Be careful always to maintain the debit and credit equilibrium.
2. Prepare accounts with Delivery Expense, Delivery Supplies, Delivery Wages, and Cash, and set up therein the debits and credits of the following transactions, all of which are for cash:
- November 1, paid $5.40 for gasoline and $1.20 for oil.
- November 6, bought a new inner tube for $3.50, and the
- following day a new shoe for $42.50.
- November 10:
- Paid $4.50 for gasoline, and $1.20 for oil.
- Paid the driver $35 for wages and $22.50 to the helper.
- Removing carbon cost $2 and patching a tire $.50.
- November 15, the car was repaired for $75.
- November 18:
- A short-term insurance policy for $25 was taken.
- Paid the driver $35 for wages, and $22.50 to the helper.
- The driver was arrested and fined $10 for passing a
- trolley car while it was discharging passengers.
- November 19, the car was wrecked by going down a
- washed-out embankment and the helper hurt. Hospital
- expenses were $50, which the
- Casualty Insurance Company paid on the 25th. It cost $60
- to take the car to a garage and repairs cost $275.
- Suit was entered against the township for costs.
3. (a) Analyze the following transactions and name the debit and credit elements of each to show:
- 1. The increase or decrease of assets, liabilities, and proprietorship.
- 2. The account titles under each of the general groups.
- R. C. Rockwell goes into the wholesale grocery business and
- invests $20,000 in capital.
- Due to a need for cash to take advantage of a favorable
- purchase of securities for personal use, he withdraws $5,000 cash.
- He sells some of his personal securities for $500 to buy
- merchandise for the store.
- He pays out of business funds household expenses of $400,
- and a personal note due on his touring car for $500.
- By selling two acres of land for $500 he returns the $500 he
- paid on the car.
- At the end of the month he transfers to his capital account
- $1,000, being the debit balance in his personal account.
(b) Set up the proprietor’s capital account as carried on the books of the grocery business.
4. (a) Analyze the following transactions and name the debit and credit elements of each to show:
- 1. The increase or decrease of assets, liabilities, and proprietorship.
- 2. The account titles under each of the general groups.
- There is a credit balance in Profit and Loss of $4,000.
- A debit balance in George B. Kelly, Personal, of $1,500.
- A credit balance in George B. Kelly, Capital, of $35,000.
- A debit balance in Cash of $5,000.
- Mr. Kelly paid bills for the business out of personal funds:
- Heat and electric light $75.60.
- Water rent $25.
- Store rent $400.
- Gas bill $26.50.
- R. G. Dun rating dues $10.
- Trade association dues $15.
- He received personally and retained the following amounts due the business:
- Interest on notes receivable $375.
- Cash in settlement of last month’s disputed electric
- light bill $15.
- Rent of desk room $150.
- Mr. Kelly withdrew $400 cash for personal use.
- He paid for telegrams for the business $15.
- He had his touring car repaired and took $75 store
- cash to pay for it.
(b) Prepare accounts with:
- 1. Profit and Loss
- 2. George B. Kelly, Personal
- 3. George B. Kelly, Capital
- 4. Cash