EXERCISE
On a certain date the assets and liabilities of David Henry are as follows:
| Assets | |
| Cash | $450.00 |
| Due from sundry debtors | 75.20 |
| Merchandise per inventory | 762.50 |
| Liabilities | |
| Due sundry creditors | 144.00 |
The following transactions are recorded:
| Sales to sundry persons on account | 44.71 |
| Bought from sundry persons on account | 337.54 |
| Sold for cash | 94.90 |
| Received cash on account | 62.00 |
| Paid cash on account | 132.50 |
| Paid cash for rent | 35.00 |
| Paid cash for clerk hire | 7.00 |
At the close of the period in which these transactions were recorded, the inventory of merchandise on hand was $987.75.
First. Open single entry books, entering these transactions in the journal and cash book.
Second. Post to ledger using the terms Debtor and Creditor to represent account of customers and those from whom goods were purchased.
Third. Prove the ledger.
Fourth. Make a statement of assets and liabilities.
Fifth. Has there been a gain or a loss, and how does it affect the account of the proprietor?