1. Summarized transactions for May were:
- Purchases:
- Bentley, Gray & Co., 2/10, n/60, $9,764.90.
- Carter Dry Goods Co., 2/10, 1/30, n/60, $29,417.70.
- Newcomb Endicott Co., 2/15, n/60, $10,846.40.
- Wm. Taylor, Son & Co., 3/5, 2/10, n/30, $9,497.50.
- Marshall Field & Co., 3/10, 2/15, n/60, $11,145.80.
- Cash purchases $1,872.45.
- Sales:
- Arnold Sheriff & Co., 2/10, 1/15, n/30, $9,465.80.
- Baird Dry Goods Co., 2/10, 1/15, n/30, $8,467.90.
- Century Dress Goods Co., 2/10, n/30, $9,748.80.
- Daniel & Co., 2/10, n/30, $7,492.40.
- Hudson Dry Goods Co., 2/10, 1/15, n/30, $9,948.30.
- New York Silk Co., 2/10, 1/15, n/30, $9,742.50.
- Silk & Dress Goods Exchange, 2/10, n/30, $9,865.80.
- Southern Dry Goods Co., 2/10, n/30, $10,480.
- Thompson Hudson Co., 2/10, n/30, $8,942.75.
- Young, Smith, Field Co., 3/10, n/30, $16,290.
- Cash sales $1,694.90.
- Journal:
- Young, Smith, Field Co. returned $1,985 worth of merchandise;
- and Century Dress Goods Co., $625 worth.
- Out-freight for April was $147.42.
- Received from the National Dress Co., a 60-day acceptance drawn
- on the United Textile Co. in favor of the firm, due July 15,
- for $5,000.
- Returned to Newcomb Endicott Co. $2,200 of merchandise.
- Gave Associated Dry Goods Co. our 90-day note dated May 15,
- non-interest-bearing, but with 90 days’ interest, $114.43,
- included in the face, for their bill of April $7,784.90
- less 2% cash discount.
- Marshall Field & Co. note adjusted.
- Final settlement of Wilson Williams Co. was effected May 15.
- (See “Cash Receipts.”)
- Due to temporary embarrassment of the Silk & Dress Goods
- Exchange, their note was extended one month.
- Cash Receipts:
- Arnold Sheriff & Co., May bill $9,465.80 less 2%.
- Atlas Dry Goods Co., April bill, $3,000 on account.
- Baird Dry Goods Co., May bill $8,467.90 less 2%.
- Bostonian Dry Goods Co., balance of April bill,
- $8,784.50 less 2%.
- Century Dress Goods Co., April bill, $2,500 on account.
- Daniel & Co., April bill, $5,000 on account.
- Hudson Dry Goods Co., May bill $9,948.30 less 2%.
- New York Silk Co., May bill $9,742.50 less 2%.
- Public Bargain Store, March bill, $2,500 on account.
- Southern Dry Goods Co., May bill $10,480 less 2%.
- Young, Smith, Field Co., balance May bill, $14,305 less 2%.
- Interest on Liberty bonds due May 15, $119.75.
- Cash was over $42.65.
- For use of one of the motor trucks for the week,
- $100 was received.
- Sold packing materials, $80.75.
- Macmillian & Co., paid their note with interest May 25.
- Received $275 from the Central Hudson Railway Co. on our claim
- made in January.
- The receivers for Wilson Williams Co. paid a final liquidating
- dividend of 10%.
- Cash Disbursements:
- Salesmen’s salaries $2,985.
- Salesmen’s traveling expenses $2,213.72.
- Delivery expenses $886.94.
- Shipping and packing materials and supplies $516.70.
- Advertising for June $3,000 less $250 discount for prepayment.
- Rent for June $1,250.
- Freight and haulage $467.90.
- Lighting and heating $186.40.
- Office salaries $2,040.
- Office supplies $240.60.
- Office expense $1,167.70.
- General expense $912.67.
- A contribution of $250 was made to the State University fund.
- Paid Marshall Field & Co. note May 15 with interest
- and adjustment.
- Newcomb Endicott Co. balance of May bill, $8,646.40 less 2%.
- Cotten withdrew May 15, $400; Wooster $500; and Woolsey $1,000.
- Carter Dry Goods Co., March bill $8,790 net.
- Wico Mills, Inc., April bill $4,970.80 less 1%.
- U. S. Dry Goods Co., April bill $8,276.40 less 2%.
- Wm. Taylor, Son & Co., May bill $9,497.50 less 3%.
- Marshall Field & Co., May bill $11,145.80 less 2%.
2. The Acorn Manufacturing Company, a corporation, is organized with a capitalization of $250,000 of which $150,000 is common stock and the remainder preferred. The company buys the plant of Brown & Towne, whose balance sheet appears below, issuing therefor $75,000 of common stock and $25,000 of preferred stock. The partners transfer all assets except cash and the vendee assumes the liabilities.
Balance Sheet of Brown & Towne
July 1, 19—
| Assets | Liabilities | ||
| Cash | $ 10,000.00 | Notes Payable | $ 2,000.00 |
| Notes Receivable | 30,000.00 | Accounts Payable | 1,000.00 |
| Accounts Receivable | 20,000.00 | Mortgage Payable | 5,000.00 |
| Inventory | 30,000.00 | Brown, Capital | 46,000.00 |
| Plant and Machinery | 10,000.00 | Towne, Capital | 46,000.00 |
| $100,000.00 | $100,000.00 | ||
| July | |
| 5. | The remainder of the preferred stock is subscribed for |
| at 90 and paid in cash. | |
| 12. | Subscriptions to common stock for $25,000 at 110 are |
| received and paid in cash. | |
| 20. | The remaining common stock is subscribed for at 90 to be paid |
| for in four equal instalments at intervals of one month. | |
| Dec. | |
| 1. | All calls were met as due. Paid the organization tax |
| and filing fees in cash $250. |
Prepare journal entries for the above on the books of the Acorn Manufacturing Company.
3. The A B Corporation is formed with a capital stock of $100,000, consisting of 1,000 shares par value $100 each. A subscribes for 500 shares, B for 200, C for 200, and D for 100. B, C, and D pay cash for their subscriptions. A pays in full for his subscription by turning over a business he has been conducting. The corporation acquires the assets and assumes the liabilities of A’s business as follows:
A’s Balance Sheet
| Assets | Liabilities | ||
| Merchandise | $15,000.00 | Accounts Payable | $ 6,000.00 |
| Accounts Receivable | 19,000.00 | A, Capital | 40,000.00 |
| Notes Receivable | 12,000.00 | ||
| $46,000.00 | $46,000.00 | ||