36. Indicate by journal entries how the following transactions should be recorded upon (a) the books of the consignor, and (b) the books of the consignee:
| 1. | Shipment of goods costing $12,000 which are expected to |
| be sold for $16,000. | |
| 2. | Sale of three-fourths of such goods to sundry customers for a |
| total of $15,000, only $5,000 of which is received in cash. | |
| 3. | Return by customers of $55 of goods sold as defective |
| in quality. | |
| 4. | Advance of $4,000 to consignor by consignee, and payment |
| of $100 freight, and $150 warehouse expense by the latter. | |
| 5. | Settlement of all customers’ accounts except items |
| totaling $200, which are written off as uncollectible. | |
| 6. | Remittance to cover balance due consignor after consignee |
| has deducted commission at the rate of 3% on the selling | |
| price of goods sold. (Account sales is rendered only when | |
| consignment is sold.) |
37. On April 30, 1921, St. John & Company and Carpel Brothers enter into a joint venture agreement. They each contribute $4,000, with which they pay for goods that are shipped on May 1 to John Doe of San Francisco. St. John & Company advance $400 to defray freight and incidental expenses. John Doe, the consignee, is allowed 10% on the cost of the goods and is to sell them at whatever price he can obtain for them.
On June 1, 1922, on the strength of a report sent by wire, Carpel Brothers draw at sight on John Doe for $4,000 to the order of Carl Peter of New York. On July 1, 1922, St. John & Company receive from the consignee a check for $11,200, all the goods being sold; on the same day St. John & Company settle with Carpel Brothers. Interest at 6% is allowed on all transactions affecting the partners in the venture.
Prepare all the ledger accounts brought about by the above on the books of St. John & Company, including a joint venture account. (Construct your ledger accounts in such a manner that they will explain fully what took place and make a cross-reference possible.)
Single Entry
38. The books of the Butter, Egg & Cheese Company, with an authorized and outstanding capital stock issue of $25,000, are kept by single entry.
It annually inventories all its assets and liabilities and from such inventory prepares a financial statement. At December 31, 19—, this inventory is as follows:
| Office, Cash | $ 1,584 |
| Balance, Bank A | 10,824 |
| Accounts Receivable | 29,521 |
| 10 shares in competing company | 1,000 |
| Plant and Equipment | 64,938 |
| Merchandise Inventory | 21,737 |
| Prepaid Expenses | 5,081 |
| Overdraft, Bank B | 5,003 |
| Accounts Payable | 19,747 |
| Mortgage Payable | 25,000 |
| Notes Payable | 20,000 |
From a comparison of the financial statements at the beginning and the end of the year, you find that the item of “Plant and Equipment” is stated in an amount less by $11,460 than it was at the beginning of the year, plus additions during the year.