Accounting theory and practice, Volume 1 (of 3)

by Roy B. Kester

XVI

1. The following transactions are to be set up, debit and credit, on the ledger. Use the transaction number as the date of the month of June. Set upon your ledger the following account titles, in the order given, allotting to each the number of lines indicated by the numeral following the title:

Cash	35
Notes Receivable	10
C. H. Scovil	10
M. K. Dorns	10
A. B. Sutton	10
J. P. Nevin	10
B. T. Stanton	10
C. J. Moger	10
R. B. Karell	10
Reserve for Doubtful Accounts	10
Merchandise Inventory	10
Furniture and Fixtures	10
Depreciation Reserve Furniture and Fixtures	10
Notes Payable	10
Crew Brothers & Co.	10
Morris, Lee & Co.	10
Bondell & Co.	10
R. Kennedy	10
C. H. Wyss, Capital	10
C. H. Wyss, Personal	10
Profit and Loss	15
Sales	25
Sales Returns and Allowances	10
Purchases	15
Purchase Returns and Allowances	10
Freight-In	10
Salaries	10
General Expense	15
Depreciation	10
Bad Debts	10
Expense Supplies	10
Interest Income	10
Interest Expense	10
Purchase Discount	10

• June
• 1. C. H. Wyss invested $10,000 cash.
• He paid $5,000 cash for merchandise; and $200
• for one month’s rent of a storeroom.
• Bought for cash, furniture and fixtures $1,000.
• 2. Bought merchandise, $2,750 of Crew Brothers & Co. on account.
• Sold merchandise for cash $675.
• 3. Sold merchandise for cash $1,345.
• Paid for office supplies $35.75.
• 4. Sold C. H. Scovil $500 of merchandise, receiving $200 cash.
• 5. Bought office safe for $150; and typewriter for $65.
• 6. Bought merchandise of Morris, Lee & Co. $957.80, paying $257.80 cash.
• Gave Crew Brothers & Co. our 6% 30-day note for $1,000.
• Wyss took merchandise for his own use, $50.
• 8. Cash sales were $1,585.
• Advertising cost $275.
• 9. Paid salesman $22; and office clerk $18; and $24 for coal.
• 10. Bought merchandise for cash $480.
• 11. Sold R. B. Karell merchandise for $90, and took his check in payment.
• 12. Paid $25 for Merchant Association dues; postage and stationery $15.
• 13. Sold bill of merchandise $358.90 to M. K. Dorns,
• receiving $158.90 in cash and accepting from Dorns,
• at its face value, R. C. Home’s note,
• non-interest-bearing, for $50, due in 10 days.
• 14. Gave Crew Brothers & Co. a 10-day 6% note for balance due.
• Dorns returned as unsatisfactory $10 worth of merchandise
• sold to him on the 13th.

XVII

1. The following transactions of C. H. Wyss are to be set up on the ledger in the same manner as those given in the practice data of [Assignment XVI].

• June
• 16. Cash sales were $875.55.
• Paid salesman $22; and office clerk $18.
• 17. Paid freightbill of $35; and express $5.80.
• 18. Wyss drew for personal use $400 cash.
• Paid electric light bill of $18.90.
• 19. Bought on account 2/10, net 20, merchandise
• from Bondell & Co. for $5,600.
• 20. Cash sales were $925.50.
• Sales on account to A. B. Sutton $1,275;
• J. P. Nevin, $150; C. J. Moger $99.70;
• and R. B. Karell $285.90.
• 22. Returned merchandise $400 to Bondell as unsatisfactory.
• 23. Paid salesman $22; and office clerk $18.
• 24. Received payment of R. C. Home’s note for $50.
• Was allowed by Bondell & Co. $50 on claim.
• 25. Paid Crew Brothers & Co. note in their favor,
• with interest at 6%.
• C. H. Scovil paid $100 on account.
• 26. Paid freight $38.50.
• Wyss took goods for his own use $45.
• Sold B. T. Stanton $175 merchandise, receiving $50
• cash and James Harvey’s note for $100 at 6% for
• 60 days, accepted at face value.
• 27. Paid telephone bill $13.90; advertising $52;
• and circulars $10.
• Allowed C. J. Moger’s claim for $10 for spoiled goods.
• Paid Bondell & Co. amount due.
• 29. Cash sales were $470.
• Wyss drew for private needs $200.
• Collections were: A. B. Sutton $275;
• J. P. Nevin $150; C. J. Moger $59.70;
• and R. B. Karell $185.90.
• 30. Paid Morris, Lee & Co. $500 on account.
• Paid salesman $22; office clerk $18.
• Cash sales were $950.
• Purchased from R. Kennedy a desk for store use
• valued at $75, Kennedy taking merchandise to
• the value of $50 in part payment and the balance
• being credited.

Instructions

Note that the Bondell & Co. bill was paid within the discount period. (2/10, net 20, means that 2% can be deducted from the amount due if it is paid within 10 days and that the face amount of the bill is due in 20 days from date of rendering.)

XVIII