Accounting Theory and Practice

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.

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.

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.

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.

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.

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.