Accounting theory and practice, Volume 1 (of 3)

by Roy B. Kester

1. Take a trial balance of C. H. Wyss’ ledger completed in [Assignment XVII] and record it on a piece of journal paper.

Draw up a balance sheet and profit and loss statement for the end of the month, taking account of the following adjustments:

• Interest accrued on notes receivable $.67.
• $49.53 worth of accounts and notes receivable will probably
• prove to be bad. Set up a reserve on the balance sheet.
• Inventories on hand: merchandise $7,218.20; expense supplies $25.75.
• Depreciation of $11.45 on furniture and fixtures for the month.
• Interest accrued on notes payable $4.
• Salaries accrued $5.71

2. The following transactions are to be entered in a purchase journal. Make daily postings to vendor accounts and a summary posting at the end of the month to Purchases account.

April
2.	Bought from Endicott-Johnson Company, 61 Hudson St., N.Y.C.:
	20 pairs men’s bluchers, black	@	$ 4.75
	36 pairs ladies’ single strap pumps, patent leather	@	3.50
	10 pairs men’s white buckskin	@	2.50
10.	Bought from Lounsbury-Soule Company, 47 Duane St., N.Y.C.:
	25 pairs men’s Scotch brogues	@	$ 6.00
	8 pairs men’s kangaroo bluchers	@	4.50
15.	Bought from Lexington Shoe Company, 141 Duane St., N.Y.C.:
	20 pairs men’s sport oxfords	@	$ 4.00
	15 pairs women’s sport oxfords	@	3.75
20.	Bought from Charles A. Eaton, 127 Duane St., N.Y.C.:
	12 pairs women’s two strap oxfords, black	@	$ 2.50
	6 pairs women’s pumps, black kid	@	1.75
	8 pairs women’s two strap sandals, white	@	2.65
26.	Bought from I. Miller, 560 Fifth Avenue, N.Y.C.:
	5 pairs Russian boots	@	$10.00
	12 pairs riding boots	@	12.00
	16 pairs single strap suede pumps	@	6.00

3. Enter the following transactions in a purchase journal ruled for two departments—Prescription and General. Make daily postings to vendor accounts. Summarize and post at end of month.

May
1.	Bought from Park Davis & Co., Detroit, Mich.:
	For Prescription Dept.	Invoice #10	2/20, n/60	$650.00
	For General Dept.	Invoice #11	2/20, n/60	425.00
3.	Bought from Lehn & Fink, Inc., 635 Greenwich St., N. Y. C.:
	For Prescription	Invoice #61	1/20, n/30	$150.00
	For General	Invoice #62	1/20, n/30	87.50
7.	Bought from Eastman Kodak Co., Rochester, N.Y.:
	General	Invoice #675	1/30, n/60	$126.50
13.	Bought from Park & Tilford, New York City:
	General	Invoice #256	1/10, n/30	$ 22.50
	From McKesson & Robbins, 91 Fulton St., N.Y.C.:
	Prescription	Invoice #27	2/20, n/60	$ 75.00
17.	Bought from Hospital Specialty Co., New York City:
	General	Invoice #27	1/30, n/60	$ 76.00
	Prescription	Invoice #28	1/30, n/60	98.00
23.	Bought from Crescent Drug Sundry Co., Philadelphia, Pa.:
	General	Invoice #75	1/30, n/60	$ 135.00
29.	Bought from Marcus & Smith, New York City:
	General	Invoice #861	1/10, n/30	$ 65.00
	From J. M. Dalton, New York City:
	General	Invoice #10,680	n/30	$ 16.00
31.	Bought from Denver Pharmaceutical Co., Denver, Colo.:
	Prescription	Invoice #16	1/20, n/60	$165.00
	From United Drug Exchange, New York City:
	Prescription	Invoice #205	1/30, n/60	$267.00

Instructions

Problem 1. Do not close the accounts in the ledger. Make up the statements from the trial balance figures and the adjustment data given.

Problem 2. Use two-column journal paper—the inner column for detail and the outer column for totals. Follow [Form 7 shown on page 142].