Chapter LXIV: Appendix: A (2)

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

XX
1. The following transactions are to be entered in a cash
receipts journal and posted, where necessary, to ledger
accounts. At the end of the week summarize and post to
a Cash account. Follow the illustration on page 148.

May
1. A. K. Foster, on account $56.10; S. C. Kramer $66.25.
Cash sales $316.
2. Miss Alice Hanna, on account $93.50; W. S. Jordan $259.50.
Cash sales $425.
3. Cash sales $543.
5. C. A. De Forest paid his note for $1,000, due today,
with interest $15.
Mrs. Irene Brush paid on account $235.
Cash sales were $276.
6. Mrs. Lena Dupont paid on account $67.25.
E. F. Gibbs paid on account $100.
Cash sales were $347.75.
7. James W. Law, on account of his non-interest-bearing
note $126.75.
Mrs. Molly Lee, on account $257.25.
E. D. Wynne, for commission on goods sold for him, $25.
Cash sales $482.

2. Enter the following transactions in a cash disbursements
journal and post daily to “T” ledger accounts set up on
plain paper. Follow the form of journal shown on page 149.
Post total disbursements for the week to the ledger Cash
account used in Problem 1.

May
1. Paid Acme Cloak & Suit Co., on account $235;
American Cloak Co. $165.
Bought postage stamps and stamped envelopes $50.
2. Paid Green & Greenberger on account $175.
Bought office stationery $51.75.
Paid Ideal Cord & Trimming Co. on account $45.
3. Paid Lakeview Garment Co. on account $127.50;
Lang Trimming Co. on account $25.
Paid salesmen’s salaries $225.
5. Paid Empire Dress & Suit Co. on account $137.
Paid telephone bill for April $30.14.
Paid Elmer Cloak & Suit Co. $75.
Our note #25 for $1,000 came due and was paid
with interest $10.
6. Paid electric light bill for April $27.50.
Paid rent May 15 to June 15, $263.
Paid Standard Novelty Works on account $115.
7. Paid Magic Cloak & Suit Co. on account $67.50;
Textile Trimming. Works on account $75.
Paid office salaries $100.

3. The following transactions are to be entered in a cash
book, cash receipts and cash disbursements bound together.
Post daily to “T” ledger accounts set up on plain paper.
Follow Forms 10 and 11 shown on pages 148-149. Post total
receipts and total disbursements for the week to the ledger
Cash account used in Problem 1.

May
8. Balance from previous week’s transactions, $1,691.96.
Paid Green & Greenberger on account $135;
American Cloak Co. $45.
Received on account from Miss Frances Clyne $102;
and Miss Lula Fields $178.
Cash purchases were $340.25.
9. Paid Acme Cloak & Suit Co. $165;
Lakeview Garment Co. $135.
Received on account from Miss Louise Fox $215;
and Miss Alice Gaynor $176.
Cash sales were $189.
10. Paid salesmen’s salaries $230; for delivery service $150.
Received on account from Miss Katherine Kennedy $216;
and Mrs. Johanna Lambert $75.
Received rent from portion of store $50.
12. Paid Empire Dress & Suit Co. on account $150;
Elmer Cloak & Suit Co. $125.
Paid freight on purchases $41.37.
Received on account from Miss Pauline Marks $167.50.
Cash sales $576.
13. Paid telephone bill, $27; advertising bill for newspaper
insertions $75.
Received on account from Mrs. D. J. McCormack $167.
Received payment of note of J. I. Ardsley $500, and
interest $7.50.
14. Paid Daisy Cloak & Suit Co. $150 on account.
Paid office salaries $100.
Received from Miss Sue Robertson $125.
Proprietor, M. D. James, drew for personal use $50.
Cash was short $4.87.

4. The following data have been taken from the ledger of the
Port Bedford Terminal Company, on December 31, 19—.

Real Estate, Wharves, and Warehouses $30,932,394
Terminal Railway 807,052
Marine Equipment 298,994
Machinery and Electric Plant 177,588
Depreciation Reserve, Real Estate, Wharves, and Warehouses 4,187,074
Terminal Railway Depreciation Reserve 45,817
Marine Equipment Depreciation Reserve 23,942
Machinery and Plant Depreciation Reserve 16,894
Cash in Bank 192,806
Accounts Receivable 451,406
Materials and Supplies Purchases 128,894
Investments in U. S. Liberty Bonds 1,809,000
Capital Stock 15,000,000
First Mortgage 4% Gold Bonds, due August 1, 1951 12,000,000
Accounts Payable 652,644
Notes Payable 247,000
Surplus 1,231,540
Warehouse Income 2,681,694
Income from Piers 2,140,562
Sundry Income 436,353
Maintenance of Property 1,160,453
Selling and Service Costs 1,081,526
General Expenses 462,386
Taxes 681,021
Bond Interest 480,000

(a) Set these items up in the ledger.
(b) Take a trial balance.

_Instructions_

Problem 1. Use plain paper with “T” accounts for the ledger.

Problem 3. Use a double sheet of two-column journal
paper for the cash book. On the receipts side enter
the balance brought forward in the outer column. For
current and summary entry follow carefully the forms
shown on pages 148-149.

At the end of the week summarize the cash book and post
the totals to the ledger Cash account. Balance and
rule the cash book, being careful to carry forward the
balance to the next week.

XXI
1. The following transactions should be entered in a general
journal, debit and credit, with full explanation.

On November 15, 19—, John Henry and James Raymond form a
partnership to carry on a retail grocery business. Losses
and gains are to be shared equally. Each partner is to be
allowed a salary of $150 per month.
Henry invests the following assets from a business of which
he has been sole owner:
Cash $150; notes receivable $570; accounts receivable $7,320;
merchandise $24,360; furniture and fixtures $4,230.
The partnership also assumes the following liabilities
for Henry:
Notes payable $3,000; accounts payable $8,815.
Raymond invests these assets:
Cash $5,500; furniture and fixtures $2,500;
building $17,000.

2. At various times the following transactions of the
partnership occur. Record them in the journal with full
explanation.

Nov.
20. Returned goods to Austin Nichols & Co. $215;
to Bronx Sugar Co. $65; to Continental Food
Products Co. $87.50.
22. Received 30-day 6% note of J. D. Jordan for $75.
Accepted draft of Armour & Co., 60 days from sight,
in favor of the American Live Stock Co., $127.50.
24. Goods sold during previous week were returned by
Franklin K. Adams $25; Eugene Alread $35;
Preston Freeman $16.50.
26. The partners gave their 90-day 6% note to Swift &
Company, payable at the store, for $725.
28. Investigation upon a complaint from James Ortner,
a customer, showed that a sale of $150 to George
Ortner had been charged to the former in error.
Dec.
8. Made Joseph Horowitz, a customer, an allowance of $25
on account of dissatisfaction with a recent purchase.
10. Sold bill of goods $425.50, to Ben. B. Brady, receiving
cash $125.50, and J. S. Gordon’s 60-day acceptance
for the balance.
20. Purchased a plot of ground for $4,000 from the Bond &
Mortgage Co., paying $1,000 cash and executing a
mortgage for the balance.

3. The following particulars relating to Problem 4,
Assignment XX, must be taken into account to show the
true condition of the Port Bedford Terminal Co. as on
December 31, 19—:

Materials and supplies on hand $68,894.
Depreciation for the period:
On real estate, wharves, and warehouses $308,401.
On terminal railway $22,581.
On marine equipment $16,714.
On machinery and electric plant $4,978.
Estimate of uncollectible accounts $10,000.
Interest accrued on Liberty bonds $21,488.
Accrued maintenance of property $25,980.
Accrued selling and service costs $16,460.
Accrued rents on warehouses $50,000.
Accrued rents on piers $30,000.
Taxes payable $50,000.
Warehouse rents prepaid $20,000.

(a) Draw up a balance sheet for December 31, 19—.
(b) Draw up a statement of profit and loss for the
twelve months’ period ending December 31, 19—.

_Instructions_

Problem 3. The net worth section of the balance sheet should be
set up as follows:

Capital Stock $........
Surplus:
At beginning of period $........
Net profit for period ........
--------
At end of period $
------ ======

Classify the items of the profit and loss statement on the
basis of:
1. Operating income
2. Operating expenses
3. Non-operating income
4. Non-operating expenses

XXII
1. Albert Johnson and Harold Taylor enter into a
copartnership agreement for the purpose of buying and
selling Christmas novelties. Each contributes cash, no
other resources of use to this undertaking being available.
Taylor, because of wide acquaintance among manufacturers,
is to handle the buying end, and Johnson is to have charge
of the details of store management and selling. They are to
share profits and losses equally.

On November 15, 19—, operations begin. They keep a full
record of all transactions, using a cash book, purchase
journal, sales journal, general journal, and ledger. The
following accounts are kept:

Cash
Notes Receivable
M. K. Lord
C. H. Marks
K. P. Temple
L. K. Lewis
F. M. Wood
T. C. Bailey
Merchandise Inventory
Furniture and Fixtures
Notes Payable
Imbrie & Co.
Bonbright & Co.
Halsey, Stewart & Co.
B. W. Chapman & Co.
Albert Johnson, Capital
Albert Johnson, Personal
Harold Taylor, Capital
Harold Taylor, Personal
Profit and Loss
Sales
Sales Returns and Allowances
Purchases
Purchases Returns and Allowances
Freight-In
Salaries
General Expense
Expense Supplies
Bad Debts
Interest Expense
Interest Income
Purchase Discount

Enter the following transactions in their respective journals:

Nov.
15. Each partner deposits $7,500 in the firm name of Johnson
& Taylor at the Park National Bank.
Paid $1,000 for furniture and fixtures.
Paid rent $250 and advertising $100.
Bought merchandise from Imbrie & Co. $2,000, paying $500
cash, giving a note for $1,000, due in 30 days at 6%,
and the balance remaining on account.
Johnson withdrew $200 in funds for personal use.
16. Cash sales $430.80: on account to F. M. Wood $569.20;
K. P. Temple $500.
17. Bought for cash, paper and twine $29.50;
miscellaneous supplies $10.
18. Sold merchandise to M. K. Lord for $1,000, accepting his
10-day 6% note for $500 and $300 in cash.
Cash sales amounted to $450.
19. Bought a cash register for $150.
Cash sales $400.
20. Bought merchandise from Bonbright & Co. for $500, 2/10, n/30.
Paid Imbrie & Co. on account $450.
Taylor took merchandise $25, for his own use.
Cash sales were $800.
22. Cash sales were $300.
Sold on account to Lewis $950; and to Marks $350.
23. Paid Bonbright & Co. the bill of the 20th.
Paid salaries $40.
24. Sold T. C. Bailey, on account, $450 of merchandise.
Johnson took $100 cash for current needs.
The firm bought $1,400 merchandise from
Halsey, Stewart & Co.
26. Bought of B. W. Chapman & Co., merchandise $250.
Cash sales were $450.
27. The firm is notified that C. H. Marks has failed.
29. Sold bill of merchandise of $200 to T. C. Bailey,
receiving $100 in cash, and a 6% note for the balance,
due in 10 days.
Cash sales were $300.
30. Returned $50 merchandise to B. W. Chapman & Co.
Paid freight $35; insurance $15.
Lord paid note of $500 and interest.
Paid $40 in wages and gave Halsey, Stewart & Co.
a 10-day 6% note for amount due.

2. Using the adjustment data of Assignment XXI, Problem 3,
close the ledger of the Port Bedford Terminal Co. and take a
trial balance after closing.

_Instructions_

Problem 1. The purpose of this assignment is to give
practice in the operation of the five journals in a going
concern. The ledger will not be used.

Use a double sheet of two-column journal paper for the
cash book. A single sheet of two-column paper will be
sufficient for each journal.

Make full opening entry on November 15.

Do not summarize the journals until directions are given.

Note that the firm takes advantage of the Bonbright
discount offer.

Make no entry as to the Marks’ failure until further
instructions.

Problem 2. Transfer the balance of the ledger Profit and
Loss account to the Surplus account.

XXIII
1. Continue the following as in Problem 1, Assignment XXII.

Dec.
1. Johnson took $100 for personal use.
The firm paid $50 for freight bills.
T. C. Bailey returned merchandise $50.
2. Bought supplies for $18.50 cash.
Electric light bill $18, and telephone bill $12, were paid.
3. Cash sales were $240.
They received $400 on account from Bailey.
4. Lewis paid $850 on account.
Bought from Imbrie & Co. $200 of merchandise.
6. Taylor sold for $650 cash merchandise, for which the firm
had paid $1,000.
Sold on account to K. P. Temple $450; and to F. M. Wood $235.
7. Paid $40 for salaries; and $15 for supplies.
8. Paid $72 on insurance.
Bailey paid his note of $100 and interest.
9. Cash sales were $275.
The firm bought from Imbrie & Co. $675; Bonbright & Co. $800.
10. Paid Halsey note with $2.33 interest.
11. Received on account from Lord $100; and from cash sales $150.
13. Temple gave a non-interest-bearing note due in 30 days
for $500.
14. Paid freight-in bill $32; and coal bill $17.
Salaries of $40 were paid.
15. Paid note to Imbrie & Co. with interest.
The receivers of C. H. Marks paid $164, the balance of
the claim being valueless.

Summarize all journals (referring to Problem 1, Assignment XXII,
and the above) and balance the cash book.

2. The following information has been taken from the books of the
Valhalla Company after the ledger was adjusted:

Sales $2,896,745.
Sales returns $22,840.
Sales allowances $12,615.
Inventories January 1, 19—, $3,096,720.
Purchases were $1,216,000.
Purchase returns $5,675; and allowances $4,200.
Inventories on December 31, 19—, were $3,514,900.
Rent expense $54,000.
Bad debts $45,000.
Depreciation $89,700.
Advertising $50,000.
Sales salaries $686,000.
Traveling expenses $64,892.
Freight-in $17,990.
Freight-out $8,960.
Delivery expense $22,600.
Office supplies $13,400.
Lighting $4,825.
Office salaries $54,000.
Telephone $2,190.
Insurance $8,900.
Taxes $22,940.
Interest expense $7,890.
Mortgage interest $60,000.
Interest income $10,890.
Income from securities $2,400.
Sundry expenses $2,890.
Repairs $14,890.

Draw up the statement of profit and loss.

3. Draft the journal entries necessary to close the ledger
of the Valhalla Company.
4. Draw up the Profit and Loss account as it would appear
in the ledger of the Valhalla Company.
5. Anthony B. Mans is the proprietor of a drug business owning
assets and subject to liabilities as follows:

Cash $5,150.
Accounts receivable $795.
Stock of merchandise $25,340.
Store furnishings $3,420.
Soda fountain $1,250.
Notes payable $4,500.
Accounts payable $9,305.

He sells the business as above, excepting the cash which he
retains, to James R. Hart for $20,000 cash, which includes a
bonus of $3,000 for his good-will. Mans withdraws all cash
and deposits it in his personal bank account.

Make the necessary entries in Mans’ journal and cash book to
record the sale transaction and the withdrawal of cash.

XXIV
As bookkeeper for Wm. C. Baldwin, dealer in coal and coke,
you will use a general journal, a sales journal, a purchase
journal, a cash book, and a ledger. Four _double_ pages
of journal paper and three _double_ pages of ledger
paper will suffice. At the top of the first page write
“Journal of Wm. C. Baldwin.” Allow 130-150 lines for your
Journal. The next blank _double_ page will be used
for a cash book, marked on the left at the top, “Dr.” and
near the middle, “Cash.” Similarly the right page, “Cash”;
and at the top, right-hand margin, “Cr.” Allow 80-100
lines for each side of the cash book. The next blank page
mark “Sales Journal,” allowing 70-90 lines. The next blank
page mark “Purchase Journal,” allowing 1 page. The last 3
pages, reserve for trial balances and statements. Number
consecutively all pages in journal and ledger.

In the cash book use the first column on either side for
items and the second column for totals and balances.
_Balance and rule the cash book at the end of each
week_, extending the “items” total before balancing and
marking it for posting purposes “Cash, Dr.” or “Cash, Cr.”
as the case may be. Enter the balance on the “Dr.” side
in the “Total” column, and so keep each week’s receipts
segregated. At the bottom of the page, unless it happens to
coincide with the end of the week, carry “totals” of each
side forward, not the balance.

In the sales and purchase journals mark the first column “On
Account” and the second “Cash,” and make entries in them
according as sale or purchase is “on account” or “cash.”
If “cash,” entry must be made in the cash book also, in
which case check the item in the ledger folio column in
both journals, as total cash, sales, and purchases are to
be posted from their respective journals. In making summary
entries for the sales journal at the end of the month, rule
and total each column, and bring the cash column total over
on the next line into the “On Account” column, marking it
“Cash Sales, Total.” Add these two and rule off, marking
them “Sales, Cr.” The purchase journal will be handled
similarly.

Open the following accounts in your ledger, beginning on
the first page in the order given and allowing the number
of lines to each account indicated by the numeral following
each:
Cash 10
Notes Receivable 5
M. R. Hamilton 10
F. S. Kent 10
H. T. Avery 10
G. C. Furnald 10
C. P. Pell 10
S. T. Hartley 10
A. D. Livingston 10
Reserve for Doubtful Accounts 5
Coal Inventory 5
Furniture and Fixtures 10
Depreciation Reserve Furniture
and Fixtures 5
Building 5
Depreciation Reserve Building 5
Land 5
Notes Payable 10
M. H. Hanna & Co. 10
American Coke & Chemical Co. 10
Peabody & Co. 10
Seabord By-Product Coke Co. 10
Midtown Realty Co. 8
Wm. C. Baldwin, Capital 10
Wm. C. Baldwin, Personal 10
Profit and Loss 20
Sales 15
Purchases 10
Purchases Returns and Allowances 8
Freight & Delivery Inward 10
Salesmen’s Salaries 10
Advertising 10
Delivery Expense 10
Expense Supplies 15
Rent 5
Insurance 8
Office Salaries 10
Sundry Expense 8
Cash Short and Over 7
Interest Expense 8
Depreciation 5
Bad Debts 5
Interest Income 8

Before recording any transactions, study carefully the
accounts, particularly the expense accounts, which you will
keep. Make your classification strictly according to them.
Keep no additional accounts.

May 2, 19—, Wm. C. Baldwin, long interested in the coke
business, bought out the Newark Coke Company on the basis of
the values shown below.

The assets taken over were:

Stocks of coal and coke $18,902.10.
Accounts receivable:
M. R. Hamilton $6,950.
F. S. Kent $7,920.
G. C. Furnald $2,450.
C. P. Pell $7,125.
S. T. Hartley $9,840.
A. D. Livingston $2,890.
Furniture and fixtures $1,200.
A note made by G. C. Furnald for $7,800, due May 11,
after which it was to bear 9% interest. This note
was taken over at its face value.

The liabilities assumed were:

Accounts payable:
M. H. Hanna & Co. $8,942.50.
American Coke & Chemical Co. $12,437.18.
Peabody & Co. $5,647.92.
A note dated February 20, 19—, for three months at 6%,
in favor of the Seaboard By-Product Coke Co., for
$5,485.50, the accrued interest assumed being $65.83.
In addition to the above investment Baldwin opened an
account with the National City Bank for $15,000 as
working capital.

May
3. Bought for cash, account books $10; stationery $18;
stamps $25; paid rent to June 2, $500.
Sales were: on account, M. R. Hamilton $1,293.75;
for cash $890.40.
4. Bought coal and coke from M. H. Hanna & Co. on account
$6,497.95.
Paid freight-in $169.72.
Bought insurance policy for one year $360.
Sales were: on account, F. S. Kent $3,497.82; cash $614.80.
5. Paid Peabody & Co. balance due.
Sales on account: H. T. Avery $1,876.49;
G. C. Furnald $5,973.80; cash $617.90.
6. Bought from Seabord By-Product Co. on account $5,890.40.
Allowed by M. H. Hanna & Co. $400 on account of impurities
in coke.
Paid freight-in $126.72.
Sales were: on account, S. T. Hartley $3,487.60;
M. R. Hamilton $2,947.30; F. S. Kent $2,476.30;
cash $457.80.
7. Received cash on account from M. R. Hamilton $1,000;
F. S. Kent $2,750; H. T. Avery $975;
G. C. Furnald $5,250.
Paid bookkeeper $30; stenographer $25; clerks $40.
Sales for cash were $1,075.
Baldwin drew $100 in cash and $80 in coal for his home.
Paid delivery expenses $200; and sales salaries $300.

Balance, summarize, and post the cash book. The
summary entry, “Cash, Dr.,” must, for this first
week only, be set up opposite the total of the cash
receipts journal, so as to include the cash capital
invested. In all subsequent summary entries, the
“Cash, Dr.” must include only the current week’s
receipts—not the “Balance.”

9. Paid the American Coke & Chemical Co. on account $7,500;
cash for supplies $62.50; and advertising $1,000.
Sales on account: H. T. Avery $2,146.70;
G. C. Furnald $1,786.42; C. P. Pell $792.50;
A. D. Livingston $863.47.
10. Bought from the American Coke & Chemical Co. $5,746.80
on account.
Paid by check $350 for safe; and $125 for typewriter.
Received payments from C. P. Pell $2,500;
and S. T. Hartley $2,150.
11. Paid M. H. Hanna & Co. $8,942.50; paid freight-in $248.50.
Canceled $250 of order of the 10th from American Coke &
Chemical Co.
12. Sales on account: A. D. Livingston $2,387.50;
H. T. Avery $1,820.
Paid demurrage charges $290.75 by check.

_Instructions_

May 2. To determine Baldwin’s net investment and to serve
as a guide for the order of entry of the various items in
the journal, make a rough draft of balance sheet. Enter the
“cash” investment in the Journal as a part of the compound
opening entry, and also in the “Total” column of the cash
receipts journal. Check (✔) the “cash” item in the general
journal and also check the capital investment entry in the
cash receipts journal.

May 12. Charge demurrage costs to the Freight and Delivery
Inward account.

XXV
May
13. Bought from Peabody & Co. on account $4,910.
Paid freight-in $144.70; paid to M. H. Hanna & Co.,
the balance due.
Sales on account were: S. T. Hartley $1,875.20.
14. Paid bookkeeper $30; stenographer $25; clerks $40.
Cash sales for the week were $3,679.80.
Baldwin drew $200 in cash, and gave on his personal
account 5 tons of coal worth $60 to the Community
Association.
Delivery expense was $220; and sales salaries were $300.

Balance, summarize, and post the cash book.

16. Bought from M. H. Hanna & Co. on account $4,895.70.
Paid freight-in $82.93; Merchants’ Association dues $50;
stationery $55.25.
Received cash on account: G. C. Furnald $1,275;
C. P. Pell $1,350.
17. Bought a multigraph for cash $75, and paid freight on it
of $10.22.
Paid $96.17 for supplies.
Returned $800 worth of coke to M. H. Hanna & Co.
Cash was short $5.48.
Paid on account: A. D. Livingston $1,375;
M. R. Hamilton $3,500; F. S. Kent $4,035.
Sold on account: H. T. Avery $1,275; G. C. Furnald $862.70;
and C. P. Pell $1,872.60.
18. Received a 30-day 6% note from S. T. Hartley for $5,000,
to apply on account; and a note dated May 16 at 6%,
due July 16, for $3,000, from A. D. Livingston.
19. Paid $38.90 for repairs to office steps, which were
broken by accident, not chargeable to the landlord.
Canceled a $100 lot from Peabody & Co. on the last order.
Bought from the American Coke & Chemical Co. on account
$7,580.
Paid $103.72 in-freight.
20. Paid Seaboard By-Product Coke Co. note $5,485.50,
and interest.
Purchases for cash were $1,270.
21. Baldwin discounted his own note at the bank for $1,000,
for 30 days at 6%.
Paid bookkeeper $30; stenographer $25; clerks $40.
Cash sales for the week were $3,195.60.
Baldwin withdrew $400 in cash.
Paid sales salaries $300; delivery expense $235;
and American Coke & Chemical Co. $5,000 on account.
Balance, summarize, and post the cash book.
23. Sold on account: A. D. Livingston $975.70;
and M. R. Hamilton $1,392.65.
Paid Patrol Protection Service $50; and $175 to repair
heater and boiler, the latter item being allowed as
applicable to future rent.
24. Sold refuse for cash $15.80.
Bought from Peabody & Co. $2,120 on account, and paid
freight $174.37.
25. Cash was short $1.04.
Paid lighting bill of $31.75.
26. Received cash on account: F. S. Kent $1,500;
H. T. Avery $1,875; G. C. Furnald $1,000.
Sold on account: C. P. Pell $1,587; F. S. Kent $1,623.80;
A. D. Livingston $1,217.80.
27. Purchased from Peabody & Co. on account, shipment of
Pocahontas coal $900.
Bought $50 worth of stamps.
Cash was over $1.37.
28. Paid bookkeeper $30; stenographer $25; and clerks $40.
Cash sales for the week were $2,175.80.
Baldwin withdrew $250 for personal expenses.
Delivery expenses were $245; and sales salaries $300.
Paid the Seaboard By-Product Coke Co. bill of May 6.
Balance, summarize, and post the cash book.
31. Paid Peabody & Co. $1,000 on account.
Bought of M. H. Hanna & Co. on account $6,250.
Telephone bill was $52.45; and cash was over $.51 (51 cents).
Bought of Seaboard By-Product Coke Co. on account $2,890.70,
paying $52.18 in-freight.
Gave the American Coke & Chemical Co. a 90-day note
at 6% for $1,250.
A. D. Livingston paid $500 on account.
Cash sales were $480.90.
Received on account: M. R. Hamilton $3,000;
F. S. Kent $2,000; C. P. Pell $2,500.
Bought from Midtown Realty Co. the lot in which the yards
were located for $2,000, and the buildings with equipment
for $8,575, giving $5,575 in cash and executing a 6%
mortgage on private properties not carried on the books
of the business for the balance.

_Instructions_

May 14. The coal given to charity is a personal expense
of Baldwin’s.

May 31. Record the purchase of lot and building as a credit
for the entire amount to the vendor. Cancel the
liability to the vendor by entry in the cash book
for the cash portion, and in the general journal
for the mortgage.

XXVI
Balance the cash book, total, and make summary entries for
the sales and purchase journals.

Post completely the sales and purchase journals, then the
general journal and cash book. Be sure to post the weekly
totals of cash receipts and cash disbursements as well as
the totals for the end of the month.

Take a trial balance of account balances and record it on
page 13 of your journals, labeling it
“Trial Balance, May 31, 19—, Wm. C. Baldwin.”

_Instructions_

Refer to pages 142, 148, 149, for the form of the various
journal summaries and to 547-548, practice data, for the
method of summarizing.

Be very careful always to cross-index every posted item in
both ledger and journals just as soon as the posting of that
item is completed. The ledger folio columns in the journals
are thus an indication as to how far the work of posting
has proceeded, in case the bookkeeper is interrupted before
completing the postings.

XXVII
Draw up a balance sheet and statement of profit and loss
for Wm. C. Baldwin, taking into account the following
adjustments and inventories:

Interest prepaid on note at bank $3.33.
Interest accrued on following notes:
G. C. Furnald $39.00
S. T. Hartley 10.83
A. D. Livingston 7.50
------
Total $57.33
Expense supplies inventory $14.50.
Insurance unexpired $330.
Merchants’ Association dues prepaid $47.92.
Delivery expenses accrued $75.
Salesmen’s salaries accrued $100.
Advertising accrued $50.
Advertising prepaid $200.
Office salaries accrued $31.67.
Prepaid rent $207.26.
Furniture and fixtures are to be depreciated at the rate
of 1% per month.
Uncollectible accounts are estimated as ½% on sales for
the month.
Coal inventory $19,352.30.

_Instructions_

Use the method of the work sheet in doing this assignment.
Follow closely the illustration in the text. After the work
sheet has proved the accuracy of the work, draw up the
formal statements.

XXVIII
1. Adjust and close Wm. C. Baldwin’s ledger, taking account
of the adjustment data given in Assignment XXVII.
2. Take a post-closing trial balance.