APPENDIX B
PRACTICE WORK FOR STUDENT—
SECOND HALF-YEAR
In this appendix enough material is furnished for approximately 30 hours of classroom work. If more time is devoted to the work, this material may well be supplemented by drawing on Appendix C.
The student will find it convenient to have a supply of standard-ruled journal paper and of analysis paper—10-or 12-column—to be used for working sheets.
For all formal statement work prepared for presentation to the instructor, it is suggested that plain, unruled paper of uniform size (8½ × 11 inches, letter size) be used. The chief purpose of this second semester’s work is to give training in analysis—the ability to grasp the essentials of a given set of conditions and to see the significance and interrelations of the various parts. Next in importance to this is the ability to draw up a statement or statements which shall present clearly and in proper order the results of your analysis. The student should develop the habit of thinking clearly and setting forth conclusions in intelligent, clean-cut form. In ninety-nine cases out of every hundred, slovenly, sloppy work evidences a like characteristic of reasoning ability. If the course develops clear thinking and clean-cut presentation, it will have accomplished its two main purposes.
The problems have a more or less direct relation to Chapters XXVIII to XXXV of this volume, but of course they are not limited to the principles developed there. Many of the problems are somewhat closely connected and relate to each other while some are entirely disconnected. They are graded, proceeding from the simpler to the more difficult by easy stages. Where necessary, instructions are given, although the student is thrown more on his own resources than previously. In the solution of problems involving trial balance, adjustments, and financial statements, the method of the accountant’s working sheet will be found to offer the best procedure. See Volume I, Chapter XLIII, pages 386-391, for explanation and illustration.
As to the method of attacking problems, the student is perhaps already aware that before attempting solution it is best to read and study the problem carefully to determine exactly what is called for and then to decide as to the treatment of all doubtful points and items—what they mean and how they must be handled to arrive at what is called for. With these preliminary points cleared up, the solution itself is mostly a matter of accuracy and form. In all problems calling for financial statements, the trial balance should first be tested as to the equality of debits and credits. As stated above, the method of the work sheet is usually the best method for summarizing results, although sometimes skeleton ledger accounts will be found helpful in order to visualize the effect of entries and to trace their course through the accounts. Only painstaking work and the solution of many problems will produce facility and confidence in work of this kind.
The instructor should direct the student to take Problem XXVIII under consideration throughout the whole semester, in order adequately to get his material together and into shape. It may well be treated as a thesis for the semester.
I
At the close of the fiscal year ended June 30, 1913, Thomas J. Howe called you in to determine his financial condition. From the books, which were kept on the single-entry plan, and from other sources, you gathered the following information:
The ledger contained the following accounts: Thomas J. Howe, Capital, $4,000; Thomas J. Howe, Drawing (debit) $472; Expense (debit) $184; Sales $18,945; Purchases $17,450; customers’ accounts considered good: H. E. Brewer $110; D. Cohen $85; Will Benton $190; Linn Bros. $77; customers’ accounts which have proved uncollectible and are considered bad: Peter Metz $43; L. C. Fish $101; creditors’ accounts: Stone Bros. $942; Little & Co. $1,082; H. Hudson $1,220; also accounts with Salaries $375; Advertising $112.