UC-NRLF HF $c m 4fii LABORATORY MANUAL Elements of Accounting ^ '3 1 1 1921 EDITION Fayette H. El well, B. A., C. P. A. PROFESSOR OF ACCOUNTING THE UNIVERSITY OF WISCONSIN LABORATORY MANUAL Elements of Accounting 1921 EDITION ^ Fayette H. El'a^ll, B. A., C. P. A. PROFESSOR OF ACCOUNTING THE UNIVERSITY OF WISCONSIN ^L8 COPYRIGHT, 1921 By FAYETTE H. ELWELL The Pakkeb Company Madison, Wisconsin PREFACE From the problems presented in this set are selected those which compromise the laboratory problem work for the second semester course in Elements of Accounting given in the Course in Commerce, University of Wisconsin. This set supplements the laboratory material contained in the text. Particular attention is called to the fact that Problems 59, 60, 68, 69, 70, 73, 75, 92, and 109 are copyrighted by Professor John R. Wildman. Permission for including them in this set was duly secured, and I herewith express my sincere appreciation to Pro- fessor Wildman for this courtesy. Problems21,22, 24, 26, 49, 51,52,71,72, 114, 115, and 116 have been adapted for use from the English Intermediate and Final Examinations. Several problems are quoted from or adapted from State C. P. A. Examinations. Unless otherwise indicated, all the problems contained in this manual have been copyrighted. f: H./ELWELL. July 1, 1921. t 452244 PROBLEM 1 1. The daily payroll of the X Manufacturing Co. is $500, and the men are paid every Saturday night. If the last day of the month falls on Thursday, what adjusting entry would you make for the payroll? 2. You find on the ledger of the J. B. Cox Co. an account called Unexpired Insurance $800 Dr. and one called Insurance $350 Dr. a. Which account would you close into Profit and Loss? b. How did the debit get into the Insurance Account — through the cash book, journal, or purchase book? 3. On December 31, the following entry was made to take up the accrued interest on a note receivable : Accrued Interest on Notes Receivable • • $200 Interest Earned $200 On January 15 the interest amounting to $210 was paid. Prepare the necessary cash book entry to record the payment. 4. Give the adjusting entries for the following: At the close of the year Dec. 31, an interest bearing note payable in favor of John Jones dated Nov. 25, at 90 days for $300, is outstanding. Also a note receivable with interest dated Dec. 15, for $100 and signed by Chas. Sprague. Taxes for the month are estimated at $20. Gas and electric bills amounting to $15 are unpaid. Manager's salary for month amounting to $150 is unpaid. It is estimated that the horses used for delivery purposes have eaten $25 worth of feed which had been bought and paid for in previous months. 5. Make the journal entries necessary for the following adjustments at the close of a period : Depreciation on Building $ 20 Depreciation on Office Equipment 5 Depreciation on Store Furniture 10 Depreciation on Delivery Equipment 100 Bad Debts 50 Office Supplies on Hand 15 Prepaid Advertising 60 Freight on Goods Purchased 200 Store Employes Unpaid 30 Care of Delivery Truck Bill Unpaid '. 20 Interest Accrued on Notes Receivable 15 Expired Insurance on Stock 25 Merchandise Inventory 6,000 6. The A Company shipped a bill of goods amounting to $460.00 to a cus- tomer, rendering the usual invoice therefor. The goods were destroyed in transit by a railway wreck. The A Company subsequently made a second shipment to its customer to replace the lost goods, and collected $460.00 from the railway company in payment of the lost shipment. Give the complete entries for this transaction. (New York, 1915) . ■' Jt < i * t ■ , ' • ' ' PROBLEM 2 On December 31, 19 — you were asked to clo£e the books of the business of F. W. Barton. The present worth which you obtain is to be accepted as the value of the business by R. J. Carter, who is purchasing Barton's business. The ledger balances are as follows: F. W. Barton, Investment $18,515 Real Estate 1,000 Buildings and Fixtures 8,000 Furniture and Furnishings 2,250 Automobile Delivery Truck 550 Accounts Receivable 7,875 Accounts Payable 5,425 Discounts on Sales 50 Merchandise Inventory, Jan. 1, 1919 10,000 Discount on Purchases 180 Merchandise Sales 15,000 Merchandise Purchases 6,000 Unexpired Insurance 75 Salaries and Wages 2,000 General Expense 1,000 Interest Paid 25 Interest Earned 20 Notes Receivable 300 Notes Payable 400 Advertising 120 Rent Received from Offices Upstairs 480 Cash on Hand 775 a. Use the following data in determining the net profit or loss and the net worth of the business : Mdse. Inventory, December 31, 1919 $ 6,000 General Expenses Prepaid 50 General Expenses Accrued 25 Insurance Unexpired ' 50 Interest Accrued on Notes Receivable 10 Interest Accrued on Notes Payable 5 Salaries and Wages Accrued 70 Barton and Carter agree that the fixed assets should be valued as follows : Real Estate $ 1,500 Buildings and Fixtures 7,500 Furniture and Furnishings 2,000 Automobile Delivery Truck 400 b. What amount should Carter pay for the business? Carter paid Barton the price obtained above by : (1) The check he (Carter) received from Ames Dwight for $1,200; (2) A New York draft of $1,500 which he received of A. Radway; (3) An accepted 10 day draft for $1,000 drawn on J. W. Miner by R. W. Wilson, and transferred to Carter by endorsement; (4) An accepted 30 day draft on J. Murray for $500; (5) Cash for the balance. Make the journal entry in Barton's books which will record the payment by Carter of the above amounts. PROBLEM 3 Group the accounts given in Problem 2, according to assets, liabilities, proprietary interest, income and expense. Follow the same general arrange- ment as indicated in Miner and Elwell, pages 347-348. PROBLEM 4 1. On July 1 Frank Wilson and Chas. K. Peck began a provision business with the following assets and liabilities : Assets Cash $1,350 Merchandise 4,250 Office Furniture 240 Delivery Equipment 200 Accounts Receivable 850 Liabilities Notes Payable 800 Accounts Payable 940 The partners had an equal interest in the business. The books had been kept by single entry. On October 1, the partners decided to change the books to double entry. The assets and the liabilities on that date were as follows : Assets Cash $ 925.00 Merchandise 4,150.00 Office Furniture 240.00 Delivery Equipment 200.00 Accounts Receivable: A. H. Kern 150.00 T. L. Fuller 130.00 E. R. Lakey 165.00 H. M. Hanna 175.00 Henry S. Arnold 250.00 Liabilities Notes Payable $325.00 Accounts Payable: H. J. Gould 100.00 J. L. Burgess 140.00 A. H. Francis 200.00 G. F. Hatfield 85.00 (a) In the ledger, credit each partner with one-half the net assets -on July 1. (b) Make a statement showing the net profit on October 1. (c) Credit each partner in the ledger with one-half the net profit, and show the present worth of each partner. (d) Change to double entry by debiting in the ledger each asset item, and crediting each liability item, on October 1. Take a trial balance of the ledger. 2. David E. Easton has assets and liabilities on December 31, as follows: Accounts Receivable $1,972.10 Bills Receivable 561.95 Merchandise Inventory 927.50 SuppHes 85.00 Real Estate 4,000.00 Cash 1,856.22 Accounts Payable $2,050.25 Notes Payable 500.00 On January 1 of the same year he began business with $6,500 in the bank, real estate worth $4,000, a note signed by Samuel Wright for $500. One of his notes in favor of Wilson and Co. for $300, was outstanding. On January 1 Easton's account was credited with $11,000. Find the profit for the period and make the necessary entry to change to double entry. 7 PROBLEM 5 1. Tell which of the following are capital expenditures and which are revenue expenditures: (aj Buiiding a road. {b; Repairing a road. (c; Jb-xtending the road already built into a new district. (d; Resurtacing tne road: 1. \Vuii materials of the same quality as were originally used. 2. VVitn materials of a better quality than were onginaiiy used, (e) Jfurchasing a wooden hling cabinet. (i) Repairing the tiling cabinet. Cgj Purchasing an additional unit for the filing cabinet. {h} Replacing the wooden tiling cabinet with a steel cabinet. 2. State which of the following should be charged or credited to capital and which to revenue : (a) Repairs to machinery and plant. (h) Replacements of machinery and plant. (cj Royalties on machines, owned and used by the company owning the patents, similar machines being leased under royalty to competitors. (d) Brokerage on a piece of property purchased. (e) Costs attending a mortgage given. (f) Costs of patents, including lawyer's charges and government fee. (g) Expenses of incorporating a company, (h) Discount on bonds sold. (i) Premium on bonds sold. 3. The trustee of an estate owning several buildings, built up from time to time a fund to care for repairs, which fund amounted to $6,000.00. The roof of one of the buildings was in such condition as to require renewal, which would be an expense of $4,500.00. It was decided to reshingle the building with material of more durable character, which would be an expense of $6,500.00. Give the entries to record this transaction. (Massachusetts, 1913) PROBLEM 6 Make the necessary journal entries for the following transactions : 1. An adding machine is purchased for $300. Depreciation is written off at the rate of 10% per annum. At the end of 5 years the machine is sold to B. I. Brown for $200. 2. Machinery account is debited for $10,000. The rate of depreciation is 10% per year. At the end of the sixth year the machine is sold for $5,000. 3. A hay dealer has a press which cost $1,800. He has reserved S% for depreciation each year for 5 years. At the end of the fifth year he is allowed $900 for the old press on a trade for a new one costing $2,000. He pays $200 in cash ; balance on account. 4. The Barnes Co. secures a new motor truck from the Austin Co. by paying $300 in cash and trading in their old truck for $500. The old truck stood on the books at $900 and a reserve for depreciation of $250 had accumu- lated against it. 5. A farmer owns a threshing machine which cost him $1,500. At the end of each of the five years he has owned it he has credited a Reserve for Depreciation account with $150. At the end of the fifth year he trades the machine to the Jones Co. for a new one costing $2,000. He is allowed $1,100 8 for the old machine and he pays $100 cash ; balance on account. The farmer sets up 10% of the cost price of the new machine as an annual credit to Reserve for Depreciation. The new machine is not satisfactory and at the end of the second year the farmer sells it for $1,200 cash. 6. Frank Penner trades in an old typewriter which was in his inventory at $90, for a new one worth $125, The typewriter company allows $70 on the old machine, for which a reserve of $30 was on the books. Make the necessary journal entries on the basis that the difference in value between the two machines was paid in cash. 7. A manufacturing concern purchased for $500 cash, a used machine, the original price of which was $1,200. The machine was charged at $1,200 and a reserve for depreciation of machine for $700 set up. Each year thereafter depreciation at the rate of 10% per annum was taken on cost. Three years after the machine was purchased it was traded in for a new machine at $100. The price of the new machine was $1,500. 8. Name the advantages or disadvantages of the following two methods of recording depreciation on machinery : (a) Crediting Machinery Account with ten per cent of the balance of the account each year and charging Profit and Loss. (b) Crediting a reserve for Depreciation, Machinery Account with ten per cent of the account each year and charging Profit and Loss. PROBLEM 7 In each of the following transactions show the balances of all accounts affected : 1. A new machine is purchased for $1,600, to take the place of an old one exactly similar that cost $1,500 four years ago. A reserve has been accu- mulated for its depreciation, amounting to $1,200, but the old machine was traded in toward the new one, counting $150 as part payment. 2. A new machine is purchased for $1,200 to replace one exactly similar that cost $1,500. The reserve account shows a credit of $1,200. $150 is allowed for the old machine to apply on the purchase of the new one. 3. A machine costing $1,000, purchased for cash to replace an old machine costing the same sum, is lost through the capsizing of a boat on the lake. A balance of $750 remained in the reserve account after the value -of the old machine had been closed into it. PROBLEM 8 1. Sales for August amount to $3,000. One per cent of sales is considered sufficient to reserve for bad debts. On August 1, the Reserve for Bad Debt account has a balance of $325. On August 15, John Smith, a customer owing $150, goes into bankruptcy and the trustee pays 10 cents on the dollar of the bankrupt's debts. On August 20, the account against Bray Bros., another customer, is collected, $75 ; fees for collection services, $10. Show journal entries for these transactions and the balance of the Reserve for Bad Debts account on August 31. 2. The loss from bad debts average one per cent of sales. December 1, the balance in the Reserve for Bad Debts account is $300. The sales for December amount to $7,000. During December, $10 is paid a firm of lawyers who were ordered to bring suit to collect an account. A debtor owing $50 assigned for benefit of creditors. The trustee paid out 50c on the dollar. 9 Five dollars was paid as special commission on collection of an old account. Show journal entries for these transactions, and the balance of the Reserve for Bad Debts account on December 31. ' 3. The following notations appear at the foot of a trial balance. Give the journal entries necessary to record them properly: (1) Accrued Interest on Notes Receivable $ 30.00 (2) Accrued Interest on Notes Payable 50.00 (3) Insurance for the Period 75.00 (4) Unpaid Wages 40.00 (5) Unpaid Gas and Electric Bill 25.00 (6) Depreciation on Building 200.00 (7) Estimated Bad Debts for Period 60.00 4. The following trial balance is made up at the end of the first period's business from the accounts appearing on the ledger of John Boyle. Note that certain adjusting entries for depreciation, bad debts, and accruals have been made. Cash $ 1,950.00 Notes Receivable 2,000.00 Accounts Receivable $4,000.00 Less Reserve for Bad Debts 400.00 3,600.00 Mdse. Inventory 10,000.00 Real Estate 1,000.00 Building 3,000.00 Less Reserve for Depreciation 150.00 2,850.00 Delivery Equipment 500.00 Less Reserve for Depreciation 100.00 400.00 Accrued Interest Receivable 10.00 Notes Payable $ 6,000.00 Accounts Payable 1,000.00 Accrued Interest Payable , 20.00 Interest Earned 40.00 John Boyle Invest 10,00o!o0 Mdse. Sales , 19,570.00 Mdse. Purchases 5,480.00 Operating Expenses 8,690.00 Bad Debts 400.00 Depreciation 200.00 Interest Paid 5o!oO $36,630.00 $36,630.00 What journal entries should be made to put the reserves and the accruals on the books? PROBLEM 9 Cash $ 244.00 Notes Receivable 217.00 Accts. Receivable 5,140!oO Mdse. Inventory, Jan. 1 3,020.00 Notes Payable 1,158.00 Accts. Payable 2'692!00 John Smith, Invest 3 500 00 Mdse. Sales .' 16,'406!00 Disc, on Purchases 329.00 Mdse. Purchases 7 588 (K) Rent Paid '..'.'.'.'.'.'.'.'.'.. '780.00 balesmen s Salaries 4 839 00 Advertising ['.'.'.['.'.'.'.'. 'S03!00 10 Fuel 100.00 Taxes and Insurance 139.00 Office Salaries 445.00 Stationery and Office Supplies 284.00 Postage 40.00 Telephone and Telegraph 108.00 Sundry Office Expense 190.00 Interest Paid 175.00 Disc, on Sales 258.00 Collection and Exchange 17.00 Notations: Mdse. Inventory, Dec. 31 $2,810.00 Estimated Loss by Bad Debts 150.00 Accruals: Expenses 90.00 Interest on Notes Pay 15.00 Interest on Notes Rec 2.00 Prepare: (a) Trial Balance.* (b) Adjusting and closing journal entries. (c) Operating and financial statements. Note: Where specific requests are not stated in the problem, the instructor may ask the student to prepare any or all the following: adjusting and clos- ing journal entries, revenue accounts, operating statement and financial state- ment. The instructor also may request that several problems be solved on working sheets, so that the student may be thoroughly familiar with this useful method of obtaining statement data. PROBLEM 10 Cash, in Safe $ 210.00 Cash, on Deposit 1,600.00 Notes Receivable 856.45 Accts. Receivable 3,276.85 Mdse. Inventory 2,146.75 Real Estate 2,000.00 ' Building and Fixtures 6,500.00 Office Furniture 450.00 Auto Delivery 475.25 Arnold Mfg. Co. Stock 2,000.00 Notes Payable $ 1,243.45 Accts. Payable 2,750.05 R. H. Tillson, Invest 7,500.00 R. H. Tillson, Drawing 98.60 Jas. A. Dodge, Invest 7,500.00 Jas. A. Dodge, Drawing 75.00 Thos. A. Wilbur, Invest 3,750.00 Thos. A. Wilbur, Drawing 40.90 Mdse. Sales 6,375.00 Interest Earned 14,50 Mdse. Disc, on Purchases 30.90 Mdse. Purchases 8,947.55 Mdse. Disc, on Sales 21.20 Sundry General Expense 17.55 Salaries 417.00 Interest Paid 30.80 * $29,163.90 $29,163.90 Inventories: Merchandise $ 7,850.00 Depreciation: Building and Fixtures 2% Office Furniture 5% Auto Delivery 10% 11 Accrued Expenses: Freight and Cartage on Purch 21.00 Freight and Cartage Out 32.00 Salaries 100.00 Sundry General Expense 4.50 PROBLEM 11 Cash $ 2,680.00 Notes Receivable 855.00 Accts. Receivable 6,025.00 Reserve for Bad Debts $ 1,495.00 Mdse. Inventory, Sept. 1 61,730.00 Store and Office Furniture 5,295.00 Fuel 300.00 Advertising 1,060.00 Light 255.00 Delivery Expense 2,475.00 Repairs to Furniture 210.00 Unexpired Insurance 860.00 Notes Payable 10,000.00 Accts. Payable 13,320.00 J. Burd, Invest 20,000.00 J. Burd, Drawing 155.00 T. Bond, Invest 20,000.00 T. Bond, Drawing 85.00 Mdse. Sales 47,495.00 Mdse. Disc, on Purchases 1,200.00 Interest Earned 20.00 Rent Earned (Sub-lease) 300.00 Mdse. Purchases 25,435.00 Rent Paid 1,000.00 Salesmen's Salaries 5,535.00 Telephone and Telegraph 35.00 Interest Paid 150.00 $113,985.00 $113,985.00 Notations: Mdse. Inventory, Sept. 30 $ 51,480.00 Insurance for the month. 50.00 The loss from bad debts estimated at 1% of the sales. Depreciation on store and office furniture, 10% for the year. The month's share of taxes is estimated at $100. Fuel on Hand 265.00 PROBLEM 12 Cash in Safe $ 245.95 Cash, on Deposit 1,210.22 Notes Receivable 800.00 Accts. Receivable - 532.75 Mdse. Inventory 2,630.60 Real Estate 2,000.00 BuildinpT and Fixtures 4,532.00 Office Furniture 132.21 Auto Delivery 365.60 Midland R. R. Stock 1,500.00 Central R. R. Stock .• . . . 1,500.00 Notes Payable $ 756.25 Accts. Payable 962.25 Jas. L. Merritt, Invest 8,000.00 Tas. L. Merritt, Drawing 55.00 Howard J. Paton, Invest 4,000.00 12 Howard J. Paton, Drawing 40.00 Martin T. Leland, Invest 4,000.00 Martin T. Leland, Drawing 56.80 Mdse. Sales ; 5,190.00 Interest Earned 25.55 Mdse. Disc, on Purchases 35.65 Mdse. Purchases 7,007.24 Mdse. Disc, on Sales 21.00 Sundry General Expense 14.23 Salaries 373.35 Office Supplies 15.00 Interest Paid 17.75 $ 23,009.70 $ 23,009.70 Inventories: Merchandise $ 5,375.00 Depreciation: Building and Fixtures 1 % Office Furniture 6% Auto Delivery 5% Accrued Expenses: Unpaid Telephone Bill 11.00 Unpaid Salaries 1 10.00 Office Supplies, Unpaid Bill 6.25 PROBLEM 13 Petty Cash $ 160.00 Cash on Deposit 2,985.00 Notes Receivable 3,000.00 Accounts Receivable 8,075.00 Reserve for Bad Debts $ 1,800.00 Merchandise Inventory 40,730.00 Furniture and Furnishings 8,585.00 Delivery Equipment 1,800.00 Unexpired Insurance 1,310.00 Fuel on Hand 425.00 Notes Payable 1 1,860.00 Accounts Payable 8,425.00 C. A. Chadwick, Investment 30,000.00 C. A. Chadwick, Drawing 210.00 Merchandise Sales 91,755.00 Mdse. Disc, on Purchases 1,770.00 Commissions Earned 660.00 Interest Earned 115.00 Rent Earned 185.00 Merchandise Purchases 48,775.00 Store Rent Paid 2,400.00 Salesmen's Salaries 9,080.00 Advertising 6,035.00 Delivery Expense 3,820.00 Warehouse Rent Paid 540.00 Office Salaries 5,485.00 Sundry Office Expenses 2,850.00 Interest Paid 305.00 $146,570.00 $146,570.00 Merchandise Inventory 24,665.00 Depreciation: Furniture and Furnishings, 10% per year. Delivery Equipment, 25% per year. Insurance for the Year 500.00 Fuel for the Year 300.00 Taxes are Estimated at 500.00 Accrued Salaries: Office 120.00 Salesmen 435.00 13 PROBLEM 14 Petty Cash $ 150.00 Cash on Deposit 4,000.00 Notes Receivable 4,750.00 Accounts Receivable 8,600.00 Merchandise Inventory 12,500.00 Furniture and Furnishings 800.00 Good Will 6,500.00 Prepaid Insurance 750.00 Notes Payable $ 1,500.00 Accounts Payable 2,000.00 Johnson, Investment 25,000.00 Johnson, Drawing 625.00 Wells, Investment 12,500.00 Wells, Drawing 325.00 Merchandise Sales 27,000.00 Interest Earned 85.00 Merchandise Purchases 17,500.00 Rent Paid 1,000.00 Heat and Light 300.00 Salesmen's Salaries 6,800.00 Freight on Sales 425.00 Traveling Expenses 400.00 Sundry Sales Expense 100.00 Office Salaries 1,305.00 Sundry Adm. Expenses 1,000.00 Discounts on Sales 150.00 Interest Paid 105.00 $68,085.00 $68,085.00 Notations: Insurance of the Six Months $ 200.00 Estimated Taxes for the Period 200.00 Allow Johnson salary at the rate of $2,500 per annum and Wells salary at the rate of $1,500 per annum. Reserve 5% for depreciation of furniture and furnishings. Reserve 2% of sales for bad debts. Merchandise Inventory 12,860.00 Division of profit and loss: Johnson, % ; Wells, Vs. PROBLEM 15 The following was the trial balance of Brown and Green, December 31, 19—: Cash $ 4,100.00 Notes Receivable 6,250.00 Accounts Receivable 8,600.00 Furniture 750.00 Good Will 5,000.00 Inventory, January 1, 19— 13,000.00 Prepaid Insurance 1 ,500.00 Notes Payable $ 2,500.00 Accounts Payable 4,000.00 Brown, Investment 25,000.00 Green, Investment 12.500.00 Brown, Drawing 1,625.00 Green, Drawing 825.00 Sales 54,000.00 Returned Sales * 425.00 Fuel and Light 2,350.00 Rent 2,000.00 Purchases 35,000.00 14 Wages 6,800.00 Traveling Expenses 1,175.00 Postage 1,300.00 Administrative Expense 3,500.00 Sundry Sales Expense 1,100.00 Discount on Sales 300.00 Office Salaries 2,400.00 $98,000.00 $98,000.00 Notations: Expired insurance for the year, $500. Taxes for the year, $400. Allow Brovi^n and Green salaries of $4,000 and $2,000 respectively. Reserve 10% for depreciation of furniture. Reserve 2% of Sales for bad debts. Inventory December 31, 19—, $15,000. Interest accrued on notes receivable, $75. Interest accrued on notes payable, $50. Freight on sales unpaid, $150. Wages unpaid, $200. PROBLEM 16 You are given: (1) The balance sheet of Owen & Norman as on Jan. 1, 19 — . (2) The cash transactions for the year ending Dec. 31, 19. — (3) A summary of the remaining transactions for that year. You are to prepare : (a) Revenue accounts for the year 19 — . (b) Financial statement as of December 31, 19 — . Balance Sheet, January 1, 19 — . Cash $ 4,000.00 Notes Payable $ 4,000.00 Notes Receivable 3,500.00 Accounts Payable 3,000.00 Accounts Re- Ow^en, Investment 25,000.00 ceivable $10,000.00 Norman, Investment 25,000.00 Less Res. for Bad Debts 500.00 9,500.00 Mdse. Inventory 15,000.00 Furniture and Furnishings.... 5,000.00 Real Estate 5,000.00 Buildings and Fixtures 15,000.00 $57,000.00 $57,000.00 (2) Cash Transactions Cash, January 1, 19— $ 4,000.00 Office Salaries $ 3,000.00 Received from customers 67,000.00 Wages 3,700.00 Notes Receivable 22,500.00 Notes Payable 38,300.00 Accounts Payable 36,750.00 Sundry Office Expenses 2,000.00 Balance, December 31, 19— . . . 10,250.00 $94,000.00 $94,000.00 (3) Summary of Remaining Transactions Purchases $75,000.00 Discounts on Purchases 750.00 Sales 95,000.00 Discount on Sales 500.00 Notes Receivable Received from Customers During the Year.... 23,250.00 15 Notes Payable Given to Creditors During the Year 38,750.00 Depreciation on Furniture and Furnishings S% Depreciation on Buildings and Fixtures 5% Reserve 1% of Sales for Bad Debts. Inventory, December 31, 19— 17,500.00 Note: In solving this problem, first build up skeleton ledger accounts as necessary, and take a trial balance to insure the accuracy of the work. PROBLEM 17 The following was the trial balance on June 30, 1919, of Johnson & Wells, carrying on a jobbing business in partnership, sharing profits or losses in proportion of two-thirds and one-third, respectively: Good Will $ 6,500.00 Fuel and Lighting 175.00 Inventory, January 1, 1919 12,500.00 Sales $27,000.00 Freight on Sales 425.00 Notes Payable 1,500.00 Notes Receivable 4,750.00 Office Salaries 2,350.00 Johnson, Investment 25,000.00 Wells, Investment 12,500.00 Johnson, Drawing 625.00 Wells, Draviring 325.00 Rent 1,000.00 Purchases 17,500.00 Wages 6,800.00 Accounts Receivable 8,600.00 Accounts Payable 2,000.00 Discounts on Sales 150.00 Cash on Deposit 4,000.00 Cash on Hand 100.00 Postage 250.00 Furniture and Furnishings 750.00 Prepaid Insurance 500.00 Traveling Expenses 400.00 Sundry Sales Expense 100.00 Sundry Administration Expense 200.00 $68,000.00 $68,000.00 Notations: Insurance for the six months, $200. Estimated taxes for the period, $200. Allow Johnson salary at the rate of $2,500 per annum' and Wells salary at the rate of $1,500 per annum. Reserve 5% for depreciation of Furniture and Furnishings. Reserve 2% of Sales for bad debts. Inventory, June 30, 1919, $12,860. PROBLEM 18 The following trial balance is taken from the ledger of Curtis, Marshall and Hall, who share profits and losses equally : Trial Balance, January 1, 1919 Curtis, Investment Account $ 57,260.00 Marshall, Investment Account 46',00o!o0 Hall, Investment Account 36,225.00 Accounts Payable 47,820.00 16 Purchases $125,010.00 Investments 3,500.00 Dividends on Investments 300.00 Cash on Hand 1,185.00 Wages 19,495.00 Notes Payable 15,550.00 Salaries 4,565.00 Office Expenses 1,445.00 Repairs 1,575.00 Depreciation Reserve Account 1 1,250.00 Interest and Discounts 4,945.00 Sales 163,430.00 Marshall, Drawing Account 3,000.00 Curtis, Drawing Account 3,480.00 Accounts Receivable 58,100.00 Rent 2,750.00 Lawyers' Fees 225.00 Land 8,650.00 Buildings 95,000.00 Machinery 40,005.00 Bills Receivable 4,905.00 $377,835.00 $377,835.00 The Inventory on hand at the close of the period was $26,470. PROBLEM 19 Draw up from the following Trial Balance the revenue accounts and the financial statement for the year ending Sept. 30, 1919. James Taylor and Co. Trial Balance, September 30, 1919 J. Taylor, Capital $180,260.00 T. Jones, Loan Account • 17,965.00 Inventory, September 30, 1918 $161,730.00 Salaries 6,970.00 Wages 55,295.00 Purchases 103,435.00 Selling Expenses 8,950.00 Advertising 6,035.00 Interest Paid 1,645.00 Bad Debts 1,190.00 Rent Paid : ' 3,780.00 Taxes 575.00 Coal 425.00 Unexpired Insurance, Sept 30, 1918 1,310.00 Sales 167,495.00 Return Sales 6,110.00 Notes Receivable 855.00 Notes Payable 14,020.00 Commissions Received 660.00 Furniture and Furnishings 5,295.00 Rent Received 150.00 Repairs to Buildings 15.00 Legal Expense 135.00 Petty Cash in Hand 1 5.00 Bank Balance— Overdraft 425.00 Bad Debt, Reserve for 1,495.00 Accounts Receivable 52,025.00 Accounts Payable 33,320.00 $415,790.00 $415,790.00 On September 30, 1919, the merchandise inventory amounted to $224,200 and the Unexpired Insurance was $900. 17 PROBLEM 20 Trial Balance, June 30, 1919 Billings, Investment $181,270.00 Inventory, July 1, 1918 $162,740.00 Salaries 6,970.00 Wages 55,295.00 Purchases 103,435.00 Selling Expenses 8,950.00 Advertising 6,035.00 Interest Paid 1,645.00 Bad Debts 1,190.00 Office Rent 3,235.00 Taxes 575.00 Coal 425.00 Insurance 1,310.00 Sales 167,495.00 Return Sales 6,100.00 Notes Receivable 855.00 Notes Payable 31,985.00 Warehous' Rent Paid 545.00 Commissior.s Earned 660.00 Furniture and Furnishings 5,295.00 Rent Received 150.00 ' Repairs to Furniture and Furnishings 15.00 Petty Cash on Hand 160.00 Cash 2,985.00 Bad Debts Reserve 1,920.00 Accounts Receivable 49,040.00 - Accounts Payable 33,320.00 $416,800.00 $416,800.00 The Merchandise Inventory on June 30, 1919, amounted to $223,210. PROBLEM 21 (Adapted from the English Intermediate Examination, June, 1900) A ccr.^fied public accountant gave one of his staff a trial balance and the inventory as on June 30, 1918, instructing him to prepare therefrom a balance sheet, after crediting partners with 5% on their capital. The following in- correct statements were the result : From the information given prepare a trial balance as of June 30, an operating statement and a financial statement. Profit and Loss Account for Half Year Ending June 30, 1918 Purchases $149,240.00 Sales $186,635.00 Inventory, June 30, 1918 18,370.00 Interest on Partner's Partner's Drawing 6,390.00 Capital 2,500.00 Rent 1.305.00 Inv. January 1, 1918 16.770.00 Salaries 3,120.00 Commission Received 9,330.00 Wages 21,860.00 General Expenses 5,825.00 Interest Paid 1,215.00 Balance, Net Pr. to Balance Sheet 7,910.00 $215,235.00 $215,235.00 Balance Sheet Accounts Receivable $ 87,195.00 Accounts Payable $ 65,025.00 Cash on Deposit 17,405.00 Notes Receivable 43.380.00 Cash on Hand 315.00 Partner's Capital, January 1, Loan from Bank 25,000.00 1918 50,000.00 Inv. June 30, 1918 18,370.00 Net Profit from Profit and Notes Payable 18,030.00 Loss Account 7.910.00 $166,315.00 $166,315.00 U PROBLEM 22 (Adapted from English Examination, December, 1904.) Inventory, January 1, 1917 $ 20,000.00 Land 25,000.00 Buildings 150,000,00 Investment, Scolt 105,000.00 Investment, Harris 78,750.00 Reserve for Depreciation, Buildings 25,000.00 Cash on Deposit 8,250.00 Cash on Hand 750.00 Accounts Payable 113,500.00 General Administration Expenses 50,000.00 Notes Payable 7,500.00 Purchases 180,000.00 Machinery and Equipment 75,000.00 Insurance Paid to July 1, 1918 1,000.00 Rent Paid to July 1, 1918 750.00 Reserve for Bad Debts 5,000.00 Repairs to Property 15,000.00 Improvements and Additions to Property, producing thereby 5% increase of rents 10,000.00 Rents Received 12,750.00 Reserve for Taxes 6,000.00 Bad Debts 5,500.00 Sales 386,500.00 Salaries 10,000.00 Depreciation of Equipment and Machinery 12,500.00 Investments 25,000.00 Interest Paid 8,750.00 Accounts Receivable 130,000.00 Drawings, Harris 5,000.00 Drawings, Scott 7,500.00 The stock on December 31, 1917, was valued at $25,000. Scott receives three-fifths and Harris two-fifths share of the profits. PROBLEM 23 Jenkins and Hart begin business as partners on January 1, 1917. The following is the trial balance on June 30, 1917 : Jenkins, Investment Account $ 30,000.00 Hart, Investment Account 20,000.00 Sales 112,290.00 Accounts Payable 26,400.00 Accounts Receivable $ 44,300.00 Cash 50.00 Purchases 114,920.00 Wages and Salaries 11,630.00 Rent 1,975.00 Furniture and Fixtures 4,700.00 Jenkins, Drawing Account 2,250.00 Hart, Drawing Account 1,500.00 General Expenses 6,360.00 Discount on Sales 1,005.00 $188,690.00 $188,690.00 The Inventory on June 30, 1917, was $30,960.00. Prepare as on June 30, 1917, the operating statement, and balance sheet providing depreciation on Furniture and Fixtures at the rate of 10% per annum, and reserving 1% on the amount of sales for bad debts. 10 PROBLEM 24 (Adapted from English Intermediate Examination, May, 1908) B. M. Bartlett and J. C. Blake carry on business in partnership, sharing profits and losses in proportion to capital invested. The following is the trial balance of their ledger on December 31, 1917: B. M. Bartlett, Investment Jan. 1, 1917 $ 60,000.00 J. C. Blake, Investment Jan. 1, 1917 40,000.00 Sales 250,000.00 Purchases $100,000.00 Stock, Jan. 1, 1917 44,500.00 Plant 33,000.00 Fixtures 2,500.00 Freight (inward) 2,500.00 Salaries and Wages 75,000.00 Commissions Paid 2,500.00 Office and Traveling Expense 16,250.00 Interest Paid 250.00 Rent and Taxes 3,000.00 Bad Debts 1,000.00 Notes Receivable 5,000.00 Accounts Receivable 40,000.00 Accounts Payable 7,500.00 Accrued Wages 1,500.00 Discount on Sales 6,250.00 Discount on Purchases 2,500.00 Bank Balance 22,500.00 Cash on Hand 250.00 B. M. Bartlett, Drawing 3,000.00 J. C. Blake, Drawing 2,000.00 $361,500.00 $361,500.00 The stock on hand at the end of the year amounted to $46,500. Adjustments : Allow each partner $2,500 for salary, and 5% interest on capital. Deprc.:iation on plant and fixtures is 5%; reserve for bad debts 3^^% on Accounts Receivable. PROBLEM 25 Cramer, Fisher, and Smith entered into a partnership agreement on January 1, 1921 for the purpose of operating a dry goods store. At December 31, 1921, the Trial Balance of the partnership, before making any adjustments, was as follows : Cash in Bank $ 4,000.00 Cash on Hand 2,000.00 Merchandise Inventory 120,000.00 Accounts Receivable — Customers 80,000.00 Accounts Receivable — Employees 30,000.00 Furniture and Fixtures 100,000.00 Notes Payable $ 50,000.00 Accounts Payable 25,000.00 Cramer, Investment 80,000.00 Fisher, Investment 60,000.00 Smith, Investment 40,000 00 Sales 594,000.00 Purchases 320,000.00 Salaries 110,000.00 Store Expense 80,000.00 Office Expense 1,000.00 Interest Paid 2,000.00 $849,000.00 $849,000.00 Notations : Interest at 5% is to be allowed on the partners' Capital Accounts. Mr. Cramer owns the store and will be credited at the end of each month with $300 for rent. Of the interest paid on Notes Payable, $500 applies to period subsequent to December 31, 1921. Accrued Salaries $1,500. Reserve y2. of 1% of Sales for Bad Debts. Allow 10% depreciation on Furniture and Furnishings. Merchandise Inventory December 31, 1921, $175,000.00. Prepare an operating and financial statement as of December 31, 1921; also prepare an account for each partner. PROBLEM 26 (Adapted from the English Intermediate Examination, December, 1898) Arrange the following figures in the form of a Trial Balance as on Decem- ber 31, 1918: Capital, $25,000; Accounts Receivable, $7,500; Accounts Payable $5,000; Notes Receivable, $1,250; Notes Payable, $1,250; Furniture, $500; Sundry Stocks and Shares, $1,000; Sundry Expenses, $2,500; Real Estate, $1,250; Depreciation, $250; Purchases, $50,000; Sales, $55,000; Discounts on Goods Purchased, $2,500; Discounts Allowed on Sales, $1,000; Cash on Hand, $16,000; Inventory January 1, 1918, $7,500. The inventory on December 31, 1918, was $8,750, PROBLEM 27 From the following information prepare : 1. A trial balance, 2. Closing journal entries, 3. Operating and financial statements as of December 31. Notes Receivable, $4,000; Accounts Receivable, $6,540; Notes Payable, $2,480.89; Accounts Payable, $3,600; Real Estate, $6,750; Plant and Machin- ery, $7,500; General Expense, $1,500; Office Salary, $600.75; Wages, $183.45; Freight and Cartage Out, $200; Cash on Hand, $175; Cash in Bank, $8,679.11; Merchandise on Hand at the Beginning of the Year, $9,500.60; Purchases, $27,000; Sales, $42,805.42; Return Sales, $168; Interest Paid, $769.40; L. S. Carter, Investment, $15,725; L. S. Carter, Drawing, $600; F. M. Gayer, Investment, $17,725; F. M. Gayer, Drawing, Debit, $760; Furniture, $600; Rent Unexpired, $250; Insurance Unexpired, $160; Good Will, $7,000; . Inventory on Hand at the End of the Period, $9,480; Rent for the Year, $1,200; Insurance Expired, $180; Interest Accrued on Notes Receivable, $28; Wages Accrued, $116. Reserve 5% for depreciation on plant and machinery, 10% for deprecia- tion on furniture. Reserve 1% of the sales for bad debts. PROBLEM 28 The following trial balance is taken from the ledger of Scott and Harrison. Prepare adjusting and closing entries, and operating and financial statements. Trial Balance December 31, 1920 Cash $ 1,185.00 Notes Receivable 20,000.00 Accounts Receivable 58,100.00 Reserve for Bad Debts $ 3,515.00 21 Inventory 28,955.00 Real Estate 8,650.00 Buildings and Fixtures 24,000.00 Reserve for Depreciation on Buildings and Fixtures 1,585.00 Investments 3,500.00 Good Will 20,000.00 Fuel on Hand 200.00 Stationery and Office Supplies, Unused 400.00 Insurance, Unexpired 3,015.00 Notes Payable 15,000.00 Accounts Payable 47,820.00 Notes Receivable Discounted 640.00 Scott, Investment 22,500.00 Harrison, Investment 22,500.00 Sales 67,375.00 Dividends on Investments 300.00 Discount on Purchases 850.00 Interest Earned 25.00 Advertising 6,035.00 Delivery Charge 600.00 Salesmen's Salaries 5,270.00 Office Salaries 2,000.00 General Office Expense 200.00 $182,110.00 $182,110.00 Notations: Inventories: Prepaid Insurance $ 2,500.00 Office Supplies 250.00 Interest Accrued on Notes Receivable 300.00 Interest Accrued on Notes Payable 115.00 Fuel Used During the Period 175.00 Taxes Estimated for the Year 240.00 Accrued Salaries distributed as follows: Salesmen 425.00 Office 160.00 Merchandise Inventory January 1, 1920 50,000.00 Purchases During the Period 14,689.00 Sales 103,109.00 Cost of Sales 35,734.00 PROBLEM 29 The following are the totals of some of the columns of a Cash Journal. With the necessary additional information given, prepare a trial balance. National Bank: Deposits $ 18,000.00 Checks 15,480.25 Cash: Receipts 55,700.50 Payments 55,325.18 General Debits: Furniture and Furnishings 2,400.00 Unexpired Insurance 250.00 Good Will 5,000.00 Notes Receivable 525.50 Fuel on Hand 315.00 Real Estate 4,000.00 Buildings 10,000.00 Notes Payable 4,000.00 General Credits: Y Investment 39,940.00 Accrued Salaries 200.00 Notes Payable 6,250.00 Reserve for Bad Debts 128.00 22 Accounts Receivable: Debit 4,000.00 Credit 1,260.00 Accounts Payable: Debit 4,280.00 Credit 10,924.00 Discount on Purchases 170.00 Salesmen's Salaries 425.50 Office Salaries 80.00 Sundry General 35.25 Taxes 90.00 Postage 15.50 Advertising 125.00 The Opening Inventory was $ 21,040.00 Purchases for the Period 4,000.00 Freight on Above 100.68 Insurance Carried on the Stock 50.00 Buying Salaries for the Period 168.50 Cost of Sales 3,246.50 Credit Sales were 1,460.50 Cash Sales were 3,463.50 PROBLEM 30 The following are the totals of the columns of a cash journal. The Gen- eral Ledger terms are given in detail. From these totals (a) Prepare trial balance, arranging the accounts in the general order. (b) Prepare that section of the operating statement which gives the gross profit on merchandise sold. The National Bank: Deposits $ 14,800.00 Checks 11,130.11 Cash: Receipts 45,699.75 Payments 45,221.15 General Debits: Unexpired Rent 300.00 Unexpired Insurance 200.00 Good Will 3,000.00 Furniture and Furnishings 100.00 Notes Receivable 1,500.00 General Credits: X Investment 35,000.00 Accrued Salaries 200.00 Notes Payable 5,000.00 Reserve for Bad Debts 500.00 Accounts Receivable: Debit 5,000.00 Credit 125.00 Accounts Payable: Debit 1,000.00 Credit 13,000.00 Discount on Purchases 193.49 Inventory: Debit 40,985.00 (Opening inventory $35,000.00.) Credit 1,600.00 Salesmen's Salaries 300.00 Advertising 75.00 Sundry Sales Expense 25.00 Office Salaries 75.00 Postage 10.00 Sundry General Expense 55.00 Sales: Debit 1,600.00 Credit 2,755.00 23 PROBLEM 31 Prepare trial balance and operating and financial statements as of January 31, 1921. • On January 1, 1921, the financial statement of X, a retailer, was as follows: Furniture and Fixtures $2,000.00 Cash 500.00 Notes Receivable 3,000.00 Accounts Receivable 5,000.00 Merchandise on Hand 4,000.00 $14,500.00 Notes Payable $5,000.00 Accounts Payable 3,000.00 X Investment 6,000.00 X Drawing 500.00 $14,500.00 During the month, the bookkeeper made all entries in the cash book and in the sales book, but made no journal entries, and did not post to his ledger; In addition to the entries appearing in the cash book and on the sales book, the following transactions took place during January : Merchandise purchases on credit amounting to $6,000, and notes payable amounting to $3,000 renewed. The Credit Sales Journal had two columns — one for the billed amounts, and the other for the cost of goods sold. The billed amount was $8,000 and the cost $5,000. The following statement gives a summary of Cash Receipts and Disburse- ments for January. Cash Received Collected from Customers (Discount of $125 allowed). $4,000.00 Collected on Notes Receivable 2,000.00 Collected on Merchandise Sold and Not Entered on Sales Book (cost $500) 600.00 $6,600.00 Cash Payments Interest on Notes Payable $ 45.00 Salaries 500.00 Rent 200.00 Sundry Expenses 300.00 Accounts Payable 5,000.00 $6,045.00 PROBLEM 32 (Wisconsin, 1916) (a) State three methods of figuring percentages in comparing income and expense. Which method is best and why? (b) Explain the use which should be made of these percentages in de- termining the administrative policies of a business. (c) The three summarized operating statements following are those of A, B, and C, respectively, each of whom conducts his business as a sole proprietorship. ^ They decide to form a corporation and you are asked for advice as to which of the several phases of the corporation's business should 24 be assigned to A, B, and C. Write a concise report, stating your views and giving reasons therefor: ABC Sales (netj $200,UU0.00 $100,UU0.00 $135,500.00 Cost of i'roduction 13U,UOO.UO 6b,000.UU 8«,U0U.00 Gross Trading Profit 70,000.00 32,000.00 47,500.00 Trading lixpense 26,300.00 13,150.00 20,325.00 Net Trading Profit 43,700.00 18,850.00 27,175.00 Administrative Expense 17,865.00 10,000.00 12,000.00 Net Operating Profit 25,835.00 8,850.00 15,175.00 Add Financial Income 6,800.00 6,500.00 3,000.00 32,635.00 15,350.00 18,175.00 Deduct Financial Expense 2,400.00 1,000.00 4,175.00 Net Profit $ 30,235.00 $ 14,350.00 $ 14,000.00 PROBLEM 33 In order to make up the statements on December 31, 1920, the central office of a manufacturing company required from all the branch offices a statement of the inventory at cost as of that date. The following report was received from one branch office : Stock on hand January 4, 1921— $9,000.00. Goods received from December 31, 1920— January 4, 1921— $1,000.00. Sales for the same period $2,000. Note: All amounts are figured on selling price which includes 20% profit. Prepare a statement of the inventory at cost, on December 31, 1920. PROBLEM 34 Cash $ 1,000.00 Accounts Receivable 1,300.00 Inventories Jan. 1, '19, Men's Furnishings 8,000.00 General Merchandise 7,750.00 Real Estate 3,750.00 Buildings 10,000.00 Furniture and Furnishings 2,000.00 Unexpired Insurance 450.00 Notes Payable $ 1,500.00 Accounts Payable 3,115.00 Reed, Investment 12,500.00 Lee, Investment 12,500.00 Men's Furnishing Sales 27,500.00 General Merchandise Sales 17,150.00 Merchandise Discount on Purchases 500.00 Men's Furnishing Purchases 22,000.00 General Merchandise Purchases 12,250.00 Heat 175.00 Light 150.00 Advertising 500.00 Janitor Service 300.00 Salesmen's Salaries 3,300.00 Sundry Sales Expense 50.00 Repairs to Building and Fixtures 250.00 Salaries, Office 1,200.00 Sundry Office Expense 165.00 Interest Paid 150.00 Merchandise Discount on Sales 25.00 $74,765.00 $74,765.00 25 Notations: Reserve 2j^% for depreciation on building and fixtures. Reserve 5% for depreciation on furniture and furnishings. The Taxes for the year estimated at $250.00. Insurance for the year, $300.00. Inventories, December 31, 1919. Men's furnishings, $9,000.00. General merchandise, $7,000.00. PROBLEM 35 The trial balance of the firm of Holman and Birch for the year ending December 31, 1919, is as follows: • Cash $ 4,000.00 Accounts Receivable 5,200.00 Inventories Jan. 1, 1919: Groceries 32,000.00 Crockery 31,000.00 Real Estate 15,000.00 Building and Fixtures 40,000.00 Furniture and Furnishings 8,000.00 Unexpired Insurance 1,800.00 Notes Payable $ 6,000.00 Accounts Payable 12,460.00 Holman, Investment 50,000.00 Birch, Investment 50,000.00 Grocery Sales 110,000.00 Crockery Sales " 68,600.00 Merchandise Discount on Purchases 2,000.00 Grocery Purchases 88,000.00 Crockery Purchases 49,000.00 Heat •. 700.00 Electricity 600.00 Advertising 2,000.00 Janitor Service 1,200.00 Salesmen's Salaries 13,600.00 Sundry Sales Expense 200.00 Repairs to Building and Fixtures 1,000.00 Salaries, Office 4,800.00 Sundry Office Expense 660.00 Interest Paid 600.00 Merchandise Discount on Sales 100.00 $299,060.00 $299,060.00 Notations: Reserve 2% for depreciation on buildings and fixtures. Reserve 5% for depreciation on furniture and furnishings. The taxes for the year are estimated at $500. Inventories December 31, 1919: Groceries $ 18,000.00 Crockery 14,000.00 PROBLEM 36 Cash $ 500.00 Accounts Receivable 2,000.00 Inventories January 1: Groceries 12,000.00 Meats 10,000.00 Building and Fixtures 13,000.00 Furniture and Furnishings 2,000.00 Real Estate 3,000.00 Unexpired Insurance 500.00 Notes Payable $ 2,150.00 Accounts Payable 4,000.00 James Bickel, Investment 15,000.00 John Salmon, Investment 12,000.00 Grocery Sales 30,000.00 Meat Sales 20,000.00 Merchandise Discount on Purchases 400.00 Grooery Purchases 25,000.00 Meat 14,000.00 Heat and Light 125.00 Advertising 175.00 Salesmen's Salaries 300.00 Sundry Sales Expense 50.00 Repairs to Building and Fixtures 25.00 Office Salaries 600.00 Sundry Office Expense 125.00 Interest Paid 50.00 Merchandise. Discount on Sales 100.00 $83,550.00 $83,550.00 Notations: Reserve 3% for depreciation of Buildings and Fixtures. Reserve 5% for depreciation of Furniture and Furnishings. Taxes for period, $200.00 Insurance for period, $250.00. Interest accrued on notes payable, $50.00. Wages unpaid, $60.00. Inventories: Groceries, $12,000.00. Meats, $8,000.00. PROBLEM 37 Kay and Keeley operate a store of three departments. The departmental accounts for the year 1921 appear as follows : ABC Inventory, Jan. 1 $ 60,000.00 $ 20,000.00 $ 30,000.00 Inventory, Dec. 31 56,000.00 22,000.00 35,000.00 Purchases 225,000.00 80,000.00 120,000.00 Purchases, Returns and Allowances 1,200.00 1,500.00 2,000.00 Sales (Gross Profit about 35%).... 300,000.00 110,000.00 200,000.00 Sales Returns and Allowances .... 700.00 400.000 300.00 The direct departmental expense accounts kept appear as follows : ABC Wages $12,000.00 $ 4,400.00 $ 8,000.00 Advertising 6,000.00 2,100.00 4,000.00 Supplies 4,500.00 1,650.00 3,000.00 Buying 9,000.00 4,000.00 7,000.00 Depreciation 300.00 200.00 _ 300.00 Occupancy charges, including heat, light, power, housekeeping, elevator, etc., total $36,600. Distribute it between the departments on the average cost of such charges, 6% on sales. Prepare departmental trading accounts showing the gross and the net trading profit, and also an operating statement, trading section. PROBLEM 38 The balances below are taken from the trial balance of a store having three departments. Show the closing journal entries : Dr. Cr. Purchases Department A $3,000.00 Purchases Department B 2,000.00 Purchases Department C 500.00 27 Sales Department A $4,000.00 Sales Department B 3,500.00 Sales Department C 900.00 Salesmen's Salaries 700.00 .Selling Expenses 150.00 Rent of Store 200.00 Office Expenses 175.00 Interest Paid 50.00 Discount on Sales 100.00 Merchandise Inventories at close: Department A $1,200.00 Department B 700.00 Department C 200.00 PROBLEM 39 From the following data, prepare the appropriate operating statement for the month : Dept. A Dept. B Dept. C Inventory, May 1 $ 7,000.00 $ 4,000.00 $ 6,000.00 Inventory, May 31 9,000.00 5,000.00 5,000.00 Purchases 15,000.00 10,000.00 5,800.00 Sales 21,200.00 19,000.00 9,500.00 Direct Dept. Charges 4,000.00 3,000.00 2,500.00 Other items to be considered are the following: Office Salaries, $500.00. Postage, $80.00. Telephone and Telegraph, $35.00. Stationery and Printing, $85.00. Depreciation, Office Equipment, $25.00. Discount on Merchandise Purchased, $600.00 PROBLEM 40 (Illinois, 1917) The Best Stove Co. operates a retail store with two departments — X and Y. The following balances appear on the books of the company before closing Dec. 31, 1919: Debit Credit Accounts Receivable (all good), X $ 15,000.00 Accounts Receivable (all good), Y 6,125.00 Accounts Payable $ 25,423.00 Advanced to B 1,075.00 Bad Debts, (X, $1,400.00; Y, $500.00) 1,900.00 Barn Rent and Expense 350.00 Bank Loans 12,000.00 Notes Receivable 650.00 Cash on Hand 250.00 Capital Stock 20,000.00 Discount on Purchases, X 15,500.00 Discount on Purchases, Y 9,768.00 Drivers' Wages 2,400.00 Feed Used 640.00 Furniture and Fixtures 5,000.00 First National Bank Deposit 2,496.00 General Advertising 7,720.00 Horses, Wagons, etc 1,700.00 Inventory Jan. 1, 1919, X 26,106.00 Inventory Jan. 1, 1919, Y 15,000.00 Insurance 1,125.00 Interest and Discount on Notes Payable 925.00 Loan from A 7,000.00 28 Office and General Expenses 1,200.00 Purchases, X 224,300.00 Purchases, Y 99,600.00 Rent and Light 4,000.00 Surplus 2,920.00 Sales, X 243,800.00 Sales, Y 106,500.00 Salaries— Office 2,850.00 Officers 10,000.00 Salesmen, X 7,553.00 Y 4,946.00 $442,911.00 $442,911.00 The books were closed on the basis of th€ trial balance by taking up the inventory of merchandise, which amounts to $33,400 for Department X and $15,000 for Department Y. Delivery expenses should be charged equally to the two departments and general expenses as follows: % to X and % to Y. Depreciation should be provided at the rate of 10% on furniture and fixtures' and at 20% for horses, wagons, etc. PROBLEM 41 (Wisconsin, 1918) (a) The following figures are for three departments of a store in the central west. You are to prepare a table such as you would present to the proprietor, showing for each department : 1. Cost of sales. 3. Gross profit. Percentage of cost of sales. 4. Percentage of gross profit. New Inventory at end of month. Department A B C Dept. A B C Department A B C 5. Inventory First of Month — January 1, 1917 Cost Price $12,045.87 , 2,264.00 4,916.45 Retail Price $20,260.78 3,911.62 7,505.13 Purchases Cost Retail $260.25 $437.11 259.34 419.74 303.72 458.26 Purchases for January Mark Down Mark Up Returned on Cost $10.15 on Retail 25.40 27.25 Cost $20.00 Sales for January Sales .$1,332.94 . 280.89 . 909.09 Purchases Retail $32.50 Mark Down on Retail $0.99 2.49 3.20 Depreciation of 2% is figured on the cost of all purchases, (b) What basis would you use for the distribution of the following ex- penses among departments?: 1. Insurance. 2. Rent. 3. Delivery expense. 4. Show window expense. 5. Advertising. 6. General administrative expense. 29 PROBLEM 42 1. A, B, and C were partners with investments of $12,000, $8,000, and $4,000, respectively. The net profit for the year was $5,987.50, after paying C a salary of $1,500, which was charged to Salary account. The net profit is to be divided according to the investment. Required : the net profit of each partner ; the present worth of each. 2. D and E made equal investments as partners. D's drawing account shows a debit balance of $1,750, and E's a credit balance of $437.50. The following are the assets and liabilities : Cash $ 540.85 Merchandise Inventory . . . . ' 894.20 Accounts Receivable 4,552.50 Accounts Payable 5,675.30 Notes Payable 1,025.60 The accounts receivable are worth 80c on the dollar. Required: the present condition of the business. If each partner, from his private funds, pays one-half of the firm's indebtedness, how much should D pay E to adjust matters between the partners? 3. Warren Phelps and H. M. Brown are each engaged in the dry goods business. They decide to unite their business interests and form a partner- ship. Phelps makes the following investment : Cash $9,000.00 Merchandise Inventory 5,280.00 Accounts Receivable 4,235.00 Notes Receivable 1,350.00 Interest Accrued on Above 62.50 5% of the accounts receivable are not collectible. Brown makes the following investment : Cash $4,000.00 Merchandise Inventory 3,250.00 Accounts Receivable 2,320.00 Notes Receivable 650.00 Discount Allowed on Above 8.90 10% of the accounts receivable are not collectible. (a) How should each partner close the books of his business? (b) How would the books of the new business be opened? (c) What is the opening journal entry for the new business? 4. Horace Porter and \Ym. Duncan began business as a partnership, under the following conditions : Mr. Duncan invests cash, $10,000; Mr. Porter makes no cash investment, as he is without capital, but is especially skilled in the details cf the business undertaken, Mr. Porter is to conduct the business and direct all of its affairs. All profits realized are to be divided equally. (a) Note some things that should be named in the articles of agree- ment, (b) What opening entry would be made at the beginning of busi- ness? (c) What entries would be made in Duncan's ledger accounts? (d) What entries would be made in Porter's ledger account? PROBLEM 43 1. Henry M. Johnson admits you as an equal partner in his business. A statement shows the following: Cash $ 750.00 Merchandise Inventory 4,780.00 Office Furniture 320.00 Accounts Receivable 2,136.00 Accounts Payable 1,145.00 Notes Receivable 896.00 Discount Allowed on Above 6.84 Notes Payable 612.00 Interest Accrued on Above 5.08 Unpaid Rent Amounts to 65.00 Unpaid Freight in 22.45 Good Will Estimated at. 1,000.00 5% of the accounts receivable are not collectible. You purchase a half interest in the business, giving Johnson your note for $2,000, indorsed by S. M. Winn, for one year, with interest at 6%, and cash for the balance of your investment. (a) Make a statement of the business, showing Johnson's present worth. (b) What is the amount of your investment, and what are the proper entries for the same? (c) It is decided to open an entirely new set of books; bow would th ; old books be closed and the new books opened? 2. Provin, Hasson & Little began business under the following condi- tions: Capital stock, $25,000; Provin invested $15,000; Hasson invested $6,000; Little borrowed $4,000 of Provin and invested it in the business. All investments were paid in cash. Required : the opening entry. 3. Pratt &: Hardy are equal partners. They decide to borrow cash, $3,000, as a means of increasing their business, giving a real estate mortgage as se- curity. (a) What entry would be made for the money borrowed? (b) If the money borrowed was used as a permanent mcrease of the firm's capital, what advance of money, and what entries would have to be made when the mortgage was paid? (c) What ledger accounts would be affected? PROBLEM 44 In each of the following problems make the necessary entries on the hooks to admit the new partner. 1. On January 1. 1921, Mr. H. C. Batch offered to pay H. L. Gaston $16,000 for a half interest in his business. The books, which were closed December 31, 1920, showed Mr. Gaston's net worth to be $28,000 on that date. The offer was accepted. 2. The net worth of J. M. Brown, wholesale grocer, on September 1, 1921, was $12,550. On that date H. H. Bloom acquired a third interest in the business by paying $9,000 cash to the credit of the firm. 3. The books of Benedict and Anderson showed their investments on June 30, 1921, the date of closing the books, to be as follows: O. J. Benedict $12,000.00 M. E. Anderson 14,500.00 81 The profits and losses in the business were shared % to Benedict and % to Anderson. On the above date B. O. Kinney was admitted as a partner, the new firm to be called Anderson and Company. The agreement between the partners provided that the new firm was to take over the assets and goodwill of Mr. Kinney, and in return he was to have a 1/5 interest in the business. The assets of Mr. Kinney were : Merchandise ^^'^^2-52 Notes Receivable HfS'^ Accounts Receivable 2,610.00 PROBLEM 45 1. Dewey & Clark are partners. At the close of one year's business the accounts of the proprietors were as follows : Dewey, Investment $7,500.00 Dewey, Drawing, Dr 350.00 Clark, Investment 7,500.00 Clark, Drawing. Dr 300.00 The profit and loss account showed the following items : Merchandise Sales, Profit $2,356.70 Sundry General Expense 43.20 Salaries 500.00 Interest Paid 32.75 Merchandise Discount on Purchases 58.93 Collection and Exchange 6.12 Interest Earned 45.20 Merchandise Discount on Sales 33.25 Close the profit and loss account, and show the present worth of each partner. 2. Hart & Crowson are partners. At the close of one year's business the accounts of the proprietors were as follows : Hart, Investment $5,000.00 Hart, Drawing, Dr 250.00 Crowson, Investment 5,000.00 Crowson, Drawing, Dr 320.00 The profit and loss account showed the following items : Merchandise Sales, Loss $2, 186.45 Sundry General Expense 50.00 Salaries . 400.00 Interest Paid 56.25 Merchandise Discount on Purchases 84.50 Interest Earned 24.35 Merchandise Discount on Sales 33.60 Close the profit and loss account and show the present worth of each partner. (a) Analyze each account. (b) What per cent of the total investment is the net loss? (c) What two things diminish the proprietor's present worth? PROBLEM 46 Meyer and Smith began a partnership business on January 1, 1919. At the time of closing the books on December 31, 1919, an examination of the capital accounts revealed the following facts : January 1— Meyer paid in $10,000.00 January 1 — Smith paid in 7,500.00 May 1 — Meyer drew out 1,600.00 June 1— Smith drew out 1,000.00 July 1— Smith paid in 6,000.00 July 1— Meyer drew out 3,000.00 October 1— Smith drew out 3,000.00 November 1— Smith drew out 2,300.00 December 1— Smith paid in 5,000.00 December 1 — Meyer paid in 4,000.00 December 31 — Meyer drew out 5,000.00 The sales for the period were $7,260. The purchases were $6,180, and the inventory on December 31 was $4,280. The cash on hand was $3,650. Customers owed the firm $6,800 on account. Notes receivable amounted to $4,694. The accounts payable showed a balance of $3,688. The notes payable outstanding amounted to $1,280. The interest paid was $125. The selling expenses amounted to $4,689 and the administration expenses were $2,690. The profit or loss is to be divided in proportion to each partner's capital, and in proportion to the time it was invested in the business. (a) Prepare an operating statement, (b) Prepare a financial statement, (c) Show each partner's accounts after all closing entries have been made. PROBLEM 47 1. Make the statements; the results will show the net profit (^r the net loss for one year. All profits or losses are to be shared equally ; each partner is to receive 6% on all investments. Required : the amount due each partner at the end of the year. Frank Melville and John F. Brown, partners, conduct a general merchan- dise business under the firm name of Melville & Brown. The stateinents are to be made from the following data : Frank Melville, Investment $25,000.00 John F. Brown, Investment 20,000.00 Merchandise Bought 78,240.00 On Hand at Close of the Year 12.564.50 Sold 74,312.25 Real Estate, Cost 5.000.00 Building and Fixtures 12,500.00 Depreciation for 1 Year 625 00 Notes Receivable 10,775.20 Interest Accrued on Notes Receivable 225.50 Delivery Equipment, Value at Close of Year 1,120.00 Office Furniture, Value at End of Year 1,350.00 Sundry General Expense 350.00 Salaries ' 2,000.00 Traveling Expenses 1,125.00 Accounts Receivable 19,685.50 Cash 20,167.30 Mortgage Payable, on Real Estate and Building 9,750.00 Interest Accrued on Above 275.00 Notes Payable 3.650.00 Interest Accrued on Above 125.00 Accounts Payable 12.200.00 Merchandise Discount on Sales 384.30 Merchandise Discount on Purchases 252.50 The account of John F. Brown is to be credited with $1,600 from the profits of the business, for special services, before the apportionment of profit and loss is made. July 1 Frank Melville withdrew $500 from the business. 33 2. In the partnership of A and B you find that the agreed division of profit and loss was to be on the basis of the capitals contributed and of the time that they were left in the business. The books show as follows: A's account, paid on Jan. 1, $6,000; March 1, $2,000; June 1, $4,000; November 1, $1,000; withdrew, April 1, $3,000; withdrew October 1, $2,000. B's account, paid on January 1, $4,000; February 1, $1,000; August 1, $3,000; withdrew. May 1, $2,000; December 1, $1,000. Prepare a statement, showing method of arriving at the correct profit distribution. PROBLEM 48 1. A, B, and C invested equal amounts, and agreed to share all results equally. When the firm dissolved the assets amounted to $15,000.50, and the liabilities to $18,520.50. The net loss was 12,520. Required : each partner's insolvency at dissolution ; each partner's invest- ment at the beginning of the business. 2. A and B engaged in business as partners, investing $10,000 and $5,000, respectively. They agreed to share all profits or losses in proportion to the investment. At dissolution the following were the assets and liabilities : Cash $ 2,350.00 Notes Receivable 4,275.00 Real Estate 3,000.00 Merchandise Inventory 10,750.00 Accounts Receivable 7,775.00 Notes Payable .• • 1,745.00 Accounts Payable 5,255.00 10% of the accounts receivable cannot be collected. If tl.c v;artnership lasted one year, and A withdrew $975 and B $1,025 as their salaries, what is each partner worth? 3. Y and Z make equal investments in a total capital of $9,000. During the year each partner added $500 to his capital. At the end of the year the books showed the following assets and liabili- ties : Real Estate $3,275.50 Cash 1,432.75 Accounts Payable 1,354.00 Notes Receivable 1,750.00 Notes Payable 1,672.50 Office Furniture 328.40 Delivery Equipment 425.60 Accounts Receivable 2,345.25 Merchandise Inventory 2,242.50 At the close of one year what amount was due each partner, the profits or the losses being shared equally? PROBLEM 49 (Adapted from English Intermediate Examination, May, 1912) 1. A and B have separate businesses, and they agree to amalgamate and enter into partnership. The firm take over the following assets and liabilities : 34 From A From B Land and Buildings $50,000.00 Stock in Trade $30,000.00 Notes Payable 15,000.00 Accounts Payable 25,000.00 Plants and Machinery 25,000.00 Accounts Receivable 50,000.00 Stock in Trade 15,000.00 Cash at Bank 10,000.00 Work in Progress 5,000.00 Accounts Receivable 26,750.00 Accounts Payable 30,000.00 Notes Receivable 10,000.00 Cash at Bank 5,000.00 Mortgage Creditor 40,000.00 Make the opening journal entries, and prepare opening financial statement. 2. On December 31, 1910, three partners had the following amounts at the credit of their investment accounts : A. $25,000; B, $15,000; C, $10,000. On January 1, 1910, they had to the credit of their drawing accounts: A, $3,750; B. $2,500; C, $2,000. Profits are divided in the same proportion as the capital up to $10,000. Above that amount, A gets 25%, B 35% and C 40%. A drew during the vear 1910 $2,500.00 B drew during the year 1910 2,000.00 C drew during the year 1910 1.500.00 The profits for 1910 amounted to $15,000. Give the drawing accotmt of each partner on December 31, 1910. (Adapted from Intermediate Examination, March, 1910) 3. X, Y, and Z are in partnership and on January 1, 1909, their respective capitals were $20,000, $13,900 and $7,950. Y'is entitled to a salary of $1,250 and Z to one of $1,000 per annum, payable before division of profits. Of the net divisible profits X is entitled to 40% of the first $5,000, Y to 35%, and Z to 25% ; over that amount profits are shared equally. The profit for the year ended December 31, 1909, after debiting partners' salaries, but before charging interest on capital, was $11,585. and the partners had drawn $4,000 each on account of salaries, interest, and profits. Prepare the closing entries of the profit and loss account and the partners' accounts for the year. PROBLEM 50 L. M. Harris and F. C. Gates, decide to combine their retail business, F. C. Gates agreeing tc nay in cash an amount suf^cient to make him an equal partner. Harris' assets and liabilitle^ are: cash $1,000; merchandise $4,280; notes receivable $1,500; with accrued interest on same $10.75: accounts receivable $985, estimated as Avorth $960; furniture $980; notes payable $1,000; with accrued interest on same $10; accounts payable $415. Gates' assets and liabilities are: cash $400; merchandise $4,800; accounts receivable $1,416; valued at $391; notes receivable $1,500; accounts payable $300; notes payable $1,460: Avith accrued interest on same $8.69; i.alaries earned but unpaid $58; notes receivable discounted $1,000. All the assets are taken over at book value. Make the journal entries for each partner to close his old set of books ; the opening journal entries ; and *he opening financial statement for the new firm. SB PROBLEM 51 (Adapted from English Examination, May, 1908) The following is the Trial Balance of A. Jumble and T. Sale on December 31, 1907: A. Jumble, Capital Jan. 1 $ 60,000.00 T. Sale, Capital Jan. 1 45,000.00 Machinery and Plant $ 50,000.00 Stock, Jan. 1 27,500.00 Purchases 110,000.00 Salaries 5,000.00 Wages 22,500.00 Sales 175,000.00 Debtors 45,000.00 Creditors 28,000.00 Freight 2,350.00 Rent, Taxes, and Insurance 6,000.00 Discount Lost 150.00 A. Jumble. Salary 3,000.00 T. Sale, Salary 2,000.00 Cash at Bankers 21,500.00 Repairs 1,250.00 Fuel 5,500.00 Notes Payable 3,750.00 Notes Receivable 1,875.00 Cash in Hand 125.00 $303,750.00 $303,750.00 The stock at the end of the year amounted to $30,000. Prepare proper revenue accounts, the partners' accounts and the financial statement. Each partner is to have 5% interest on his capital ; the profits and losses are to be divided, two-thirds to A. Jumble and one-third to T. Sale; 7^^ depreciation is to be written off machinery and plant; $1,750 is to be reserved for bad debts; and insurance, amounting to $1,500 paid for the year ending March 31, 1908, has to be apportioned. PROBLEM 52 (Adapted from English Examination, Nov.-Dec, 1910) A and B carried on business as pottery manufacturers at Hanley, under the style of A, B and Co. They dissolved partnership on March 31, 1909, A retiring from the business and B continuing to carry it on under the same style and purchasing A's share therein at the amount shown as his capital at March 31, 1909, after a proper re-valuation of the assets. The firm's balance sheet at December 31, 1908, was as follows: Assets Liabilities Land and Buildings $ 50,000.00 Accounts Payable $ 25,000.00 Plant and Machinery 30,000.00 Notes Payable 7,500.00 Equipment and Tools 15,000.00 A-tortgage on Land and Build- Merchandise Inventory 45,000.00 ings at 4% 37,500 00 Accounts Receivable 37,500.00 A, Capital 72,500 00 Notes Receivable 5,000.00 B, Capital 47;S00.00 Cash in Hand and at Bank 7,500.00 $190,000.00 $190,000.00 Profits and losses, both of Revenue and Capital, were divided in the pro- portion of A, two-thirds, and B one-third. The re-valuation at March 31 resulted as follows: Land c.nd Buildings, 36 $45,500; Plant and Machinery, $28,000; Equipment and Tools, $17,500; Stock in Trade, $40,000. The other assets at that date were agreed as follows : Accounts Receiv- able, $42,500; Notes Receivable, $3,000; Cash in hand and at Bank, $10,000. The liabilities were: Loan on Mortgage at 4%, $37,500 (interest paid to 31st December, 1908J ; Notes Payable, $5,000, Accounts Payable, $17,500. Make out the necessary adjustment accounts and Financial Statement on March 31, 1909. PROBLEM 53 The following are the sectional and columnar headings (left to right) of a subscription ledger used by the Acme Company : Date. Number of shares subscribed. Unit value. Total amount. Installments: No. 1—50%. No. 2—25%. No. 3—25%. Date: Called. Paid. Installments: No. 1—50%. No. 2—25%. No. 3—25%. Balance. You are asked to draw the form and to record the following facts in the appropriate spaces : On December 1, 19 — , John White subscribed to 25 shares of common stock in the Acme Company, par value, $100. The conditions under which the stock is issued are as follows : One-half the purchase price due with the sub- scription and quarter to be called on February 1 and the last installment of 25% to be called on April 1. John White pays the first installment at time of subscription, the second on December 3 and the third on April 5. PROBLEM 54 (a) The following are the sectional and columnar headings (left to right) of the stock ledger used by the Baker Company : Date. Number of Certificates: Issued. Cancelled. Number of Shares: Debit. Credit. Balance. How Paid. From Whom Transferred. To Whom Transferred. You are asked to draw the form and to record the following facts in the proper spaces of the stock ledger accounts with John White, Joe Brown and Sam Black : On December 1, 19 — , each of the three gentlemen subscribed for 20 shares 87 of stock in the company and paid for it in cash. On January 2, 19 — , Brown sold White 10 shares at 110 per share; on March 15, 19 — , Black bought 5 shares of Brown at 115; on June 1, 19 — , White sold Black 15 shares at 112;^ and on June 15 Brown repurchased the shares sold W^hite on January 2, at 108. (b) The Clark Company uses the form as above described with the addi- tion of three columns for the amount of the shares — Debit, Credit and Bal- ance. You are asked to draw the form and to record properly the same facts as given under "a." PROBLEM 55 The following are the columnar headings (left to right) of the stock trans- fer book used by the Drane Company: Date. Number of Cancelled Certificate. Number of Shares. By Whom Surrendered. To Whom Issued? Number of New Certificate. Number of Shares. You are asked to draw the form and to record the following information in the appropriate spaces : The same facts are to be used as in Problem 43 ; the certificate numbers are as follows : Original Certificate to White, No. 12. Original Certificate to Brown, No. 14. Original Certificate to Black, No. 15. Jan. 2 — Transaction: New Certificate issued White, No. 48; new Cer- tificate issued Brown, No. 49. Mar. 15 — Transaction: New Certificate issued Brown, No. 90; new Cer- tificate issued Black, No. 91. June 1 — Transaction: New Certificate issued Black, No. 141; new Cer- tificate issued White, No. 142. June 15 — Transaction: New Certificate issued Brown, No. 198; new Cer- tificate issued White, No. 199. PROBLEM 56 (Pennsylvania, 1900) Make the necessary opening entries in the stock ledger, cash book, and subscription books of a company having an authorized capital of $100,000, $75,000 of which is subscribed for, and on $50,000 of which an installment of 50% has been paid. Nothing has been paid on the balance of the subscribed stock. The stockholders and their holdings are as follows : A $20,000.00 50% paid B 4,000.00 C 16,000.00 D 2,000.00 E 2,000.00 F 2,000.00 G 2,000.00 H 2,000.00 I 10,000.00 nothing paid J 5,000.00 K 5,000.00 L 5,000.00 38 PROBLEM 57 The Farm Tractor Company incorporated on December 1, 1918, in the state of North Dakota, for 5,000 shares of common stock and 2,000 shares of preferred; the par value of each being $100. The stock subscription books show the following signatures : Common Stock Subscription Book Name No. of Shares Amount Paid How Paid R. L. Weeks 5,000 100% Cash, Property and Services (see note below) Preferred Stock Subscription Book R. L. Weeks 500 30% By Check L.V.Bond 200 30% N. K. Giles 100 30% H. S. Rand 175 30% J. T. Noyes 125 30% On June 1, 1919, the second installment of 20% was paid on the preferred stock and scrip receipts were issued for the amount paid in to the subscribers in the order listed above. On the same date R. L. Weeks donated 1,000 shares of common stock to the treasury for working capital. R. Brand then pur- chased 100 shares of this treasury stock at 90, E. Jones 200 shares at 95, F. Schmidt 100 shares at 98, M. Lund 100 shares at par, and the certificates were issued to them. On December 1, 1919, the preferred stock subscribers paid in the remain- ing 50% and the necessary certificates were issued. The profits for the year were $60,000 and a 7% dividend was declared on both the common and preferred stocks. The remaining 500 shares of common stock were sold at 105, upon this indication of prosperity, to K. Thon. R. L. Weeks sold 100 shares of preferred stock to E. Hunt and turned in cer- tificate number 1, from which the transfer is to be made. From the above facts prepare the following : 1. Journal entries to record all stock transactions, including the decla- ration of the dividend and the donation and sale of the Treasury Stock. 2. Subscription Ledger. 3. Stock Ledger. Note : Proportion of Cash 30%. Property (Plant and Machinery) 50%. Services 20%. New certificate numbers are to be provided for all exchanges and for the issue of Treasury Stock. PROBLEM 58 The Martin Company was organized and incorporated January 1, 1922, for the purpose of manufacturing concrete mixers. The Authorized capital of $200,000 consisted of 1,500 shares of common stock, having a par value of $100 per share, and 500 shares of preferred stock of the same par value. The following subscribed and paid for the common stock : James Carmen, 500 shares paid in cash; Alvin Lilly, 250 shares by transferring the following assets and liabilities: 39 cash $35,000; notes receivable $26,000; merchandise $15,000; accounts re- ceivable $8,000; furniture $6,000; accounts payable $40,000; notes payable $25,000 ; Herscy Halvorson, 400 shares, paying one half in cash and the balance payable at the end of the first year ; Fred Gilbert, 350 shares, by giving his personal note for $35,000 payable one year after date. The following organization expenses were paid in cash: filing fees $200; legal expenses $400; inspection trips $600. Of the 500 shares of preferred stock, 250 shares were sold to outsiders for cash. (a) Give the opening journal entries. (b) Prepare the opening financial statement of the corporation. PROBLEM 59 The American Chocolate Company was organized by James Phipps, Henry Borman, and William Jennings, who signed the certificate of incor- poration and subscribed for ten shares each. The certificate of incorporation was filed by the Secretary of the State of New York on July 1, 1912. The authorized capital stock was $100,000 divided into one thousand (1,000) shares of the par value of $100 each. The subscribers paid for their stock on July 1. The organization tax and filing fees amounted to $54.20. The certificates issued to the incorporators were numbered 1, 2 and 3 in the order the names appear above. During the six months subsequent to July 1 the following transactions took place : July 23, J. F. Dominick bought 100 shares and received certificate No. 4 ; August 10, A. J. Hudson subscribed for 5 shares and paid 25% on account; August 20, the incorporators subscribed for 500 shares and paid 25% on account; August 28, certificate No. 5 for 100 shares was issued to A. E. Pratt for land ; September 4, paid contractor $5,000 on account of building contract of $40,000; September 10, incorporators paid 25% on account of stock; September 12, paid contractor $15,000; September 14, issued cer- tificate No. 6 for 50 shares to R. E. Holmes for patents on machinery ; Septem- ber 17, bought machinery for $10,000, paying $5,000 on account and giving notes for the balance ; September 20th, Dominick sold 25 shares to James Powers (new certificates No. 7 and No. 8) ; September 24, incorporators paid balance due on stock, except Jennings, who gave a note for $5,000 for part of the amount due from him ; certificates were issued — No. 9 to Phipps for 200 shares. No. 10 to Borman for 200 shares, and No. 11 to Jennings for 100 shares ; October 10, paid balance on building contract ; October 12, William Mortimer, attorney, rendered a bill of $500 for services in connection with the organization of the company ; October 14, H. Britton subscribed for 15 shares of stock and paid 50% on account; October 18, Dominick .sold 5 shares each to D. Read, H. Robinson, and F. Stone (new certificates No. 12, No. 13, No. 14, No. 15) ; October 30th, Hudson refused to make fur- ther payments on his subscription and it was cancelled; October 3r, Borman . pledged 100 shares of his stock as collateral for a loan of $5,000 from the Park National Bank. From the foregoing prepare : (a) Formal journal entry opening the general books (debiting capital stock unissued and crediting capital stock authorized). 40 (b) Skeleton ledger accounts showing the transactions on the general books. (c) General balance sheet, October 31, 1912. (d) Stock book as required by law. (e) List of stockholders, showing number of shares held by each, October 31, 1912. Memo. Acceptance of Jennings' note fund not to be legal (Penal Law, Section 664, Sub-section 3). Note replaced by cash, September 27. Copyright, 1912, by John R. Wildman. PROBLEM 60 The New York Tool Company was incorporated under the laws of the State of New York, July 1, 1912, with an authorized capital stock of $100,000, divided into 1,000 shares of the par value of $100 each. The incorporators, each of whom subscribed and paid for 20 shares of stock, were R. S. Savage, W. L. Groves, and S. B. Long. The organization tax and filing fees were $53.45. The bill of the attorney for services in connection with incorporation was $300. The first three stock certifiicates were issued to the incorporators. The subsequent transactions were as follows : July 20, C. Stevens bought 100 shares and received certificate No. 4; August 5, H. Tepper subscribed for 10 shares and paid 50% on account thereof; August 17, Savage sub- scribed for 100 shares, Groves 125 shares, and Long 75 shares, each paying 50% on account ; August 26, certificate No. 5 for 300 shares was issued to John Thompson for land and buildings ; September 5, bought machinery in the amount of $12,000, paying $8,000 in cash and giving note for balance ; September 16, certificate No. 6 for 60 shares issued to John Darby for Patents; October 2, Stevens sold 30 shares to M. McLean (new certificates No. 7 and No. 8) ; October 4, Savage and Groves paid balance on account of subscriptions, in cash ; Long paid part in cash and gave services $2,500 for the balance; certificates No. 9, No. 10, and No. 11 issued to the incorporators; October 21, K. Libby subscribed for 30 shares, paying 50% on account; October 23, M. McLean sold 10 shares to B. Partridge, 5 shares to E. Flint, and 5 shares to T. Porter (new certificates No. 12, No. 13, No. 14, and No. 15 issued) ; October 31, Savage assigned 10 shares of stock to B. Jones; Tepper refused to make further payments on his subscription and it was cancelled. From the foregoing prepare : (a) Formal journal entry opening the general books and journal en- tries for subsequent transactions. (b) General balance sheet, October 31, 1912. (c) Stock book as required by law. (d) List of stockholders, showing number of shares held bv each, October 31, 1912. Copyright, 1912, by John R. Wildman PROBLEM 61 1. A corporation has been formed with a capital stock of $80,0(X); par value of each share, $100. 750 shares have been subscribed for, and $50,000 cash has been paid on the subscription. The remaining 50 shares are to re- main unissued. Required : the opening journal entry, and the cash book entry. 2. A corporation has been formed with a capital stock of $120,000, 1,200 shares of a par value of $100 each. 50% of the capital stock has been sub- 41 scribed for at par, and paid for in cash; 25% of the capital stock has been subscribed for, payments to be made in monthly installments. The remain- ing 25% of the capital stock is to remain unissued. Required : the opening journal entries, and the cash book entries. 3. Henry S, Wyman is the owner of a manufacturing plant. The fol- lowing are his assets and liabilities : Cash $ 6,000.00 Manufacturing Plant 9,000.00 Real Estate 10,000.00 Raw Material 7,000.00 Accounts Receivable 2,000.00 Accounts Payable 3,000.00 Mortgage Payable 5,000.00 Mr. Wyman has decided to unite with Edwin L. Horton, Benj. S. Milton, and Wm. A. Carter, to form a corporation. The capital stock is to be $75,000; 750 shares of a par value of $100 each. Mr. Wyman is to receive 300 shares of stock, and each of the other incorporators lOO shares. The remaining 150 shares are to remain unissued. The difference between the assets and the liabilities of Mr. Wyman, and the par value of 300 shares, is to be charged to Good 'Will account. Required : The necessary entry to close Mr. Wyman's books. Also, the necessary entries to open the new books of the corporation. PROBLEM 62 A Massachusetts corporation temporarily in need of funds makes the fol- lowing arrangement with three of its directors. They individually pledge their stock, par value $15,000, $10,000, and $5,000, and receive loans of $7,500, $5,000, and $2,500, with which they purchase new stock at par. It is their intention, when the loans are paid by the corporation, to return this $15,000 worth of stock. (a) May this stock be purchased by the company? (b) What should be the entries on the books of the corpqration? (Massachusetts, 1915) PROBLEM 63 L The stockholders of the Brown Book Company vote to increase the capital stock of the company from $100,000 to $150,000. The former amount is fully paid. Give the journal entry to record the increase, assuming the permission of the state officials has been obtained. (a) Give the necessary journal entries for recording the subscription to one-half the increase in capital stock, and the payment in cash of one-half the amount subscribed. 2. A corporation has been formed for the manufacture of machinery with a capital stock of $160,000 ; par value of each share, $100. The owner of the patents is to receive 400 shares of stock for his inventions ; the promoter is to receive 150 shares of stock for interesting moneyed men in the company; 750 shares of the remaining stock have been subscribed for and paid for in cash ; the remaining 300 shares are to remain unissued. Make the opening entry. PROBLEM 64 'The Hill Oil and Mining Co. is incorporated in Blank State with a capital stock of $1,000,000, divided into 500,000 shares of $2 each. At a meeting of the incorporators the sum of $4,000 was subscribed and cash to the amount of $2,000 ($1 per share) was paid in, the balance being chargeable to Organization Expense. The board of directors votes to offer the public 125,000 shares at $1 each to create a working fund. They also authorize the issuance of 80,000 shares of stock in exchange for oil leases valued at $160,000. Incorporating expenses amounting to $600 were paid. The board approved the sale of 8,000 share^. Prepare the operating and the financial statements. Smith and Roberts decide to form a corporation, the Excelsior Company. The company is incorporated for $200,000, of which Smith is to receive $91,- 000 for his interest in the business and Roberts is to receive $59,000 for his interest. In order to provide additional working capital, Smith donated 10 shares of stock, which are sold to Taylor, for $750 cash. (a) Show journal entries necessary to close the books of the old part- nership of Smith-Roberts & Co. (b) Show journal entries necessary to open the books of the cor- poration. (c) Outline the entries to record the stock donated by Smith and later sold. (d) Prepare the financial statement of the new corporation. PROBLEM 106 John Mathews and Richard Grady started in business in 1915, as a part- nership, and although the business was incorporated at December 31, 1920, the old books were continued and no entries have yet been made to record the fact of the incorporation. The assets and liabilities of the firm on December 31, 1920 are shown as follows : 71 Cash $ 3,000.00 Notes Payable $20,000.00 Accounts Receivable 20,000.00 Accounts Payable 25,000.00 Notes Receivable 10,000.00 Mathews $50,000.00 Inventories 50,000.00 Grady 44,000.00 Land 15,000.00 94,000.00 Buildings 25,000.00 Machinery and Equipment... 16,000.00 $139,000.00 $139,000.00 The market value of the land is $20,000 and it is agreed to take it over at that amount. Machinery and equipment should be depreciated 15%, the merchandise 2% and the accounts receivable 1%. The authorized capital is $200,000.00, of which $100,000.00 is subscribed for by outsiders, and the remaining- $100,000.00 is divided between the part- ners. (a) Prepare closing entries for the books of the partnership after tak- ing the above notations into consideration. (b) Prepare opening entries for the books of the corporation. (Illi- nois, May, 1915.) PROBLEM 107 Scott and Mackey are partners, trading under the name of Scott-Mackey & Company. The following is a financial statement of the partnership books : Cash .' $ 10,000.00 Accounts Receivable 125,000.00 Inventories 75,000.00 Notes Receivable 45,600.00 Land and Buildings 208,000.00 Good Will 100,000.00 $563,600.00 91,600.00 Accounts Payable $ 75,600.00 Notes Payable 16,000.00 Scott, Capital $200,000.00 Mackey, Capital 272,000.00 472,000.00 They decide to incorporate under the name O. K. Company. Scott is to receive $250,000.00 for his interest and Mackey is to receive $300,000.00. In order to provide additional working capital, they donate back to the cor- poration 20 shares of stock. (a) Prepare closing entries for the old books. (b) Prepare opening entries for the new books. (Michigan, 1917). PROBLEM 108 The Supreme Shoe Company's subscription book was opened December 21, 1920, in accordance with the provisions of the Corporation Act of the State of Wisconsin. The capital stock of $80,000 in shares of $100 each was subscribed as follows : John Graham 180 shares $18,000.00 Ralph Snider 125 " 12,500.00 Lewis Bancroft 140 " 16,000.00 Charles Colbv 80 " 8,000.00 Ray Jones 40 " 2,000.00 Carl Gibbons 235 " 23,500.00 All the subscriptions were paid for in cash. 72 At the meeting of the Board of Directors, held on the 5th day of January, 1921, the secretary presented to the meeting a communication from Tohn Graham. The communication was an offer to sell and transfer to the com- pany, by instruments of conveyance and transfer, all the assets, subject to the liabilities of the business now being conducted by John Graham & Son. The condition of John Graham & Son on December 31, 1920 was: Cash .$ 6,280.00 Notes Payable $ 4,600.00 Accounts Receivable 4,690.00 Accounts Payable 3,294.00 Notes Receivable 3,246.00 Accrued Interest on Notes P.. 125.00 Furniture and Furnishings . . . 5,480.00 Net Worth 73,202.00 Machinery 10,924.00 , Raw Material Inventory 14,614.00 Goods in Process Inventory. . . . 19,468.00 Finished Goods Inventory.... 15,230.00 Unexpired Insurance 1,289.00 $81,221.00 $81,221.00 The stockholders of the corporation authorized the officers to purchase the business of John Graham & Son for $75,000. In order to provide working capital, each stockholder donated twenty shares of stock to the corporation. All the shares were immediately disposed of as follows : 40 shares at $ 95.00. 30 shares at par. 50 shares at $110.00. (a) Closing entries on the books of Graham & Son. (b) Opening entries for the corporation. (c) Entries recording the donation of stock. PROBLEM 109 On April 1, 1912, W. B. Hone, A. J. Hone and F. G. Hone, all being gen- eral partners in the firm of L. B. Hone's Sons, building contractors, decided, in order to preserve the organization of their business in case of the death of any of the partners, to incorporate. Accordingly, they filed a certificate of incorporation with the Secretary of State at Albany, and paid the organization tax and filing fee in the amount of $15.75 ($12.50 tax, $3.25 filing fees) out of $500 advanced by W. B. Hone. The par value of the shares was $100 each. The balance sheet of the co-partnership was as follows : Assets, land and buildings (net value), $35,000; machinery and tools (net value), $9,500; lOM Mich. Cent. 4's (cost), $9,887.50; horses, wagons and harness (net value), $500; furniture and fixtures (net value), $1,000; building materials, $7,929.04; contracts in progress, $18,417.23; cash, $12,395.84; accounts receivable,- $22,- 486.75; notes receivable and interest, $3,025.17; unexpired insurance. $425. Liabilities and capital : taxes accrued, $125 ; salaries and wages accrued, $250; accounts payable, $7,528.82; capital W. B. Hone, $40,237.28; capital A. J. Hone, $35,182.16; capital F. G. Hone, $37,243.27. Upon the formation of the corporation and the taking over of the busi- ness, each partner received SSy^ shares of stock and notes bearing interest at the rate of 6% per annum for the balance of his capital account. The cor- porate name was L. B. Hone's Sons, Incorporated. After the new books had been opened it was discovered that charges to contracts in the amount of $325.72 had been omitted from the schedule and that $53.75 had been omitted from the accounts payable. On April 3 a check 73 in the amount of $100 was received from the firm's brokers for interest, due April 1, which hud been collected on the Mich. Cent. 4's. The check was handed to W. B. Hone. Prepare : (a) Journal entries opening- the books of the corporation. (b) Balance sheet of the corporation, April 1, 1912. (c) Skeleton ledger accounts showing the closing of the firm's books. Copyright, 1912, by John R. Wildman. PROBLEM 110 John Doe and Richard Roe started in business January 1, 1920, as a part- nership. The business was incorporated at December 31, 1920, the old books were continued and no entries have yet been made to record the fact of the incorporation. The assets and liabilities of the firm at December 31, 1920, are shown on the books as follows : Land $ 10,000.00 Notes Payable $ 10,000.00 Building 20,000.00 Accounts Payable 15,000.00 Machinery and Equipment .. 15,000.00 Capital Accounts: Accounts Receivable 25,000.00 John Doe $45,000.00 Notes Receivable 5,000.00 Richard Roe 54,000.00 Cash 4,000.00 99.000.00 Merchandise 45,000.00 $124,000.00 $124,000.00 No definite agreement has yet been reached as to the disposition of the difference in the capital accounts of the partners. Give the journal entries necessary to adapt the books of the partnership to the use of the corporation based on the following information. Also pre- pare a financial statement after they have been posted. The authorized capital stock is $200,000.00, of which $150,000.00 has been issued to the partners equally. Profits and losses have been shared equally in the past. The market value of the land is $17,000.00, and it is desired to include it at this figure. The depreciation of the building has been offset by the appreciation of building materials and by the improvements charged to expense. The machinery and equipment should be depreciated 15%, the merchan- dise 2%, and the accounts receivable 1%. (Illinois, May, 1915.) PROBLEM 111 Upon the examination of the partnership accounts of a manufacturing busi- ness the following conditions are revealed : 1. Sales toward the end of the period are unusually large. 2. A large deposit in bank is made on the closing fiscal date, which amount is credited to the bank two weeks later. 3. Machinery sold has been credited to merchandise sales. 4. A loan to the firm has been credited by mutual consent to the capital account of one of the partners. 5. Depreciation or discount from the value of a certain class of the in- ventory, instead of being 30 per cent., as in prior years, is shown as 10 per cent. 74 What would you deduce from these facts, and what would you feel called upon to do by way of extended inquiry or report in each of these instances? (Illinois, December, 1910.) PROBLEM 112 1. The Trial Balance of A, B and C, sharing profits and losses equally, shows the following facts : Plant and Machinery $ 14,000.00 Factory Fixtures 2,000.00 Furniture and Fixtures in Sales Room 3,000.00 Furniture and Fixtures 1,500.00 Tools 1,500.00 Accounts Receivable 19,500.00 Notes Receivable 16,300.00 Accounts Payable 18.700.00 Notes Payable 4,000.00 Rent of Factory 4,000.00 Labor 32,000.00 Factory Expense 3,200.00 Power, Light and Heat 8,800.00 Raw Materials Purchased 31,000.00 Freight Inward 500.00 Factory Supplies 900.00 Discount on Purchases 1,500.00 Discount on Sales 1,100.00 Sales 152,000.00 Returned Sales 200.00 Insurance on Factory \ 1,400.00 Repairs to Machinery 1,500.00 Rent of Sales Room 3,000.00 Commission Paid by Us 1,800.00 Salesmen Expenses 3,000.00 Advertising 1,000.00 Freight Outward 1,200.00 Packing Materials 700.00 General Expense 3,000.00 Office Salaries 6,000.00 Office Rent 1,200.00 General Insurance 900.00 Postage and Express 500.00 Stationery and Printing 1,100.00 Interest Paid 400.00 A Drawing Account, Dr 4,275.00 B Drawing Account, Dr 2,700.00 C Drawing Account, Dr 2,025.00 A Investment Account 9,500.00 B Investment Account 6,000.00 C Investment Account 4,500.00 Cash to Balance Inventories on hand are as follows: Raw material, $5,300; Goods in Process of Manufacture, $3,200; Finished Goods, $3,000; Unexpired Insurance, $250; Depreciation on Plant and Machinery, 10% ; Estimated Bad Debt Loss, 1%. They agree to incorporate the business under the name of A & B Furni- ture Co., after making a complete operating statement. The new company is to incorporate for $100,000. A to get 25 shares at $100 per share ; B 22 shares; C 20 shares, and the subscription list contains names of subscribers to the extent of 21 shares and the remainder is unissued. Supposing you were employed to make the change, what would you do (1) if they requested you to use an entirely new set of books; (2) to use old books? Make all entries complete. 36 PROBLEM 113 (Adapted from English Examination, May, 1907) The directors of a corporation ask you to draft their Operating- Statement and Financial Statement, to be submitted to the annual stockholders' meet- ing. The following is the trial balance : Good Will $ 200,000.00 Rents Payable 7,500.00 Bonds in X Company 100,000.00 Expenses Connected with Underwriting Bonds of X Co 5,000.00 Cash 40,000.00 Real Estate 10,000.00 Buildings and Equipment 715,000.00 Accounts Receivable 45,000.00 Notes Receivable 15,000.00 Taxes 2,500.00 Interest on Loan and Bonds 25,000.00 Directors' and Auditors' Fees ". 5,525.00 Depreciation of Plant 25,000.00 Petty Cash 125.00 Legal Expenses 1,000.00 Inventories 100,000.00 $1,296,650.00 Gross Profit $ 125,000.00 Rents Receivable 15,000.00 4% Bonds Issued 500,000.00 Interest Half Year Thereon 10,000.00 Commission for Underwriting X Company Bonds 30,000.00 Accounts Payable 6,000.00 Notes Payable 15,000.00 Reserve for Depreciation 25,000.00 Reserve for Bad Debts 1,500.00 Deposits of Employes 3,500.00 Special Loan Payable 100,000.00 Capital Stock ; . 450,000.00 Surplus 15,650.00 $1,196,650.00 PROBLEM 114 (Adapted from the English Intermediate Examination, May, 1907) Prepare a financial statement of the O. K. Company, as at December 31, 19 — , from the following: Land and Buildings $190,000.00 Inventories 200,000.00 Capital Stock Authorized: Common 300,000.00 Preferred 200,000.00 Capital Subscribed and Paid: Preferred 200,000.00 Common 270000.00 Plant and Machinery 80,000.00 Mortgage Bonds 50,00000 Additions to Plant During Year 10,000.00 Accounts Receivable 100,000.00 Cash on Hand 500.00 Accounts Payable 15,500.00 Notes Payable 10,000.00 Cash on Deposit 5,000.00 Dividends Payable 100.00 76 Notes Receivable (in addition to which notes amounting to $2,500.00 were under discount) 5,500.00 Surplus: Balance from Last Year $ 1,000.00 This Year's Net Profit 33,600.00 34,600.00 Organization Expenses 500.00 Reserve for Depreciation 11,800.00 PROBLEM 115 (Adapted from English Examination, November, 1907) The following is the Trial Balance of the K Company, on December 31, 1906: Capital Stock $400,000.00 Land and Buildings $162,500.00 Machinery and Plant 102,500.00 Stock, January 1, 1906 87,920.00 Purchases 123,410.00 Wages 51,110.00 Office Salaries and Expenses 13,420.00 Taxes and Insurance 3,720.00 Discounts on Sales 5,410.00 Metropolitan Bank 18,420.00 Sundry Debtors 44,455.00 Sundry Creditors 12,920.00 Cash in Hand 470.00 Bad Debts 3,110.00 Sales, Less Returns 226,825.00 Repairs 2,040.00 Patents, Cost 21,000.00 $639,735.00 $639,735.00 Upon audit it appears that a purchase of goods in December to the amount of $2,410, unpaid on December 31, 1906, has been omitted and also that Machinery and Plant account has been debited with a sum of $345, which should have been charged to Repairs. Prepiire the operating and the financial statements, correcting the above errors, and writing $5,000 ofiF Machinery and Plant and 10% oflf Patents. The stock on December 31, 1906, was val- ued at $98,400. PROBLEM 116 (North Carolina, 1919) From the following accounts, prepare a Balance Sheet that will exhibit a correct view of the Net Worth : Accounts Receivable $ 50,000.00 Accounts Payable 20,000.00 Bonds Outstanding 100,000.00 Cash on Hand 100,000.00 Common Stock Outstanding 100,000.00 Dividends on Preferred Stock Due and Unpaid 10,000.00 Inventories at Cost 10,000.00 Notes Receivable 5,000.00 Notes Payable 213,000.00 Plant Account (at cost) 200,000.00 Preferred Stock Outstanding 100,00000 Profit and Loss (Debit Balance) 126,000.00 Reserve for Depreciation 30,000.00 77 • Y.. VE 02734 Fy?^ CT/: / £6^ ^52244 UNIVERSITY OF CAUFORfflA UBRARY 1 1 UNIVERSITY OF CALIFORNIA LIBRARY m BERKELEY Return to desk from which borrowed. This book is DUE on the last date stamped below. FEB 18 1948 REC'O t0 NOV 10 \9SI ^^%'S9HK RECP WO NOV stn iV *• I-: ji'i- ■ III!