Record these transactions in single entry books; prepare proof of ledger and statements of assets and liabilities, the merchandise inventory at end of period being $983.75. Do the books show a profit or a loss, and how does it affect the account of the proprietor?
7. Explain, briefly, the necessary routine followed in changing single entry books to double entry.
8. H. P. Hayes established a small factory upon a borrowed capital of $10,000. The undertaking was a success, and at the close of the first year his financial condition was disclosed by the following particulars:
| Bills payable | $4,000.00 |
| Accounts payable | 6,574.50 |
| Cash | 1,752.50 |
| Accounts receivable | 12,694.18 |
| Inventory | 4,765.90 |
| Salaries | 3,500.00 |
| Sundry expenses | 435.50 |
| Manufacturing expenses | 11,759.50 |
Mr. Hayes kept his own books during his first year in business, but did not keep them by double entry. His sales for the year amounted to $35,643.25, and his total purchases amounted to $16,076.07. At this point Mr. Hayes admitted as a partner, A. B. Andrews, who contributed $10,000.00 to the partnership upon the agreement that the partners should share equally in the business. A bookkeeper was engaged to keep the books by the double entry system. From the particulars given, make a trial balance and the necessary journal entries to complete the change to the double entry method. Ascertain the interest of Mr. Hayes in the business, and credit his account with the same.
9. Foster, Harvey, and Morton—a copartnership—wish to change their method of bookkeeping from single to double entry. The partnership agreement provides that each partner shall share in the profits in proportion to his investment. Separate investment and withdrawal accounts have been kept with each partner. In the following statement of ledger accounts, partners' investment accounts show the same balances as at the last adjustment, no additional investments having been made:
| Foster, Investment | Credit Balance | $1,600.00 |
| Harvey, Investment | Credit Balance | 1,200.00 |
| Morton, Investment | Credit Balance | 1,200.00 |
| Personal Accounts | Credit Balance | 900.00 |
| Personal Accounts | Debit Balance | 1,900.00 |
| Foster, Withdrawals | Debit Balance | 315.00 |
| Harvey, Withdrawals | Debit Balance | 240.00 |
| Morton, Withdrawals | Debit Balance | 155.00 |
| Bank | Debit Balance | 2,050.00 |
| Cash in Office | 45.00 | |
An inventory shows merchandise $1,775.00, fixtures $300.00.
Show all entries necessary to make the partnership adjustment and change the books to double entry, indicating by check √ the accounts to be posted.
10. The books of the Star Coal Company, a corporation with a paid-up capital of $10,000.00, have been kept by single entry. The following facts are gathered from the books: