Prepare a reconciliation statement.
2. John Doe commenced business with a cash capital of $15,000. At the close of the first fiscal period the ledger accounts (except Cash and Capital) were: Accounts Receivable $4,312.50; Merchandise, debit balance $5,062.50; Accounts Payable $5,375; Expense $900. Doe’s net loss for the period was $2,775, and his sales were $50,000.
Prepare a statement of assets and liabilities and the profit or loss.
3. From the books of Messrs. Deas & Alexander, which are kept by single entry, the following balance sheet as at June 30, 19— was taken:
| Assets | Liabilities | |||
| Cash in Bank | Accounts Payable | $10,300.00 | ||
| and on Hand | $10,800.00 | Capital Accounts: | ||
| Accounts Receivable | 16,032.00 | Deas | $ 3,263 | |
| Inventories | 29,980.00 | Alexander | 51,249 | 54,512.00 |
| Buildings and Equipment | 8,000.00 | |||
| $64,812.00 | $64,812.00 | |||
It was agreed that the partnership would be dissolved as at October 31 of the same year, but that Alexander would continue the business. It was further agreed that Deas would be paid the balance to his credit at June 30, 19—, together with a sum of $5,000 to cover his interest in the good-will of the business and his profit up to October 31, which latter was estimated at $1,200. From this amount, however, his drawings, amounting to $800, were to be deducted.
The following balances were shown on the books at June 30 of the next year: Cash in Bank and on Hand $8,310; Accounts Receivable $12,203; Inventories $29,143; Buildings and Equipment $8,103; Accounts Payable $8,706.
You ascertain that on April 30 of this year, merchandise valued in the books at $500 was destroyed by fire. As this loss was not covered by insurance, Mr. Alexander reduced the book value of his inventory to take care of the loss.
The additions to the buildings and equipment during the year cost $503, but the book value of these assets was reduced by the sum of $400 to take care of depreciation.
Alexanders personal drawings during the year amounted to $2,500.