Accounting theory and practice, Volume 1 (of 3)

by Roy B. Kester

Dec.
1.	Johnson took $100 for personal use.
	The firm paid $50 for freight bills.
	T. C. Bailey returned merchandise $50.
2.	Bought supplies for $18.50 cash.
	Electric light bill $18, and telephone bill $12, were paid.
3.	Cash sales were $240.
	They received $400 on account from Bailey.
4.	Lewis paid $850 on account.
	Bought from Imbrie & Co. $200 of merchandise.
6.	Taylor sold for $650 cash merchandise, for which the firm
	had paid $1,000.
	Sold on account to K. P. Temple $450; and to F. M. Wood $235.
7.	Paid $40 for salaries; and $15 for supplies.
8.	Paid $72 on insurance.
	Bailey paid his note of $100 and interest.
9.	Cash sales were $275.
	The firm bought from Imbrie & Co. $675; Bonbright & Co. $800.
10.	Paid Halsey note with $2.33 interest.
11.	Received on account from Lord $100; and from cash sales $150.
13.	Temple gave a non-interest-bearing note due in 30 days for $500.
14.	Paid freight-in bill $32; and coal bill $17.
	Salaries of $40 were paid.
15.	Paid note to Imbrie & Co. with interest.
	The receivers of C. H. Marks paid $164, the balance of
	the claim being valueless.

Summarize all journals ([referring to Problem 1, Assignment XXII], and the above) and balance the cash book.

2. The following information has been taken from the books of the Valhalla Company after the ledger was adjusted:

• Sales $2,896,745.
• Sales returns $22,840.
• Sales allowances $12,615.
• Inventories January 1, 19—, $3,096,720.
• Purchases were $1,216,000.
• Purchase returns $5,675; and allowances $4,200.
• Inventories on December 31, 19—, were $3,514,900.
• Rent expense $54,000.
• Bad debts $45,000.
• Depreciation $89,700.
• Advertising $50,000.
• Sales salaries $686,000.
• Traveling expenses $64,892.
• Freight-in $17,990.
• Freight-out $8,960.
• Delivery expense $22,600.
• Office supplies $13,400.
• Lighting $4,825.
• Office salaries $54,000.
• Telephone $2,190.
• Insurance $8,900.
• Taxes $22,940.
• Interest expense $7,890.
• Mortgage interest $60,000.
• Interest income $10,890.
• Income from securities $2,400.
• Sundry expenses $2,890.
• Repairs $14,890.

Draw up the statement of profit and loss.

3. Draft the journal entries necessary to close the ledger of the Valhalla Company.

4. Draw up the Profit and Loss account as it would appear in the ledger of the Valhalla Company.

5. Anthony B. Mans is the proprietor of a drug business owning assets and subject to liabilities as follows:

• Cash $5,150.
• Accounts receivable $795.
• Stock of merchandise $25,340.
• Store furnishings $3,420.
• Soda fountain $1,250.
• Notes payable $4,500.
• Accounts payable $9,305.

He sells the business as above, excepting the cash which he retains, to James R. Hart for $20,000 cash, which includes a bonus of $3,000 for his good-will. Mans withdraws all cash and deposits it in his personal bank account.