Make the entries to record the above data under date of October 25, 1916. (Charge the discount on stock against the surplus received from donation.) Transfer the cash balance in the Building Fund into the General Cash, there being no longer any need of the separation.
Instructions
September 2. Make careful calculation of the balance due Boston Office Co. Record in the general journal the stock drawn for factory furniture and fixtures, as a credit to proper sales account.
October 25. Transfer of the balance of Building Fund cash back to General Cash is effected in the same way as the original creation of the fund. Issue certificates of stock to new holders.
XX
Practice Data
By October 31, 1916, all of the sundry office supplies had been closed out for $2,000 cash.
The raw materials contracted and partially paid for on August 25, were received, and on November 10 a check for the balance due less 2% discount on the contract, was sent to the New Method Manufacturing Co. (Be sure to book the proper charge to Raw Materials.) Materials were insured for one year at a cost of $175 cash.
On November 30, the last of the machinery was received from the Harvey Machine Manufacturing Co. and installed. The invoice cost was $15,000, of which $12,000 was paid in cash and the company’s note secured by mortgage on the machinery was given for the balance. In-freight and delivery on the machinery amounted to $675.40, and placement expense (not including concrete platforms and piers which had been charged to the building at a cost of $750) amounted to $225, all of which were paid in cash. Noble’s salary for the three months while passing upon and superintending the placing and erection of machinery is to be charged $400 to Machinery and $200 to Power Equipment. The additional expenditure of connecting the machinery with the power—including shafting, belting, labor, etc.—amounted to $550.50 cash.
On December 2 an insurance policy for one year covering machinery was purchased for $275.40 cash from the New Jersey Mutual.