14. The board of directors of the X, Y, Z Company removed their manager on April 30, 1918, on the general suspicion that his books misrepresented the true financial condition of the business. Prepare a statement showing the nature and the probable extent of the misrepresentation, also an approximate statement of income and profit and loss for the four months ending April 30, 1918, and a balance sheet as of April 30, 1918.
The following is a trial balance taken from the books April 30, 1918:
| Capital Stock | $ 75,000.00 | |
| Fixtures | $ 10,000.00 | |
| Inventory, January 1, 1918 | 128,600.00 | |
| Cash | 15,450.00 | |
| Accounts Receivable | 24,600.00 | |
| Accounts Payable | 39,000.00 | |
| Loans Payable | 10,000.00 | |
| Sales | 51,000.00 | |
| Purchases | 40,700.00 | |
| Salaries, Salesmen | 2,200.00 | |
| Advertising | 1,650.00 | |
| Salaries, Office | 1,100.00 | |
| Rent | 400.00 | |
| Interest | 200.00 | |
| Insurance, January 1 to December 31, 1918 | 999.00 | |
| Stationery and Printing | 105.00 | |
| Reserve for Depreciation of Fixtures | 2,710.00 | |
| Surplus, January 1, 1918 | 48,294.00 | |
| $226,004.00 | $226,004.00 |
An analysis of the Purchases and Sales accounts revealed the following: purchases, year 1915, $122,000; sales, year 1915, $153,750; inventory, January 1, 1915, $101,000; purchases, year 1916, $123,000; sales, year 1916, $153,170; inventory, January 1, 1916, $100,000; purchases, year 1917, $121,000; sales, year 1917, $154,722; inventory, January 1, 1917, $102,000.
15. Robert Adams and William Stevens are equal partners. On the night of July 3, their stock and fixtures were destroyed by fire. A trial balance, which Adams had at his home, showed the following condition of the ledger at the close of business, June 30:
| Robert Adams | $ 600.00 | $ 7,450.00 |
| William Stevens | 600.00 | 7,450.00 |
| Cash | 3,309.00 | |
| Fixtures | 1,500.00 | |
| Merchandise Purchases | 32,600.00 | |
| Merchandise Sales | 24,800.00 | |
| Notes Receivable | 1,000.00 | |
| Notes Payable | 2,000.00 | |
| Interest | 120.00 | 50.00 |
| Expense | 780.00 | |
| Customers | 4,500.00 | |
| Creditors | 3,259.00 | |
| $45,009.00 | $45,009.00 |
The property is fully covered by insurance. The insurance company, for the purpose of estimating the value of the merchandise destroyed has agreed to allow 35% as the average gross gain on the sales, and to pay 66⅔% on the value of the fixtures as shown by the ledger.
On the basis of this agreement, state the result of the business and the capital of each partner.
Statement of Affairs
16. C. C. Carter and A. D. Walker were unable to meet their obligations. From the books of the firm and additional information you ascertained the following: