Make the necessary entries in Mans’ journal and cash book to record the sale transaction and the withdrawal of cash.
XXIV
As bookkeeper for Wm. C. Baldwin, dealer in coal and coke, you will use a general journal, a sales journal, a purchase journal, a cash book, and a ledger. Four double pages of journal paper and three double pages of ledger paper will suffice. At the top of the first page write “Journal of Wm. C. Baldwin.” Allow 130-150 lines for your Journal. The next blank double page will be used for a cash book, marked on the left at the top, “Dr.” and near the middle, “Cash.” Similarly the right page, “Cash”; and at the top, right-hand margin, “Cr.” Allow 80-100 lines for each side of the cash book. The next blank page mark “Sales Journal,” allowing 70-90 lines. The next blank page mark “Purchase Journal,” allowing 1 page. The last 3 pages, reserve for trial balances and statements. Number consecutively all pages in journal and ledger.
In the cash book use the first column on either side for items and the second column for totals and balances. Balance and rule the cash book at the end of each week, extending the “items” total before balancing and marking it for posting purposes “Cash, Dr.” or “Cash, Cr.” as the case may be. Enter the balance on the “Dr.” side in the “Total” column, and so keep each week’s receipts segregated. At the bottom of the page, unless it happens to coincide with the end of the week, carry “totals” of each side forward, not the balance.
In the sales and purchase journals mark the first column “On Account” and the second “Cash,” and make entries in them according as sale or purchase is “on account” or “cash.” If “cash,” entry must be made in the cash book also, in which case check the item in the ledger folio column in both journals, as total cash, sales, and purchases are to be posted from their respective journals. In making summary entries for the sales journal at the end of the month, rule and total each column, and bring the cash column total over on the next line into the “On Account” column, marking it “Cash Sales, Total.” Add these two and rule off, marking them “Sales, Cr.” The purchase journal will be handled similarly.
Open the following accounts in your ledger, beginning on the first page in the order given and allowing the number of lines to each account indicated by the numeral following each:
| Cash | 10 |
| Notes Receivable | 5 |
| M. R. Hamilton | 10 |
| F. S. Kent | 10 |
| H. T. Avery | 10 |
| G. C. Furnald | 10 |
| C. P. Pell | 10 |
| S. T. Hartley | 10 |
| A. D. Livingston | 10 |
| Reserve for Doubtful Accounts | 5 |
| Coal Inventory | 5 |
| Furniture and Fixtures | 10 |
| Depreciation Reserve Furniture and Fixtures | 5 |
| Building | 5 |
| Depreciation Reserve Building | 5 |
| Land | 5 |
| Notes Payable | 10 |
| M. H. Hanna & Co. | 10 |
| American Coke & Chemical Co. | 10 |
| Peabody & Co. | 10 |
| Seabord By-Product Coke Co. | 10 |
| Midtown Realty Co. | 8 |
| Wm. C. Baldwin, Capital | 10 |
| Wm. C. Baldwin, Personal | 10 |
| Profit and Loss | 20 |
| Sales | 15 |
| Purchases | 10 |
| Purchases Returns and Allowances | 8 |
| Freight & Delivery Inward | 10 |
| Salesmen’s Salaries | 10 |
| Advertising | 10 |
| Delivery Expense | 10 |
| Expense Supplies | 15 |
| Rent | 5 |
| Insurance | 8 |
| Office Salaries | 10 |
| Sundry Expense | 8 |
| Cash Short and Over | 7 |
| Interest Expense | 8 |
| Depreciation | 5 |
| Bad Debts | 5 |
| Interest Income | 8 |
Before recording any transactions, study carefully the accounts, particularly the expense accounts, which you will keep. Make your classification strictly according to them. Keep no additional accounts.
May 2, 19—, Wm. C. Baldwin, long interested in the coke business, bought out the Newark Coke Company on the basis of the values shown below.
The assets taken over were: