| Dr. Cash | Cash Cr. |
| 19— | 19— |
| June 30 | A. B. Cornell | ✔ | | 500.00 | Dec. 31 | Purchases | | | 3,500.00 |
| Dec. 31 | Sales | | | 10,000.00 | | Morey & Co. on a/c | 5 | 500.00 | 500.00 |
| | B.C. Davis on a/c | 5 | 250.00 | 250.00 | | Jackson & Co. ” | 5 | 600.00 | 600.00 |
| | C.D. Elliot ” | 5 | 300.00 | 300.00 | | H.J. Kelsey Co. ” | 5 | 675.00 | 675.00 |
| | D.E. Foley ” | 5 | 400.00 | 400.00 | | Mortgage and Interest | | | 530.00 |
| | | | Clerks | | | 750.00 |
| | | | Cashier Stenographer, | | | 250.00 |
| | | | N.Y.C. Ry. Freight | | | 250.00 |
| | | | Horse Feed and Driver Expense | | 125.00 |
| | | | Newspaper Advertising | | 300.00 |
| | | | A.B. Cornell | 6 | 2,000.00 | 2,000.00 |
| | | | | | | Balance | | | 1,970.00 |
| | | | 950.00 | 11,450.00 | | | | 3,775.00 | 11,450.00 |
| 19— | |
| Jan. 2 | Balance | 1,970.00 | |
| |
| Sales Journal |
| 19— |
| Dec. 31 | Cash | | | 10,000.00 |
| B. C. Davis | 5 | 300.00 | |
| C. D. Elliot | 5 | 400.00 | |
| D. E. Foley | 5 | 500.00 | |
| E. F. Gaynor | 5 | 600.00 | |
| F. G. Harvey | 5 | 700.00 | |
| Sales on Account | | 2,500.00 | |
| Sales for Cash | | 10,000.00 | 10,000.00 |
| Total Sales | | 12,500.00 | |
| |
| Purchase Journal |
| 19— |
| Dec. 31 | Cash | | | 3,500.00 |
| G. H. Jackson & Co. | 5 | 500.00 | |
| H. J. Kelsey | 5 | 450.00 | |
| J. K. Landon Co. | 5 | 750.00 | |
| Morey & Co. | 5 | 1,000.00 | |
| Purchases on Account | | 2,700.00 | |
| Purchases for Cash | | 3,500.00 | 3,500.00 |
| Total Purchases | | 6,200.00 | |
| |
| B. C. Davis |
| 19— | 19— |
| June 30 | J2 | 50.00 | Dec. 31 | C4 | 250.00 |
| Dec. 31 | S4 | 300.00 | |
| |
| C. D. Elliot |
| 19— | 19— |
| June 30 | J2 | 75.00 | Dec. 31 | C4 | 300.00 |
| Dec. 31 | S4 | 400.00 | |
| |
| D. E. Foley |
| 19— | 19— |
| June 30 | J2 | 100.00 | Dec. 31 | C4 | 400.00 |
| Dec. 31 | S4 | 500.00 | |
| |
| E. F. Gaynor |
| 19— | 19— |
| June 30 | J2 | 25.00 | Dec. 31 | J2 | 250.00 |
| Dec. 31 | S4 | 600.00 | |
| |
| F. G. Harvey |
| 19— | 19— |
| June 30 | J2 | 125.00 | Dec. 31 | J2 | 25.00 |
| Dec. 31 | S4 | 700.00 | ” ” | ” | 500.00 |
| |
| G. H. Jackson & Co. |
| 19— | 19— |
| Dec. 31 | C4 | 600.00 | June 30 | J2 | 250.00 |
| | Dec. 31 | P4 | 500.00 |
| |
| H. J. Kelsey |
| 19— | 19— |
| Dec. 31 | J2 | 20.00 | June 30 | J2 | 375.00 |
| ” ” | C4 | 675.00 | Dec. 31 | P4 | 450.00 |
| |
| J. K. Landon Co. |
| 19— | 19— |
| Dec. 31 | J3 | 1,000.00 | June 30 | J3 | 500.00 |
| | Dec. 31 | P4 | 750.00 |
| |
| Morey & Co. |
| 19— | 19— |
| Dec. 31 | J2 | 50.00 | Dec. 31 | P4 | 1,000.00 |
| ” ” | C4 | 500.00 | |
| |
| A. B. Cornell, Personal |
| 19— | 19— |
| Dec. 31 | C4 | 2,000.00 | Dec. 31 | J3 | 2,259.50 |
| ” ” | J3 | 259.50 | | |
| |
| A. B. Cornell, Capital |
| | 19— |
| Net Worth (down) | 8,759.50 | June 30 | J2 | 8,250.00 |
| | Dec. 31 | J3 | 250.00 |
| | | ” ” | J3 | 259.50 |
| | 8,759.50 | | | 8,759.50 |
| | 19— |
| | Jan. 1 | | 8,759.50 |
| |
| Ledger List(before closing) |
| |
| B. C. Davis | $ 100.00 | | |
| C. D. Elliot | 175.00 | |
| D. E. Foley | 200.00 | |
| E. F. Gaynor | 375.00 | |
| F. G. Harvey | 300.00 | |
| G. H. Jackson & Co. | | $ 150.00 |
| H. J. Kelsey | | 130.00 |
| J. K. Landon Co. | | 250.00 |
| Morey & Co. | | 450.00 |
| A. B. Cornell, Personal | 2,000.00 | |
| A. B. Cornell, Capital | | 8,500.00 |
| | $3,150.00 | $ 9,480.00 |
| | | 3,150.00 |
| Excess of credits | | $ 6,330.00 |
| |
| Proof |
| |
| Total | postings | from | Journal | $1,445.00 | | $10,400.00 |
| ” | ” | ” | Sales Journal | 2,500.00 | |
| ” | ” | ” | Purchase Journal | | 2,700.00 |
| ” | ” | ” | Cash Book | 3,775.00 | 950.00 |
| | $7,720.00 | $14,050.00 |
| | 7,720.00 |
| Excess of credits as above | | $ 6,330.00 |
Net Profits.—Inasmuch as the change in proprietorship is determined only by a comparison of the two financial statements, at least the result of the comparison should be incorporated into a journal entry and so be brought into the ledger account. Sometimes the statement itself and the calculation of change in net worth are made on the face of the journal, thus making permanent record of them. This is worth while since they are an essential part of the system. A permanent statement book will accomplish the same result. In the illustration the statement is entered in the journal. The net profit of $2,259.50 may be set up in the proprietor’s personal account, and the balance of that account, being the amount of profits retained in the business, transferred to the capital account; or the net amount left in the business may be transferred directly to the capital account and the personal account ruled off without balancing as suggested in [Chapter LIII]. The same result is accomplished, but the ability to prove postings against the books of original entry is lost. Hence the first method which is the one shown in the illustration is the better.
APPENDIX A
PRACTICE WORK FOR STUDENT—
FIRST HALF-YEAR
Accounting principles cannot be mastered without adequate practice work. Practice work cannot be properly done unless the principles on which it is based have been developed and explained. Practice work should, so far as possible, follow closely after the explanation of new principles. This applies particularly to the introductory work of the first half-year. Later work is cumulative in its effect and may use all principles previously developed as well as the new principles just developed.
The practice work for the first half-year consists largely of disconnected problems. However, a few longer problems running through several assignments are included. Effort has been made to keep to a minimum the purely mechanical work of computation. While emphasis should be placed always on the principles involved, the need for accuracy should not be lost sight of; in its practice in business, accountancy requires accurate and, where possible, proven results.