 1st N. B., Chicago, dated Mar. 5, for $176.23, being the amount of Parton's check sent them 5th inst., less their charges. Forwarded the bank drafts received to-day, to our Central City correspondent, as usua 1 Cusey, Heald and Sumner have each called and received cash for the certificates of deposit issued payable to them this day. Received the following deposits this day per tickets: J. D. Atwood $96.50, E. C. James $50.50, Lee & Avery $159.50, M. Mason $225.75, James York $96.75, J. Burgess $98.70, Howard & Payne $109.50, Howard Smith $350, for which we gave our certificate of deposit payable to Joshua French; John Talt $375, for which we gave our certificate of deposit. Paid depositors' checks per checks filed: Chase & Smith $129.50, $33.75, $44.25; E. C. James $29.75, $162.25; J. D. Atwood $29.20, $45.75, $33.88, $169.50; Lee & Avery $29.75, $46.50, $75; C. Matter $19.20, $39.85, $57.75; Charles Jones, certificate of deposit, $212.50. Cash on hand at the close of business to-day amounts to $14,757.45. 7 Received the following deposits this day per tickets: James York $169.60, Myron Taft $93.65, Chase & Smith $229.50, E. C. James $300, J. Ryan $375, H. Sanger $500, for which vve have issued our certificate of deposit in favor of R. Keyes; C. Jenks $600, for which we have issued our certificate of deposit in favor of B. Parks. Paid depositors' checks per checks filed: J. D. Atwood $250, $125; J. Ryan $500, $625; J. Burgess $315.04, $430.25; C. Matter $220, $106.31, $75; Howard & Payne $56.50, $45.95; M. Mason $150, $225, $87.90; Lee & Avery $56.1 3, $47.1 2; Chase & Smith $375. Discount No. 2 paid to-day by D. Ford $500. . . .Cash on hand at the close of business to-day amounts to $13,835. 8 Paid B. Parks to apply on his certificate of deposit $200, and issued a new certificate of deposit for the balance. Paid J. Taft in full of his certificate of deposit, $375. Collection No. 9 paid, and H. Turner's net proceeds entered as a certificate of deposit in his avor, $274, our charges for collection being $1. Received from Union Bank of Clear Lake, their draft No. 2621, on Tenth N. B., New York, dated 7th inst, for $194.80, proceeds of collection No. 10, sent them 6th inst. We have de- ducted a total collection fee of $1.00, and have written our certificate of deposit in favor of Jones for the proceeds, $194.50. Paid cash for the following sight drafts on Central City firms, which we have cashed less charges: For A. Preston, drawn on Stacey & Wentworth, $100, proceeds $9950; for A. Learner, drawn on Lee & Somers, $125, proceeds $124.37. Remitted to the Central Bank for credit, the bank draft received and the two sight drafts discounted this day, the latter being estimated at their face value. Received the following deposits this day per tickets: J. D. Atwood $100, J. Burgess $220, J. Ryan, $256.50, C. Matter $225, Howard & Payne $125, Chase & Smith $126.50. Paid depositors' checks per checks filed: J. D. Atwood $25.20, $16.35, $ r IO -55J Chase & Smith $210; Howard & Payne $105, $225; James York $227.50, $49.85; Myron Taft $12.50, $37-$o, $210; M. Mason, $49, $47.25; Lee & Avery $29.75, $48.50; E. C. James $20, $123.29. Cash on hand at the close of business to-day amounts to $12,816.89. In the illustrated forms we have given the deposit ledger for Monday, Tuesday, and Friday, leaving the student to fill out the intervening days ; we have also given the continued trial bal- ances, showing the results of the general ledger accounts for the first five days. ■ 54 HIGHER ACCOUNTING II Received of the Union N. B., Waterloo, their draft No. 1256 on the Mechanics' Bank of New York, dated 9th inst, for $238.50, the proceeds of collection No. 1. [Debit Collection for the balance.] Wrote a certificate of deposit favor Ravvley for the proceeds of above collection after deducting 75 cents from the face. The Union N. B., Waterloo, also sends us the following papers to collect for them, each bearing date of the 9th inst.: Demand draft of Jones & Co. on Carr & Smith of our city for $96.50; sight draft of Lane & Lewis on Bentley & Brown of our city, for $125; draft, atone day's sight, of Lane & Lewis on Davis & Evans of our city, for $150.25. Received a dividend from the B. C. Railway of $5 per share on 10 shares of stock now on hand. . . .Paid cash for postage and stationery, $3.75. Received from the College Bank of Iowa City, their draft No. 2917 on Merchants' National Bank, New York, dated 9th inst., for the proceeds of Harting's check sent them 4th inst., after deducting exchange 10 cents. Received cash on discount No. 1, $500, and also for interest on $500 for 3 days at 8 per cent per annum, and a new note of 30 days dated 8th inst., signed by R. C. Crawford, in- dorsed by W. M. Smith, for the remaining $500, receiving cash for the discount, (interest in ad- vance) on the new note 33 days at 8 per cent per annum. Exchanged one of our office desks for a larger one, paying $22.50 for the difference in price. Sold drafts on the Central Bank as follows: To Lee & Avery, favor Hoyt & Sherman, $125.20, receiving cash for the face and for exchange 15 cents; to J. Burgess, favor J. M. Bur- gess, $107.50, receiving cash for the face and for exchange 10 cents. Received the following deposits to-day: J. Burgess $56.50, E. C. James $119, Chase & Smith $72.25, Myron Taft $100, James York $65, Howard & Payne $100. Paid depositors' checks to-day as follows: J. Ryan $725, $37.50, $230; J. D.Atwood $29.75, $43.82; C. Matter $115, $28.50; Lee & Avery $15; M. Mason $900, $87.50. Certified checks for J. D. Atwood, No. 19 in favor of H. E. Sumner $59.50, No. 20 in favor of J. A. Bunnel $40.50. Remitted to the Central Bank for credit, all bank drafts received to-day. The cash on hand at the close of business to-day amounts to $1 1,878.27. 12 Paid cash for $12,500 of the Electric Railway Bonds at 80 cents on the dollar. Received from the First N. B., Vinton, their draft No. 121 5 on the Ninth N. B., Chicago, dated nth inst., for the proceeds of discount No. 5 after deducting 50 cts. [Debit Collection.] Received from the Union N. B., Mt. Vernon, their draft No. 1856 on the First N. B., Bos- ton, for $199.50, dated 1 ith inst., for proceeds of Lee's check sent them 5th inst. [Make a ticket, debiting J. D. Atvvood with the balance of this check, since you allowed Atwood the face value of the check.] Sold to the Electric Railway Co. for cash, three drafts on the Central Bank, as follows: Favor Ryan & Co. $2000, favor Lee & Grant $2000, favor Kennedy & Co. $2000, charging no exchange. Received from the Third N. B., Chicago, their draft No. 2917 on the Central Bank of Central City, dated I ith inst., for $574.50, being the net proceeds of collections Nos. 6 and 8. [Debit collection with the difference.] Charge for collection fee on No. 6, $1, and on No. 8, 50 cents, and credit the firms for whom these collections were made with the proceeds as deposits. Received payment of collections Nos. 11,12 and 13, and forwarded our draft on the Cen- tral Bank to the First N. B., Waterloo, for the proceeds after deducting 75 cts. Received deposits as follows, in addition to those already named: Myron Taft $51, M. Mason $175, C. Matter $200, J. Ryan $180, Electric Railway Co. $4000. Among the above deposits the following local checks on neighboring banks were received and counted as cash, less a total collection fee deducted, amounting to $2.50, which should be credited to Collection: H. Sherman's check No. 95 on Commercial Bank, Belleville, for $100, indorsed by Chase & Smith; G. Preston's check No. 39 on the Citizen's Bank, Wheatland, for PRACTICAL BANKING 55 #125, indorsed by M. Mason; R. Smith's check No. 42 on Merchants' Bank of Preston, for #80, indorsed by J. Ryan. Forwarded these checks to the banks named, for collection. Paid depositors' checks as follows: J. Burgess $250, #137; Howard & Payne #72.50, #22.25.; Lee & Avery #1 50, #57; James York #300, #27.75. Paid B. Parks for his certificate of deposit #400. Certified checks for the Electric Railway Co., No. 1 favor J. G. Crisman #300, No. 2 favor M. M. Preston #200. Paid certified checks favor H. E. Sumner #59.50, favor J. A. Bunnel #40.50, issued on the 11th inst. Forwarded all bank drafts received to-day to the Central Bank for credit as usual. The cash on hand at the close of business to-day amounts to #1 1,037.02. 13 Paid cash for 20 shares B. C. R. Stock at 1 10. .. .Sold #5000 of the Electric Railway Bonds at 95 cents on the dollar, receiving cash. Discounted notes and bills as follows: For J. Burgess, note his favor signed by Robert Payton, dated Feb. 12, due in one month, for #275; discount #2.50, proceeds paid in cash For E. C. James, his draft at 2 months from date on Martin & Moore, Chicago, dated Jan. 13, for #300; discount #1.75, proceeds deposited. For J. York, note his favor, signed by Hiram Norton, dated Mar. 1, and due in 30 days from date, for #475.50; discount #3.50, and we have given him drafts on the Central Bank favor Lane & Lewis #274.50, favor Avery & Baker #196.75, charging as exchange on the two drafts, 75 cents .Forwarded James's draft to the Fourth N. B., Chicago, to collect for us. Cashed the following local checks for C. Matter who has indorsed each, deducting a col- lection fee of #1.75, from the total amount of the checks: D. Dent's check No. 37 on the Peo- ple's Bank of Trenton for #1 17.50, E. Ford's check No. 1 19 on the Exchange Bank of Albion, for #214.25. Sent these checks to the banks named, for collection. Received from the Commercial Bank, Cedar Falls, their draft No. 2919 on the Fourth N. B., New York, dated 12th inst., for the proceeds of collection No. 7, after deducting exchange 50 cents. [Make a deposit ticket favor J. Ryan, for #273.75, and a ticket crediting Collection for the balance.] Received the following deposits in addition to those of E. C. James and J. Ryan already named: J. Burgess #129, Myron Taft #200, Lee & Avery #100, Howard & Payne #90; B. F. Curtis #225, for which we gave certificate of deposit, and R. E. Sawyer #170, for which we gave certificate of deposit. Paid depositors' checks as follows: Electric Railway Co. #29.75, #275, #50, #417.75; J. Graves #11 5, #27.50; J. Ryan #15.50, #87.75; Chase & Smith #300, #22.75. * Received the following paper for collection: Draft at 3 days' sight, dated to-day, drawn by E. C.James on Brown & Jones, of Elmira, for #275.50^0 collect for E. C. James, which we have forwarded to the First N. B., Elmira, to collect for us; note at 30 days, signed by J. D. Atwood, dated Feb. 12, for #300, payable to Rogers & Lambert and indorsed by them to the Fourth N. B., Chicago, for whom we collect. Paid cash for janitor work in bank, #3.50. Remitted to the Central Bank for credit all bank drafts received to-day. The cash on hand at the close of business to-day amounts to #12,554.02. 14 The Commercial Bank of Belleville, has returned H. Sherman's check unpaid, and we have returned the same to Chase & Smith, charging it as a paid check. The Merchants' Bank of Preston, has sent us their draft No.. 916 on the Central Bank of Central City, dated 13th inst., for the proceeds of R. Smith's check after deducting ex- change 25 cents. [Debit this to Collection.] Discounted paper as follows: For J. D. Atwood, note his favor, signed by D. Sherman, Central City, dated Jan. 14, payable 2 months after date, for #500, bearing interest at 6 per cent. Estimating interest to maturity #2.50, and discount 35 cents, we have given him credit on de- posit for the proceeds, #502.15 For C. Matter, his sight draft on Miner & Mann of^Central City, dated to-day, for #275. 25, deducting as discount #1.75, and paying him the proceeds in 56 HIGHER ACCOUNTING two bank drafts, one for $150 payable to C. E. Jenkins, one for $123 payable to R. A. Sones, the balance being kept for exchange .Fcr Myron Taft, note his favor, signed by B. O. West, dated Mar. 1, payable 60 days after date, for $600, estimating $6 discount, we have given him credit on deposit for $300, and a draft on the Central Bank for $293.50, charging exchange 50 cents. M. Stanley has paid collection No. 2 due this day, and we have deducted $2.50 for col- lection fee, selling G. Stone a draft on the Central Bank for $200, no exchange, and giving him our certificate of deposit for the balance of the proceeds. Exchanged our safe for a larger one, paying cash for the difference in price, $75. Paid the following checks: J. D. Atwood $129.50, $28.83, $56.50; James York $29,75, $14.25; Chase & Smith $15.50, $27.60, besides the debit for returned check; M. Mason $150, $29.15, $32.12; C. Matter $32.87, $15.65; Electric Railway Co. $287.50, $485, $217.25 Paid certificate of deposit favor Joshua French $350, and certificate of deposit favor H. Turner $274 Paid the check which we certified on the 12th inst, $500. Received the following deposits besides the proceeds of the two discounts named above: Chase & Smith $350, M. Mason $100, James York $87.50, A. V. Turner $250, for which we issued a certificate of deposit. Among the deposits to-day were the following bank drafts, which we have remitted to the Central Bank, together with all other bank drafts received to-day: Draft No. 3196 drawn by the Ninth N. B., Cleveland, on the Chemical N. B v Philadelphia, dated 1 ith inst., for $300, indorsed by Chase & Smith; Draft No. 299 drawn by the People's Bank of Syracuse on the First N. B., Chicago, dated 1 2th inst., for $200, indorsed by A. V. Turner. The cash on hand at the close of business to-day amounts to $10,591.05. 15 The Citizens' Bank of Wheatland, sends us their draft No. 1274 on the Third N. B., New York, dated 14th inst, for $124.50, being the proceeds of Preston's check, sent them for :ol- lection. Sold the following drafts on the Central Bank for cash: To M. Mason, favor Earl & Mar- tin, $200, exchange 25 cents; to J. D. Atwood, favor Smith & Moore, $1 15, favor Wright & Hunt, $175, exchange on the two 40 cents; to E. C. James, favor self, $125, favor C. C. Jen- nings, $300, exchange on the two 75 cents. Discounts Nos. 4 and 7 have been paid to-day. Sold 10 shares B. C. R. Stock at 130, receiving cash. Paid for bookkeeper's wages $50. Discounted the following paper for our depositors, in each case giving them credit on deposit for the proceeds: Fcr Chase & Smith, note their favor at 30 days from Mar. 1 , signed by R. E. Grant, for $300, estimating the discount $1.25; for Howard & Payne, their draft at 30 days from Mar. 11, on Starr & Seeley, of Central City, for $250, estimating the discount $1.50; for James York, note his favor, signed by A. R. Raines, dated Feb. 20, at 30 days, for $400, estimating discount $1.75. . . .Forwarded the draft on Starr & Seeley to the Central Bank to collect for us. Paid cash for railing placed on bank counter, $37.50. Sold $2,000 of the Electric Railway Bonds at 100 cents on the dollar. Cashed the following sight drafts on Central City firms: R. E. Martin's draft on Crone & Dailey for $275, C. A. Carter's drafc on Strong & Black for $225, both of these drafts being in favor of J. D. Atwood who endorsed them to us, receiving cash for the proceeds after deduct- ing a collection charge of $2.50. Forwarded all bank drafts received to-day with the two sight drafts last named, to the Central Bank for credit. Received other deposits besides those of Chase & Smith, Howard & Fayne, and James York already named, as follows: J. Burgess $75, M. Mason $122, C. Matter $1 19.50, Lee & Avery $129.50; Henry Bennett $200 for which we issued certificate of deposit, George Strand $300 for which we issued certificate of deposit. PRACTICAL BANKING 57 Paid depositors' checks as follows: J. D. Atwood, $129.17, $22.33; E - C. James, $73 .50, $22.18, $212.75; J. Ryan, $129.16, $225; J. Graves, $29.15, $102.10; Myron Taft, $113.12, $38.15, $26.23; Electric Railway Co., $519.50, $237.75, $126.19; and we have also paid cer- tificates of deposit favor R. Keyes, $500, favor J. C. Jones, $194.50. The cash on hand at the close of business today amounts to $13,542.67. The student may now make a financial statement showing (1) The total resources, using the ledger balances and the following inventories: 20 shares of B. C. R. Stock worth $112.50 per share; $5500 of Electric Railway Bonds, worth 100 per cent; Office Furniture now worth $700; Books and Stationery worth $125; we owe on Salaries $27.50, on Rent $75. (2) The total liabilities other than gains. (3) The net gain. (4) The gain distributed as follows: 5 per cent to dividends, J}£ per cent to surplus, and the remainder to undivided profits. Close the ledger in accordance with the above, entering the inventories to the respective accounts in red ink, the losses or gains also in red ink, ruling the accounts and carrying inven- tory balances below the ruling. Use the folio columns of ledger accounts for explanations. Foot the debit and credit columns of each ledger account closed. Open an account with Loss and Gain and carry to it the losses and gains from the several accounts. Having found the net gain, enter in red ink in the debit column the three divisions to which it is to be carried, and rule the account. Open accounts with Dividends, Surplus, and Undivided Profits and carry the respective divisions of the gains to these accounts. Take a trial balance. The dividend account will be charged as the dividends are paid to the respective investors. The surplus account will remain to augment the working capital. The undivided profits account will remain without change until another division of the gains and losses. Questions on Practical Banking. 1. Into what four departments is banking ordinarily divided? 2. What is understood by Deposits? Exchange? Discounts? Collections? 3. Describe the ticket system of recording entries. 4. What is the office of the teller ? the bookkeeper ? the cashier ? 5. Name eight auxiliary books used. 6. Name the three essential books. 7. Describe the depositors' balance ledger ; the cash book ; the general ledger. 8. How is discount computed on notes ? 9. How should collections be entered ? 10. How is a fund kept in the central bank, against which to draw drafts ? 1 1. How is the petty ledger used ? 12. What is meant by certification of checks? What entries are made when a check is certified ? 13. What is a certificate of deposit? 14. How often is the trial balance taken? 1 5. Describe a bank statement. 16. What must be determined with reference to all real and personal accounts in any business, before the present worth can be shown ? Corporation Accounting. The division of the capital stock of a business concern into equal shares provides a unit, the share, for the measure of the respective interests of the investors. Joint stock accounting has to do with the records of these shares. A partnership may divide its capital stock into shares and become a joint stock company. Such companies are regulated by the statutes of the states in which they are located. The capital stock of corporations conducted for pecuniary gain is divided into equal shares. These shares are owned by the stockholders, each of whom has a greater or less interest in the business, depending upon the number of shares in his possession. The records of the different transactions affecting these shares are given in this set. So far as the bookkeeping records are concerned, the corporation accounting is identical with the accounting of a joint stock company which may or may not be incorporated. Three or more persons are required to organize a corporation, the number being determined by the statutes of the state where the corporation is organized. These persons decide on the kind of business to be conducted, the amount of capital required, the amount that each binds himself to contribute, and the place of business. Their action is reported by their secretary to the proper state official, and, if all legal requirements are complied with, a charter or license is given by state authority which permits the organizers in the form of a corporate person to issue shares of stock, and in exchange for these shares receive cash or other property from the persons who are to become stockholders. A stockholder becomes such by paying or obligating himself to pay for a certain number of shares. He may pay in full or in installments as the directors of the company shall deter- mine. He may transfer his shares to another person and thus cease to be interested as an investor in the corporation. So long as he retains his stock, he is entitled to his proportionate amount of the profits in dividends, and subject to his proportionate amount of assessments, should there be any against the stock. The entries pertaining to the purchase, transfer, payment by installment, issuance and retirement of stock, in their relation to the individual stockholders are kept in a special set of books, separate from the general books of the business. From the stock books the aggregates that concern the general business are carried to the general books. The Books Used. The Minute Book, kept by the secretary, records all meetings of the board of directors and the stockholders. It furnishes official memoranda of all proceedings, while some of the proceedings may also require book entries. The Stock Journal. This important book contains consecutive entries of all transactions pertaining to the stockholders as such. A corporate existence is expected to extend over many years. Transfers of stock and payments on stock may be numerous, and frequently the -58- CORPORATION ACCOUNTING 59 relations of stockholders become involved. A clear, consecutive journal record is the best form of reference to settle possible differences among stockholders. The journal is ruled in four columns, two for the debits and credits passing to the stock ledger, and two for the debits and credits derived therefrom that are carried to the general books. The Stock Ledger contains a page account with each stockholder, ruled in such a way as to show the number of shares held by each, the amount paid on these shares, the transfers, etc. It is conveniently ruled as shown in the form on page 9. The Installment Certificate Book. When stock is to be paid in installments, each payment on stock is receipted for. The special form of receipt is called Installment Certificate or Installment Scrip. The installment blanks are kept in a book with stubs. Entries from these stubs are journalized and posted to the stock ledger. When installment certificates are issued to the paid up or par value of the stock, the holder returns them and receives in exchange certificates of stock. The Stock Certificate Book. This book is similar in form to the installment certifi- cate book; certificates of stock are issued to those who have made full payment for their shares. Journal entries are made from the stub of this book and from thence are posted to the stock ledger. The Transfer Book contains blank assignment forms to be filled by stockholders who desire to transfer their stock to other persons. Thus, the secretary is given authority to cancel certain certificates and issue other certificates to other persons. Another method of transferring stock, now commonly used, is to make an assignment on the back of the certificate, a blank form for this purpose being printed on the certificate. Other Forms Used. Articles of Incorporation. The proposed incorporators draw up articles of incorpora- tion, very much like the constitution of a society, giving the name, object, amount of capital, officers and method of management, and such restrictions and limitations as they desire. These articles are recorded in their own county, and also in the capital of their state, after which a charter, or authority to transact business is issued by the state department. Certain kinds of corporations require a charter to be granted by special act of the legislature of the state. The Subscription List is the agreement between the original incorporators signed by each. It binds them to take and pay for the number of shares there agreed upon. If any subscriber fails to fulfill his agreement, this form may be made the basis of a legal action to compel him to do so. See form on page 5. Installment Lists. These are made out from the stock ledger as installments are called in by the directors. Columns are provided for the subscriber, number of shares, amount of in- stallment, when paid, etc. See form on page 9. Care of Papers. In the organization and management of a corporation, certain forms, such as the subscrip- tion list, installment lists, dividend lists, etc., may be made on loose sheets of paper. Many prefer to make them in this way, as it is difficult to find blank forms exactly suited to every case. When loose sheets are used, they should be pasted carefully in the minute book, so that they may not be mislaid. Practice in Joint Stock Entries for Corporations. A number of persons desiring to form a corporation for the purpose of manufacturing and selling watches, hold a preliminary meeting and decide to incorporate with a capital of $400,000. A stock subscription list is opened and signed by persons as shown below. They agree thereby to take the number of shares set opposite their names. The minutes of the secretary for the first meeting, the subscription list, the minutes of the second meeting and the articles of incorporation should be copied by the student. 60 HIGHER ACCOUNTING Subscription List. Cedar Rapids, Iowa, Feb. 15, igoo. We, the undersigned, hereby subscribe for the number of shares set opposite our names in the Union Watch Company, a corporation organized under the laws of the State of Iowa, with an authorized capital of Four Hundred Thousand Dollars ($4.00,000), divided into four thousand (4.000) shares of One Hunderd Dollars ($100) each; and agree to pay the calls made on such stock as they may be made by the Directors of the Company, Number of Shares. One thousand. Five hundred. Five hundred. One hundred. One hundred. One hundred . Four Jiundred Amount Tivo hundred and fifty Fifty Eighty Five. $100,000 50,000 50,000 10,000 10.000 10,000 40,000 25,000 5,000 8,000 500 $308,500 Name 2*-^^>£^ C^^r^^^^^z^^— > astM^ /o^-tx^i^ I J sJjL^H^W 6 Residence Cedar Rapids, Iowa. (< «< H tt << «« «< « « Marion, Iowa. U ft Iowa City, Iowa. New York City, N. Y Chicago, III. Dubuque, Iowa. Des Moines, Iowa. The certification of this stock agreement by a notary public is given on page 61. CORPORATION ACCOUNTING 61 Before me, a Notary Public in and for the County of Linn, State of Iowa, personally came A. H. Norton, C A. Hawley, Joseph Davis, Mrs. D. M. Johnston, C. C. Sweeney, James Fitz- patrick, Duncan McGregor, T. B. Summers, John J. Gill, James Drummond, and Daniel Bennett, the persons whose names are hereunto recorded, and who in my personal presence voluntarily signed the same, as subscribers for stock in the Union Watch Company, to the amounts set opposite their names in the foregoing Stock Subscription Agreement. In witness whereof, I have hereunto set my name and the official seal of my office, at the City of Cedar Rapids, County of Linn, State of Ioiva, this fifteenth day of February, ipoo. [seal] Notary Public. Minutes of the First Meeting. Cedar Rapids, Iowa, Feb. 15, 1900. Upon the above date the proposed incorporators of the Union Watch Company held a meeting at the office of A. H. Norton, in the city of Cedar Rapids, Iowa, for the purpose of attaching their signatures to a Stock Subscription List, and for the purpose of taking steps for the permanent and legal organization of the company. There were present A. H. Norton, Joseph Davis, C. A. Hawley, C. C. Sweeney, James Fitzpatrick, Duncan McGregor, John J. Gill, and A. Student. A. H. Norton was elected chairman, and A. Student, secretary. The chairman then an- nounced that promises had been secured for subscription of the stock of the proposed corpora- tion and he suggested that before proceeding further, the incorporators present attach their signatures to the stock subscription list, and that the same be duly certified to, and made a part of the company records. The suggestion was complied with, and subscriptions of stock to the amount of Three hundred eight thousand five hundred dollars (#308,500), were duly signed and certified. Moved by Mr. McGregor that a committee of three incorporators be appointed by the chairman to prepare articles of incorporation, said committee to make its report at a meeting to be subsequently called by the chairman. The motion was carried and the following gentle- men were appointed by the chairman to serve on such committee: Duncan McGregor, C. A. Hawley, and James Fitzpatrick. After further informal discussion of the prospects and affairs of the proposed company, the meeting was adjourned subject to the call of the chairman. Approved Feb. 1 8, 1 900. A. H. Norton, President. A. Student, Secretary. Minutes of the Second Meeting. Cedar Rapids, Iowa, Feb. 18, 1900. Upon call of A. H. Norton, Chairman, the proposed incorporators of the Union Watch Company, held a meeting at the office of A. H. Norton to consider the report of the committee on incorporation appointed at last meeting. The minutes of the previous meeting were read and approved. Mr. McGregor, chairman of the committee, read the articles of incorporation and moved their adoption. C. A. Hawley seconded the motion. After discussion, the Articles of Incorpora- tion hereafter written were unanimously adopted. On motion of James Fitzpatrick, seconded by C. C. Sweeney, the secretary was directed to see that the Articles of Incorporation be duly recorded by the county recorder and secretary of state and that notice of same be published as provided by law. Motion carried. Meeting adjourned subject to call of the president. A, Student, Secretary. [To be approved at the third meeting.] 62 HIGHER ACCOUNTING Articles of Incorporation of the Union Watch Company, of Cedar Rapids, Iowa. We, the undersigned, desiring to form ourselves into a body corporate under the laws of the state of Iowa, do, for this purpose adopt for our organization, and as a basis for said in- corporation, the following Articles of Incorporation: — Article I. The name of this corporation shall be The Union Watch Company and its principal place of business shall be Cedar Rapids, in the county of Linn, state of Iowa. Article II. The purpose for which this corporation is formed is the manufacture and sale of watches, assembled and in parts, also jewelry and material of similar construction, both wholesale and retail, also the acquisition of lands, buildings, machinery, and such other property as may be necessary for carrying on the said business, and to do such other acts as are necessary for the management of said business. Article III. The amount of the capital stock of said corporation shall be Four Hundred Thousand Dol- lars (#400,000) to be divided into four thousand (4000) shares of One Hundred Dollars ($100) each, the same to be issued only when paid for in cash or its equivalent. Article IV. This corporation shall be deemed in legal existence and its officers qualified to do business in its name from and after the filing of these Articles of Incorporation, in the office of the Sec- retary of State for the state of Iowa, due notice of the same having been received by the corpora- tion secretary and shall continue in existence thereafter for the period of twenty-five years un- less sooner legally dissolved. Article V. The officers of this corporation shall comprise a President, a Vice-President, a Secretary, a Treasurer, a board of five Directors, two of whom shall be the President and Secretary of the corporation, who shall serve as President and Secretary of the Board of Directors, respectively. These officers shall be chosen at the regular annual meeting of the corporation and their terms of office shall continue until their successors have been chosen and qualified. The duties of said officers shall be such as may be prescribed by the by-laws of the cor- poration, to be hereafter adopted by said board of directors, as hereafter provided for. Article VI. The affairs of this corporation, in so far as they are not regulated by these articles of in- corporation or by majority vote of the incorporators at any legal meeting, shall be under con- trol of the board of directors, who shall hold meetings, adopt by-laws, and take such action relative to the affairs of the company, as may seem to them advisable. Article VII. The regular annual meetings of this corporation shall occur on the second Tuesday in January of each year, at such place and hour as may from time to time be designated by the board of directors. Until the occurrence of the first annual meeting on the second Tuesday of January, 1901, the following persons are hereby elected to serve in the offices designated: — President — A. H. Norton. Vice-President — Duncan McGregor. Secretary — A. Student. Treasurer — Joseph Davis. Directors — A. H. Norton, T. B. Summers, Joseph Davis, Duncan McGregor, A. Student. CORPORATION ACCOUNTING 63 Article VIII. The greatest amount of indebtedness for which this corporation shall make itself liable, shall not at any time exceed two-thirds of the capital stock. Article IX, These articles of incorporation may be amended at any regular meeting or at any meeting called for that purpose, by a two-thirds majority of all stock voted. Witness our hands this 18th day of February, 1900. A. H. Norton, C. A Hawley, James Fitzpatrick, T. B. Summers, STATE OF_ County of Iowa Linn ss. Joseph Davis, Mrs. D. M. Johnston, John J. Gill, Daniel Bennett, On this 18 d av f C. C. Sweeney, Duncan McGregor, James Drummond. February, 19 00 before me, a Notary Public [ n an( j f or sa i(j County personally appeared -4. H. Norton, C. A. Hawley, James Fitzpatrick, T. B. Summers, Joseph Davis, Mrs. D. M. Johnston, John J. Gill, Daniel Bennett, C. C. Sweeney, Duncan McGregor, and James Drummond. known to me to be the persons named in and who executed the foregoing instrument, and severally acknowledge that they executed the same freely and voluntarily, and for the intents and purposes therein contained and mentioned. \ SEAL Y John J. Garton Notary Public. The above forms are representative of the secretary's records. In the following work, attention will be directed, principally, to the entries involved in the issuance, transfer and sale of stock, dividends, assessments, etc. March 1, 1900. By referring to subscription list, it will be found that of the authorized capital stock of #400,000, there has been subscribed #308,500, leaving #91,500 not definitely placed. An account should be opened with Unsubscribed Stock to be charged with the amount not placed, and credited as other subscriptions are received. Three general ledger accounts will be in- volved in the opening entry. Stock Journal Entry. Date £b/. /7/r Stbc/r Ledger Cn fir Crpn'/Lecfqer Cr. / 700 / C^^^i^L^^^^^^^t^^^^ 0*fS*0 <^W^^Cs£^^^ f/J~00 <^^^^ 77s3 + * /lx jbta.tr at ion J? e bits Cr eetcts ^dosLa-nca-S jja.Lt, „/»-o. Shares /f m outr't /Yo. ■Sha^ei A trt o urft: A>o. A trt e u 1-ftT / -< \* ftoo ^ '000 >> 1 1 The above stock ledger account credits A. H. Norton with 1000 shares of stock on which nothing has been paid. As payments are made, the amount actually paid in should show in the balance column. As each subsequent entry is made, the number of shares should be brought down showing at a glance the number of shares held and their paid up value. March 5, 1900. The board of directors of the Union Watch Co. order a first installment of 25 per cent of the subscription paid in. Prepare installment list No. 1 as shown below, with exception of payment column which is to be filled in when payments are made. ^g ,^ ^^ / &£3& jja.it ofCa.U Subscrijbtiotr sVo of Sh a-rei lf75ta.il/7tt, Interesi /rm't. Pa.icL J? en? arks. ,r ^Z^y^i^z^f-^^^^-^?^ /too Xfff 00 Xie J ft lyfot 1 > ' S~o lyftc ■ \ / j yfe t (S-<£>. ^£t*A-f j? ^r> J vy 100 yfoe rs'e* fyuuLA/ J^_ / fo O Cf s7l<>^* ^S-^J^f^f^J^y /// >fd c #00 ht 00 / yji^^-^/foe J* ivfj \y{o /f. 3a£ J 'feJL&AJ^z) ft 7000 f /v/ i ?f 77 ivf I . CORPORATION ACCOUNTING 65 The installments of A. H. Norton, Duncan McGregor and C. C. Sweeney are paid in cash. Mark the payments in installment list and issue installment script or certificates to each as shown in model below. Installment Certificate. INSTALLMENT CERTIFICATE 1 No.../. I e Installment No.../. ♦ ° Per Cent J.^C...... | • No. ofShara/jZ.f.J?- « (0 Amount. t^.^J?. '/?.y> <^^^<^^-^^^-^ 3-.-r*y„ 2 \jf~~* tr . ^ r «2^C3£ 2^f~s-'¥'. / /> . &^*-*f. /. .? . U. -^k^^. The student need not post the entries to the general ledger, as they do not now concern the work before us. Post the credits to stock ledger accounts. The first payment, A. H. Nor- ton, is posted to his stock account as per second entry in form below: — Stock Ledger Account. r^J^?^ T)~+* EIxfrLancitL on. Debits Cr~e etc tS 3a,L*-nce$ Mute SnZ'res Amount: ShO'Vi Amount Amou fit /?0 - / W*6 +- •* '0 a a & ** 7jT# 'f?6 'XJl? 66 HIGHER ACCOUNTING March 7, 1900. C. A. Hawley, Joseph Davis, James Fitzpatrick and Daniel Bennett each pays cash for his first installment, receiving certificates Nos. 4, 5,6, and 7 in the order given. Mark date of payment on installment list, journalize, and post to stock ledger. The directors decide to require 6 per cent interest added to the amount of all the first in- stallments paid after March 10. March 27, 1900. John J. Gill and James Drummond each pay their first installments with interest from March 10 to March 27 at 6 per cent, receiving certificates Nos. 8 and 9. T. B. Summers pays #3000 of his assessment, agreeing to pay the remainder next week, receiving certificate No. 10. The interest credited will not be entered in the certificate of installment. T. B. Summers' inter- est will not be computed until he pays the remainder of his installment. Entries as below. Stock Journal E.ntry. March 30, 1900. The remaining two subscribers have paid the first installment in full together with interest on deferred payment from March 10, at 6 per cent, Summers receiving certificate No. 11 and Mrs. Johnston receiving certificate No. 1 2. In computing interest on Summers's deferred payments, estimate interest on $6250 from March 10 to March 27, and on $3250 from March 27 to March 30. April 4, 1900. Of the unsubscribed stock, J. B. Caldwell has subscribed for 300 shares and C. S. Benning ton for 50 shares, each paying the first installment of 25 per cent with interest on same at 6 pe cent from March 10. Their subscriptions are subject to subsequent calls for installments the same as other shares. Caldwell receives certificate No. 13 and Bennington No. 14. This transaction requires entry in installment list No. 1, and in stock journal. Subscriptions should be charged and Unsubscribed Stock credited with face of stock; afterward, charge Cash and credit Subscriptions and Interest. March 1. 1901. The board of directors called a second installment of 10 per cent of all stock subscribed. Make out installment list No. 2. Interest at 6 per cent per annum is ordered collected on all payments made after March 5, interest dating from March 1. In computing interest, count exact days. Cash is received in full of second installments from Joseph Davis, A. H. Norton, James Fitzpatrick, T. B. Summers, and C. S. Bennington, and certificates Nos. 15, 16, 17, 18, and 19 are issued in the order given. Mark date of payment on installment list, journalize, and enter in stock ledger. CORPORATION ACCOUNTING 67 March 3, 1901. C. A. Hawley, Daniel Bennett, and J. B. Caldwell pay their second installment in cash, receiving certificates Nos. 20, 21, and 22. John J. Gill pays one-half of his second installment, receiving certificate No. 23, and James Drummond pays $500 to apply on his second install- ment, receiving certificate No. 24. Enter carefully in installment list, as it is from this list that partial payments are to be collected. Journalize and post to stock ledger. March 15, 1901. Mrs. D. M. Johnston and C. C. Sweeney pay their second installment with 6 per cent from March 1, receiving certificates Nos. 25 and 26. April 4, 1901. Duncan McGregor pays his full installment and John J. Gill and James Drummond pay the balance of their installments with interest at 6 per cent from March 1, receiving certificates Nos. 27, 28, and 29. August 1, 1901. James Fitzpatrick has transferred his installment certificates to Duncan McGregor, who assumes payment of future calls. All transfers of installments or stock certificates should be made "on the books of the com- pany;" i. e.: a provision in the certificate should require the stockholder who transfers stock to sur- render his certificates with assignment directing the secretary to reissue certificates to transferee. Assuming that James Fitzpatrick's certificates Nos. 6 and 17 have been surrendered and can- celled, they should be attached to the original stubs, and a new certificate, No. 30, should be issued to Duncan McGregor. The journal entry for this transaction does not pass to the general books. The debit, when posted, will close James Fitzpatrick's account on the stock ledger, and the credit, when posted, will show Duncan McGregor in possession of 500 shares, with a credit balance of $17,500. Stock Journal E,ntry. J2t c^ar l^^J / A \^tdL*^u>. / dL£j£ * c^2^-j^^z^y2^^^^^^/^^ d J^a . ?Z^ 4 V V '9z*. ^a. August 15, 1901. C. S. Bennington transfers ten shares of his partly paid stock to Duncan McGregor. C. S. Bennington must surrender his certificate calling for fifty shares and have two new certificates showing 35 per cent paid; certificate No. 31 for ten shares to Duncan McGregor, and No. 32 for forty shares to himself. In making the journal entry, post ten shares to debit of Bennington and credit of McGregor. Refer to the certificate numbers of the entire transaction. September 15, 1901. Duncan McGregor purchases the entire eighty shares of James Drummond, the transfer being made in regular form on the books. McGregor receives certificate No. 33. March 1, 1902. The remaining 65 per cent of subscription is called in. Make out installment list No. 3 from the stock ledger. A. H. Norton hands a check in payment of his final installment, $65,000. Upon a surrender of the installment certificates previously issued, which are cancelled and attached to the original stubs, a certificate of stock No. 1 is made out, as shown on following page. 68 HIGHER ACCOUNTING Certificate No . / For Share*. ISSUEO TO FROM WMO*» TRANSFERRED Dated . Si H Received Certificate NoA. for^4^&f^i^»f^hares £2^9^<7Z^-^cC*-7tJ Certificate of Stock. THE UNION WATCH COMPANY STATE OF IOWA CAPITAL STOCK $400,000 this Certifies That ^^^^^*-^(^€><^>^L is the owner "t &&^^2&L-t>--e>c^--ez^^-e^ Shares of the Capital Stock of THE UNION WATCH COMPANY hilly paid transferable only on the Books of the Corporation, by him or his attorney, upon sur- render of this Certificate In Witness Whereof the officers of this Corporation have hereunto subscribed their names and caused the corporate Seal to be hereto affixed at cedarkapids,iowx thii^=4=^^rteY of ^^eSL^C^t^^^L \go-2. Enter iiTstock journal the payment of the last installment referring to the installment certificate numbers and the number of the stock certificate. This installment when posted to the ledger will show A. H. Norton's account credited with iooo shares on which $ 100,000, or par value, has been paid. March 2, 1902. C. A. Hawley, Mrs. D. M. Johnston, C. C. Sweeney, Duncan McGregor, and Daniel Ben- nett each pay their last installment in cash and receive certificates of stock Nos. 2, 3, 4, 5, and 6 in the order given. June 2, 1902. Joseph Davis, T. B. Summers, and J. B. Caldwell pay their third installment with interest at 6 per cent from March 1, receiving certificates of stock Nos. 7, 8, and 9, in the order given. June 23, 1902. John J. Gill and C. S. Bennington are unable to make any further payments on stock ac- count. John J. Gill returns his installment certificates as forfeited and the company pays him cash for the amount to his credit on stock account. (Charge Unsubscribed Stock, credit Cash.) C. S. Bennington takes paid up shares at par for the amount to his credit on installments, re- ceiving stock certificate No. 10, and the balance of his stock is returned to the Unsubscribed Stock account. In order to show the relation of the general books to the stock books, the student may use the last page of his blank for a general ledger, opening accounts with Capital Stock (9 lines), Subscription (17 lines), and Unsubscribed Stock (6 lines). Post from the general columns to these accounts. Having posted, the Subscription account should be in balance, showing that all subscrip- tions have been paid. The Unsubscribed Stock account shows a number of shares unsold. De- ducting the number of shares unsold from the credit to Capital Stock, the difference should equal the list of credits to stockholders found in stock ledger. Take a list of credit balances in the stock ledger and compare the total with this amount. August 1, 1902. The corporation purchases of W. C. Estes real estate at a valuation of $76,400. Mr. Estes takes in payment all unsubscribed stock at no and cash for the remainder. Stock certificate No. 1 1 is issued. Debit Real Estate; credit Unsubscribed Stock, Loss and Gain, and Cash. Open an account with W. C. Estes in the stock ledger. March 1, 1903. The general books show an undivided profit of over $40,000. It is decided to pay a dividend of 10 percent on all stock. Make a dividend list from the stockholders' accounts, as shown in the stock ledger. This can be ruled on a sheet of paper as per form on page 69. CORPORATION ACCOUNTING 69 Dividend No. 1 of 10 Per Cent Declared March 1, 1903. Name; of Stockholders No. OF Shares Amount of Dividend Date of Payment Signature A. H. Norton, .... C. A. Hawley, .... IOOO 500 IOOOO 5000 Mar. 2 ^^^^^^^-^ If a dividend book is not kept, the dividend list is usually pasted in the minute book. The memorandum entry only is required in the stock journal, as the payments do not affect the stockholders' accounts. Entries for the cash dividends are made in the general books. March 1, 1905. The profits of the concern, which have been undivided since last dividend, now amount to over #400,000. The board of directors have previously obtained authority to increase the capital stock to #1,000,000. They vote to issue stock dividends to each of the stockholders for an amount equal to his present stock holdings; #200,000 of the new stock is to be held for sale. This issue of #200,000 is to be preferred stock on which is guaranteed an annual cumulative dividend of 8 per cent. Any profits in addition to the 8 per cent on preferred stock are to be distributed in stock dividends to the present stockholders, whose shares will be termed "common stock" in distinction from the preferred stock just provided for. Certificates of common stock are issued to the stockholders for stock dividends, as follows: A. H. Norton No. 12, C. A. Hawley No. 13, Joseph Davis No. 14, Mrs. D. M. Johnston No. 15, C. C. Sweeny No. 16, Duncan McGregor No. 17, Daniel Bennett No. 18, T. B. Summers No. 19, J. B. Caldwell No. 20, C. S. Bennington No. 21, and W. C. Estes No. 22. Debit Loss and Gain and Unsubscribed Stock Preferred. The general ledger title, Capital Stock, should be changed to "Capital Stock, Common," and a new account opened with "Capital Stock, Preferred" on the fifth line below. Post to stock ledger. Many business corporations, in order to attract capital to conduct their business, issue pre- ferred stock. This stock is subject to special contract which gives the holder a preference over other stockholders. Usually provision is made that the preferred stockholder shall receive a certain per cent dividend annually whether the holder of common stock receives any dividend or not. Frequently provision is made for a Cumulative Dividend, or a dividend pay- ment to include all payments that have been passed on account of no profits earned at previous dividend days. When the specified dividends are paid to the holders of preferred stock, the remaining profits are paid to the holders of common stock. The dividends on the common stock may be greater or less than on the preferred stock. February 1, 1906. The following stockholders transfer their certificates to Duncan McGregor: T. B. Sum- mers, certificates Nos. 8 and 19; Daniel Bennett, certificates Nos. 6 and 18; and J. B. Caldwell, certificates Nos. 9 and 20. McGregor receives certificate of common stock No. 23 in place ot the six certificates that are surrendered. W. C. Estes surrenders certificates Nos. 11 and 22, transferring one thousand shares of his common stock to A. H. Norton who receives certificate No. 24, and taking new certificate No. 25 for the balance. March 1, 1906. The preferred unsubscribed stock is sold today at 103 to the following persons for cash: — A. H. Norton 1000 shares — Preferred certificate No. I. David Fackler 100 shares — Preferred certificate No. 2. M. Harrington 50 shares — Preferred certificate No. 3. The premium in above sales is credited to Loss and Gain. A separate stock ledger should be provided for preferred stock. In this practice set, pages 22 and 23 of the stock ledger should be used for preferred stockholders. 70 HIGHER ACCOUNTING Certificate of Preferred Stock. S t a t eof.owa. UNION WATCH COMPANY Certificate No.X CAPITAL STOCK $1 ,000,000. Preferred Issue of March 1 , 1 905, $200,000. THIS CERTIFIES that A - H - Norton is the owner of 0ne Thousand Shares of preferred stock of the Union Watch Company of the par value of One Hundred Dollars per share, fully paid and non- assessable, transferable only on the books of the company, in person or by attorney in fact on surrender of this certificate properly endorsed. An accumulated dividend of eight per cent from date of this certificate payable annually on the first of March on preferred stock of this corporation, shall be paid from its net earnings before any dividend shall be declared or paid on the common stock, and in case of non-payment of any such dividend the portion unpaid shall be a charge against the earnings of said company which shall be paid prior to any dividends upon the common stock. Any profits in excess of said annual eight per cent shall accrue to the common stock ac- cording to the holdings thereof. IN WITNESS WHEREOF the officers of this corporation have hereunto sub- scribed their names and caused the corporate Seal to be hereto affixed at Cedar Rapids, Iowa, this ^ day of March 1 9_^ A - Student Secretary. A - H - Norton President. January 1, 1907. The remaining shares of unsubscribed stock preferred are purchased by Duncan McGregor at 103 for cash, who receives preferred certificate No. 4. March 1, 1907. The undivided profits in treasury, amounting to $170,333.33, are to be distributed as dividends to stockholders. The preferred stock receives a dividend as per terms in the pre- ferred stock certificates, the remaining profits are distributed to the holders of common stock. Take lists of stockholders' accounts and compare the totals with the capital stock, com- mon and preferred. If correct, make out two dividend lists showing in the preferred list the time since the issue of each certificate. Questions on Corporation Accounting. 1. What is meant by shares of stock? 2. Define joint stock accounting. 3. Name the general procedure in organizing a corporation. 4. From what authority is th2 charter, certificate, or license of a corporation received? 5. How does a stockholder become such? 6. Name the three principal books of record and account in a corporation. , 7. Describe the minute book; the stock journal; the stock ledger. 8. What is an installment certificate or installment scrip? 9. What is a stock certificate? 10. Mention the general differences between preferred and common stock. 11. How is stock transferred from one holder to another? 12. What are the articles of incorporation? 13. What is a subscription list? installment list? dividend list? assessment list? 14. How can subscribers be compelled to pay their installments? 15. Where are articles of incorporation recorded? 16. How are general ledger accounts posted from the stock journal? 17. How are stock ledger entries posted from the stock journal? 18. How is the posting to the stock ledger verified? 19. Does a dividend payment involve a stock ledger, or a general ledger entry? 20. Explain the following general ledger accounts: Capital Stock, Subscription, Unsub- scribed Stock. Factory Accounting, Departments— Voucher System— Cost Accounting, This manufacturing set of books is so arranged as to give to the proprietor or superinten- dent a daily statement of the business, derived from vouchers originating in the Office and in three departments; viz.: Factory, Sales, and Collections. The aggregates of the general accounts, showing the progress of the business, are posted daily to a balance ledger. i. Office. All general accounts not originating in any department and all open pur- chase accounts. 2. Factory. One general account is drawn from this department — Unfinished Stock. A voucher register in this department distributes the various charges for material, labor, fuel, transportation, etc. All of these items, as well as the credit for the finished product, are car- ried to the general books under this title. 3. Sales Department. Three general ledger accounts are drawn from this depart- ment: — Merchandise, debited with the cost of product from the factory, and credited with sales at cost prices. The balance of the merchandise account shows the factory cost of the merchandise at any given date. Cost of Sales, including advertising, traveling expenses, postage and stationery, salaries and other items appearing on the voucher register of this department as necessary expenses of selling. Profit of Sales, representing the excess of selling price over factory cost of all items sold. 4. Collection Department. Five accounts originate from this department: Ac- counts Receivable, Bills Receivable, Cost of Collection, Losses of Collection, Interest of Collection. The rulings of the books are such as to make a perpetual showing of the information de- sired. The General Ledger. It is planned to have the general ledger contain the following accounts which are to be posted and balances extended for comparison daily. Capital Stock } Subscription > Pertaining to the ownership of interest in the business. Unsubscribed Stock I Real Estate ^ Machinery >Kept as separate ledger accounts to be adjusted to actual value monthly. Tools J Unfinished Stock, representing actual cost of material, fuel, labor, and all other elements of manufacture not yet converted into finished product. Merchandise, representing factory cost of all products of the factory unsold. Accounts Receivable, representing all open sales accounts with agents or others. Bills Receivable, representing the notes received in settlement of agents' accounts or from the direct sale of merchandise. Vouchers Payable, representing all accounts regularly entered, for which checks are to be issued according to terms. 71- 72 HIGHER ACCOUNTING Cash, showing daily cash balances. • Cost of Sales, representing all outlays from sales department such as advertising, salaries of salesmen, traveling expenses incurred in the sale of merchandise. Profit of Sales, representing the excess of net selling price over factory cost of goods sold (computed daily). Cost of Collection, representing outlays, such as postage, traveling expenses, attorney fees, bank collection charges, etc., incurred in collecting accounts receivable and notes of the company. Loss of Collection, representing claims uncollectible in full or in part and charged oft as worthless. Interest of Collections, representing interest on accounts and bills receivable. Depreciation, charged with estimated wear and tear and other loss in value of machinery, tools, and buildings. Office Supervision, salaries of general office force. General Expenses, expenses not pertaining exclusively to any department. Personal Accounts. Four accounts current with firms from whom material is pur- chased are to be kept in the ledger. They are, Fiske & Jones, Western Paint Co., Union Iron Co., and Kent Lumber Co. Accounts are also kept with the traveling representa- tives. The department voucher registers are so arranged as to make an entry of every transac- tion occuring in the given department. This record is transferred to a voucher from which charges or credits affecting the above named general accounts will be made in the general office. The General Journal. The General Journal contains a daily record of all transactions drawn from the department vouchers. It also contains such entries as record transactions originating in the office. Special columns are used for such general accounts as will have repeated entries in a day's work. It is balanced each day and posted to the ledger. The daily exhibit of the condition of the business is to be especially noted in this set. The Voucher. A voucher is a written form made for the purpose of verifying any transaction or fact of the business. In a large business where different departments are carrying on their different business activities, a voucher for every essential transaction in a given department, signed by the person responsible in that department, should be sent to the central office. These vouchers may concern journal records called Record Vouchers, or they may call for cash payments called Vouchers Payable. All vouchers are recorded in the voucher register of the department where they originate. They are then passed to the central office. It is essential that every cash payment made should be properly receipted. The* voucher itemizes the matter referred to, giving the proper disposition. If payment is required, the office will issue a check, which, accompanied by the voucher, is handed or mailed to the firm to be paid the amount of the bill. The office requests the payee to receipt the voucher, if correct, and return it to the office. As there are occasions when the payee fails to return the receipted voucher, this contingency may be guarded against by having the check printed on the voucher sheet, thus requiring its proper receipt when the check is taken to the bank. This form is called a Voucher Check. The check that pays a given voucher is not issued in the department from which the entry originates, but is left to be issued or not as decided upon in the office. The record vouchers after the entries are made, the vouchers payable after receipt and re- turn by the payee, and the voucher checks after the bank returns them with the monthly state- ment, are filed numerically in boxes, each department separately. Thus the voucher for any past transaction can be produced promptly by number whenever any entry is questioned. The detailed records for the handling of vouchers is one of the features of this set and should be observed closely by the student as the work progresses. FACTORY ACCOUNTING 73 Monday, Apr. 1, 190— • A stock company has been incorporated under the name of The Brown- Sherman Wagon Com- pany with a capital stock of $100,000 divided into shares of $100 each. Subscriptions have been received for $80,000 of the stock, while $20,000 is to be charged to Un- subscribed Stock. In the absence of a stock journal, an entry is re- quired in the general jour- nal debiting Subscription and Unsubscribed Stock accounts and crediting Capital Stock. The following persons have signed the sub- scription list for the number of shares set op- posite their names: Henry Brown, 350 Shares; Roger Sherman, 200 Shares; Martin Townsend, 100 Shares; Cyrus Adams, 50 Shares; John Carter, 50 Shares; Peter Foster, 50 Shares. A subscription list would be made like the one il- lustrated on page 60. En- tries would be made later in the stock ledger. In writing this set the stu- dent may omit the entries of stockholders' accounts, making only the entries that pertain to the general books. The first day's work being very brief, do not post until the close of the second day. 74 HIGHER ACCOUNTING Tuesday, April 2, 190 — Bought of Brown & Sherman, receiving bill of sale, their entire manufacturing plant and material, finished stock, and other resources and liabilities as per the following statement: — RESOURCES. The real property, including grounds and buildings #22,000 Machinery 1 1 ,500 Tools 1,500 Lumber, Iron, and other material for manufacture of vehicles, per inventory 1 2,000 Finished Vehicles ready for sale, at factory cost, per schedule 10,000 Bills Receivable, per schedule 5,000 Accounts Receivable, per schedule 4,599.84 #66,599.84 LIABILITIES. Four balances of account which are to be kept in the general ledger: — Kent Lumber Co., Bentonville #2,810.70 Union Iron Co., Iron City 2,749.34 Western Paint Co., Chicago 775-55 Fisk & Jones, Boston 264.25 #6,599.84 Form of a Record Voucher. £^--<&^ t ~r "yTsfryr/ Factory Voucher N« / Brown-Sherman Wagon Co o«ce voucher n JOURNAL ENTRY TlVVtL DEBTOR TO 7^ roduct are so specialized that the student would gain ittle by making the estimates. The form in which they are prepared is given on page 4 of factory blank. 76 HIGHER ACCOUNTING VOUCHER REGISTER DATE ^4^ Voucher No. To Whom Payable Explanation UNFINISHED Iron Mfgd. Parts Paints, Oils. Etc. 6Z&Y %L L Cbi^t,^,^*,^/ Sa JL&. ZjM- La yvq y To 7fst ri te*ss- ~^tv-c>sy %g t v^U**^ S+Z.J 3 / \M &t2£44=&* & ^Le^fJ^^ // t&t^i^SZi ti?rf/H<4~—<- ^MtdjLzUA I ^f: &Z. H. *J~ /^^t^^a^?t^-*^t^^Tt^v>t> ^£?lstS-t&-*-rf ZXfJll J I &^f9^/ / t± ¥f * i M ^ 4 J 4^-4 LJL tlui X* 4 . LLxJu LA n rd i i 4-1 S^JL &1 yjlL *fl.f4 (2_2_ u XJl uju £ LL Il£l£ LI Ud££ s~r ment, at $4 50 per day. Frank Reynolds, foreman in paint shop, at #5.50 per day; and other workmen, numbered 32 to 40 inclusive, in same department, at $4 per day. Eight hours is considered a day's work in each department. 1 1 In reporting work, if any of the men lose time, the number of hours they work will be re- ported. Model Form of Time Book— Different Amounts. ISlsO^TSUL^/ *t W. 3d J.G& K X. 5. J*JL *<> *7 ¥f / S / 1 // /o f 1 /a // /3 If /a. v */" /..TV ^^r' ^ ^ 2 a (/ f LT^»/ ?^ d?V / ^ 4?* >T? / f*Sf >-0 K £-* '^n^aL^e^> y^< ^5-f-?^ ^ ~? /^ > -y

1/ j¥^fc^<^t^s *2fe*r <^i^u^^t^V jB-tf*. ~^Z^K^L-y // /?& jyi TTZyA^K^- / ^^-^>9T^f Oz-0L~(4sri^^-d^e^i4*^ty '/7£-4fz»--t<^t~0 ! tZ 'a*?<^*& -n*. "$/$-&a 7 / it- 'fa- IA cJ~a^t^y <££<*~^ &- When Due a^d \dtfi M £6* <24^'S/ &£*- /JT /ft- M 'Q- / 'ft- /// '/ /f£- /££. /fa- '^nZe. U> // Z-S- £ . 2- & J-aZis £ Bills Rec. Dr. / O

Interest Cr. J"Vc )JLZJi Date fyL^r-^C a^_ a^L-*-. £/l-*- Ml 77 Remarks DEBTOR TO ■9- j!-L EXPLANATION INVOICE DATE EXTENSIONS <^^£e^L *l( / *//0» HOLLARS in settlement of above account. Date Prciidenl. PLEASE DATE. SI9N AND RETURN THIS VOUCHER N EXT MAIL Collection Department. Received from sales department the sales book showing the day's net total of #1268. Enter record voucher debiting Accounts Receivable and credit- ing Sales Department. Post sales book entries to the sales ledger, entering list, discount, and net amounts in the respective columns. Enter voucher for postage, #30. Under the general heading, Cost of Collection, the three columns should have sub heads, "Salaries," "Traveling Expenses," and "Collection Charges, Postage and General." Enter voucher favor C. & N. W. Ry. Co. for #60 for mileage book for traveling collector and send to office. See that the voucher register is in balance. FACTORY ACCOUNTING 83 Office. The vouchers re- ceived from the three depart- ments will now be taken up in the order of the departments is- suing them. From the factory 3 vouchers: — No. 2, debiting Unfinished Stock; bought from Halloway & Co., #711.60, Apr. 1, 30 days. No. 3, debiting Unfinished Stock; due to C. & N. W. Ry. Co., #62.31, Apr. 1, Cash. No. 4, debiting Unfinished Stock; bought from Acme Paint Co., #392.61, Apr. 1, 60 days. Give these vouchers office numbers 4, 5 , and 6, respectively. Taking up F. V. No. 2, (Fact- ory Voucher No. 2), to which has been given O. V. No. 4, (Of- fice Voucher No. 4); note that un- finished stock has been charged, while the credit is to be officially determined. If this voucher called for immediate payment, a check could be issued at once. As it is a bill allowing 30 days time from April 1, it will be en- tered in the journal, charging "Unfinished Stock" in the spec- ial column and crediting Vouch- ers Payable. After the voucher payable is entered, the maturity date should be filed on the back. Such future due vouchers are to be placed in a clip in the order of their maturing dates, to be taken up and paid at the proper time. When payment is made, the voucher is sent with the check to be receipted by the payee, who should return it* It is then filed numerically with the other vouchers. O. V.'s Nos. 5 and 6, payable to C. & N. W. Ry. Co. and Ac- me Paint Co, should be entered as vouchers payable, then pay- ment date filed on back. 84 HIGHER ACCOUNTING From the sales department, five vouchers. Give them office numbers 7, 8, 9, 10, and 11 in the order named below: — No. 2, debiting Collection Dept. $1268 crediting Merchandise $959.41 Record Profit on Sales 308.59 ' Cost of Sales No. 3, No. 4, No. 5, No. 6, Caldwell & Co 128.30 terms cash Postmaster 50.00 " Star Newspaper Agency 190.00 " " M. K. & T. Ry. Co 180.00 " No. 2 is merely a voucher recording the proceeds of the day's sales. Credit the two titles given in the general column. Numbers 3, 4, 5, and 6 call for cash payment. Make proper entry, crediting Vouchers Payable. From Collection Department three vouchers: — No. 2, debiting Accounts Receivable; crediting Sales Department (in Dept. Bal- ances Column)... $1268.00 Record No. 3, " Cost of Collection " Postmaster - 30.00 Cash No. 4, " " " " " C. & N. W. Ry. Co.. 60.00 " Give them office voucher numbers 12, 13, and 14. Enter No. 2, charging Accounts Receivable, general column, and crediting Sales Depart- ment in Dept. Balances column. Observe that the credit in department balances column for this voucher equals the similar debit for sales voucher No. 2, and both may be checked out. All transfers of values between departments are booked as going through the office. On any given day, the department balance debits will necessarily equal the department balance credits. These columns need not be considered further if the debits and credits are equal. Enter No. 3 and 4, the vouchers to be credited, to Vouchers Payable. Having entered all vouchers in journal, the following transactions are to be carried out. Enter checks for office vouchers Nos. 5, 8, 9, 10, 11, 13, 14. (Check Register.) The voucher payable is sent with the check to the payee, who receipts and returns the voucher. The voucher is then checked on the journal to show its return to the office, where it is filed for future reference. It is not necessary to have all vouchers payable passed to the payee for receipt. The checks for postage, mileage books, freight, etc., can be paid and the vouchers retained in the office, being merely approved by the proper officer. The vouchers payable at a future date are kept at hand arranged in the order of their ma- turities, to be paid when due. Enter bank checks (no vouchers attached) favor the following firms with whom accounts current are kept in the general ledger: — Kent Lumber Co #1000. Union Iron Co 500. Balance the check register, carrying the totals to the general journal, entering the accounts to be charged. Carry special columns of general journal, except department balance columns, to general column and balance the day's work. Post to ledger, extending balances. Model Vouchers Payable Account— General Ledger. /y ^^L-^^^j^C^^-^ O^^-^^eU^. Date Explanation Credits Dr. Balances Cr. Balances -y £ 6 f 6 6± UlLJL ^V v y (JL / v i/y 7 j'0 i / / O V- 6 J> > / >-a > 7 FACTORY ACCOUNTING 85 Thursday, April 4, 190— i * C~ ' r At Office. Received in the mail, four letters containing cash remittances to be credited in the collection department. The cash should be taken from these remittance sheets and entered in a daily cash blotter. The amount and date should then be indicated on the sheets, which are passed to the collection department for credit. An entry is made in the general journal debiting cash and crediting collection department (in department balances column,). This entry need not be made until all cash receipts for the dav are entered. When the collection department makes proper disposition of the cash, a voucher will be returned, crediting the general titles affected and debiting cash. These titles will be credited *in the general journal; the corresponding debit should be checked with the total of the cash blotter. The total cash received at office and the names of remitters is given on the daily cash blotter below. As the form of this book is simple and its use easily understood, it will not be considered further here. Model Entries in Daily Cash Blotter. Factory. Received an invoice of iron and steel from Union Iron Co., amounting to $1275.75, billed on open account. (Enter voucher.) Enter voucher for freight expense bill, favor C, M. & St. P. Ry., on above, $55.75. Enter voucher for 27 Phaetons at $78.29, and 41 Top Buggies at $69.10, the cost of man- ufacture. Above vouchers are to be passed to office. Pencil footings should be made in the voucher register. Workmen's Report. No. i six hours, No. 12 seven hours, No. 19 five hours, No. 31 four hours, Nos. 9, 29. and 39 absent all day. Others have worked full time. Enter. Sales Department. Received finished Phaetons and Top Buggies from factory valued at $4946.93, factory cost. Enter voucher, debiting Merchandise and crediting the department. Shipped to Cyrus E. French, on sale at list price, 2 Spring Wagons, 2 Surreys, 3 Road Carts. Shipped S. A. Jackson, Elgin, 3 Top Buggies, 2 Surreys, 4 Road Carts. Shipped C. C. Dallman, Pine Ridge, 4 Wagons, 2 Surreys, 1 Top Buggy. Deduct 20 per cent as yesterday. Make voucher charging Collection Department and crediting Merchandise and Profit on Sales with total. Collection Department. Enter a voucher for the day's sales as shown on sales book received from sales department. Post the sales to the sales ledger. Received from office four remittance sheets or letters showing that cash was sent in by the following four remitters : — Henry Cushman, on account $ 600.20 Geo. A. Truman, " " 500.40 Geo. A. Truman, in full Note No. 8 1530.00 Emerson & Gardner, on account 495.36 Daniel Flowers, part Note No. 13 75.00 $3200.96 86 HIGHER ACCOUNTING C.Ol 1 F.CTION Cash Bills Rec. Interest From Whom Reed. 6 t^ < i Mdse., Profit of Sales, 9993.43 3372.82 V. 14 << Accts. Rec. 13366.25 < 1 Sales Dept., 13366.25 < 15 < i Cost of Colin. 270.00 < 1 Paymaster 270.00 • 16 < < ' 105.16 << Henry Cullerson 105.16 ' 17 «< t< i< < 1 54.12 1 < David Olson 84.12 F. V., 30, 31, S. V., 27, 28, andC. V., 15 are entered as vouchers payable. Enter one check in register for five vouchers payable entered today, also give check for O. V. No. 4, which will be due tomorrow. Charge Depreciation Acct. and credit Machinery and Tools accounts each with 1 per cent of ledger balance, the estimated loss in value during the present month. Depreciation is the account taken of the diminishing valueof machinery, tools, building, etc. All of these assets will decrease in value with time and use. Some parts will lose value more rapidly than others. Usually a certain per cent of the cost value is charged off; 10 per cent per year is often very nearly the actual loss in value. Enter a check for #560, payment of salaries in the office and charge to Office Supervision. Transfer check register totals to general journal and complete day's work by posting to general ledger. After having posted to the ledger make a trial balance from the general ledger balances. This trial balance is also a statement of the business. Questions on the Manufacturing Set. 1 Into what four departments of accounting is this set divided? 2 Name six or more ledger accounts that are characteristic of manufacturing. 3 Kow does the merchandise account differ from the account as commonly used ? 4 Define the voucher. 5 What is a record voucher ? A voucher receivable ? A voucher payable ? A voucher check ? 6 By what means is the general office notified of the transactions occurring in the de- partments ? 7 Describe the department voucher register. 8 What are the principal books used in the factory ? In the sales department ? In the collection department? 9 What books are kept in office ? 10 Describe the general journal. The check register. The general ledger. 1 1 Describe the Vouchers Payable account. 12 Is it necessary to enter all firm bills to be paid in vouchers payable account ? 1 3 Why is it desirable to enter as many as possible in that way ? 14 How should vouchers payable maturing at a future date be kept? 1 5 How should vouchers be filed after final entry has been made ? 16 What methods are used to make the trial balance the equivalent of a financial state- ment? Railway Accounting. Railway accounting in all of its departments, including the books of the auditor and super- intendents, would be too extended for general study, and besides, the great proportion of ac- countants would only be concerned with the accounting methods that apply to the railway stations. The transactions at a railway station mainly consist of the sale of passenger tickets, check- ing of baggage, sale of sleeping car tickets, shipping and receiving freight, and the collecting of transportation charges on freights forwarded and received. Special Terms Used. The following terms used in railway accounting may need explanation: Consign^ ment, the merchandise included in a shipment; Consignor, the person or firm making the shipment; Consignee, the person or firm to whom the shipment is sent; Unpaid Charges, transportation charges not paid by the consignor when the shipment is made; Prepaid Charges, transportation charges paid in advance by the consignor when the shipment is made; Local Charges, charges for shipment of freight over the transportation company's own line; Advanced Charges, charges paid by the transportation company to the consignor, or a transfer company, of another transportation company when they receive merchandise for shipment, and which they collect of the consignee, along with the local charges; Local Business, business between stations on the transportation company's own line; Interline Business, business originating at local stations, requiring transfer to another transportation company, or transferred by another transportation company for delivery at some local station. The Books Required. The agent in an ordinary railway station will be required to keep three general books of record, besides a number of reports and abstracts which are forwarded to the general office of the company. The Freight Forwarded Book contains an itemized record of all freight that is forwarded to other stations. (See model form on pages 94 and 95.) In actual railroading the way bill containing an itemized record of a given shipment, is written in copying ink and an im- pression copy of the way bill is made in a forwarding book, consisting of tissue sheets bound in book form. This book, containing impression copies of all way bills, gives a complete record of all outgoing freights, without recording this data in the ordinary method. In this practice set the way bill will not be used and the student will make the shipping records in the blank book, which has rulings for every column on the way bill. The Freight Received Book contains an itemized record of all freight that is re- ceived from other stations for delivery to local consignees or other carriers. In actual railroad- ing, the receiving book frequently consists of carbon copies of the expense bills which are made out for the consignees. In such case, the consignee will sign the duplicate expense bill, which is retained in the bound book, the original expense bill being removed and passed to the con- signee as his freight receipt. In this practice set the duplicate expense bill and freight receipt will not be used and the student will make the receiving records in the blank book, which has rulings and headings for every column required. -93- 94 HIGHER ACCOUNTING Left Folio of Freight Forwarded. Freight Forwarded by the B. C. R y. Co. from C^tt^C&^s/ C^-^p Station WAYBILL /^>a Initial No. CONSIGNOR CONSIGNEE DESTINATION ^ jtf£ &f y^ ^^^^^^^^^^^y:^^^^^^/,^ &£^uzl~4J &ujr~ %tt^ ^e^u^JX/itd^y &sr?i4i > t 21 WrJ" &^t^4C*^t^t^f *\ &K*^*~7is/3-4e-^&j&U/ £ '* ±1 4_4. stfJ/ -^d&e^rn-^t^sfh^C^e^ i'^^u^^-^T^-t^jjz^rt^Ji dj2^rz^CA~ac/ '(ZUJZtT' iA yq^%2^ ^<£*77r^?a /3-£^yU^*-~?z^/ x. d£ y // ■ -££&24S,d*£2&£&2k^ i ^^t^y^^e^w, d^-/t£^J-£- ^V-^t-c^cy cJL-4^-n^£/ ^ £_ fa t ^ x < V^^~nJlr-l£* ^3^=a^£<^L^£t^^^^^^^- yj 'yas Stor^.tfriS* '&& ■ '^iM^i^y^t^t^&0 r A> /f - 'foaA ^/ J/f &£_ Ha- M. /#//> i y/y/ &>. <^^^^>^^g£^-^^^2^ ^^g-^^-^^^ t ^^^^ y&^n^^^y ^•<^@*1b1hd£s3~ '2&*Aa£L l£ -- ^W^ /^y^jfe^ J ^W^^W^^ o^^^^^^^^r-^;^ ^M *& ^. ~^7 / /£-:- c>/S7^3-*t^t^t7?y)- y ^ "?-&^ti S* */"> ' \JLf~^L£^*CjeJ -y Ta>0 K2 \d- ' /■0xf /> ' dT'U &ts&tft*t£ t &£J I ? '/ /r & y<7 s&HL^^t, &*/* (//< 2 ' e /cf 7 ^# >j£ ' ) y#jUj>^ &&S^6U) _^ 3~0-0 / rtz2i-4t^Jt D lvision DESCRIPTION WEIGHT RATE Freight Charges Advances Disposition or Signature of Consignee //<-J^ ^L,t-tz^6 ■ £-*/-# jL-r?/\ / i? ' ^t/y J?i*<,v \ /*z^e*-^£ ' . ' -?■ %Ll 'rA 4-vi. &s&*9te*^/ <&& \J^-e^r>t^!^c^^7t2/. \s 6 Y/ rf Vi^Z^^Oyrt-L^tf^t *f >£>sSy / /&z^/~<$6L, is < ^Lct4X^^W a ( z J^€A /? ■ Z&edU£d*&* vr^f *S *y& J^IjL'IA L£LZ2. 'Jajl £L&a Li 7/^J'of The Freight Cash Book contains a classified record of all cash receipts and pay- ments, and remittances to the officials of the company. The cash book entries are grouped in columns for the agent's convenience in making his reports and his general balance sheet for the auditing department. RAILWAY ACCOUNTING 97 Right Folio of Freight Cash Book. CASH DISBURSEMENTS r. EXPLANATION WAY BILLS Miscellane- ous Cash Remitted Vouchers Rem. as cash Date Advances on Freight Forw'd. Over prepaid on Freight Rec'd. TOTAL "%^ /. /' » £^^jL,^j£~ /2 i/rf *&?>i^Z&^/j£ ^k^a^^t. *S /d4a fo^J /^o Lt " /2 jTc /.r^ ^r 1??2^z^/ 2. / 1? 07 r fa^J*r&fA*0^rfZ(» & - ^U^*<^£ *&; Ar-a^k^tJ &S2r*-6 // f V ^^ty rf^ysJ ^ rJ '** /^?yM&6tf^£> $*-~0O-*£6CA e^£y /Jj l AJ /t he /J J '/J -yyj ~ //> f/ 71 i> o >JS 7* / ¥- 7^ c? o 7 T3~ Cash Entries for May 7 . . ^^/^i' d..t WO. PgGS DESCRIPTION OF ARTICLES. WEIGHT. /S^-^£x( (Z£^e^~£^ ..Agent the following articles in good order, to be delivered in like order, as addressed, with out unnecessary delay. ^ Consignee .<^™^*^^ Destination .^Cfe^r^^tg' DESCRIPTION OF ARTICLES. Agent -98— The Bill of Lading as a distinct form is only used when the consignor does not have a shipper's receipt book described on preceding page. Transient shippers usually leave freight for shipment without duplicate bills, and in such case a bill of lading would be delivered to the consignor by the railway agent. FORM OF A BILL OF LADING. (BILL OF LADING) College City, May 1, 190 Business College Railway Company RECEIVED in apparent good order of. Thomas Johnson the articles as marked and described below. They agree to deliver in like good order and condition (the unavoidable dangers of fire, explosion and collision excepted) at Ashton unto Edward Sherman G r assigns, Freight Unpaid at the rate named below per^ cwt. MARKS DESCRIPTION OF MERCHANDISE WEIGHT RATE AMOUNT B. C. 1929 Household Goods 3130 20 6 26 For the Company, H. C. Loring Agent. The Freight Expense Bill is a description of the freight and the conditions of shipment with a receipt for any charges that are paid by the consignee when he receives the freight. (Expense BUl-Foj^rOEht Received) VoyPT&ghl Received) \ ^j A 190_ Consigned TO THE BUSINESS COLLEGE RAILWAY COMPANY, DR. For Transportation of Merchandise as specified below : The written part of the expense bill is duplicated in carbon copy, the printed portion being changed so as to constitute a receipt when signed by the consignee. The expense bill is handed to the consignee and the freight receipt is kept by the freight agent. Consign* oratfiom Goo^ l&c a^£L ifezz^ ./ / &4 2#iJ <££*£—* — z^c^^a^^y kjT 7. f~t J\* # / £ &g / dzJLs—**^ A f## s S / yj &£ 4&? 5 s N ■^ ^ W s ^ $ 3 ^ ^ C^ v ^ \ 3 < Si v. V* 8 s t £ c — ' * -C vi A a 3 a 5 5 3 O s c c a _ ■p < ~i 3 > 5 * a J b a 3 •CI 3 J3 je a I & u o •o P, c 3 M pa s c 3 I a 1 01 '3 < I \ a s ft id T3 -a 3 O > 3 3 s* ^ s. ■O p be ~ H 3 O B„ u 3 la ■ 3 09 "3 3 1 a o J3 73 □ > •a VJ rt !| H to 3 t> < O « 'J < "— g S 3 ' - ■«" ' c KM a. 5 •a a a > r3 a. sji 8 2s a 8 3, 1 c u 3 j"0 <- "3 U i 8 3 3 3 J3 >> a 1 O a C a • ST! ! 3e H 5 M < < s ^ ^ \ S V ^ \ *1 ti ^ ^ s J X ^ N V) % s rs s ^t ^ f \ ^ V, \ 1 \ s * ^ ^ > ^ *1 I i 3 ■ a 2 1 a •O ■ •6 ■c ~ 3 1 e 3 « o 5 -5 o T E 3 1 '5 0. 3 c < 1 t a c 3 ■ 3 O B % « 3 O iJ < 1 a o o 3 CO E o ■c § ■S ■ s i r- « a O a i 1 a b H u | K be 3 O > £ ■0 3 SB c o 5 S *1 M G o i o 3 s ■ C3 a D be E 'c! 9 < a 3 a E ■S 3 O A 3 u 7 3 > < ■5 3 < B 1 •3 ■a bo 3 C £ 3 8 M 3 la 3 O be 3 M S 3 c a $ a ■8 3 C s -3 > a -c u •c 3 3 o M M 3 a re i»t A 3 c j a. *rt E fi -^ 3- « a sx it fa M a > •o 3 •o s a c a o O a f •3 O 3 3 o i B*. > > T3 J< > 3 3 3 3 3 3 R 3 k _!<; O o O Q J 1 y g w a a a a 3 M c M 5 ■2, M « < < < < 104 HIGHER ACCOUNTING Balance Sheet. This is a statement of all business transacted at the station for a given period, some railways requiring their agents to make balance sheets on the 7th, 14th, 21st, and last days of each month, and other railways requiring only one balance sheet for each month. (See model form on page 103.) Besides these general summaries and statements, the agent is provided with many forms for special reports, such as passenger tickets, sleeping car tickets, accident insurance tickets, milk tickets, telegrams, switching charges, list of freights not delivered, etc., which will not require special explanation, as the rulings and printed headings will readily suggest the method of using each blank. We give below one of these model forms, which will serve to illustrate the special report blanks. The student's practice outfit will contain all report blanks required in the practice set, each form being numbered to correspond to the reference number given in the balance sheet. Report for Switching Charges. Business College Railway Co. (Form No. 352.) Report on SWITCHING, CAR SERVICE. ETC. a for Ss-~£^rQ/ Ending ^^^•^-a«^_Statc^*^^^^^Dlvisio 190. Date Car Initial Car Number AtfJ/ ///// r/jJ &r?iAA g/7fZ NAME fy^L^^t^tf ^-^ z ^?^eJ ^ ( Z^U^U^ ^ Commodity t£2~-tZ_^£s/ (2 2, 5,0, 1, 5, 5. Enter cash balance remitted to treasurer. Balance cash book. 110 HIGHER ACCOUNTING May 6. Receive from I. C. Ry. car I. C. 29376, Cloverdale W. B. No. 10, May 5, loaded with cattle, 21600 lbs., for shipment to Swift & Co., Central City. This is an interline shipment; consignor, W. B. Huffman & Co., Cloverdale, over the I. C, to which road you advance charges to College City, #21.60, by giving to the agent of I. C. Ry. your draft No. 15901 on the treasurer for that amount. (Form 356 and C. B.) Bill this shipment charges unpaid. The agent is authorized to draw drafts, for which he is supplied with blank numbered forms, on the treasurer of the company for authorized disbursements, when he is short of cash. Such drafts are entered in the cash book as receipts (miscellaneous column) from the treasurer, and also on the opposite side as disbursements, the column being governed by the nature of the payments. Receive W. B. May 5, No. 21, B. C. 3704, from Ashton, 1 car sheep, 14620 lbs., for re- shipment over the I. C. Ry. to Kansas City; consignor, D. Barr, Ashton, consignee, Agyr Pack- ing Co., Kansas City. Freight charges were prepaid to destination as shown by W. B. #44.44. The amount in excess of local freight charges is to be paid to the second carrier. Enter in credit side of cash book, 2nd column (see model). Enter (Form 356) draft No. 15902 on treasurer to make the payment. Receive from Kingston, W. B. May 3, No. 430, B. C. 3847; consignor, F. J. Dollman, consignee, F. J. Dollman, Chicago, 4 bxs. H. H. Goods 1580 lbs., billed charges prepaid to Chicago, #32.75. Enter difference between local charges and amount prepaid as paid to C. & N. W. Ry. Pay by draft on treasurer No. 15903. Receive in-freight for local consignees: W. B. May 5, No. 216, car B. C. 2882, from Grafton, consignor Harvey & Patterson, Still- water, via C. R. & D. Ry., consignee A. M. Horton, Wheat 31000 lbs , freight #13.95 an( * ad- vanced charges #5.10 unpaid. Do not enter delivery of this consignment until instructed later. W. B. May 5, No. 325, car B. C. 9210, from Houston, consignor E. C. Thomas, consignee A. M. Horton, Potatoes 30120 lbs., unpaid #17.29. This is not to be delivered at present. W. B. May 5, No. 326, car B. C. 9216, from Central City, consignor Swift & Co., for re- shipment over I. C. Ry. to Jordon & Co., Independence, 10 brls. Pork 3450 lbs., 20 cs. Bacon 2000 lbs., freight unpaid #10.14, which you will enter collected from the agent of the 1. C. Ry. on delivery to him for re-shipment. Pay cash to A. N. Moore for claim voucher No. 37298, #7.50. Receive cash for ticket sales: Junction City 3, Logan 5, Dover 4, Fairfield 5, Ashton 6, Central City 2. Tickets check up as follows: 20, 10, o, 20, 18, o, 13, 13, 7, 5, o, 1, 5, 8. Receive cash for excess baggage, 80 lbs. Junction City, 75 cts. Remitted balance of cash to treasurer. Balance C. B. May 7. Receive the following in-freight for local consignees: W. B. No. 431, May 5, from Junction City, B. & M. car No. 29216, loaded with Oranges, 31750 lbs., consignor Riverside Fruit Co., Riverside, Cal., via U. P. Ry., consignee Central Fruit Co., advanced charges unpaid #190.50, local charges unpaid #127. Enter delivery and collection of all charges. W. B. No. 43 from Easton, dated May 4, B. C. No. 9237, loaded with Hogs 24500 lbs., consignor John G. Loomis, consignee Western Packing Co., local charges unpaid #36.26. Enter delivery and collection of the freight charges. Receive W. B. correction sheet from the agent at Central City advising overcharge on shipment May 5, advanced charges from Central City to Lake City. (See page 101.) Col- lection was made for 20 cts. per cwt. which should have been 1 5 cts. per cwt. Enter cash paid refund of #16.25 to Western Cereal Co. (Form 355 and C. B.) W. C. Co.'s receipt should be taken for this repayment. Payments of this nature, if made before the original transaction is reported, can be made on the books by a correction entry. If the item has been reported, the correction is to be carried as a cash item until such time as the agent is relieved of it by an inspector. Frequently several weeks or months even intervene before the agent is authorized to charge cash items thus carried. The stu- dent will regard this as a payment to be carried on form 355 until relieved. RAILWAY ACCOUNTING Hi The Central Fruit Co. deliver 20 bxs. Lemons 1500 lbs., 20 bxs. Oranges 1700 lbs., for shipment to Landis & Crosby, Kingston, freight unpaid. Forwarded in car B. C. No. 3702. The C. M. & St. P. Ry. by Union Transfer Co. deliver 20 brls. Flour 4300 lbs., and 20 brls. Sugar 6640 lbs., consigned by B. T. Babb, Elyria, to Sprague & Sons, Dover, freight un- paid, on which we pay advance charges #23 88. Forwarded in car B. C. No. 3702. Receive cash for ticket sales: Houston 6, Norton 4, Benton 3, Junction City 2, Central City 3. The ticket check up shows the following numbers: 23, 16, 4, 20, 18, o, 13, 13, 7, 8, o, 1, 5. 10. Milk shipments received for which collection was made today : From Dale & Co., Ash- ton, Pasteurized Milk Co., 24 eight-gallon cans at 23 cts. Ticket dated May 7. Received cash for excess baggage to Norton 50 lbs., 25 cts., Junction City 100 lbs., 75 cts., Benton 100 lbs., 25 cts. Enter remittance of cash to treasurer. Balance cash book and carry balances down as per form. The Balance Sheet. The agent is required to forward a Balance Sheet at the close of each month or at the close of each week, the railroad weeks ending the 7th, 14th, 21st and last of the month. This bal- ance sheet is a summary of the reports made out covering the given period. Every report represents the receipt of cash or credits by the agent for which he is accountable, or the dis- bursements or offsets by which he is credited. The former are placed on the balance sheet to his debit, the latter to his credit. Before making up the balance sheet, report forms should be footed and the footings com- pared with the corresponding columns of the cash book. Some columns of the cash book represent more than one report, as the third on the debit side, which is made up of report forms Nos. 351, 352 and 356. Foot the Freight Charges, Advances and Prepaid columns of the abstracts of freight forwarded and freight received. These footings should prove with similar footings of freight forwarded and freight received books. List all undelivered in-freight for which collection has not been made on form 357. List on form 350 the cash and vouchers remitted as cash since last similar list, excluding those not yet credited in the general offices during the current period. (Exclude remittances of May 6 and 7.) On form 353, extend the total number of tickets sold during the period into "Tickets Sold" column, the prices in the following column and the amount and total in the last column. This total with the total of form 354 should equal the fourth column of cash book. Having footed and compared with cash book all reports, enter same in the balance sheet — debit or credit side as the nature of the report requires. (See model on page 103.) Enter in credit side of balance sheet the remittances made during the period that are not included in form 350. It will be observed that the items aggregating #479.98 are carried over to the next report as a charge against the agent. When the balance sheet is completed it is to be signed and forwarded together with all abstracts and reports from which the balance sheet is made up. May 8. Harper & Jones deliver 10 brls. Flour 2170 lbs., for shipment to Thomas Olson, Junction City, freight unpaid. Ship in car B. C. No. 2137 J a ^ so same shippers send 25 brls. Flour 5375 lbs. for shipment to A. N. Parker, Fairfield, freight unpaid. Ship in car B. C. No. 4932. (En- ter Freight Ford., Freight Reed., and Freight Cash.) Howard & Payne forward car B. C. No. 12460 loaded with Barley 32600 lbs., consigned via Junction City, C. & N. W. Ry. to Central Malting Co., Milwaukee, unpaid. The Central Fruit Co. forward to J. E. Overfield, Kingston, 15 bxs. Lemons 1200 lbs., prepaid W. B. in car B. C. No. 2170. Deliver the consignment received on the 6th inst. Wheat 31000 lbs. to A. M. Horton, col- lecting charges. , 112 HIGHER ACCOUNTING Receive from C. M. & St. P. Ry. Co. one car their No. 23070 containing 33670 lbs. Lime consigned by Crescent Lime Works, Crescent City, to C. C. Donner & Co., Ashton, charges collect, on which we have advanced to the first carrier $18.74. Receive W. B. May 6, No. 354, M. & O. car No. 31080 for Western Packing Co., 1 car cattle 22900 lbs. from Central City, consignor Coe & Jones, Minneola, over M. & O., local charges collect $ , advanced charges collect $43.70. Receive W. B. May 7, No. 76, car B. C. No. 1 2006 from Carver & Lane, Houston, 40000 lbs. Corn consigned to Jones & Luberger, charges collect. Receive W. B. May 8, No. 5, car B. C. 3962 from J. M. Coleman, Dover, 12 cs. Cheese 480 lbs. charges billed 45 cts. prepaid, consigned to the College City Jobbing Co. Deliver three consignments received today collecting cash. The agent at Dover miscalculated the freight on College City Jobbing Co. shipment. Collect the difference making regular entry and consider advice of same sent to Dover through a correction sheet. Received cash for switching charges : Car B. C. 12640 Howard & Payne, Barley, $2.00 " M. & O. 31080 Western Packing Co., Cattle, 2.00 " B. C. 12006 Jones & Luberger, Corn, 2.00 Milk ticket collections today: From D. & Co., Ashton, to P. Milk Co., 16 eight-gallon cans at 23 cts., 20 twelve-quart crates at 9 cts.; from C. & Co., Dover, to P. M. Co., 25 five- gallon cans milk at 14 cts. Passenger tickets sold today: Houston 7, Junction City 3, Logan 1, Grafton 72, Central City 11. Enter the last ticket numbers from previous form 353 in forwarded column, then in the following column the ticket numbers in the order of stations thus: 34, 23, 4, 20, 90, o, 13, 13, 8, 8,0, 1, 5, 13. Received cash for excess baggage 75 lbs., Central City, 50 cts.; 1 bicycle, Junction City, 75 cts.; 1 baby cab, Houston, 25 cts. Remitted to treasurer cash on hand. Close the cash book. Do not carry totals of cash columns forwarded from previous cash book. May 9. Receive in-freight as per way bills : From Ashton, consignor Dodge & Ashby, consignee A. Partridge & Co., W. B. May 8, No. 13, B. C. 1 3 120, 12 era. Chickens 1800 lbs., freight prepaid billed $2.60. From Junction City, consignor Caldwell & Cone, consignee Western Packing Co., W. B. May 7, No. 521, B. C. 8303, 1 car Hogs 24650 lbs., freight unpaid $54 85. Receive from Junction City, consignor P. Garver, Dallas, via A. T. & S. F., consignee Western Packing Co., W. B. May 7, No. 522, A. T. & S. F. 28364, car of Cattle 28940 lbs., freight $73.77 and advanced $87.34 unpaid. From Benton, consignor The Westlake Co., consignee W. Lincoln, W. B. May 8, No. 16, car C. M. & St. P. 149376, 1 car Lime 37600 lbs., chgs. $18.24 unpaid. After entry in freight received book, re-compute the local freight charges finding two errors. In your record make a circle around the incorrect in-billing and place the correct amount above. Then deliver and receive correct cash for the freight charges of the four in-shipments en- tered today, collect also any shortage in prepaid freight. It is assumed that you send a W. B. correction sheet to each agent who bills charges incorrectly from any cause. The agent in error can thus correct his mistakes frequently before it is necessary to report on them. Deliver car B. C. 9210 received May 6, to A. M. Horton, collecting charges as per W. B. Also collect $1.50 for car service, the car having remained one day longer than the 48 hours allowed for unloading. (Form 352 and C. B.) Paid E. A. Beach claim department voucher No. 139264, $42.78, and G. Caldwell freight department voucher No. 58908, $13.24. RAILWAY ACCOUNTING 113 Enter switching charges : Car B. C. 8303, Western Packing Co., Hogs. #2.00; car A. T. & S. F. 28364, Western Packing Co., Cattle, #2.00. * Ticket numbers in order are as follows: 37, 41, 4, 23, 129, o, 13, 13, 13, 9, 4, 1, 5, 17. Enter cash from day's sales. Remit cash and balance as previously. May 10. Forward freight from shippers as follows : From Harper & Jones to C. E. Gentry, Ashton, 25 brls. Flour, 5375 lbs., forwarded in car B. C. 5463, unpaid. From Clinton Anderson to Clinton Anderson, Houston, 10960 lbs. H. H. Goods, car B. C. 6201, prepaid. From Amos Ford to Mary D. Collins, Central City, 7590 lbs. H. H. Goods, W. B. 23, car B. C. 6201, one-half prepaid, one-half unpaid. Interline from I. C. Ry. car I. C. 58021, consignor D. B. Cunningham, Overberg, to Em- erson & French, Central City, 1 car 38796 lbs. Shelled Corn, advances paid $20.64, charges collect. (C. B.) From R. B. Cole to D. R. Collins, Easton, 1 car Lumber 36980 lbs., B. C. 6848, prepaid. From R. B. Cole to Simon Olson, Dover, 1 car Lumber 28040 lbs., car B. C. 9374, un- paid. Interline from L. L. Ry., consignor D. Crowley, Ottumwa, to Armour & Co., Junction City, car L. L. 5907, load Sheep 16090 lbs., advances $20.16, unpaid. From Churchill Mercantile Co. to Wendell Hill, Grafton, 4 bxs. Prunes 320 lbs., 10 bxs. Soap 800 lbs., 1 cs. Raisins 100 lbs., 5 brls. Flour 1 100 lbs. All W. B. 28, B. C. 4307, charges collect. Freight received from Logan, W. B. May 9, No. 243, B. C. 4944, consignor Conner & Lennan, consignee C. Thies, car Millet 32900 lbs., billed prepaid $34.02. Make necessary cor- rection in amount of freight, and after substituting the correct amount for the in-billing as given, leaving the prepaid column as billed, assume a correction sheet sent by you to the agent at Logan. Receive from Ashton W. B. 17, May 8, B. C. 9388, one car Slack (coal) 40000 lbs., con- signor Juckett Coal Co., consignee City Water Works, unpaid. Deliver the two shipments received, collecting cash for the latter. Ticket numbers: 42, 43, 7, 29, 141, o, 16, 14, 13, 9, 6, 5, 6, 22. Enter cash for sales. Collected excess baggage, Marion, 100 lbs. $1.50; Grafton, 50 lbs. 25 cts.; Benton, 100 lbs. 50 cts. Collected switching charge B. C. 9388, City Water Works, Slack, $2.00. Paid Amos Cushman time ticket No. 74, $19.12. Paid D. B. Coleman claim voucher No. 141 3 12, $3 96. Refunded to Central Fruit Co., an overcharge of advances paid by them May 7, on the entire bill amounting to $317.50. The advance charges should have been $158.96, making a difference of $31.54, which you are advised by the agent at Junction City to refund. (Enter in Form 355 and Misc. column of C. B.) You are authorized by the auditor to credit the refund made by you to Western Cereal Co., May 7, off the agent's debit balance. (Enter in Misc. columns debit and credit of cash book and check both items to indicate that no report will be made on them.) Remit to treasurer and close cash book as usual. May 13. Receive in-freight as follows : W. B. May 1 1, No. 469, B. C. No. 100 18, consignor Larimore & Co., Central City, to E. K. Fassett, 16 bxs. Soap 4800 lbs., charges $8.93, collect. W. B. May 11, No. 469, B. C. No. 10018, consignor Larimore & Co., Central City, to Great Western Hotel, 20 brls. Sugar 6200 lbs., $11.53, charges prepaid. W. B. May 10, No. 216, B. C. 9201, shipped by Leo Varnes, Marion, to E. K. Fassett, 16 brls. Apples 3450 lbs., freight prepaid, $6.13. 114 HIGHER ACCOUNTING W. B. May 10, No. 732, B. C. No. 108 13, Farmer & Souls, Star, via M. & O., Junction City, to Western Packing Co., College City, 1 car Cattle 28960 lbs., advance charges #24 1 1 and local charges, collect. W. B. May 10, No. 733, B. C. No. 7921, consignor Caldwell & Cone, Junction City, to Western Packing Co., 1 car Hogs 64390 lbs., freight unpaid $143 27. W. B. May 12, No. 183, C. P. No. 93668, consignor Newell & Lane, Grafton, to E. K. Fassett, 12 cs. Cheese 9680 lbs., $12.06, charges collect. (Correct W. B. as explained before.) W. B. May It, No. 29, B. C. No. 3941, consignor Ray Fallon, Norton, to Ray Fallon, College City, H. H. Goods 3864 lbs., freight $6.03, unpaid. W. B. May 10, No. 448, B. C. No. 6230, consignor Baird & Lee, Central City, to Perkins & Son, 4 sks. Coffee 429 lbs., 4 brls. Sugar 1661 lbs., charges $3.89, collect. W. B. May 10, No. 448, B. C. No. 6230, M. Field & Co., Central City, to E. K. Fassett, 3 bxs. Prunes 421 lbs., 4 sks. Rice 408 lbs., total charges unpaid $1.73. W. B. May 10, No. 329, S. P. No. 1093960, consignor California Fruit Co., Los Angeles, over S. P. Ry. via Junction City, to Central Fruit Co., 1 car Oranges 29680 lbs., advances $136.41 and local freight charges computed at $108.72, unpaid. W. B. May 10, No. 592, B. C. No. 3260, Sears & Co., St. Louis, over the C. C. C. & St. L. via Junction City, to D. B. Edmonds, 10 bxs. misc. Groceries, billed as 3d class, 890 lbs., charges $3.56, prepaid. Receive from Junction City W. B. May IX, No. 613, S. P. No. 39261, shipper Bennett & Lane, to Silverton & Co., Pittsburg, Pa., 1 carload Prunes, weight 40020 lbs., freight prepaid $209.87. Reshipped over C & N. W., paying excess of prepaid freight over local charges by draft No. 15904 on treasurer. Enter delivery of the four consignments to E. K. Fassett, together with cash for correct freight charges where collectible. Deliver the two consignments to Western Packing Co., collecting cash as called for. Ticket numbers, 46, 43, 10, 41, 163, o, 20, 19, 22, 11, 10, 14, 9, 28. Remitted the cash balance to the treasurer. May 14. The balance sheet for the week may now be taken. Fill report forms including form 350 in which are entered two days' remits from last week. Omit the remittance of 1 3th from this report as not yet credited. The over prepaid freight on freight received book of May 10, $10, may be entered in balance sheet without any report. Having completed the balance sheet and reports, both are to be forwarded to the auditing department. Questions in Railway Accounting. 1 . What are the principal duties of the station agent ? 2. What is understood by the term local shipment? inter-line shipment? consignment? consignor ? consignee ? freight charges ? advanced charges ? 3. Describe the freight cash book. 4. How are records of freight forwarded and freight received kept ? 5. Describe the freight abstract. 6. Name eight representative report forms in which are entered details of the business in the office. 7. Describe the balance sheet. 8. How is the balance sheet made up? 9. How are items in the balance sheet tested by the cash book ? 10. How often is a balance sheet prepared? Wholesale Accounting. Wholesaling has to do with the purchase of merchandise in large quantities from the manufacturer, producer, or jobber, and the sale of the same to dealers in quantity to supply the consumer. A wholesaling system of accounting should include a purchase department, a sales depart- ment, a credit and collection department, and a general department. The Purchase Department. Purchases of merchandise are made through purchasing agents, and by correspondence. A copy of every order sent out for goods, should be kept in the office. When the merchan- dise ordered has been received, the invoice should be compared with the order. The quantity and kind received should also be carefully compared with the invoice. Terms of credit differ among different firms and in different lines of business. As a rule in all lines of business, cash discounts are offered. As cash discounts represent a reduction in cost more than equal to the interest worth of the cash required to make payment, it is assumed that firms in good standing, having cash, or being able to borrow cash, will take ad- vantage of ail discounts offered. The accounting plan of this set requires merchandise to be charged at net cost. In order to make payment at the right time the exact date of payment of each bill is emphasized in the accounting scheme. A voucher for each payment is filed in such a way as to appear as a reminder upon the settlement date. To illustrate the purchase and payment system, a bill of merchandise from the Central Drying & Canning Company is ordered, entered, and paid for as given below. An Order for Merchandise. Order No *£L M_ Kindl'f send at once rC^>^>t^C^ ^^4Z_ Vouchers' Payable *J~J/ £ v/>/ 4jt WHOLESALE ACCOUNTING 117 3 P O 3 rt CL rr „. n U H a 3 3 3- rt t < >-t cr H p rt rt n * rT 3 H O rr ►*> m c-f > 3 fp B ft 3 < *i *• o Ft •— ■ 3 rr rt- o rt 3* 3 r» n> o cr < o o w o Ci ?r o 3-1 "0 P 3" rt 3 09 r-r (n p rr r-r P a 3 a. cr n fj* n P rt 3 r* 3 cu 3* rt) -t P ro" 3 c "a 3 n -t 3 TJ p ca H o rt O O p rr r-r rT n 3 S3 rt> P P a *j < (i 3 o c H 3 3* T1 P TO a P re it CD O "1 00 cr w" H Td H pr 3* rt) • "< o fj 3* re n Cu^O p P rt < O c 3* rD cr < Q o 3 i o *• ts 4 rt >-*> i r-r M cr n 3 O n rr re P o P *a *< p P a (IB 1 \ \ 5 : 3 s unt iction Bill V g" V> *» p^ V_/> s s * \ \ ^ V* *s *\ *\ U In K ^ K • ^\ fr -s ^ * 5 ^ ^ ^ h fo fc 3 a » cr O in < 5 » c (a hi £*0 a w fD i 2 3 t 8 2 3* w >1 -«• 8 D* 0) n i to* o 3 — o 118 HIGHER ACCOUNTING Reverse Side of the Voucher and the Filing Clip. WHOLESALE ACCOUNTING 119 The ChecK Register gives complete data regarding all checks that are drawn and all deposits in bank with a column showing bank balances. Business houses using a check register, generally use voucher checks which do not have stub entries and regular checks in pads without stubs. In such case the check is entered in the check register before it is delivered or sent to the payee. At maturity the voucher payable on page 117 would be filled out in the check form on the back of the voucher as illustrated in the left upper form on page 118. It would then be entered in the check register like the second line in form below. At maturity the voucher is taken from the file and entered in the check register thus: CHECK R] EGISTER -Date PAYEE Fol. CHARGE :v-^ 'J~Z» /^fza J &*&L*As@* //?/> / /* /2~S>7/* '&sd> /f b v/^r *J^ A- • * '* ) 2^ f r/ 2-/0 it 2/c, 5 * *V/iV ^fe^^A t*A> // / /offj/f \ tfa /// 2/ fa ffa f ^ //!>?/ /* J L^7^7-^ The order sheet is received by the credit man or office manager, who stamps on the upper right hand margin of the sheet the form for memorandum entries. He should fill the first four blanks, giving the date received, from what salesman or by mail, credit O. K., and terms of payment. The order sheet is then passed to the shipping clerk, who selects the goods, checking the items sent and writing the net weights or quantities when these are required. He fills in the fifth and sixth lines in the stamped form, giving shipping route and date of shipment. Order with Memoranda for Shipping and Billing. Order No Kindly, send at once. via. &K?74/^f2 1 , f^ and bill on the following terms (]!^?-*£&^Z^ -6* Credit M _£__15-i>-r&< -^ -7-3 snr / 122 HIGHER ACCOUNTING The model ledger account gives on the debit side the date, terms, bill number, and amount of charge for each shipment made. The explanation space on the credit side allows for such matters as pertains to credit by items or collection memoranda. It will be noted that the bill given above is the ninth debit. Previous bills are balanced off by credits, are in process of collection, or are still unpaid. An X mark is placed before such bills as are paid, for reference when statements are rendered. The Credit and Collection Department. Credits on account are usually received in the form of cash remitted by the customer, dis- counts for prompt payment, cash collected by sight draft, notes to apply on account, and re- turned goods. All of the above are conveniently entered in a credit register from which post- ing is made to the customer's accounts. CREDIT REGISTER 4^£ z /- - ¥t&6jL^~. j„^<*4< REMITTER •*P ?7Z4ts£^&a-£££>-ur-tt/ -*^gt< <*~ 2-f/sJf 2_tA WSis1-TA^C£\^->— gti^ &Cc^f. IjT S/-1- U.\ ^^-^Azt£^1>nzA^J & &/r*^~^l5i "? j£/.^ / */£> f~~o J~* 3 2- SJL. &a WHOLESALE ACCOUNTING 123 The General Accounts. The General Ledger accounts will include the following titles : C. A. Carpenter, partner Office Expenses Student, partner Traveling Expenses Cash Salaries Merchandise Cost of Shipping Sales Ledger Interest and Discount Bills Receivable Discount to Customers Furniture and Fixtures Collection and Allowances Vouchers Payable C. A. Carpenter, personal Bills Payable Student, personal Profit of Sales Peter Henderson General Expenses Enter these accounts in the General ledger in the order given, allowing one-quarter page to each. Ordinarily posting is made to the general ledger but once monthly. Some accounts re- quire posting by items instead of by monthly totals. Either standard or four column balance ledger ruling may be used advantageously in the general ledger. In this set the standard ledger is given. Practice in Wholesale Accounting. November 1, 19 — C. A. Carpenter and the student have formed a partnership as wholesale dealers in gro- ceries under the firm name of C. A. Carpenter & Co. Each partner is to receive a salary of #100.00 per month. After payment of this salary, the net gains and losses are to be shared by each in proportion to this average investment. C. A. Carpenter invested a stock of merchan- dise, inventoried at #5,160.25 for which amount he is to receive full credit, and cash #839.75. The student invested cash #1500.00. Make opening entry in the journal. Deposited all cash in the bank. Make an entry in the check register as in model page 119. Received an invoice of merchandise from Kephart & Co., Philadelphia, dated October 29, amounting to #501.50, on account 60 days, with a discount offer of 1^ per cent if paid in 10 days. Make out Voucher No. 1, descriptive of this bill and enter payment date as 10 days from October 29. Deduct the cash discount at once and make entry in voucher journal as shown on model page 1 16. After entry, the voucher should be placed in the maturity clip awaiting payment. Received an invoice of tea, coffee, etc., of Grant, Kennedy & Co., New York, dated Octo- ber 29, amounting to #1,459.74. Terms, 60 days, 2 per cent 10 days. Enter as above using voucher No. 2. Received of Diamond Match Co., City, an invoice of matches, dated November 1, amount- ing to #139.50. Terms 1-10 n-30. Fill and enter voucher No. 3. In filing, place this voucher, which should be paid Novem- ber 1 1 , after the vouchers maturing on a previous date. Hereafter file all vouchers payable in the order of their maturity. Received from N. K. Fairbank & Co., City, an invoice of soap, dated October 3 1 , amount- ing to #567.40, billed 2-10 n-30. Received an invoice of flour dated October 28, from Great Northern Milling Co., Minneap- olis, amounting to #631.25, billed I *^-io n-30 ds. Preparatory to selling, date a daily profit sheet November 1, and copy in it from the text the buying and selling prices of the day. See page 125. From these enter in the profit or difference between buying and selling prices. Use the selling prices for today's billing. Take note that where the selling is based on quantity per hundred pounds, your billing should be per pound. 124 HIGHER ACCOUNTING Buying and Selling Prices. ARTICLES SOLD PER Nov. 1, 19 — . Not. 6, 19 . Nov. 10 19 . Cost Selling Cost Selling Cost Selling Dried Fruits Apricots cwt. 9 45 11 945 11 9 60 11 Currants cwt. 5 70 7 525 6 50 5 65 7 Dates cwt. 7 45 8 795 8 50 8 40 9 Figs cwt. 10 45 12 1040 12 10 85 12 50 Peaches cwt. 12 45 14 12 45 14 12 45 14 Prunes, Cal. cwt. 11 45 12 10 90 11 50 5 55 5 Prunes, Turk. cwt. 7 55 8 790 8 50 8 40 9 Raisins cwt. 7 95 9 7 95 9 8 9 Mill Products and Cereals Corn Meal sack 40 55 40 55 40 60 Chop Feed cwt. 75 1 15 75 1 10 75 1 10 Flour, Acme brl. 3 50 4 60 3 65 4 65 3 65 4 65 " XX sack 85 1 05 85 1 05 90 1 10 " Graham sack 46 60 46 60 50 65 Oat Meal cwt. 2 98 4 3 4 2 98 4 Rice, Carolina cwt. 6 30 7 50 6 75 8 6 75 8 Nuts Almonds cwt. 15 35 20 15 35 20 15 50 20 Brazil cwt. 8 35 11 8 80 11 50 9 35 12 Eng. Walnuts cwt. 10 35 13 11 20 14 11 20 14 Filberts cwt. 8 85 10 50 9 20 11 9 20 11 Pecans cwt. 12 35 14 12 35 14 12 35 14 Sugar and Syrups G Sugar cwt. 5 37^ 6 5 37^ 6 5 40 6 A " cwt. 4 95 5 50 4 95 5 50 4 95 5 $0 C " cwt. 4 50 5 4 50 5 4 50 5 Molasses, N. O. gallon 25^ 28 25 28 26 29 Syrup gallon 30^ 34 31 35 31 35 Teas and Coffees Tea, Japan cwt. 32 37 50 31 40 37 31 40 37 " Y. H. cwt. 34 42 34 42 36 43 Coffee, Java cwt. 17 20 19 17 20 19 17 20 19 Rio cwt. 9 90 11 9 10 10 9 10 10 Sundries , Salt, Sk. sack 08 10 08 10 08 10 " Brl. brl. 86 1 10 86 1 10 86 1 10 Soap, Laundry box 1 40 2 10 1 40 i 2 10 1 40 2 10 WHOLESALE ACCOUNTING 125 Daily Profits. By estimating the profit on every article sold, the accountant can compute the total profits on sale for each day. If Merchandise account is credited only with the cost of goods sold, the debit balance will show the cost of merchandise unsold at any date. WHOLESALE OFFICE DAILY PROFIT SHEET SXJt^Z* 4 .190.... Vertical List of Items Articles Sold Per Cost Per SeTTing Per Quantity Profit Per Gross Profit Dripd Fruits (Zf>t^ ' n / 0. Prunes. Turk. // 7 fJ ' f te PX* Raisins // 7 # ' &60*- YJ /j *3~# # J/-6 Z » / t>J*£ Flour. Acme JU& 3 r# it fo /a / 1 C // 2#d& VY _4fc> /J / *J 2o ka V -* E *\ i/4J^ " Graham ~J& i/i 4i / / /4t /■ &- JTl^ •N Oat Mm! dn^/r- .? ft ¥ ^9^6 0? / Si ^r ^7 L /04** Rire r Carolina // £ 36 <7 n J/JL C / 2o J // > Nuts Almonds &Hpt- /jr iA 1^2 u it/ 600* Brazil // / JJ '// b 00 2 6j ■ U 'f* lot* Enar. Walnuts " / /) t,i M 3.-*i- / fa X ft / f* S to ■— % Day's Gro; i i'rofi i ft Sjr —r 126 HIGHER ACCOUNTING Practice in Wholesale Accounting— Continued. Shipped James Lee, Vinton, per C. & N-W. Ry., their order Nov. I, terms i per cent 10 days, net 30 days: 1 brl. Currants, 256 lbs., 8 bx. Cal. Prunes, 200 lbs., 10 brl. Acme Flour, 4 sks. Graham Flour, 1 sk. Carolina Rice, 104 lbs., 5 bxs. Laundry Soap. Enter the above on duplicate sales sheets giving weights when billed by the pound. Num- ber the order No. 1. Then insert prices from selling list. (As a substitute for a loose leaf holder, the duplicate sales sheets of this set may be pinned together.) Shipped Kingman & Co., Toledo, via L. S. & M. S. Ry., terms 2-10 n-60, order dated Oct. 31:3 brls. C Sugar, 947 lbs., 2 brls. N. O. Molasses, 98 gals., 6 bxs. Cal. Prunes, 150 lbs., 2 bxs. Peaches, 100 lbs., 1 bx. Raisins, 42 lbs., 2 sks. Carolina Rice, 208 lbs. Enter as above. Shipped E. M. Bundy, Deerfield, via C. B. & Q., terms 2-10 n-60, their order Oct. 30: Chop Feed 500 lbs., 20 sks. XX Flour, 4 brls. Oat Meal, 556 lbs., 1 sk. Carolina Rice, 114 lbs., 1 brl. Syrup, 45 gals., 2 ch. Y. H. Tea, 120 lbs., 1 sk. Java Coffee, 102 lbs. Shipped Henry Thompson, Thompsonville, via C. B. & Q , terms 1-10 n-30, order Oct. 31:2 sks. Eng. Walnuts, 200 lbs., 1 sk. Pecan Nuts, 175 lbs., 5 sks. Brazil Nuts, 600 lbs., 4 bxs. Dates, 200 lbs., 1 bx. Figs, 50 lbs., 1 brl. G Sugar, 280 lbs. Shipped J. E. Overfield, Overton, via C. & N. W., terms 1-10 n-30, his order Oct. 31: 4 bxs. Dates, 200 lbs., 1 bx. Peaches, 50 lbs., 7 sks. Graham Flour, 2 brl. G Sugar, 575 lbs., 1 brl. N. O. Molasses, 43 gals., 3 bxs. L. Soap. Having entered above sales in duplicate, pass the originals to the mail and post from the duplicates to the customers' ledger. (Refer to model customer's account page 121.) At this point compute the day's Profits of Sales. For this purpose the profit sheet is prepared containing a list of the kinds of merchandise sold. The items of this list are arranged under the general headings for speedy reference. Each day the person who has to do with the markets, reviews this list and enters the cost and selling prices and the amount of profit or loss on each quantity as bought and sold at the current day's figures. The cost price includes the net price at which the package or quantity is billed to the firm, plus carriage. The selling price is computed at 100 lbs. or other convenient denomination. To illustrate: take the first item of the list, Apricots, and assume that this article is bought at 9 cents per pound plus 45 cents per cwt. carriage, the total cost, #9.45 per cwt., should be deducted from the selling price, n cts. per lb. or #11.00 per cwt, giving #1.55 as the profit per cwt. When the weight does not enter into buying or selling quotations, the price per quantity quoted is usually more con- venient. Turning to the Profit Sheet, to the left of the items are vertical listing columns to which can be carried the items from the duplicate sales sheets. To use these columns, begin on the line opposite the item with the first quantity taken from the duplicate and enter succeeding sales above. After all sales for the day are listed, carry the total of each kind to the Quantity col- umn and make extensions to the Gross Profit column. For the sake of uniformity in extensions call y 2 cent as one cent additional and drop smaller fractions. The total of this column will give the gross profits of the day's sales. See illustrated profit sheet on page 125. Paid cash to Graham & Co., for rent of store building to December 1, #200. It is assumed that the checks are kept in tabs, checks tabbed for use with the register are frequently numbered before being tabbed, as a precaution against loss of any check or the issu- ance of any check that has not been entered in the register. Bank drafts are almost universally tabbed and entered in a draft register in this way. It is a good rule to make the entry in the register first, then fill out the check afterwards. The student may make entry in the check register, assuming that the check is written. Be sure to deduct the amount of check from last balance as in model. Drew #50.00 for sundry cash expenses. It is assumed that all cash received in the regular channels is deposited in the bank. The cashier draws from time to time certain amounts with which to make small cash payments. He keeps a record of these payments in a petty cash book, which need not be illustrated here. Enter the check as in model, December 3. WHOLESALE ACCOUNTING 127 Paid to Lynch Transfer Co. #129.49, the amount of freight bills for the invoices of mer- chandise received today. The freight bills of the in-freight are paid by the transfer company and collected by the latter of the consignee, who retains them as vouchers. Enter as in model. As this completes the day's entries in check register, the columns may be footed and ruled as shown in the model and the totals entered in journal. Post to the general ledger all accounts found in the general columns of the journal or check register. The journal debit general column represents the items posted from the check register. November 6, 19— Received an invoice of cheese from H. A. Hudson Co., Falls City, dated Nov. 5, amount- ing to #392.25 on account 60 days or 3 per cent discount 12 days. Enter voucher for net bill as usual. Received an invoice of goods amounting to #739.12, from Cunnard & Long, City, dated Nov. 5, on acct, 30 days or 1^ per cent off 10 ds. Received an invoice of goods from Hunter & Parsons, Capetown, dated Oct. 27, amounting to #469.29, invoiced 90 days or 5 per cent discount 30 days. Received an invoice of goods dated Nov. 1, from Kephart & Co., Philadelphia, amounting to #1,641.39, billed 60 ds., 2 per cent discount 10 ds. Received an invoice of merchandise from Silverman & Co., St. Johns, dated Nov. 1 , on account 30 days, without discount, amounting to #277.80. Cash has been received today as follows: From James Lee, Vinton, #107.53, payment invoice Nov. 1. Make entry of the cash receipt in the credit register giving date, name, address, invoice date, if it is specified, and amount of cash. If the customer is entitled to a discount, the discount can be inserted in the discount column at the time of posting. Cash was received from other customers: J. E. Overfield, Overton, #79.24, payment invoice Nov. 1. E. M. Bundy, Deerfield, #139.77, payment invoice Nov. 1. Henry Thompson, Thompsonville, #80.00 to apply on invoice Nov. 1. Enter in credit register, then post to sales ledger. In the first credit, that of James Lee, it is seen that he is entitled to #1.09 discount, which will balance his charge of #108.62. Enter this discount in the ledger, then transfer it back to the discount column of the credit register. Likewise credit the other remittances. No discount is to be credited on the partial payment of Henry Thompson. Post a partial payment of a bill above the writing line so that final pay- ment can be posted on writing line. Carry the total of cash received to the journal, charging cash and crediting in the general column. Other columns of credit register may be left open until close of month. Deposited cash in bank #406.54, showing the deposit in the check register. Preparatory to billing today's sales enter buying and selling prices and profit per, on profit sheet dated November 6. Made the following sales today: Henry Thompson, Thompsonville, his order Nov. 5, via C. B. & Q., terms, 2-10 n-60: 1 bx. Turkish Prunes, 45 lbs., 2 bxs. Raisins, 80 lbs., 5 sks. Carolina Rice, 540 lbs., 1 sk. Filberts, 200 lbs., 2 brls. G Sugar, 500 lbs., 1 brl. N. O. Molasses, 45 gals., 2 sks. Java Coffee, 100 lbs. Kingman & Co., Toledo, their order Nov. 5, via L. S. & M. S. Ry., terms 1-10 n-30: Chop Feed 500 lbs., 10 bxs. L. Soap, 4 sks. Carolina Rice, 420 lbs., 1 brl. Syrup, 45 gals. James Lee, Vinton, his order Nov. 6, via C. & N. W., terms, 1-10 n-30: 2 bxs. Figs, 100 lbs., 5 bxs. Peaches. 250 lbs., 10 sks. Corn Meal, 25 lbs. ea., 4 brls. Oat Meal, 536 lbs., 12 sks. Gra. Flour, 25 lbs. ea., 3 ch. Y. H. Tea, 180 lbs. James Finch, Orchard, his order Nov. 6, via S. C. & O., terms, 1 % off net, C. O. D.: 5 sks. Eng. Walnuts, 500 lbs., 2 sks. Pecan Nuts, 350 lbs., 10 sks. Brazil Nuts, 1200 lbs., 25 bxs. Dates, 1250 lbs., 3 bxs. Figs, 150 lbs., 2 bxs. Raisins, 84 lbs. Allison Hotel, City, their order Nov. 6, delivered, terms, net 10 ds. : 12 brls. Acme Flour, 50 sks. Graham Flour, 25 lbs. ea., 25 sks. XX Flour, 50 lbs. ea., 5 brls. C Sugar, 1580 lbs., 10 sks. Java Coffee, 1000 lbs. 128 HIGHER ACCOUNTING Colgate & Collins, Fairfax, their order Nov. 6, via C. & N. W. Ry., terms, i-io n-30: 14 bxs. Cal. Prunes, 25 lbs. ea., 5 brls. Acme Flour, 5 brls. Oat Meal, 700 lbs., 3 brls. G Sugar, 840 lbs., 3 brls. A Sugar, 900 lbs., 1 brl. N. O. Molasses, 47 gals., 4 bxs. Jap. Tea, 320 lbs., 2 sks. Rio Coffee, 240 lbs. J. H. Lyman, O'Neill, his order Nov. 5, via S. C. & O., terms, net 10 ds. : 5 bxs. L. Soap, 4 brls. Oat Meal, 540 lbs., Chop Feed, 1000 lbs., 1 brl. N. O. Molasses, 43 gals. After passing out original sales sheets, post to sales ledger from duplicates. Compute profits of the day. Kingman & Co. returned as unsalable the following goods from invoice Nov. 1. 3 bxs. Cal. Prunes, 75 lbs. Enter same in the return goods register, giving credit for the amount charged at the billing price. The Allison Hotel returned the following goods billed to them today: 25 sks. XX Flour, 50 lbs. ea., 6 sks. Java Coffee, 600 lbs. Give credit on returned goods register at prices bille'd. James Lee returned from invoice Nov. 1, 8 bxs. Cal. Prunes, 200 lbs., for which he is to receive credit at the price billed, to apply on subsequent orders. From the returned goods register post these items to the credit of the customers' accounts. Having posted to ledger, extend in the Return Profit column the profit at the rate credited on the day of sale. Leave the column open till last day of month. Enter check favor Lynch Transfer Co., for in-freight on merchandise received, #73.26. Referring to clip of unpaid vouchers you will find the first one payable Nov. 7. Allowing one day for transmission of your remittance to the Great Northern Milling Co., remove the voucher and enter in check register as in model form. Then fill check form on reverse of voucher to agree with entry in check register and pass the voucher check to the out-mail. In like manner enter two vouchers payable maturing Nov. 8, and pass the voucher checks to the out-mail. The last of the three vouchers payable entered will show an overdraft at the bank. Place this overdraft in balances column in red ink. As the checks to New York and Philadelphia cannot be returned and presented to your drawee bank before two or three days, the apparent overdraft is not a real one until the checks are all paid. Before that time the balance at the bank should be made safe by an additional deposit. Enter a check favor C. A. Carpenter on personal account for #100. Note that the amount of this check will increase the overdraft balance written in red ink. Enter a check for weekly payroll, #57.40, charged to Cost of Shipping. Enter a check for weekly payroll to office clerks, #42.10, and charge to Office Expenses. Make a discount at bank on 30 days' time, no days of grace, at 6 per cent for enough cash in even thousands to balance the overdraft and to pay the vouchers payable maturing prior to Nov. 15. Make journal entry charging Cash and Interest and Discount, and crediting Bills Payable. (Entry in an auxiliary Bills Payable Book need not be made in this set.) Enter the net credit, #2985, in check register and extend the bank balance in black. Post the three items in general column of check register to the general ledger, opening an account with C. A. Carpenter, personal". Foot the check register and carry totals to the journal, charging Vouchers Payable, Mer- chandise, and General, and crediting Cash. As a proof of the cash balance, compare the difference between debit and credit cash columns, with the balance on check register. November 10, 19— Engaged the services of Peter Henderson as traveling salesman. The firm agrees to pay him #100 per month and traveling expenses. Open an account in the general ledger with Peter Henderson and charge this account with cash advanced to him. He is to be credited monthly with salary, and weekly with traveling expenses as he reports the latter. Enter check for $50 handed to Peter Henderson on account. WHOLESALE ACCOUNTING 129 Received a bill of furniture and fixtures from Lambert & Co., City, amounting to $377.21, for which we agree to pay cash Dec. 10. Make voucher for this payment with journal entry. Received from Dayton Canning Co., Dayton, an invoice of goods dated Nov. 9, payable 60 ds., 2 per cent 15 ds., amounting to $396.41. Enter regularly for payment at net amount. Make out voucher payable to Lee & Avery, attorneys, in full for services to date, $75. Enter in journal, and, as you are to pay this at once, fill out the check and enter in check register, and then pass to mail. Received an invoice of merchandise from G. A. Mullin Co., Cedar Rapids, dated Nov. 9, terms 2-10 n-60, for $127.66. Enter as usual. Preparatory to today's billing enter prices and profits on daily profit sheet of this date. Sold and shipped E. M. Bundy, Deerfield, via C. B. & Q., terms 2-10 n-60, his order Nov. 9: 4 bxs. Dates, 200 lbs., 3 bxs. D. Peaches, 150 lbs., 4 bxs. Turkish Prunes, 135 lbs., 1 brl. G Sugar, 280 lbs., 4 brl. N. O. Molasses, 179 gals. Henry Thompson, Thompsonville, via C. B. & Q., terms 1-10 n-30, his order Nov. 8: 2 chs. Jap. Tea, 160 lbs., 3 sks. Eng. Walnuts, 300 lbs., 1 brl. N. O. Molasses, 46 gals., 2 sks. Java Coffee, 200 lbs., 40 bxs. L. Soap. Allison Hotel, City, delivered, net 10 days: 5 brls. Oat Meal, 670 lbs., 10 brls. Acme Flour, 20 sks. Graham Flour, 25 lbs. ea., 15 sks. Corn Meal, 25 lbs. ea., 4 sk. Carolina Rice, 420 lbs., 3 brls. N. O. Molasses, 140 gals., 6 bxs. Laundry Soap. James M. Finch, Orchard, via S. C. & O., terms, 2 per cent off, C. O. D., his order Nov. 9: 6 brls. G Sugar, 1500 lbs, 2 brls. A Sugar, 600 lbs., 4 brls. N. O. Molasses, 180 gal., 4 brls. Acme Flour, 6 brls. Oat Meal, 840 lbs., 3 sks. Carolina Rice, 312 lbs, 10 bxs. L. Soap. Henry Thompson, Thompsonville, via C. B. & Q., terms, 1-10 n-30, his order Nov. 9: 6 bxs. Peaches, 300 lbs., 1 brl. Eng. Currants, 258 lbs., 2 bxs. Apricots, 100 lbs., 5 brls. Acme Flour, 2 sks. Carolina Rice, 210 lbs., 7 bxs. Laundry Soap. James Lee, Vinton, via C. & N. W. Ry., terms, 1-10 n-30, his order Nov. 9: 2 brls. G Sugar, 490 lbs., 1 brl. C Sugar, 300 lbs., 2 sks. Java Coffee, 200 lbs., 3 ch. Y. H. Tea, 180 lbs., 4 sks. Almonds, 440 lbs., 5 brls. Syrup, 225 gals., 1 sk. Filberts, 200 lbs. J. H. Lyman, O'Neill, via S. C. & O., terms, net 10 days, his order Nov. 8: 10 brls. Acme Flour, 5 brls. Oat Meal, 670 lbs., 6 bxs. Peaches, 300 lbs., 1 bx. Cal. Prunes, 50 lbs., 4 sks. Brazil Nuts, 480 lbs., 1 sk. Eng. Walnuts, 100 lbs., 1 bx. Dates, 50 lbs. Extend bills at today's prices, pass originals to mail, post from duplicates to sales ledger, and compute profits on profit sheet. (The loss on California Prunes can be entered in red ink. The total losses should be deducted from total gains.) Received the following remittances on account, which enter in credit register. If no men- tion of discount is made in the remittance, credit should be given if earned. From Kingman & Co., Toledo, Inv. Nov. 1, cash, $114.83; from Henry Thompson, Thompsonville, cash payment invoice, Nov. 1, $73.75; from J. H. Lyman, O'Neill, a note for $249.04, which we have accepted in full of account; from Allison Hotel, City, cash for balance of invoice, Nov. 6, $240.80. Notice is received from bank that they have placed to our credit proceeds of collection of C. O. D., Nov. 6, James M. Finch, Orchard, $384.67, they having de- ducted 25 cents collection charges. (Enter this credit at once in check register as a deposit, then make entry in credit register as of an ordinary remittance. Credit the 25 cts. collection charge in ledger to balance charge of Nov. 6, then enter that amount in the collection or allow- ance column of credit register.) After posting is completed, foot total cash receipts and carry total to journal. Enter de- posit of today's cash receipts with exception of the C. O. D. credit at bank, which has already been entered as a deposit. Colgate & Collins have returned for credit items of invoice Nov. 6: 5 bxs. California Prunes, 125 lbs., 2 brls. Oat Meal, 280 lbs. (Enter and post.) Pay by check to Lynch Transfer Co., freight on today's receipts, $89.30, distributed as follows: Mdse. $46.20; Furniture and Fixtures, $43.10. Enter in check register. Find in vouchers payable clip three vouchers payable, one today to a local firm and two on Nov. 1 1 to out-of-town firms. Enter these in check register, fill checks, and pass to mail. 130 HIGHER ACCOUNTING Foot check register and journalize. Compare cash balance of journal with balance in check register. Examine duplicate sales sheets, credit register, returned goods register, check register, and journal to see that postings of the sales accounts and the accounts in the general columns are complete. November 15, 19— Paid J. S. Johnson & Son, Agents, for $3000 insurance on stock, in Merchants Fire Insur- ance Co., Policy No. 81 119, by check, #43.20. Charge General Expense. Peter Henderson sends expense account for traveling expenses of week ending Nov. 15, amounting to #20.29, which is approved. Credit same in journal. The student will readily observe that if items similar to the above become numerous enough in a business, a separate register for this class of entries should be kept similar to the returned goods reg- ister, the credit register, and the like. Enter a check for #30 favor Peter Henderson, on account. Enter payment of the two vouchers payable, maturing on the 1 5th and 1 7th respectively. Received cash remittances from the following persons : Henry Thompson, Thompsonville, Inv. Nov. 6, #135 07 ; Colgate & Collins, Fairfax, Inv. Nov. 6, #318.17; Kingman & Co., Toledo, Inv. Nov. 6, #75.09; James Lee, Vinton, Nov. 6, #131.41. After entry of above in credit register, journalize the day's receipts and deposit cash. Post to sales ledger. Total the check register and journalize. November 18, 19— Enter payment of vouchers due tomorrow. When the amount of business is small, it is not necessary to make daily transfers of cash to the journal, November 24, 19 — Credit Peter Henderson expense account for week ending Nov. 20, #25 19. Enter check favor Peter Henderson on account, #50. We are unable to pay the bill of Dayton Canning Co. today and have decided to defer payment until maturity, 60 days from Nov. 9. Substitute the new payment date on back of voucher for the present payment date and add the discount in red ink. When the check pay- ing this item is filled, the charge will be Interest and Discount, #7.93, Vouchers Payable #388.48. Return the voucher to clip placing it in the order of date of payment. Hunter & Parsons have agreed to take our interest bearing note for their net invoice pay- able Nov. 26. Enter in journal Vouchers Payable to Bills Payable, and mark the blank check on back "void." November 30, 19— Credit each partner #100 and Peter Henderson $66.67, f° r November salary, and charge salaries account. Preparatory to closing the month's work, carry the sales totals from the duplicate sales sheets to monthly summary sheet and foot. A similar summary of the daily profits should be made from the profit sheets. The stu- dent may find the total of profits on a slip of paper and on the monthly summary of sales de- duct the profit, leaving the difference opposite Merchandise. Journalize the above, charging Sales Ledger account and crediting Merchandise and Profit of Sales. Total the columns of the credit register and transfer totals to journal, charging Discount to Customers, Collection and Allowance, and Bills Receivable, and crediting Sales Ledger. The cash debit should be entered in general column, as it has been transferred to the cash column daily. WHOLESALE ACCOUNTING 131 Total the returned goods register and journalize, charging Merchandise and Profit of Sales and crediting Sales Ledger. Make the day's entries from the check register. Balance the journal. Finish posting the general ledger. Take a list of sales ledger balances and compare it with Sales Ledger account in the general ledger. Take a list of unpaid vouchers payable at the net amount charged and compare with Vouchers Payable account in the general ledger. Observations on the Trial Balance. The student will observe that since the merchandise account has been charged with cost of merchandise and credited with merchandise sales at cost price, the balance should theoretically equal an actual inventory now taken. In practice such an inventory must needs be corrected by loss or gain by reason of reduction or increase in value of goods from any cause. In most lines of business, however, the actual value of the merchandise ac- count and the profits of the business can be kept sufficiently close for practical purposes. The slight discrepancy between the ledger balance and the actual annual inventory when taken, can be reconciled by a journal entry charging Merchandise and crediting Loss and Gain, or the reverse. No system of profit accounting can give mathematically accurate results. Yet modern business methods, especially in active lines, demand that the business man should have the facilities for making a safe estimate of his daily gains or losses. The total of open accounts in the sales ledger should equal the Sales Ledger balance in the general ledger. The list of unpaid vouchers payable (net) should equal the Vouchers Payable balance in the general Ledger. Questions on Wholesale Accounting. i. What four natural divisions are found in a wholesale scheme of accounting? 2. Describe the purchase method given. 3. Describe the sales method given. 4. How are credits to customer's accounts entered and posted ? 5. Name the general books. 6. Describe the voucher journal. 7. Describe the check register. 8. Describe the method of computing daily profits. 9. How are aggregates of sales ledger accounts and vouchers payable verified monthly ? 10. What are the general advantages of casting out the profits from the merchandise ac- count daily? INDEX Page Abstracts of Freight Forwarded 102 Abstracts of Freight Received 102 Abstracts of Title . 27 Account Sales 3, 4 Account Sales Register 6, 10, 11 Articles of Incorporation— Corporation Account- ing 1 59 Balance Sheet— Railway Accounting 103 Banking— Daily Routine 41 Bank Statement 45, 51 Bill of Lading— Railway Accounting 99 Bills Receivable— Factory Accounting 81 Card Cabinet— Real Estate and Insurance 29, 30 Cash Blotter- Factory Accounting 85 Cash Book— Banking 44, 48,49 Cash Book— Railway Accounting 96, 97 Certificate of Deposit Register— Banking 43, 47 Certified Check Register— Banking 43, 47 Check Register— Factory Accounting 75 Check Register— Wholesale Accounting 119 Collection Department— Factory Accounting 78 Collection Journal— Factory Accounting 86, 87 Collection Register— Banking 43, 48, 49 Collection Tickler— Banking 43 Commission Accounting 3 Commission Cash Book 10, 11 Commission Merchant 3 Commission Sales Ledger 4, 5 Consignment 3 Consignor's Expense Bill— Railway Accounting.101 Consignee's Receipt— Railway Accounting 99 Corporation Accounting 58 Cost and Selling Prices— Wholesale Accounting. 124 Credit Register — Wholesale Accounting 122 Customer's Ledger Card 33 Daily Profit Sheet— Wholesale Accounting 125 Dealers' Ledger— Commission 12 Depositors' Balance Ledger— Banking 44, 50, 51 Discount Register— Banking 42, 48, 49 Discount Tickler— Banking ___ 43 Dividends 69 Draft Register— Banking 42, 47 Duplicate Bills 121 Expense Bill— Railway Accounting 99 Factory Accounting 71 Freight Forwarded— Railway Accounting. _93, 94, 95 Freight Received— Railway Accounting___93, 94, 95 General Journal— Factory Accounting 72, 73, 83 General Ledger — Banking 44, 50 General Ledger— Commission 14 General Ledger — Factory Accounting 71 General Sales Book 6, 9 Index to Real Estate Transfers 26 Installment Certificates— Corporation Account- ing •_ __ 59, 65 Page Installment List— Corporation Accounting 59, 64 Insurance Policy Regisrr ___36, 37 Invoice of Shipment 3 Land and Town Lots 22 Loose Leaf Accounting 6 Loose Leaf Account Sales 6, 7 Minute Book— Corporation Accounting 58 Notices of Freight— Railway Accounting 101 Petty Ledger— Banking 45, 50, 51 Policy Expiration Card 33 Practical Banking 41 Preferred Stock— Corporation Accounting 69, 70 Purchase Book ___ 8 Railway Accounting 93 Railway Accounting Terms 93 Real Estate and Insurance Accounting 29 Real Estate Cash Book 36, 37 Real Estate Plat 24, 25 Real Estate Titles 22 Real Estate Transfers 28 Receiving Book 5 Register of Real Estate Transfers 26, 27 Remittance Register— Banking 42, 47 Renting Card— Real Estate 30, 31 Report Blanks— Railway Accounting ....102, 104 Returned Goods Register— Wholesale Account- ing 122 Sales Book— Factory Accounting 81 Sales Department— Factory Accounting 78 Sales Ledger— Factory Accounting 79 Sales Ledger— Wholesale Accounting 121 Selling Card-Real Estate 32 Shipment 3 Shippers' Bills and Receipts— Railway Account- ing 98 Signature Book— Banking — 43 Stock Certificates— Corporation Accounting.. 59, 68 Stock Journal- Corporation Accounting 58, 63, 65, 66, 67 Stock Ledger— Corporation Accounting.__59, 64, 65 Subscription List— Corporation Accounting.. 59, 60 Superintendent— Factory Accounting...* 75 Tenant's Ledger Card 31 Time Book 77 Transfer Book— Coiporation Accounting 59 Trial Balance Book— Banking 45, 52 Voucher Checks 72, 118 Vouchers for Payment 72, 82, 84, 117 Vouchers for Record 72, 74 Voucher Journal— Wholesale Accounting 116 Voucher Register— Factory Accounting 76, 77 Voucher— Wholesale Accounting 117, 118 Way Bill— Correction Sheet 101 Way Bill— Railway Accounting 100, 101 Wholesale Accounting - H5 ^E 02747 M513271 UTiTG3S- G G6>7 (? \ H07