April 6. Sold F. C. Watkins 20 bu. corn @ 35c, 10# butter @ 30c, 1 vinegar cask $1.50; paid F. C. Watkins cash $42.50; Henry Watson paid his account in full; paid 1 month's rent $35.00; paid clerk hire $7.00; sold for cash, merchandise $27.90.
At the close of business, the merchandise inventory was $987.75.
Using journal, cash book, and ledger, open the books, enter and post these transactions Make a trial balance and a balance sheet, showing present worth. Does the business show a profit or a loss, and how much? How is the amount determined from the balance sheet?
Close the books into the proper accounts, showing gross and net profit and loss. To what account is the profit or loss transferred?
RETAIL COAL BOOKS
16. The proprietor wishes to retire from the grocery business, and, having an opportunity to sell the stock at inventory value, does so, receiving $1,042.77 in cash. He immediately pays sundry accounts payable, $149.02. He collects all accounts receivable except the amount due from L. B. Jenkins, $24.45. This leaves him with assets consisting of cash $1,462.55; due from L. B. Jenkins, $24.45; and no liabilities.
He next engages in the retail coal business, investing his entire assets. He rents an office and yards at $40.00 per month, and engages a teamster who owns a team and wagon, paying him $24.00 per week.
17. In this business there are introduced a sales book, with which the student is familiar, and a form of ledger known as center ruled (p. 25). This form at first appears slightly confusing; but there is considerable advantage in having the debit and credit columns side by side, as balances can be calculated more readily.
18. The cash book used is one having three columns. On the debit side the third column is used for cash sales. The footing is carried forward until the end of the month, or any other time when a trial balance is desired, when the amount is posted in one item. All bills are paid by check, the money received being deposited in the bank.