Chapter LXIII: Appendix: A (1)

PRACTICE WORK FOR STUDENT—FIRST HALF-YEAR

Accounting principles cannot be mastered without adequate practice work. Practice work cannot be properly done unless the principles on which it is based have been developed and explained. Practice work should, so far as possible, follow closely after the explanation of new principles. This applies particularly to the introductory work of the first half-year. Later work is cumulative in its effect and may use all principles previously developed as well as the new principles just developed.

The practice work for the first half-year consists largely of disconnected problems. However, a few longer problems running through several assignments are included. Effort has been made to keep to a minimum the purely mechanical work of computation. While emphasis should be placed always on the principles involved, the need for accuracy should not be lost sight of; in its practice in business, accountancy requires accurate and, where possible, proven results.

Of the budget of stationery provided for this work, the loose-leaf supplies—statement, journal, and ledger paper—are for the first half-year’s work. The three-column paper is to be used for balance sheet and profit and loss statements, unless other directions are given for particular assignments. The use of journal and ledger paper is indicated where necessary. Observance of directions given and of forms to be followed, together with careful and accurate work in drafting solutions, will save much time in the location and correction of errors.

Sufficient practice work is furnished to accompany 30 hours of lecture or classroom work, opportunity being provided for two review periods, one at mid-term and one at the close of the semester. Where the lecture period is two hours in length—the class usually meeting but once a week—two of these assignments should be given to accompany each such lecture period. The student should make his solutions as a part of his home-work and these should be taken up for discussion at the next class session and correct solutions should be presented there so that always the student may have a criterion with which to compare his own work. Where more practice work is desired than is provided in this appendix, a collection of miscellaneous problems is given in Appendix C.

I
1. On January 1, 19—, H. L. Lewis has the following property:

Bank deposit $1,893.74.
Merchandise $14,987.42.
Office equipment: safe, desk, counters, cash register, $850.
Delivery equipment $836.
Securities held as investments $6,950.
Accounts due him from customers as follows:
John Morris $ 90.87.
Peter Conley $135.
Chas. Grant $742.93.
Frank Hewitt $157.48.
L. M. Moore $790.72.
N. T. Taylor $48.95.
A. S. Keene $75.

For merchandise bought there remains unpaid:

To Jones Bros. $1,350.45.
” T. J. Langdon $890.
” Stewart & Co. $965.
” T. M. Lawes & Co. $4,862.97.
And a note for $125.

Draw up a statement to show H. L. Lewis’ capital as of the
above date.

2. From the following information determine the total amount of
the liabilities:

Cash in bank $840.
Goods on hand $2,500.
Accounts receivable $1,600.
Supplies on hand $320.
The year’s rent $600, was paid in advance and the premises
have now been occupied for six months.
The capital is $2,500.

3. From the following items in a balance sheet, which is complete
except as to the asset cash, determine the amount of cash:

Capital $2,500.
Supplies $87.50.
Real estate $2,500.
Ford delivery truck $575.
Accounts receivable $2,280.
Accounts payable $1,800.
Notes receivable $300.
Notes payable $500.
Salaries due but unpaid $50.
Mortgage on real estate $1,000.

4. The following data, complete excepting for the amount of a
certain mortgage and interest accrued thereon, are taken
from the records of Benjamin Goodwin for the year ending
June 30, 19—. Determine the face amount of the mortgage
payable, and the amount of the interest accrued thereon
at 6% for one year.

Cash on hand $75, and subject to check $1,200.
Factory $6,100.
Land $2,000.
Office furniture $185.
A three-year insurance premium
was bought one year ago for $300.
Accounts receivable $4,500.
Goods on hand $2,800.
Goods in process of manufacture $1,450.
Raw materials inventory $2,250.
Supplies $295.
Accounts payable $9,150.
Notes payable $4,650.
Accrued wages $135.
Mortgage payable and interest.
Capital $5,000.

5. The following was taken from the books of the treasurer
of the Yorktown Lodge:
Balance in Fifth National Bank, January 1, 19—, $689.22.
The receipts during the year were:
Proposition fees $515.
Initiation fees $2,510.
Lodge dues $4,904.60.
Interest on Liberty bonds $332.14.

Summary disbursements for the year were:

Grand lodge dues $554.
Printing and postage $818.25.
Entertainment $2,199.86.
Sundries $216.20.
Returned proposition fees $80.
Rent for lodge room $750.
Salaries $387.50.
Charity $1,211.84.
Supplies $38.80.
Testimonial dinner $846.48.

There is also cash $4,498.67, on deposit in the Irving Savings Bank
December 31, 19—, on which interest at the rate of 4% per annum
is now due for one-quarter.
The treasurer holds $10,000 in Liberty bonds.

Submit statement showing the available balance of cash for
the new year.

II
1. Make up three problems, using your own data, to
illustrate the three types of business organization.

2. On January 2, 19—, Allen B. Dawes has in his business
the following assets and liabilities which you are to
classify for balance sheet purposes according to the
definitions which have been given, changing the descriptions
here used to standard titles:

Alongside of a railroad spur, on a plot 100 by 75 feet,
costing $2,500, Dawes has erected a plant for $12,000,
for a part of which he is still indebted to the Mutual
Savings Bank, which debt is secured by a claim for $5,000
against the property.
In the plant Dawes has installed stationary operating
apparatus amounting to $19,750, and loose operating parts
and supplementary devices amounting to $250.
The value of the models and patterns which he uses amounts
to $1,215.
His stock, totaling $12,215, is in three distinct phases
or conditions:
Raw materials $4,305.
Partly finished or in process goods $4,020.
Completed stock $3,890.
In the plant Dawes has $725 worth of furniture.
In the bank he has a balance of $940 and $83.50 in the safe.
Some of his customers owe him for goods bought, the total
being $5,397.50 on open account and $875 on signed promises
to pay.
Dawes owes creditors on account $4,857.50.
He has formally acknowledged and accepted drafts amounting
to $543.50.
He is liable for a pay-roll of $150, earned but not yet due.

Draw up a statement showing assets, liabilities, and net worth,
using standard titles.

3. Dawes has reached a point where it is not only profitable
but really necessary to expand his business if he is to
retain the good-will of his old customers and secure new
ones. He has therefore persuaded Edward A. Robbins, a
capitalist, to put cash into the business equal to Dawes’
net interest and so become a partner with him.

The partnership uses $3,100 of this new capital to purchase
additional raw material, and $2,500 for some partly finished
stock (bought at a sacrifice sale). They spend $1,600 for
new machinery, $250 for tools, and $100 for new patterns.
With an eye toward future building facilities they acquire
another and adjoining strip of property with a building on
it. The latter costs them $5,470 and the land $2,500.

To facilitate securing and delivering goods, the partners
invest $1,800 in a small truck. They add shop furniture
amounting to $80.

These various deals were consummated by the early afternoon of
January 2, 19—. The partners ask you for a new balance sheet
to show the condition of the business and the respective
interests of each.

4. At the end of the year’s operation, Dawes & Robbins ask you
to draw up a statement of assets, liabilities, and net worth,
the following figures being submitted:

Balance of cash in the bank $28,000.
Accounts owing the partnership $12,000; notes $6,000.
The inventory is again split up into:
Raw materials $9,000.
Partly finished goods $5,000.
Finished stock $500.
Still on hand unused:
Advertising material $640.
Oil, waste, and supplies $500.
Packing supplies $750.
Other assets:
Models and patterns $500.
Loose tools $75.
Shop furniture is to be shown at the last
balance sheet figure less an estimated
depreciation in value of $161.
Machinery in the same manner less depreciation of $2,669.
Delivery equipment less depreciation of $360.
Factory less depreciation of $3,498.
Land as it was on the last balance sheet.
Liabilities are as follows:
Accounts owing to creditors $1,000.
Notes $250.
Accrued pay-roll $200.
The mortgage had been reduced to $2,000.

5. Robbins is anxious to withdraw from active participation
in the partnership. To facilitate this and to secure
additional funds with which to buy new models and other
things needed for the growing business, it had been decided
some time ago to incorporate and to dispose of some of the
stock to outsiders. The necessary steps had already been
taken. In accordance therewith the corporation takes over
the business at the values shown in the balance sheet of
Problem 4, with the exception of $14,252 cash which Robbins
retains. For the good-will of the business the corporation
gives the partners $15,000 of its capital stock. $25,000 of
the capital stock is sold to outsiders for $25,000 cash.
The rest of the capital stock is used in purchasing the
partnership.

Set up the balance sheet of the corporation.

III
1. A. K. Sutton is proprietor of hardware store.
On June 30, 19—, he has the following assets
and liabilities:

Bank deposits $1,980.47.
Notes receivable $450.
Accounts due from customers:
L. M. Taylor $190.
L. K. Jones $275.
G. Sanford $18.73.
F. Daly $87.54.
C. Baker $103.13.

Merchandise inventory $4,745.
Office equipment $135.
Delivery equipment $575.

He owes:
First National Bank $565.
Chas. Goodwin $487.97.
L. Birch $150.
H. Tuttle $92.50.
James Bros. $325.

Sutton’s 60-day promissory note for $200 with interest at 6%
is due today, but payment is deferred, with consent of
the creditor, to tomorrow morning.

On the above date Sutton buys out the automobile accessory
business of his neighbor, A. M. Lawrence, and combines it
with his own. The deal was completed on the basis of the
balance sheet submitted below, except that Lawrence is to
retain the cash. Sutton pays Lawrence in cash from his
hardware business. Lawrence’s balance sheet contains the
following items:

Cash $347.90.
Accounts receivable:
Taxi Service, Inc. $49.50.
The Market Shops $18.50.
Whitney’s Delivery Service $80.
Merchandise inventory $1,597.
Delivery equipment $475.
Office equipment $90.
Accounts payable $850.

Draw up a balance sheet to show Sutton’s condition after his
purchase of Lawrence’s business.

Why is Sutton’s net worth the same as before buying
Lawrence’s business?

_Instructions_

Show accounts receivable and accounts payable as totals, with
a supplementary schedule listing each separately.

2. From the following particulars prepare a balance sheet of
the Mountel Manufacturing Company as of December 31, 19—:
Premises $2,500.
Machinery $11,500.
Buildings $5,300.
Capital stock $30,000.
Stock-in-trade: finished goods $12,500;
goods in process of manufacture $8,670;
and raw materials $4,980.
Loose tools $490.
Models and patterns $650.
Patents $1,000.
Good-will $3,000.
Trade creditors $15,540.
Cash $50.
Motor truck $1,580.
Bank deposits $1,740.
Outstanding claims against customers
on open account $8,975.
A 60-day note payable for $1,000 had
been discounted at the bank at 6%
and is due in 30 days.
Office equipment $250.
Supplies $500.
Notes receivable $4,970.
First National Bank stock and other investments $4,000.
Unexpired insurance premium $150.
Accrued wages $75.
Other notes payable outstanding amount to $8,960.
Purchase money mortgage on machinery $5,500, due in 18 months.
Mortgage on buildings $2,000, due in six months.
Unpaid motor truck expense $85.

It is estimated that during the year machinery has depreciated
10% and buildings 5% from the values shown above.
Investigation shows that the present market value of finished
goods is 75% of that carried on the books, goods in process
90%, and raw materials 100%.
It is decided to reduce the values of stock-in-trade to present
price levels.
A reserve of 5% is to be created for bad debts, 50% for models
and patterns, and 20% for the delivery truck.
Loose tools are valued at $245.

3. The Cordovan Tanning Company has issued $3,000,000 of
capital stock. It suffered heavy losses due to the drop
in prices during the year. The following balance sheet
submitted to the stockholders as of December 31, 19—,
showed:
Cash on hand $1,805; on deposit $378,090.
Customers’ acceptances unmatured $249,754.
U. S. Liberty bonds $47,500.
General investments $82,950.
Loans receivable $15,280.
Income accrued on investments $3,450.
Accounts receivable $2,948,582.
Reserve for doubtful accounts $56,125.
Notes receivable $82,000.
Prepaid insurance $14,950.
Finished goods $750,000.
Goods in process $697,974.
Raw materials $460,900.
Plant and equipment, $4,980,760.
Depreciation reserve for plant and equipment was $460,640.
Accounts payable $1,980,760.
Notes payable $350,000.
Dividends payable January 15 of the next year,
and constituting a present liability of the
company $230,000.

From the following information and the balance sheet as of
December 31, 19—, prepare the balance sheet as of
December 31 one year later.

Cash on hand December 31 was $1,790; on deposit $162,875.
Customers’ acceptances unmatured $449,500.
The market value of the Liberty bonds was $46,000,
and general investments $50,000.
Loans receivable $16,000.
Income accrued on investments $1,800.
Accounts receivable $2,310,000.
Reserve for doubtful accounts $60,000.
Notes receivable $150,000.
Prepaid rent $2,400.
During the year $380,000 worth of goods was added to
finished stock, and $420,000 at cost price was sold.
It is decided that the balance must be marked down
50% to conform to market replacement costs.
Goods now in process are valued at $315,890.
Raw materials carried on the books at $670,000 are to be
written down 30% to market value.
5% of the cost of plant and equipment is to be added to
the reserve for depreciation.
Accounts payable $3,670,980.
Notes payable $1,475,000.
A dividend of 5% had been declared and was payable
January 15 of the next year.

4. By comparing the two December 31 balance sheets of the
Cordovan Tanning Company, what can you tell as to the
progress of the company during the year? Did it make a
profit or suffer a loss?

IV
1. Draw up a comparative balance sheet as of December 31,
19— of the Interurban Railway Company, from the balance
sheets of December 31, 19— and December 31 of the
previous year.

Balance sheet of 19— showed:
Cash $40,909.18.
Accounts receivable $33,097.49.
Securities deposited with Workmen’s Compensation
Commission $4,893.75.
Materials and supplies $27,112.28.
Prepaid insurance $5,732.16.
Work in progress $7,509.81.
Road and equipment $696,622.49.
Accounts payable $17,058.81.
Notes payable $70,000.
Accrued interest on first mortgage bonds $3,645.84.
Accrued taxes $6,450.65.
Depreciation reserve for road and equipment $19,995.96.
Surplus $223,725.90.
Capital stock $300,000.
First mortgage 5% bonds $175,000.

Balance sheet of the year previous showed:
Cash $34,313.78.
Accounts receivable $57,779.47.
Securities deposited with Workmen’s Compensation
Commission $4,893.75.
Materials and supplies $29,308.56.
Insurance prepaid $3,639.19.
Work in progress $98.64.
Road and equipment $694,216.73.
Depreciation reserve for road and equipment $15,813.46.
Capital stock $300,000.
Accounts payable $25,973.61.
Notes payable $100,000.
Accrued interest on bonds $3,645.84.
Accrued taxes $8,872.31.
First mortgage bonds $175,000.
Surplus $194,944.90.

2. Can you tell definitely and in detail how the increase
in surplus in Problem 1 was effected?

3. The annual report of the Northeastern Power Company for
year ending December 31, 19—, gave the following balance
sheet as of December 31, 19—:

Investments in subsidiary companies $4,244,855.57.
Cash $1,927,898.84.
Accounts receivable $1,514,605.11.
U. S. Government Liberty Loan 4¼% bonds $915,102.
Canadian Victory Loan 5½% bonds $497,769.88.
Securities deposited with State Workmen’s Compensation
Commission $8,893.75
Other securities $241,001.
Mortgages owned $13,500.
Materials and supplies $364,410.81.
Work in progress $12,931.10.
Prepaid insurance $231,350.66.
Prepaid taxes $624,744.28.
Real estate, plant and transmission systems $48,230,896.04.
Mortgage on real estate $15,000.
Accounts payable $867,763.35.
Accrued taxes $707,870.94.
Interest payable $213,896.68.
Dividends payable $201,519.50.
First mortgage 5% bonds $10,000,000.
6% refunding mortgage bonds $8,226,000.
6% debentures $10,200,000.
Depreciation reserve $2,254,476.13.
Surplus $138,932.44.
Capital stock outstanding $26,002,500.

The report for the following year gives the following particulars
as to the balance sheet of that year:

Cash $1,677,663.43.
Accounts receivable $1,286,731.23.
U. S. Liberty bonds 4¼% $1,106,452.
Canadian Victory Loan 5½% bonds $747,769.88.
Securities deposited with State Workmen’s Compensation
Commission $8,893.75.
Other securities $170,501.
Mortgages owned $15,500.
Materials and supplies $391,645.
Prepaid insurance $355,302.71.
Investments in subsidiary companies $1,406,325.67.
Prepaid taxes $607,575.33.
Real estate, plant, and transmission systems $53,470,089.04.
There were no changes in the various bond issues nor in the
capital stock during the year.
Mortgages on real estate $20,000.
Accounts payable $875,214.37.
Notes payable $1,650,000.
Accrued taxes $484,806.02.
Interest payable $215,509.58.
Dividends payable $201,519.50.
Reserves for depreciation $2,532,715.94.

Draw up a comparative balance sheet and determine the profit
for the year.

4. Make an analytical statement showing the effect on the
various assets and liabilities of the profits made during
the year.

5. Discuss these changes and so far as possible show how they
were brought about.

V
1. On December 31, 19—, James Good’s books revealed the
following facts:

Cash $25,000.
Due from customers $130,000.
Plant and equipment $100,000.
Other assets $15,000.
Due creditors for merchandise $55,000.
Accrued expenses $7,980.
Mortgage on plant $50,000.
Other liabilities $49,500.
Merchandise now on hand $67,800.
Capital at beginning of year $150,000.
Drawings during the year $10,000.
Sales $300,000.
Initial inventory $75,000.
Purchases $200,000.
Selling expenses $30,000.
General administrative expenses $27,480.

Draw up a balance sheet with the net worth section expanded
to show the operations for the year.

2. On January 2, 19—, the value of the goods on A. R. Knight’s
shelves amounted to $85,980, and he bought $275,600 worth
during the year. On December 31 of the same year the inventory
was $106,720. What was the amount of gross sales, if gross
profits were $96,000 and returned sales $17,500?

3. Expenses for conducting Knight’s business for the year
were as follows:

Salesmen’s salaries $18,750.
Advertising $2,750.
Expenses of shipments $4,580.
Office help $12,800.
Rent $18,000.
Insurance $2,500.
Supplies $5,400.
Depreciation on buildings $6,500.
Interest $5,250.
Taxes $3,920.

What was the net profit?

4. During the year 19—, the Morton Trading Company’s
books showed:

Net sales amounting to $265,000.
Purchases were $148,000, of which $7,540 worth of goods
were returned.
The cost of goods sold was 60% of the net sales and the
final inventory was $84,900.
Sales salaries $29,760.
Advertising $30,000.
Shipping expenses $4,680.
Office salaries $10,260.
Rent $4,800.
Insurance $1,500.
Depreciation of plant $6,890.
Supplies $1,230.
Taxes $4,430.

Prepare a statement of profit and loss for the year.

VI
1. The books of Alfred Gristede show the following record
at the close of business September 30, 19—:

Inventory September 1, 19—, $500,000.
Purchases $2,500,000.
Purchases returns $50,000.
Sales $3,250,000.
Sales returns $100,000.

If the gross profit is $850,000, what is the final inventory?

2. The profit and loss records of A. C. Dye for the year 19—
show the following figures:

Merchandise January 1, 19—, $235,960.
Sales $875,900.
Sales returns $6,900.
Purchases net $586,900.
Advertising $16,000.
Office salaries $22,500.
Sales salaries $34,800.
Insurance $6,300.
Taxes $21,700.
Depreciation on buildings $4,630; on motor fleet $1,875.
Accounts written off as uncollectible $36,875.
Interest on notes and accounts receivable $6,790.
Interest on notes payable $3,275.

At the end of the year the merchandise amounted to $216,735.
Draw up the statement of profit and loss for the year.

3. Prepare a formal profit and loss statement of the Lincoln
Leather Company for the year ending December 31, 19—,
from the data below taken from the company’s books:

Sales $1,559,087.
Sales returns $13,456.
Merchandise on hand January 1, 19—, $487,693.

Leather bought during the year $876,019, of which there were
returns because of defects amounting to $8,716.

Inventory on December 31, 19— disclosed $513,860 worth of
goods on hand.

Expenses of operation were:
Advertising $247,920.
Sales salaries $143,560.
Sales commissions $88,723.
Sales traveling expenses $6,423.
Freight-out $1,976.
Delivery expenses $38,976.
Rent $38,500.
Taxes $12,890.
Insurance $7,680.
Light $4,320.
Heat $15,648.
Interest paid $3,216.
Interest received $4,872.
Office salaries $27,875.
Sundry expenses $9,213.

4. The Interurban Railway Company whose comparative balance
sheet was the basis of work in Assignment IV, Problem 1,
had the following particulars for its statement of profit
and loss for the year ending December 31, 19—:

Operating revenue, i.e., income received from sale of service
to community, $152,228.11.
Other income $1,191.83.
Operating expenses $100,582.96.
Deductions from income were:
Interest on 5% first mortgage bonds $8,750.
Interest on notes payable $4,727.41.
Taxes $10,578.57.

What was the amount of the net profits for the year?

Compare this with the surplus change as developed by
the comparative balance sheet in Assignment IV, Problem 1.

5. Draw up a comparative profit and loss statement of the
Interurban Railway Company for the years ended December 31, 19—
and December 31 of the previous year from the information
submitted in Problem 4 and the following data for the year
ended December 31 of the previous year:

Operating revenues $181,016.11.
Other income $526.52.
Operating expenses $122,143.23.
Deductions from income:
Interest on the first mortgage bonds $8,750.
Interest on notes payable $6,030.
Taxes $13,634.59.

VII

1. The financial condition of the Subway Seller at the beginning
of the year is shown by the following balance sheet:

THE SUBWAY SELLER
BALANCE SHEET
January 1, 19—

_Assets_
CURRENT ASSETS:
Cash $100,000.00
Notes Receivable 15,000.00
Accounts Receivable 225,000.00
Merchandise Inventory 450,000.00
Liberty Bonds 50,000.00 $840,000.00
-----------
DEFERRED CHARGES:
Prepaid Insurance $ 25,000.00
Supplies Inventory 20,000.00 45,000.00
-----------
FIXED ASSETS:
Furniture and Fixtures $ 30,000.00
Delivery Equipment 18,000.00
Buildings 350,000.00
Land 200,000.00 598,000.00 $1,483,000.00
------------ -----------

_Liabilities_
CURRENT LIABILITIES:
Notes Payable $300,000.00
Accounts Payable 20,000.00
Accrued Expenses:
Salaries 12,000.00
Taxes 25,000.00
Interest on Mortgage 10,500.00 $367,500.00
-----------
Fixed Liabilities:
Mortgage on Land and Bldg 350,000.00 717,500.00
----------- -------------

_Net Worth_
Represented by:
Capital Stock $500,000.00
Surplus 265,500.00 $ 765,500.00
=========== =============

At the end of the year the following facts are taken from
the books of account:

The profit and loss records show:
Sales $2,125,000.
Sales returns and allowances $15,000.
Purchases for the year $1,200,000.
In-freight $15,000.
Purchase returns and allowances $8,000.
Advertising $125,000.
Sales salaries $190,000.
Delivery expense $50,000.
Depreciation on furniture and fixtures $3,000,
and on delivery equipment $2,250.
Superintendence $50,000.
Clerical salaries $75,000.
Repairs and maintenance $20,000.
Supplies $30,000.
Insurance $60,000.
Telephone and telegraph $10,000.
Bad debts $10,625.
Depreciation on building $14,000.
Taxes $30,000.
Interest on notes payable $15,000.
Interest on the mortgage $21,000.
Sales discounts $15,000.
Interest received on Liberty bonds $2,000.
Purchase discounts $24,000.

The balance sheet records show:
Cash $141,000.
Notes receivable $15,000.
Accounts receivable $335,000.
A reserve for doubtful accounts of $10,625.
Merchandise inventory $350,000.
Prepaid insurance $15,000.
Supplies inventory $30,000.
Furniture and fixtures $27,000.
Delivery equipment $15,750.
Building $336,000.
Notes payable $300,000.
Accounts payable $25,000.
Accrued sales salaries $15,000.
Accrued taxes $30,000.
Accrued interest on mortgage $10,500.
Mortgage on land and building $250,000.

Other figures on the balance sheet of January 1, 19—
have remained unchanged excepting surplus, the amount
of which you are required to determine.

From the above information:
(a) Prepare a comparative balance sheet.
(b) Prepare a statement of profit and loss.
(c) Determine the following ratios:
1. Current assets to current liabilities
2. Working capital turnover
3. Merchandise turnover
4. Accounts receivable to sales
(Assume a normal credit period of 60 days)
5. Net profit to net worth
6. Gross profit to net sales
7. Selling expenses to net sales
8. Net operating expenses to net sales
9. Net profit to net sales

2. From the following particulars taken from the books
of the United Steel Company, prepare a pro forma balance
sheet, and a statement of profit and loss:

Stocks of goods on hand from preceding year $4,964,792.
Purchases $12,945,983.
Sales $14,987,653.
Sales salaries $52,500.
Sales traveling expenses $8,613.
Sales commissions $1,780.
Cash $1,420,909.
Executive salaries $32,500.
Interest on notes payable $18,604.
Rentals $17,000.
Capital stock outstanding $38,669,600.
Interest income including the accrued, $29,911.
Real estate, plant, and equipment $34,469,867.
Trade debtors $7,082,026.
Notes receivable $302,638.
Customers’ acceptances unmatured $4,446,000.
Trade creditors $1,609,101.
Notes payable $250,000.
Repairs to plant $8,790.
Investments in subsidiary companies $3,358,933.
Advertising cost to date $35,680, exclusive of
the amount prepaid.
Telegraph $2,514.
Telephone $8,716.
Freight-out $4,978.
Demurrage $1,972.
Taxes expense $39,447, of which $17,017 is unpaid.
Surplus without taking account of the current year’s
profit is $13,678,362.
Goods now on hand $7,004,339.
Interest accrued on notes receivable $5,510.
Prepaid advertising $11,892.

Note: Show Interest Income Accrued as a current asset.
3. The warehouse of the Eastern Distributing Company is
destroyed by fire. The records at the main offices showed
that there were $785,960 worth of merchandise in the
building on January 1, 19—.

The fire occurred on October 3, 19—, and to that date
purchases had been made amounting to $2,486,475, of which
$18,920 were not yet delivered. Included in the cost of
purchases is $22,500 for freight paid.

Sales had amounted to $2,930,760. Statistical records for
the ten years previous to the loss, showed a gross profit
on sales of 51.42%.

The loss is complete except as to a small amount of goods
salvaged, the realizable value of which is estimated at
$125,000.

It is necessary, according to the terms of the fire insurance
policy, to file an immediate claim for goods destroyed.
Prepare such a claim, having due regard to a form suitable
for showing the loss.

VIII
1. Draw up from your own data the balance sheet of a corporation,
with at least twelve assets and at least five liabilities and
a total asset figure of over $250,000.

2. Making your own assumptions set up a balance sheet for the
succeeding year and a comparative balance sheet for the
two years.

3. Determine the ratios of fixed assets to capital stock,
of working capital to net worth, and of current assets to
current liabilities.

4. Write a brief statement of about 150 words giving your
opinion of the financial condition of the concern.

IX
1. Enter in ledger “T” accounts the information for the “end
of the year” given in Assignment VII, Problem 1, page 525.

2. Using the account titles in the ledger of Problem 1, draw
up a chart of accounts similar to Form 2, page 75.

3. Show and explain how the ledger of Problem 1 is the
proprietorship equation.

4. Draw up a profit and loss statement to account for the
change in proprietorship shown by Assignment VIII, Problem 2,
making your own assumptions as to items in the various
sections of the statement.

5. State the probable business transactions occurring to
bring about these changes in proprietorship (Problem 4),
i.e., show the interaction of the profit and loss elements
with the asset and liability elements in causing the changes
in financial condition.

_Instructions_

Problem 1. A ledger “T” account is a skeleton account ruled
only with the horizontal “title” line and the vertical line
separating the left section from the right, date and amount
columns being left without formal ruling.

Problem 3. The illustration on page 41 gives the form to
follow in solving this problem.

Problems 4 and 5. Make your assumptions reasonable as to the
turnover and the ratios of expenses and profit to sales.
Assume a merchandise turnover of 5, and a gross profit of
40% of sales. From these determine roughly the cost of goods
sold, the purchases, and the sales figures. Make reasonable
provision for bad debts, depreciation, interest, etc.,
in accordance with the balance sheet requirements. Make
the other expense items whatever amounts are necessary to
produce the same net profits as is shown by the comparative
balance sheet.

Follow closely the illustration in Chapter VII for the form
of solution to be used for Problem 5.

X
1. Using the schedule shown on page 82, write out three
examples of each class and show their effects in each of
the three opposite classes (27 examples).

2. Set up ledger “T” accounts for each of the illustrations
on pages 82-84, entering therein the proper amounts, debit
and credit.

XI
1. (a) Analyze the following transactions from the seller’s
viewpoint and name the debit and credit elements of
each to show:
1. The increase or decrease of assets, liabilities, and
proprietorship.
2. The account titles under each of the general groups.

The Dairymen’s League on August 1, 19— owed the Union Car
Line Company $19,780 for transportation services rendered,
and paid $9,780 cash on account, and gave a 60-day note
(6%) for $5,000.

Services to the League for the week ending August 7
totaled $2,920.

A claim of $720 was allowed the League on the 12th for
goodslost in transit.

The bill of August 7 was paid in full August 14,
less 5% for prompt payment.

On the 15th the note for $5,000 was discounted at
the bank at 6%.

(b) Set up the Dairymen’s League account on the books
of the Union Car Line Company.

2. (a) Analyze the following transactions of Samuel Lawson
and name the debit and credit elements of each to show:
1. The increase or decrease of assets, liabilities, and
proprietorship.
2. The account titles under each of the general groups.

On September 5, 19—, Lawson entered a claim for $1,000
against the Mohawk and Westchester Railroad Company for
goods bought but lost in transit on August 12.

September 16 one of Lawson’s trucks was destroyed by fire
and a claim was entered against the Shippers Fire Insurance
Company for $5,800. The truck was new and cost $7,500.

September 20 a bill for $23,400 for services was received
from the Union Transport Company.

Payment of $16,900 was made September 23 to the Transport
Company.

September 30 the claim of September 5 was paid in cash by the
M. and W. R. R. Company to Lawson, and he paid by check the
balance due the Transport Company.

(b) Set up the Union Transport Company account on the books
of Samuel Lawson.

3. (a) From the data of Problem 1, set up the Union Car Line
Company account on the books of the Dairymen’s League.

(b) From the data of Problem 2, set up the Samuel Lawson
account on the Union Transport Company books.

4. (a) Analyze the following transactions from the viewpoint
of the business and name the debit and credit elements
of each to show:
1. The increase or decrease of assets, liabilities, and
proprietorship.
2. The account titles under each of the general groups.

Balance of cash on hand July 1, 19—, $8,940.
July 2, received from cash sales over the counter $760.
July 3, received from customers in payment of notes $575.

July 5, paid for salaries $175, motor repairs $85,
advertising $325, postage $22.
July 6, discounted $1,000 6% 30-day note at the bank.
July 7:
Paid for new Ford truck $925, f.o.b. Detroit, and
freight-in on truck, $38.75; insurance $75.
Paid creditors $4,290.
Made a promissory note in favor of a creditor for $500 for
three months at 6%.
Paid note for $2,000 due on the 8th of July with interest at
6% for three months.
Bought a Liberty bond for $887.50 with accrued interest of
$16.50.

(b) Set up the Cash account.
(c) Show the account properly ruled and balanced.

5. Name the debits and credits for each of the following
transactions and set up the Notes Payable account:

On October 1, 19—, discounted 30-day 6% note for $2,500
at the bank.
Paid six months’ promissory note at 6% for $1,000 on the
10th and gave to a trade creditor our note for $3,750
due in 30 days without interest for balance of open
account.
Discounted trade customer’s three months’ 6% note for
$5,000 at bank on the 15th, the discount period being
60 days.
Paid note for $2,500 at the bank on the 31st.

6. The Willow Spring Dairy Farm purchased a new Cleveland
Tractor April 1 for $1,850, f.o.b. Cleveland. Freight
charges were $32.90; insurance in transit $15; hauling the
accessories from the station to the farm $12; attachments
cost $435; and assembling the parts cost $35. After being
used for six months the machine with accessories was sold
for $2,000.

Set up the Farm Implements account and determine the profit
or loss. Disregard depreciation.

7. On January 15 a tract of land was purchased for $32,000,
which amount included the cost of searching title $800, and
unpaid taxes at time of purchase $350. The cash paid included
all but the taxes.

On March 1 a new road was completed through the tract at
a cost of $1,250.
April 1 the unpaid taxes of $350 were paid.
August 1 assessments were levied for the state highway
amounting to $3,280.
Half of the land was sold, December 10, for $18,500.

Name the debits and credits of each of these transactions and
set up the Land account.

_Instructions_

Problems 1, 2, and 4. Set up each item somewhat in the following
manner:

Paid $9,780 cash on account (Dairymen’s League paid to
Union Car Line Company).

Debit: Increase of Assets (Cash, $9,780).
Credit: Decrease of Assets (Accounts Receivable,
Dairymen’s League $9,780).

XII
1. (a) Analyze the following transactions and name the debit and
credit elements of each to show:
1. The increase or decrease of assets, liabilities,
and proprietorship.
2. The account titles under each of the general groups.
[Refer to (b) for account titles to be used for this.]

Paid, March 1, repairs on auto truck $62.50; by check, rent $100.
March 4, $18 for office supplies; advertising circulars $128;
postage $25; telephone $18.50.
March 8, interest on borrowed money $12; new sign on door $22.
March 15, received interest on Liberty bonds $21.25.
March 18, typewriter repairs cost $8; gasoline and oil $57;
wrapping paper and general supplies $20.
March 25, advertising $75; electric light $17; insurance $15.
March 31, salaries of manager $125; office force $100;
telegrams $12.80; discount on borrowed money $5; coal $50;
sales salaries $75; traveling expenses $14.

(b) Prepare accounts with:
1. Delivery Expense
2. Advertising
3. Interest Cost
4. Interest Income
5. General Office Expense
6. Postage, Telephone, and Telegraph
7. Selling Expense
8. Cash

and set up the debits and credits of the transactions therein.
All transactionsa re for cash.

Be careful always to maintain the debit and credit equilibrium.

2. Prepare accounts with Delivery Expense, Delivery Supplies,
Delivery Wages, and Cash, and set up therein the debits and
credits of the following transactions, all of which are for
cash:

November 1, paid $5.40 for gasoline and $1.20 for oil.
November 6, bought a new inner tube for $3.50, and the
following day a new shoe for $42.50.
November 10:
Paid $4.50 for gasoline, and $1.20 for oil.
Paid the driver $35 for wages and $22.50 to the helper.
Removing carbon cost $2 and patching a tire $.50.
November 15, the car was repaired for $75.
November 18:
A short-term insurance policy for $25 was taken.
Paid the driver $35 for wages, and $22.50 to the helper.
The driver was arrested and fined $10 for passing a
trolley car while it was discharging passengers.
November 19, the car was wrecked by going down a
washed-out embankment and the helper hurt. Hospital
expenses were $50, which the
Casualty Insurance Company paid on the 25th. It cost $60
to take the car to a garage and repairs cost $275.
Suit was entered against the township for costs.

3. (a) Analyze the following transactions and name the debit
and credit elements of each to show:

1. The increase or decrease of assets, liabilities,
and proprietorship.
2. The account titles under each of the general groups.

R. C. Rockwell goes into the wholesale grocery business and
invests $20,000 in capital.
Due to a need for cash to take advantage of a favorable
purchase of securities for personal use, he withdraws $5,000
cash.
He sells some of his personal securities for $500 to buy
merchandise for the store.
He pays out of business funds household expenses of $400,
and a personal note due on his touring car for $500.
By selling two acres of land for $500 he returns the $500 he
paid on the car.
At the end of the month he transfers to his capital account
$1,000, being the debit balance in his personal account.

(b) Set up the proprietor’s capital account as carried
on the books of the grocery business.

4. (a) Analyze the following transactions and name the debit
and credit elements of each to show:

1. The increase or decrease of assets, liabilities,
and proprietorship.
2. The account titles under each of the general groups.

There is a credit balance in Profit and Loss of $4,000.
A debit balance in George B. Kelly, Personal, of $1,500.
A credit balance in George B. Kelly, Capital, of $35,000.
A debit balance in Cash of $5,000.
Mr. Kelly paid bills for the business out of personal funds:
Heat and electric light $75.60.
Water rent $25.
Store rent $400.
Gas bill $26.50.
R. G. Dun rating dues $10.
Trade association dues $15.

He received personally and retained the following amounts
due the business:
Interest on notes receivable $375.
Cash in settlement of last month’s disputed electric
light bill $15.
Rent of desk room $150.
Mr. Kelly withdrew $400 cash for personal use.
He paid for telegrams for the business $15.
He had his touring car repaired and took $75 store
cash to pay for it.

(b) Prepare accounts with:
1. Profit and Loss
2. George B. Kelly, Personal
3. George B. Kelly, Capital
4. Cash

and set up the debits and credits therein.

Transfer the net balance of Profit and Loss account to Kelly,
Personal; and transfer the net balance of the latter account
to Kelly, Capital.

XIII

1. Analyze the following transactions and name the debit
and credit elements of each to show:

1. The increase or decrease of assets, liabilities,
and proprietorship.
2. The account titles under each of the general groups.

Credit sales to customers $389,650.
Sales returns $9,480.
Inventory at beginning of year $62,780.
Credit purchases $206,240.
Purchase returns $4,760.
Cash received from customers $250,000.
Sales discounts allowed $1,280.
Purchase discounts taken $3,560.
Cash paid creditors $175,000.
Freight-in $2,670, and freight-out $3,935,
were paid in cash.

2. Bought a motor truck for $2,250, on which the freight
charges were $40 in addition. Accessories cost $150 and
of these the speedometer was later sold for $50, its cost
price. Set up the Delivery Truck account and show it
properly adjusted at the close of the period to take
account of 10% depreciation.

3. An old building cost $10,000.

Renovation with betterments $1,200.
Assessments for paving the street were $750.
An extension not joined to the main building
cost $2,000.
The extension was sold for $2,500 cash early
in the second year.
Loss by fire at the end of the third year amounted
to $3,000, which the insurance company made good
by repairing the damage.
Depreciation at 5% per annum is calculated on the
balance of the Building account at the end of
each year.

Show the Building account and its depreciation reserve at
the end of the fifth year.

4. The Office Supplies account shows $450, of which $400 is
still on hand at the end of the period. Show the account
properly adjusted and closed.

5. From the data of Problem 1, prepare a single Merchandise
account. Assume a final inventory of $75,000, and show the
account adjusted and closed.

6. Analyze the following transactions relating to a business
plant, and name the debit and credit elements of each to
show:
1. The increase or decrease of assets, liabilities,
and proprietorship.
2. The account titles under each of the general groups.

Purchased a building for $100,000 from James Jackson & Co.
Paid James Jackson & Co. $40,000 cash and executed a mortgage
for the balance.
Installed a new heating plant at a cost of $15,000 cash,
$1,000 cash being received from sale of old plant.
A new roof, at a cost of $5,000 cash, was put on.
The old roof had no value as scrap.
One year later the entire heating plant was covered with
asbestos to conserve fuel. The cost was $500 cash.
The roof was repainted at a cost of $100 cash.
Glass broken by a hail storm was replaced at a cost
of $50 cash.
Two new skylights costing $750 cash were built.
Gutters and down-spouts were replaced at a cost of $150.

XIV
1. Allowing five lines for each account and for the necessary
depreciation reserve accounts which should follow immediately
their particular assets, set up the following accounts on the
ledger in proper form and under correct titles, and take a
trial balance as of December 31, 19—.

C. M. Loomis, capital investment $50,000.
Withdrawals $3,000.
Initial inventory of merchandise $19,740.
Purchases $63,800; returns $1,524.50.
Sales $99,360; returns $1,480.
Cash in bank $2,750.
Office equipment $800.
Delivery trucks $5,000.
Accounts receivable $40,950.
Notes receivable $5,000.
Liberty bonds $5,000.
Notes payable $1,700.
Interest and discount $90, Dr.
Supplies $600.
Salesmen’s salaries $3,500.
Advertising $1,200.
Delivery expenses $569.50.
Office salaries $4,655.
Legal advice $50.
Light and heat $150.
Insurance $75.
Building $22,910.
Taxes $245.
Land $2,500.
Mortgage $10,000.
Accounts payable $18,980.
Depreciation incurred during previous years on
buildings $2,000; on delivery equipment $500.

2. Loomis’ final merchandise inventory is $20,680. He estimates
depreciation on buildings at 5%, and on delivery equipment at
10%. 5% of the outstanding accounts and notes are deemed
uncollectible. Office equipment is to be written down $300.
Unexpired insurance is $25; accrued mortgage interest $300;
accrued taxes $250; accrued sales salaries $350; and supplies
on hand $200.

Prepare a statement of profit and loss and a balance sheet.

XV

1. Give three examples each of deferred expense and income,
and accrued expense and income (12 examples). Show these
in account form after the account has been adjusted.

2. From the following particulars, take a trial balance of
the ledger of the Builders’ Supply Co. on June 30, 19—.

Warehouse $ 22,500.00
Land 7,800.00
Capital Stock 300,000.00
Surplus 50,193.00
Stock-in-Trade 245,680.00
Furniture and Fixtures 2,500.00
Good-Will 25,000.00
Trade Debtors 362,400.00
Cash 38,490.00
Trade Creditors 176,700.00
Notes Payable 15,700.00
Notes Receivable 18,900.00
Sales 589,760.00
Purchases 356,420.00
Salaries 38,900.00
Coal 4,200.00
Repairs 2,800.00
General Expenses 17,900.00
Depreciation Reserve Warehouse 5,000.00
Mortgage Payable 10,000.00
Interest Expense 475.00
Interest Income 662.00
Lighting 700.00
Telephone 600.00
Insurance 1,860.00
Taxes 890.00

Draw up a balance sheet and profit and loss statement for
the year, taking consideration of these additional data:

The merchandise on hand is $256,920.
Coal on hand $500.
Accrued mortgage interest $600.
The warehouse has depreciated 5%, and furnitures
and fixtures 10%.
3% of the Trade Debtors balance is deemed uncollectible.

Note: Do not classify expenses in the profit and loss statement.
List them under the two titles, Operating Expenses and
Non-Operating Expenses.

3. (a) Using the trial balance data of Problem 2, set up the
ledger of the Builders’ Supply Co.
(b) Close the ledger in accordance with the data given.
(c) Take a trial balance of the ledger after it is closed.

XVI
1. The following transactions are to be set up, debit and
credit, on the ledger. Use the transaction number as the
date of the month of June. Set upon your ledger the
following account titles, in the order given, allotting
to each the number of lines indicated by the numeral
following the title:

Cash 35
Notes Receivable 10
C. H. Scovil 10
M. K. Dorns 10
A. B. Sutton 10
J. P. Nevin 10
B. T. Stanton 10
C. J. Moger 10
R. B. Karell 10
Reserve for Doubtful Accounts 10
Merchandise Inventory 10
Furniture and Fixtures 10
Depreciation Reserve Furniture
and Fixtures 10
Notes Payable 10
Crew Brothers & Co. 10
Morris, Lee & Co. 10
Bondell & Co. 10
R. Kennedy 10
C. H. Wyss, Capital 10
C. H. Wyss, Personal 10
Profit and Loss 15
Sales 25
Sales Returns and Allowances 10
Purchases 15
Purchase Returns and Allowances 10
Freight-In 10
Salaries 10
General Expense 15
Depreciation 10
Bad Debts 10
Expense Supplies 10
Interest Income 10
Interest Expense 10
Purchase Discount 10

June
1. C. H. Wyss invested $10,000 cash.
He paid $5,000 cash for merchandise; and $200
for one month’s rent of a storeroom.
Bought for cash, furniture and fixtures $1,000.
2. Bought merchandise, $2,750 of Crew Brothers & Co.
on account.
Sold merchandise for cash $675.
3. Sold merchandise for cash $1,345.
Paid for office supplies $35.75.
4. Sold C. H. Scovil $500 of merchandise,
receiving $200 cash.
5. Bought office safe for $150; and typewriter for $65.
6. Bought merchandise of Morris, Lee & Co. $957.80,
paying $257.80 cash.
Gave Crew Brothers & Co. our 6% 30-day note for $1,000.
Wyss took merchandise for his own use, $50.
8. Cash sales were $1,585.
Advertising cost $275.
9. Paid salesman $22; and office clerk $18; and $24 for coal.
10. Bought merchandise for cash $480.
11. Sold R. B. Karell merchandise for $90, and took his
check in payment.
12. Paid $25 for Merchant Association dues; postage
and stationery $15.
13. Sold bill of merchandise $358.90 to M. K. Dorns,
receiving $158.90 in cash and accepting from Dorns,
at its face value, R. C. Home’s note,
non-interest-bearing, for $50, due in 10 days.
14. Gave Crew Brothers & Co. a 10-day 6% note for balance due.
Dorns returned as unsatisfactory $10 worth of merchandise
sold to him on the 13th.

XVII
1. The following transactions of C. H. Wyss are to be set up
on the ledger in the same manner as those given in the
practice data of Assignment XVI.

June
16. Cash sales were $875.55.
Paid salesman $22; and office clerk $18.
17. Paid freightbill of $35; and express $5.80.
18. Wyss drew for personal use $400 cash.
Paid electric light bill of $18.90.
19. Bought on account 2/10, net 20, merchandise
from Bondell & Co. for $5,600.
20. Cash sales were $925.50.
Sales on account to A. B. Sutton $1,275;
J. P. Nevin, $150; C. J. Moger $99.70;
and R. B. Karell $285.90.
22. Returned merchandise $400 to Bondell as unsatisfactory.
23. Paid salesman $22; and office clerk $18.
24. Received payment of R. C. Home’s note for $50.
Was allowed by Bondell & Co. $50 on claim.
25. Paid Crew Brothers & Co. note in their favor,
with interest at 6%.
C. H. Scovil paid $100 on account.
26. Paid freight $38.50.
Wyss took goods for his own use $45.
Sold B. T. Stanton $175 merchandise, receiving $50
cash and James Harvey’s note for $100 at 6% for
60 days, accepted at face value.
27. Paid telephone bill $13.90; advertising $52;
and circulars $10.
Allowed C. J. Moger’s claim for $10 for spoiled goods.
Paid Bondell & Co. amount due.
29. Cash sales were $470.
Wyss drew for private needs $200.
Collections were: A. B. Sutton $275;
J. P. Nevin $150; C. J. Moger $59.70;
and R. B. Karell $185.90.
30. Paid Morris, Lee & Co. $500 on account.
Paid salesman $22; office clerk $18.
Cash sales were $950.
Purchased from R. Kennedy a desk for store use
valued at $75, Kennedy taking merchandise to
the value of $50 in part payment and the balance
being credited.

_Instructions_

Note that the Bondell & Co. bill was paid within the
discount period. (2/10, net 20, means that 2% can be
deducted from the amount due if it is paid within 10 days
and that the face amount of the bill is due in 20 days from
date of rendering.)

XVIII
1. Take a trial balance of C. H. Wyss’ ledger completed in
Assignment XVII and record it on a piece of journal paper.

Draw up a balance sheet and profit and loss statement for
the end of the month, taking account of the following
adjustments:

Interest accrued on notes receivable $.67.
$49.53 worth of accounts and notes receivable will
probably prove to be bad. Set up a reserve on the
balance sheet.
Inventories on hand: merchandise $7,218.20; expense
supplies $25.75.
Depreciation of $11.45 on furniture and fixtures for
the month.
Interest accrued on notes payable $4.
Salaries accrued $5.71

2. The following transactions are to be entered in a purchase
journal. Make daily postings to vendor accounts and a
summary posting at the end of the month to Purchases account.

April
2. Bought from Endicott-Johnson Company, 61 Hudson St., N.Y.C.:
20 pairs men’s bluchers, black @ $ 4.75
36 pairs ladies’ single strap pumps,
patent leather @ 3.50
10 pairs men’s white buckskin @ 2.50

10. Bought from Lounsbury-Soule Company, 47 Duane St., N.Y.C.:
25 pairs men’s Scotch brogues @ $ 6.00
8 pairs men’s kangaroo bluchers @ 4.50

15. Bought from Lexington Shoe Company, 141 Duane St., N.Y.C.:
20 pairs men’s sport oxfords @ $ 4.00
15 pairs women’s sport oxfords @ 3.75

20. Bought from Charles A. Eaton, 127 Duane St., N.Y.C.:
12 pairs women’s two strap oxfords, black @ $ 2.50
6 pairs women’s pumps, black kid @ 1.75
8 pairs women’s two strap sandals, white @ 2.65

26. Bought from I. Miller, 560 Fifth Avenue, N.Y.C.:
5 pairs Russian boots @ $10.00
12 pairs riding boots @ 12.00
16 pairs single strap suede pumps @ 6.00

3. Enter the following transactions in a purchase journal
ruled for two departments—Prescription and General.
Make daily postings to vendor accounts. Summarize and
post at end of month.

May
1. Bought from Park Davis & Co., Detroit, Mich.:
For Prescription Dept. Invoice #10 2/20, n/60 $650.00
For General Dept. Invoice #11 2/20, n/60 425.00
3. Bought from Lehn & Fink, Inc., 635 Greenwich St., N. Y. C.:
For Prescription Invoice #61 1/20, n/30 $150.00
For General Invoice #62 1/20, n/30 87.50
7. Bought from Eastman Kodak Co., Rochester, N.Y.:
General Invoice #675 1/30, n/60 $126.50
13. Bought from Park & Tilford, New York City:
General Invoice #256 1/10, n/30 $ 22.50
From McKesson & Robbins, 91 Fulton St., N.Y.C.:
Prescription Invoice #27 2/20, n/60 $ 75.00
17. Bought from Hospital Specialty Co., New York City:
General Invoice #27 1/30, n/60 $ 76.00
Prescription Invoice #28 1/30, n/60 98.00
23. Bought from Crescent Drug Sundry Co., Philadelphia, Pa.:
General Invoice #75 1/30, n/60 $135.00
29. Bought from Marcus & Smith, New York City:
General Invoice #861 1/10, n/30 $ 65.00
From J. M. Dalton, New York City:
General Invoice #10,680 n/30 $ 16.00
31. Bought from Denver Pharmaceutical Co., Denver, Colo.:
Prescription Invoice #16 1/20, n/60 $165.00
From United Drug Exchange, New York City:
Prescription Invoice #205 1/30, n/60 $267.00

_Instructions_

Problem 1. Do not close the accounts in the ledger. Make
up the statements from the trial balance figures and the
adjustment data given.

Problem 2. Use two-column journal paper—the inner column
for detail and the outer column for totals. Follow Form 7
shown on page 142.
Use plain paper with “T” accounts for the ledger.

Problem 3. Use three-column journal paper. Rule in
additional lines to make it conform with Form 9 on page 144.
Follow carefully the illustration on that page in making the
entries.
Use plain paper with “T” accounts for the ledger.

XIX
1. Close C. H. Wyss’ ledger, taking account of the
adjustments mentioned in Assignment XVIII. Use the profit
and loss statement already drawn up to show the order in
which the accounts should be closed.

Take a post-closing trial balance, recording it on a piece
of journal paper, and compare it with the balance sheet.

2. The following transactions are to be entered in a sales
journal. Make daily postings to customers’ accounts and a
summary posting at the end of the month to Sales account.

April
3. Sold on account to Mrs. A. K. Foster: 3 waists @ $1.50;
1 suit $45; and 6 pairs hosiery @ $1.10.
Cash sales were $175.
7. Sold on account to Mrs. R. F. Burns: 1 evening dress $75;
1 evening cloak $125; 3 pairs hosiery @ $3.30.

To Mrs. B. J. Scott: 1 riding habit $65; 1 pair riding
boots $20; 1 riding crop $7.50; 1 riding hat $12.
Cash sales were $225.
15. Sold to Miss Alice Hanna, on account: 1 pair 18-button
gloves $7.50; 1 evening dress $45; 1 pair cut-steel
buckles $25; 1 pair evening slippers $16.
Cash sales $376.
21. Sold to Mrs. W. S. Jordan, on account: 1 evening dress
$97.50; 1 afternoon dress $72.50; 1 business suit
$45; 1 pair sandals $8.50; 1 pair evening slippers
$16; four pair hosiery $20.
Cash sales $413.
28. Sold to Mrs. Franklin Perry, on account: 1 bathing suit
$13.50; 1 pair hose $1.50; 1 pair bathing shoes $2.50;
1 rubber cap $1.75.
Cash sales, $365.

3. The following transactions are to be entered in a sales
journal ruled for two departments—Prescription and General.
Make daily postings to customers’ accounts. Summarize and
post at end of month.

May
2. Sold to Alhambra Pharmacy, Invoice #325, 1/30, n/60:
Prescription, $325; General $215.
To Alpha Drug Co., Invoice #326, 1/30, n/60: General $165.
Cash sales: Prescription $614; General $528.90.
6. Sold to Ambassador Pharmacy, Invoice #350, 1/20, n/30:
Prescription, $235; General $129.
To Anglo-American Drug Co., Invoice #352, 1/10, n/30:
Prescription $12; General $137.25.
Cash sales: Prescription $562; General $489.
10. Sold to Arcade Drug Store, Invoice #375, 1/20, n/30:
Prescription $27; General $439.
Cash sales: Prescription $281; General $314.
18. Sold to Boston Pharmacy, Invoice #401, 1/30, n/60:
Prescription $426; General $237.
To Boyer-Gordon Drug Co., Invoice #402, 1/30, n/60:
Prescription $374; General $472.
Cash sales: Prescription $489; General $654.
24. Sold to Bronx Pharmacy, Invoice #431, 1/30, n/60:
Prescription $256; General $416.
Cash sales: Prescription $617; General $529.
28. Sold to Terminal Drug Co., Invoice #465, 1/20, n/30:
Prescription $10; General $438.
Cash sales: Prescription $675; General $981.

_Instructions_

Problem 2. Use two-column journal paper—the inner column
for detail and the outer column for totals. Follow Form 7
shown on page 142.
Use plain paper with “T” accounts for the ledger.