Analysis by Comparison
12. The trading accounts of a company covering two years are herewith submitted.
Analyze the accounts and make a report to the company showing the reasons for the difference in results.
| 1916 | |
| Merchandise Inventory, January 1, 1916 | $150,000.00 |
| Merchandise Purchases | 633,000.00 |
| Merchandise Sales, Travelers | 600,000.00 |
| Merchandise Sales, Domestic | 150,000.00 |
| Merchandise Sales, Cash | 10,000.00 |
| Commissions Paid Travelers | 30,000.00 |
| Salaries Paid Travelers | 30,000.00 |
| Salaries, Domestic Sales | 15,000.00 |
| Rental | 5,000.00 |
| Stationery, etc. | 3,000.00 |
| Expense | 22,000.00 |
| Interest | 4,000.00 |
| Inventory, January 1, 1917 | 125,000.00 |
| 1917 | |
| Merchandise Inventory, January 1, 1917 | $125,000.00 |
| Merchandise Purchases | 600,000.00 |
| Merchandise Sales, Travelers | 600,000.00 |
| Merchandise Sales, Domestic | 150,000.00 |
| Merchandise Sales, cash | 10,000.00 |
| Commissions Paid Travelers | 30,000.00 |
| Salaries Paid Travelers | 10,000.00 |
| Salaries, Domestic Sales | 10,000.00 |
| Rental | 5,000.00 |
| Stationery, etc. | 3,000.00 |
| Expense | 15,000.00 |
| Interest | 1,000.00 |
| Merchandise Inventory, January 1, 1918 | 125,000.00 |
13. A corporation’s balance sheets for August, 1918, and September, 1918, were respectively as follows:
August, 1918
| Assets | ||
| Plant and Equipment | $4,000,000.00 | |
| Furniture | 6,000.00 | |
| Tools | 3,000.00 | |
| Stable | 3,811.28 | |
| Cash | 15,250.36 | |
| Material Supplies | 30,750.28 | |
| Accounts Receivable | 28,920.13 | |
| Unexpired Insurance | 510.29 | |
| Total | $4,088,242.34 | |
| Liabilities | ||
| Capital Stock | $2,500,000.00 | |
| Bonds | 1,350,000.00 | |
| Accounts Payable | 31,336.28 | |
| Bills Payable | 26,240.12 | |
| Accrued Taxes | 3,500.00 | |
| Accrued Interest | 5,625.00 | |
| Profit and Loss | 171,540.94 | |
| Total | $4,088,242.34 | |
September, 1918
| Assets | ||
| Plant and Equipment | $4,012,310.21 | |
| Furniture | 6,205.58 | |
| Tools | 3,218.86 | |
| Stable | 4,009.37 | |
| Cash | 8,328.29 | |
| Material Supplies | 39,280.17 | |
| Accounts Receivable | 32,321.83 | |
| Unexpired Insurance | 832.12 | |
| Total | $4,106,506.43 | |
| Liabilities | ||
| Capital Stock | $2,500,000.00 | |
| Bonds | 1 ,362,000.00 | |
| Accounts Payable | 33,445.59 | |
| Bills Payable | 18,240.12 | |
| Accrued Taxes | 4,000.00 | |
| Accrued Interest | 11,250.00 | |
| Profit and Loss | 177,570.72 | |
| Total | $4,106,506.43 | |
Analyze the differences in the corresponding accounts for the period and show disposition of increased resources.
14. The board of directors of the X, Y, Z Company removed their manager on April 30, 1918, on the general suspicion that his books misrepresented the true financial condition of the business. Prepare a statement showing the nature and the probable extent of the misrepresentation, also an approximate statement of income and profit and loss for the four months ending April 30, 1918, and a balance sheet as of April 30, 1918.
The following is a trial balance taken from the books April 30, 1918:
| Capital Stock | $ 75,000.00 | |
| Fixtures | $ 10,000.00 | |
| Inventory, January 1, 1918 | 128,600.00 | |
| Cash | 15,450.00 | |
| Accounts Receivable | 24,600.00 | |
| Accounts Payable | 39,000.00 | |
| Loans Payable | 10,000.00 | |
| Sales | 51,000.00 | |
| Purchases | 40,700.00 | |
| Salaries, Salesmen | 2,200.00 | |
| Advertising | 1,650.00 | |
| Salaries, Office | 1,100.00 | |
| Rent | 400.00 | |
| Interest | 200.00 | |
| Insurance, January 1 to December 31, 1918 | 999.00 | |
| Stationery and Printing | 105.00 | |
| Reserve for Depreciation of Fixtures | 2,710.00 | |
| Surplus, January 1, 1918 | 48,294.00 | |
| $226,004.00 | $226,004.00 |
An analysis of the Purchases and Sales accounts revealed the following: purchases, year 1915, $122,000; sales, year 1915, $153,750; inventory, January 1, 1915, $101,000; purchases, year 1916, $123,000; sales, year 1916, $153,170; inventory, January 1, 1916, $100,000; purchases, year 1917, $121,000; sales, year 1917, $154,722; inventory, January 1, 1917, $102,000.
15. Robert Adams and William Stevens are equal partners. On the night of July 3, their stock and fixtures were destroyed by fire. A trial balance, which Adams had at his home, showed the following condition of the ledger at the close of business, June 30:
| Robert Adams | $ 600.00 | $ 7,450.00 |
| William Stevens | 600.00 | 7,450.00 |
| Cash | 3,309.00 | |
| Fixtures | 1,500.00 | |
| Merchandise Purchases | 32,600.00 | |
| Merchandise Sales | 24,800.00 | |
| Notes Receivable | 1,000.00 | |
| Notes Payable | 2,000.00 | |
| Interest | 120.00 | 50.00 |
| Expense | 780.00 | |
| Customers | 4,500.00 | |
| Creditors | 3,259.00 | |
| $45,009.00 | $45,009.00 |
The property is fully covered by insurance. The insurance company, for the purpose of estimating the value of the merchandise destroyed has agreed to allow 35% as the average gross gain on the sales, and to pay 66⅔% on the value of the fixtures as shown by the ledger.
On the basis of this agreement, state the result of the business and the capital of each partner.