| A. T. Johnson | | | 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 = 3875 =
+
+56
+
+**ESSENTIALS OF BOOKKEEPING**
+
+6. place the grand total of all entries in the general column on the next line under this red line; these totals should be equal;
+7. as a rule more of the credit page of the cash book is used than the debit page; this is because cash is usually paid out in smaller amounts and often than it is taken in. Therefore draw a red line clear across the money columns of both pages, at a level just above the total in the general column on the credit page;
+8. leave one space and then draw a double red line clear across the money columns of both pages;
+9. on the debit page bring down the total of the general column to the last ruling; the cash book is now closed.
+10. on the debit page bring down in black ink the cash balance below the last red ink double ruling and date it April 1.
+
+Closing the ledger. Accounts in the ledger are of three kinds:
+1. those which show only resources and liabilities, consisting of notes payable, notes receivable, and personal accounts;
+2. those which may show losses and gains;
+3. ownership or proprietor's account.
+
+In Part One of this section was explained how to balance personal accounts by adding up the debit column and the credit column, and subtracting the smaller sum from the larger, the result being the balance of the account. This is far enough to go in getting the figures for the trial balance, and ordinarily personal accounts in the ledger do not need to be closed often than once a year except for special reasons, such as final settlement, legal provisions, loss of the customer or dealer by death or removal, and so on.
+
+How to close a personal account. When a personal account is closed, it is "ruled up" in this fashion:
+If both sides of the account balance, a red ink line is ruled under the last entry on both the debit and credit sides. The total of the money column is then brought down and written on the next line, and a double red ink line ruled below it.
+
+The account is now "closed."
+
+If there are more entries on one side than on the other, as is often the case, a second ruling may be made on the short side, even with the long side, and the totals brought down, as shown in Form 46 on page 57.
+
+HALES AND THOMAS
+
+
+
+ | 19- |
+ Oct |
+ J7 |
+ 200.00 |
+ Oct |
+ 10 |
+ C6 |
+ 200.00 |
+
+
+ | 1 |
+ 39 |
+ 150.00 |
+ 20 |
+ C8 |
+ 275.00 |
+
+
+ | 16 |
+ 218 |
+ 450.00 |
+ 30 |
+ (31) |
+ 37 |
+
+
+ | 23 |
+ J15 |
+ 38.46 |
+ |
+ (31) |
+ 37 |
+
+
+ | 28 |
+ J15 |
+ 17.91 |
+ |
+ (31) |
+ 37 |
+
+
+ |
+ |
+ |
+ |
+ |
+ |
+
+
+ | FORM 46 |
+
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+ |
+ |
+ |
+ |
+ |
+ |
+
+
+ | LUCAS AND PRATT |
+ |
+ |
+ |
+ |
+ |
+
+
+ | 19- |
+ Nov |
+ J16 |
+ 2000.00 |
+ Nov |
+ 6 |
+ C9 |
+ 2000.00 |
+
+
+ |
+ 19 |
+ J25 |
+ 179.84 |
+ 18 |
+ | 47
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+A blank form titled "Petty Sales Ledger" with columns for date, description, quantity sold, cost per unit, total cost sold, and other details.
+
+JOURNAL
+
+
+
+
+ | Date |
+ Accounts |
+ Explanation |
+ Debit |
+ Credit |
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+
+ | FORM 49: Six Column Journal |
+
+
+
+
+FORM 49: Six Column Journal
+
+
+
+
+
+FORM 59: Petty Sales Ledger
+
+ 63
+
+THE ROMANY MASSAGE CREAM COMPANY No. 76
+Albany, N. Y. April 11 19...
+At eight pay to the order of A. B. Ball $34.02
+$34.02
+Value received, and charge to the account of The Romany Massage Cream Co.
+To Ernest and Jennie
+Erie, Pa.
+ Secretary-Treasurer
+FORM 51 Sight Draft Payable When Presented
+
+THE ART NEEDLEWORK EXCHANGE AND MANUFACTURING CO.
+No. 67
+Charleston, S. C. Sept. 25 19...
+At fifteen days sight pay to the order of The Ansonia Manufacturing Co. $189.28
+One Hundred Fifty-One Dollars 25/100 DOLLARS
+Value received and charge to the account of The Boston Leather Co.
+Boston, Mass.
+The Art Needlework Exchange and Mfg Co.
+ Secretary-Treasurer
+FORM 52 Draft Payable A Certain Time After Sight
+
+THE ART NEEDLEWORK EXCHANGE AND MANUFACTURING CO.
+No. 67
+Charleston, S. C. Sept. 25 19...
+At fifteen days sight pay to the order of The Ansonia Manufacturing Co. $189.28
+One Hundred Fifty-One Dollars 25/100 DOLLARS
+Value received and charge to the account of The Boston Leather Co.
+Boston, Mass.
+The Art Needlework Exchange and Mfg Co.
+ Secretary-Treasurer
+FORM 53 Acceptance
+
+Pittsburgh, Pa. October 12 19...
+THE ELECTRIC MANUFACTURING AND SUPPLY COMPANY
+$244.01
+Outstanding Balance Payable on Demand $244.01
+Two Thousand Four Hundred Forty-One Dollars 25/100 DOLLARS
+Value received and charge to the account of The Hatcher Co.
+To The Hatcher Co.
+Meadville, Pa.
+ Secretary-Treasurer
+FORM 54 Time Draft
+
+ 64
+
+FARM ACCOUNTS 65
+
+In the petty sales ledger all sales to customers are entered at the time of the sale, together with any payments received. In this case the petty sales ledger is divided into five columns to correspond with the special accounts kept.
+
+The petty sales ledger account. An account in the general ledger, called Petty Sales Ledger, is opened and at the end of each month the total of all sales would be debited to that account and the footings of the special columns would be credited to the accounts indicated at the tops of these columns; at that time also Cash would be debited and Petty Sales Ledger credited for the total amount of the "Payment received" column of the petty sales ledger.
+
+What a draft is. In keeping the Kemi Truck and Fruit Farm's books, the student will make entries for drafts or bills of exchange. A draft or bill of exchange is a written request by one person asking a second person to pay a certain sum of money at sight or at some future time to a third person or perhaps to the original of the request. "At sight" means simply "when presented." Form 51 on page 64 shows a sight draft.
+
+How many original parties to a draft? There are three original parties to a draft:
+
+1. the drawer, the one who draws the paper or makes the request;
+2. the drawee, the one on whom it is drawn or who is asked to pay;
+3. the payee, the one in whose favor it is drawn or who is to receive the money.
+
+As indicated in the preceding paragraph, the drawer and the payee may be the same person.
+
+Drawing a draft is merely making a request. It creates no obligation on the part of the drawee. He does not have to pay it just because he has been asked to do so, but if he is willing to pay it as requested, he writes across the face of the draft the word "Accepted," the date, and his name; this is his "acceptance" of the request; that is, he accepts the obligation and agrees to pay the money for the drawer. The paper is then called an acceptance, illustrated by Form 53 on page 64.
+
+66
+ESSENTIALS OF BOOKKEEPING
+
+How a draft is accepted. The acceptance of a draft may be written on the face or on the back; it may even be written on another paper, and in a few cases it has been held by law to be valid when made by a telegram or orally. These are extreme cases, and acceptances so made may cause much trouble and long-drawn-out court actions. The simple way is to write the acceptance across the face of the draft.
+
+In the draft shown in Forms 52 and 53 the drawer is the Art Needlework Exchange and Manufacturing Co.; the drawee, who becomes the acceptor when the acceptance is written, is the Boston Leather Co.; the payee is the Amoskeag Manufacturing Co. This acceptance will be due on October 13, which is 15 days after the date of acceptance.
+
+Another form of time draft is shown in Form 54. This draft, or, as it is now called, this acceptance, will be due December 11. It is due on that date regardless of the date it is accepted, so long as it is accepted before the due date.
+
+How drafts are classified. Drafts are classified
+1. as to time of payment into
+ a. sight drafts, payable at sight, and therefore needing no acceptance
+ b. time drafts, payable some time after sight or after date, which become bills receivable of the payee and bills payable of the drawee after the drawee accepts and thus becomes the acceptor
+2. as to locality into
+ a. domestic or local drafts, which are drawn for payment between persons in the same country or state,
+ b. foreign bills of exchange, which are drawn between persons in different countries or different states
+3. as to relationship into
+ a. commercial when drawn by business houses, firms, companies, or individuals, among themselves or in favor of banks,
+ b. bank drafts when drawn by a bank on its correspondent in another city and sold to the public for the purpose of facilitating exchange.
+
+ Google
+
+FARM ACCOUNTS 67
+
+The chart shown in Form 56 on page 69 will help in the classification of draft entries. The student should make a copy of the chart and then try to reproduce it from memory.
+
+Entries for time drafts. The drawer debits the payee because in the payee's account liabilities are being decreased, and credits the drawee because in the drawee's account resources are decreasing. The drawer debits the drawer because the drawer's account is decreasing his liabilities and credits Bills (or Notes) Payable because in that account his liabilities are increasing. The payee debits Bills (or Notes) Receivable because in that account his resources are increasing and credits the drawer
+
+
+
+ | THE NATIONAL BANK OF COMMERCE |
+
+
+ | Nashville, Tenn. |
+ Feb. 11 |
+ 18:00 |
+
+
+ | Pay to the order of A. F. Gordon $405. 25. |
+
+
+ | Four Hundred Fifty-Five 25/100 DOLLARS |
+
+
+ | To THE SEABOARD NATIONAL BANK NEW YORK |
+
+
+
+FORM 55: Bank Draft
+
+ J.D. Sherry Cashier
+
+because in the drawer's account his resources are decreasing. If the drawer draws in his own favor and is both drawee and payee, he debits Bills Receivable and credits the drawee, while the drawee, in his books, debits the drawer and credits the bills payable account.
+
+Entries for sight drafts. The drawer debits the payee and credits the drawee as in time drafts. The drawee debits the drawer and credits Cash. The payee debits Cash and credits the drawer. If the drawer draws in his own favor, it is a simple cash book entry for both parties. He will debit Cash and credit the drawee, while the drawee in turn will credit Cash and debit the drawer.
+
+Drafts deposited for collection. No entry is made until the bank reports the result of the collection, when it becomes the same as an ordinary payment of cash by the drawee to the
+
+ 68
+
+**ESSENTIALS OF BOOKKEEPING**
+
+drawer, except for the bank's fee, which is charged to the collection account if one is kept, and is otherwise charged to the expense account.
+
+**BOOKKEEPING PRACTICE**
+
+How drafts are handled
+
+The student should write the draft in each of the following exercises. After having written the draft, he should rule a blank sheet to make spaces like those in Form 50 on page 69, then analyse the entries which each of the respective parties would make in their books, and place them in the proper spaces on the blank, with the reasons. He should also write out the entries in his own form, which the drawer, the drawee, and the payee would make in their own works.
+
+1. J. W. Allen draws a sight draft on L. M. Arthur in favor of T. P. Kohn for $63.75 on January 10, 19--.
+2. The M. Y. Crane Co. draws a draft payable 60 days after sight on The Cottage Creamery Co. in favor of Elliott & Martin, $243.90, on Feb. 8, 19--. The draft is accepted on Feb. 16. On Feb. 21 this acceptance is sold by Elliott & Martin who indorse it in full to T. C. Freeman.
+3. On March 12, 19--, the Van Horn Iron Works, through its treasurer, W. R. Steed, draws a draft at 45 days after date in its own favor, on The Pattern Supply Co. for $77.86. The draft is accepted on March 16. On March 27 the draft is sold to the State National Bank, being used as security.
+4. J. L. Thompson is sending an order for goods to the Builders' Supply Co., Aroostook, Maine. With this order he desires to send the money and to do so goes to the People's National Bank in Indianapolis, Ind., and secures a bank draft on the Seaboard National Bank, of New York City, for $234 in favor of J. L. Thompson, $19--. The cashier of the People's National Bank is M. T. Pascoe.
+5. Hammond and Parker draw a draft for $234 in favor of Rand, McNally and Co. on J. F. Underwood, on May 11, 19--, at 60 days sight. The draft is accepted May 15. On May 25 the acceptance is sold to L. C. Baker by endorsement in full. It is sold to P. F. Brokaw on June 1 by indorsement in blank. It is discounted at the Exchange National Bank on June 3.
+
+To keep an accurate and complete record of notes and drafts received the bills receivable book is used, likewise the bills payable book for notes and acceptances we shall have to pay: Forms 57 and 58, on pages 70 and 71, are really quite simple, and almost self-explanatory.
+
+
+
+HOW TO MAKE THE ENTRIES FOR DRAFTS
+
+(1) TIME DRAFTS
+
+
+
+
+ | On the books of the |
+ Debit the |
+ Because |
+ Credit the |
+ Because |
+
+
+
+
+ | drawer |
+ payee |
+ liabilities are decreasing in the payee's account |
+ drawer |
+ resources are increasing in the drawer's account |
+
+
+ |
+ |
+
+
+ | drawer |
+ drawer |
+ liabilities are decreasing in the drawer's account |
+ Bills Payable |
+ liabilities are increasing in the bill's payable account |
+
+
+ |
+ resources are increasing in the drawer's account |
+
+
+ | payee |
+ Bills Receivable |
+ resources are increasing in the bill's receivable account |
+ drawer |
+ resources are decreasing in the drawer's account |
+
+
+ |
+ |
+
+
+ | drawer when he is also the payee |
+ Bills Receivable |
+ resources are increasing in the bill's receivable account |
+ drawer |
+ resources are decreasing in the drawer's account |
+
+
+ |
+ |
+
+
+
+
+(2) SIGN DRAFTS
+
+
+
+
+ | On the books of the |
+ Debit the |
+ Because |
+ Credit the |
+ Because |
+
+
+
+
+ | drawer |
+ payee |
+ liabilities are decreasing in the payee's account |
+ drawer |
+ resources are increasing in the drawer's account |
+
+
+ |
+ |
+
+
+ | drawer |
+ drawer |
+ liabilities are decreasing in the drawer's account |
+ Cash |
+ resources are decreasing in the cash account |
+
+
+ |
+ |
+
+
+ | payee |
+ Cash |
+ resources are increasing in the cash account |
+ drawer |
+ resources are increasing in the drawer's account |
+
+
+ |
+ |
+
+
+ | drawer when he is also the payee |
+ Cash |
+ resources are increasing in the cash account |
+ drawer |
+ resources are decreasing in the drawer's account |
+
+
+ |
+ |
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+(3) DRAFTS DEPOSITED FOR COLLECTION
+
+No entry until bank reports collection, then
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+BILLS OR NOTES
+
+
+
+ | Dresser Maker |
+ Endorser |
+ From whom |
+ Account |
+ Where |
+ Date |
+
+
+ | If draft note |
+ Drawer if draft note |
+ receives |
+ credited |
+ payable |
+ Received |
+
+
+
+FORM 57-A
+
+BILLS OR NOTES
+
+
+
+ | No. |
+ Payer |
+ :Drawer if draft |
+ Where payable |
+ Account debited |
+
+
+
+FORM 56-A
+
+70
+
+RECEIVABLE
+
+
+
+ | Date |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+
+
+ | Accepted |
+ if |
+ Made |
+ Dis- |
+ Due |
+ Face |
+ Remarks |
+
+
+ | draft |
+ or note |
+ if note |
+ counted |
+ run |
+ of the paper |
+ paid |
+
+
+ |
+ |
+ |
+ |
+ |
+ |
+ How or when paid and so forth. |
+
+
+
+FORM 57-B
+
+PAYABLE
+
+
+
+ | Date |
+ |
+ |
+ |
+ |
+ |
+ |
+
+
+ | Time to run |
+ accepted draft |
+ made if note |
+ 1/20 worst thing |
+ Face of the paper |
+ Date due |
+ Remarks |
+
+
+ |
+ |
+ |
+ |
+ |
+ |
+ How or when paid and so forth. |
+
+
+
+FORM 56-B
+
+71
+
+![]() A scanned document with two tables labeled "RECEIVABLE" and "PAYABLE". The "RECEIVABLE" table has columns for Date, Accepted, Made if note, Dis-counted, Due, Face of the paper, Date paid, and Remarks. The "PAYABLE" table has columns for Time to run, accepted draft, made if note, 1/20 worst thing, Face of the paper, Date due, and Remarks. Both tables have blank spaces for data entry.
+
+Dated Google
+
+72
+
+# ESSENTIALS OF BOOKKEEPING
+
+## ACTUAL BOOKKEEPING
+
+**Transactions of the Kemi Truck and Fruit Farm for May**
+
+The student should enter these transactions in the proper books, making out also all forms called for. At the end of the month he should prove cash, post the entries to the ledger, and make a trial balance.
+
+May 1. Bought 50 Rhode Island red chicks from the Valley Poultry Yard @ $1.50 each.
+
+May 2. Received cash for draft received Feb. 13 from Hotel Elmwood for $263.75.
+
+May 3. Bought 2 tons of fertilizer for cash, $30.
+
+May 4. Paid office help, $12. Paid outside help, $12. (Salaries are charged to Expense). Paid $2.25 for 10 gallons of gasoline for the tractor. Sold to customers for cash: F. M. Stone, 2 bunches of asparagus @ 15c; E. G. Gessler, 8 bunches onions @ 5c; 2 lbs. lettuce @ 1/2c; O. G. Johnson, 300 cts.; O. J. Jones, 4 bunches asparagus @ $1.80; M. Roberts, 2 bunches asparagus @ 1/5c; T. P. O'Connor, lettuce, 15c; R. C. Osborn, 4 bunches asparagus @ 15c; A. R. Leonard, 2 bunches asparagus @ 15c; onions 25c. Sold to Hotel Elmwood for cash, 50 bunches of asparagus @ 12½c. Sold to the P.W. Nelson Co., 10 bunches of asparagus @ 15c; 12 doz. bunches of young onions @ 35c a doz. Sold to the Goodaire Commission Co., 3-20-lb. baskets of lettuce @ $1.75 a basket on %.
+Bought for cash 10 gallons of gasoline for the truck, $22.5.
+
+May 7. Sold to customers: F. M. Stone, asparagus for cash, 30c; E. G. Gessler, asparagus on %; 45c; J. G. Morton, lettuce for cash, 30c; O. R. Jones, lettuce on %; L.R.Richardson, asparagus on %; 30c; R.C.Osborn, asparagus on %; 30c.
+Sold to Hotel Elmwood on %: 50 bunches of asparagus @ 12½c.
+Sold to the Goodaire Commission Co., 3-20-lb. baskets of lettuce @ $1.60 on %.
+
+May 9. Paid our acceptance of March 25 by check, $63.25.
+
+May 11. Paid office help for the week, $12. Paid outside help for the week, $34.
+Sold to customers: F.M.Stone on %: asparagus on %; 25c; E.G.Gessler, radishes and onions on %; lettuce on %; asparagus on %; T.P.O'Connor, radishes for cash, 25c; A.R.Leonard, lettuce on %; and radishes, 25c on %. Sold to Hotel Elmwood on %: 60 bunches asparagus @ 1/1c.
+Sold to the Goodaire Commission Co., on %: 2-20-lb.
+basket lettuce @ $1.50, 100 doz. bunches of radishes @ 50c a doz.
+
+May 14. Received a check to pay the Goodaire Commission Co.'s note of March 25 at Hotel Elmwood Co., in favor of the Valley Poultry Yard at thirty days' sight for $6.
+The draft was accepted, Sold to customers: F.M.Stone on %: lettuce, 25c; radishes, 24c; E.G.Gessler on %: asparagus, 38c; J.G.Morton on %: asparagus, 25c; O.R.Jones, asparagus, $1.25 for cash, also cash
+
+FARM ACCOUNTS 73
+
+for credit, $1.00; L. M. Roberts on %, asparagus, 25c for cash, also cash for credit, 30c; T. P. O'Connor on %, asparagus, 75c; R. C. Osborn on %, lettuce, 20c; asparagus, 25c; A. R. Leonard on %, asparagus, 30c.
+
+May 15. Paid by check our note of January 15, in favor of A. T. Bardeen, $150. Paid for 10 gallons of gasoline for the tractor, $22.25.
+
+May 18. Paid office help for the week, $12. Paid outside help for the week, $12. Sold to customers: J. G. Morton on %, asparagus, 24c; O. R. Jones on %, lettuce, 50c, onions, 30c; L. M. Roberts for cash, asparagus, 24c; T. P. O'Connor paid cash for credit, 75c; R. C. Osborn for cash, asparagus, 48c; A. R. Leonard on %, asparagus, 48c; also cash for credit, 97c. Sold Hotel Elmwood on %, 100 bunches asparagus @ 10c. Sold the P. W. Northwood Co. on %, 100 bunches asparagus @ 10c, 3-20 lb., baskets lettuce @ $1.25, 20 doz. radishes @ 35¢ a doz.
+
+May 20. Paid by check your acceptance of April 20 for $67.50.
+Paid $25 for 10 gallons of gasoline for the truck. Exchanged notes for $30 at 60 days with A. T. Bardeen. Discounted A. T. Bardeen's note at the bank at %6% for 60 days.
+
+May 21. A. B. Mann withdrew for private use, $100. Bought a carload of barn manure for cash, $40. Bought from A. T. Bardeen on % hand currency, $35.66.
+Sold to customers: F. M. Stone for cash, asparagus, 40c; E. G. Gessier for %, E. G. Gessier on %, asparagus, 30c; also cash for credit, 38c; J. G. Morton on %, asparagus, 20c; O. R. Jones for cash, asparagus, $1, also cash for credit, 80c; L. M.
+Roberts for cash, lettuce, 20c; asparagus, 20c; R. C. Osborn for cash,
+lettuce, 20c; asparagus, 40c; A. R. Leonard on %, asparagus, 50c.
+Sold Hotel Elmwood on %, lettuce @ $1.
+Sold the P.W Northwood Co., on % ,120 bunches asparagus @ $8., & 20 lb., baskets lettuce @ $1., & basket lettuce @ $1., & basket radishes @ $35 a doz.
+Bought 10 gallons gasoline for tractor, $225 in cash.
+
+May 23. Drew a draft in our own favor on the Hotel Elmwood at $3 days' sight for $150 and left it at the bank for collection.
+Received from the bank the drafts accepted in their favor drawn by F.M.
+Fodick on X.S.Braithwaite dated May 18 at days' sight,
+and accepted May 13, for $150 in %.
+
+May 25. Paid office help for the week, $12.
+Paid outside help by $24.
+Sold to customers: F.M.Stone for cash, 5 lbs., peas @ 13c; E.G.
+Gessier on % ,6 lbs., peas @ 13c; J.G.Morton for cash ,6 lbs., peas
+@15c.; also cash for credit ,6 lbs., peas @ 38c.; R.C.Osborn on %,
+asparagus ,30c; T.P.O'Connor for cash ,5 lbs., peas @ 13c.; R.C.Osborn on %
+asparagus ,40c; A.R.Leonard on % ,lettuce ,20c., radishes ,15c.
+Paid $22.5 cash for 10 gallons gasoline for the automobile.
+
+May 27. Paid cash for repairs on the auto truck,$425.
+Sold cash to the Farmers' Exchange ,2,000 tomato plants @ .75e a hundred.
+
+
+
+
+ |
+ |
+ |
+
+
+
+
+ |
+ |
+ |
+
+
+
+
+74
+
+**ESSENTIALS OF BOOKKEEPING**
+
+May 28. Sold to customers: F. M. Stone on %, separate, 40c; J. G. Morton on %, separate, 50c; L. M. Roberts on %, 10 lbs. peas @ 12½c.; T. P. O'Connor for cash, 10 lbs. peas @ 12½c.; R. C. Osborn for cash, 6 lbs. peas @ 12½c., also cash for credit, 40c.; A. R. Leonard paid cash for credit, 85c. Sold to the Goodair Commission Co. on %, 50 lbs. peas @ 11c. Sold to Hotel Elmwood on %, 50 bunches separa-
+tages @ 3c. Sold to F. W. Northwood Co. on %, 90 bunches separa-
+tages @ 3c. Bought from Valley Poultry Yard for cash, 100 Rhode Island red chicks @ 12c.
+
+May 29. The bank reports collection of our draft for $150 on Hotel Elmwood; collection charges, 25c. Paid cash for 10 gallons gasoline for the auto truck, $2.25. Bought for cash, 100 lbs. arsenate of lead powder, $24.50.
+
+May 30. Received a check from the F. W. Northwood Co. for $74.95 on %; Sold to sundry customers for cash, 350 tomato plants, $3.50, 150 pepper plants @ 15c per doz., 96 egg plants @ 30c per doz.
+Sold for cash, 2 doz. eggs @ 40c a doz.
+Accepted the Agricultural Implement Co.'s draft at 10 days' interest, favor of E. A. Walcott, for $76.80.
+
+May 31. Debit the petty sales ledger and credit Vegetables for the total sales to customers during the month, and make a cash book entry crediting the petty sales ledger for the cash received through that book.
+
+Prove cash, post the entries to the ledger, and make a trial balance.
+
+**STANDARD QUESTIONS**
+
+The books of the Kemi Truck and Fruit Farm
+
+1. What is the object of using special columns in the cash book and journal?
+2. Why are accounts with private customers not kept in the general books?
+3. What book is suggested for these accounts? How is it arranged?
+4. When and how are the summaries carried to the general books?
+5. What elements are necessary in these small accounts?
+
+**STANDARD QUESTIONS**
+
+Drafts or bills of exchange
+
+1. What is a draft?
+2. Who are the original parties to a draft? Which two of these may be the same person or firm?
+3. When and how does the obligation arise in the case of a draft?
+
+FARM ACCOUNTS 75
+
+4. Name several of the various ways in which a draft may be accepted.
+5. Which is the best method? Why?
+6. How are drafts classified as to time of payment?
+7. How are drafts classified as to locality?
+8. How are drafts classified as to relationship?
+9. What is a sight draft?
+10. What entries does the drawer of a time draft make?
+11. What entries does the payee make?
+12. What entries does the drawee make?
+13. How do the entries differ in the case of sight paper?
+14. What entries are made in case of a draft which has been deposited for collection?
+15. What is the purpose of the bill books?
+
+PART TWO
+
+INTEREST is a premium paid for the use of money. It is usually reckoned as a certain percentage of the sum on which it is paid, and the ordinary rate fixed by law in most states is 6%. When interest is mentioned and no rate is given, it is understood to mean 6%.
+
+How to figure interest. Interest is calculated in three ways, as follows:
+
+1. Simple interest is the interest on the principal of the note for the given time at the given rate, and is found by one calculation.
+
+2. Annual interest is found by adding to the simple interest the interest on each annual instalment which remains unpaid for the length of time from its due date until it is paid.
+
+3. Compound interest is found by adding the interest due at the end of each period of calculation to the previous principal, thus making a new principal for each successive calculation; the compound interest is the difference between the original principal of the note and the total amount which is due at the time of payment.
+
+If a contract is worded to indicate that it bears interest and the kind of interest is not designated, it is taken for granted that it means simple interest.
+
+76
+
+**ESSENTIALS OF BOOKKEEPING**
+
+**ILLUSTRATION**
+
+1. $500 at 6% for 4 years will amount to how much at simple interest?
+ \[
+ \text{principal} \times \text{rate} \times \text{number of years} = \text{interest}
+ \]
+ \[
+ 500 \times 0.06 \times 4 = 120
+ \]
+
+2. $500 at 6% for 4 years will amount to how much at annual interest? The interest for the first year was $30 and has remained unpaid for 3 years. The interest for the second year was also $30; this has remained unpaid for 2 years. The interest for the third year was likewise $30, and this has remained unpaid for only 1 year.
+ \[
+ \begin{array}{|c|c|c|}
+ \hline
+ \text{Interest on principal} & \text{No. of years} & \text{Interest on unpaid interest} \\
+ \hline
+ \text{1st year} & 30 & 3 \\
+ \text{2nd year} & 30 & 3 \\
+ \text{3rd year} & 30 & 1 \\
+ \text{4th year} & 30 & 0 \\
+ \hline
+ \end{array}
+ \]
+ Interest on principal: $120.00
+ Interest on interest: $10.80
+ Total interest: $130.80
+ Principal: $500.00
+ Amount: $630.80
+
+The solution may be shortened by taking the interest on $30 for 6 years; this involves, however, a license which is strictly true to mathematics.
+
+3. $500 at 6% for 4 years will amount to how much at compound interest?
+ \[
+ \text{principal} \times \text{rate}^{\times} \text{years} = \text{interest};\;\text{principal + interest} = \text{amount}
+ \]
+ 1st year: $500.00 × 0.06 × 1 = $30.00. $500.00 + $30.00 = $530.00.
+ 2nd year: $530.00 × 0.06 × 1 = $31.80. $530.00 + $31.80 = $561.80.
+ 3rd year: $561.80 × 0.06 × 1 = $33.71. $561.80 + $33.71 = $595.51.
+ 4th year: $595.51 × 0.06 × 1 = $35.73. $595.51 + $35.73 = $631.24.
+
+If the interest were compounded at shorter intervals (semiannually or quarterly) the principal would increase still more rapidly.
+
+1. The amount due by simple interest is $629.00.
+2. The amount due by annual interest is $639.80.
+3. The amount due by compound interest is $631.24.
+
+**Bank discount** It is the custom of banks to collect the interest on negotiable instruments in advance, calling it discount.
+
+![]() A table showing calculations for simple and compound interest.
+
+FARM ACCOUNTS 77
+
+Bank discount is calculated as was explained in Section II, Part Three, on page 50.
+
+Trade discount. A trade discount is very different from the bank discount, and there is no connection between the two. It is a special discount which wholesale houses and manufacturers allow their dealers from the prices printed in their catalogs. If they printed the prices of the articles at the time actually went when the catalog was prepared, the catalog itself would be out of date by the time it could be printed, for these prices are constantly changing. It would be necessary to issue new catalogs two or three times each year, and then they would not be wholly reliable.
+
+How to figure trade discount. To avoid this difficulty goods are priced in the catalog at figures higher than they are expected to rise. To adjust this catalog or "list" price to the current market, discount sheets are sent to dealers as occasion requires, allowing a certain percentage "off" the list. Frequently a standing rate is allowed, bringing the price within an approximate range of the market, and then the temporary variations are provided for by one or two additional discounts. Thus, a list price of $15 per dozen with 40%, 25%, and 10% off means that the actual selling price is only $6.07. This price is found by the following method:
+
+
+
+
+ |
+$15. |
+
+
+
+
+| less 40% of $15 |
+6. |
+
+
+| balance |
+9. |
+
+
+| less 25% of $9 |
+2.25 |
+
+
+| balance |
+6.75 |
+
+
+| less 10% of $6.75 |
+.68 |
+
+
+| actual price |
+6.07 |
+
+
+
+
+The goods are billed at $6.07 a dozen, and entries for them are made in the books of both seller and buyer at that price. Any increases or decreases in price are cared for by changing the discounts to correspond.
+
+Cash discount. The opportunity frequently afforded in business to reinvest money in other goods makes it desirable to collect accounts receivable as soon as possible. To accomplish this many houses offer a special discount for immediate payment.
+
+78
+
+**ESSENTIALS OF BOOKKEEPING**
+
+If goods are sold on 30 days' time, for example, a discount of from 2% to 5% is often allowed, provided payment is made within 10 days of the date of the invoice. This has no connection with the trade discount discussed above. In making the entries in the books the face of the bill is entered and if there is a cash discount, a separate entry is made for it in the cash book.
+
+**BOOKKEEPING PRACTICE**
+
+How to figure interest and discount
+
+1. What is the difference between the simple and the annual interest on $264.50 for 2 years and 6 months at 8% if no payment of any kind has been made in the interval?
+2. Interest at the rate of 4% compounded quarterly at the savings bank. If you have a savings account and deposit $25 on the first of each month, beginning on Jan. 1, 1918, for 1 year, making no withdraws, and no interest is paid on sums on deposit less than 3 months, how much will you have on June 30, 1918?
+3. J. W. Brull made a note in favor of Angus McKenzie for $112.80 with interest, dated March 16, 1919, for 1 year. The payee had the note discounted at the bank April 30, 1919, for his credit. How much should he add to the stub of his check book?
+4.
+What is the actual cost of pocket knives listed at $25.21 a dozen,
+30%, 20%, and 10% off?
+5. Which is the better series of discounts for the purchaser—40%, 20%, and 10% off, or 10%, 20%, and 40% off? How much difference would it make on half a gross of carpet sweepers listed at $.75 each?
+6. A. B. Welch arranged to install the fixtures and plumbing in his bathroom. The fixtures are listed at $136, 15%, 10%, and 5% off.
+The cost of installation is $35. What is the best way to discount if the bill is paid within 10 days. To take advantage of this offer he has his note discounted at the bank for 30 days for an amount the proceeds of which will exactly pay the bill. Find:
+a. the face of the plumber's entire bill
+b. the face of the note
+c. how much is saved by having the note discounted instead of waiting 30 days and paying the whole bill.
+
+**ACTUAL BOOKKEEPING**
+
+Transactions for the Kemi Truck and Fruit Farm for June
+
+The student should enter these transactions in the proper books, making out also all forms called for by each transaction. At the end
+
+FARM ACCOUNTS 79
+
+of the month, he should prove cash, post the entries to the ledger and make a trial balance.
+
+June 1. Paid office help by check, $12. Paid outside help in cash for the week, $18. Sold Hotel Elmwood on % 50 bunches asparagus @ 8c. Sold the P. W. Northwood Co. on % 100 bunches asparagus @ 8c. Sold to the Goodaire Commission Co. on % 1 cwt. peas @ 10c per lb., 30-2b. baskets lettuce @ $.1, 50 doz. radishes @ .25c a doz.
+Sold sundry customers for cash 720 tomato plants @ 10c a doz., .866 pepper plants @ 12c a doz.
+
+June 3. Bought 10 shares of preferred 7% stock in the General Motor Manufacturing Co. @ $.95. Paid $300 by check and gave 2 notes of $300 each at 20 and 40 days with interest at % for the balance.
+Sold to sundry customers for cash, 612 tomato plants @ 10c a doz., 188 pepper plants @ 12c a doz.
+
+June 4. Sold to Hotel Elmwood on % 50 bunches asparagus @ 8c.
+Sold to the P. W. Northwood Co. on % 94 bunches asparagus @ 8c.
+Sold to the Goodaire Commission Co. on % 4-20-b. baskets of lettuce @ $.1, 62 doz. radishes @ .25c a doz. Sold to sundry customers 486 tomato plants @ 10c a doz., .66 pepper plants @ 12c a doz., .72 egg plants @ .50 c a doz.
+
+June 5. Bought from the Arco Manufacturing Co., paying by check, an underground gasoline tank with accessories, for $36. Paid for installation of tank and pump, $4.80, to Charles F. Horton by check.
+Bought 200 gallons of gasoline, paying the Standard Oil Co. by check, @ .22c.
+June 8. Sold to Hotel Elmwood on % 50 bunches asparagus @ 8c.
+Sold to the P. W. Northwood Co. on % 94 bunches asparagus @ 8c, 2-2b. baskets lettuce @ $.1. Sold to the Goodaire Commission Co. on % 40 doz. radishes @ .25c a doz., .3-20-b. baskets lettuce @ $.1.
+Sold to sundry customers 6 doz. eggs @ .40 each paid in cash.
+Paid office help by check for the week, $12. Paid outside help in cash, $34.
+
+June 10. Paid our acceptance in favor of E. A. Walcott by check.
+June 11. Sold Hotel Elmwood on % 50 bunches asparagus @ 8c.
+Sold to the P.W. Northwood Co., on % 94 bunches asparagus @ .8c, 4 half-bushel baskets of wax beans @ $.125. Sold to the Goodaire Com-
+mission Co. on % .120 lbs. peas @ .8c.
+
+June 12. Received check for S. R. Braithwaite's acceptance due today.
+
+June 13. Bought the following goods of the Ajax Manufacturing
+Co.: .246 feet from a $47 box of .14" long, listed at $10 each, .99%. .99%
+20%, and .10% off; .50 rods of standard wire fencing, listed at .60s a rod,
+15% and .10% off; .60 steel line posts @ .40c, .4 end posts @ $.52, and
+4 corner posts @ $.25, .20% , .10%, and .5% off.
+Gave our note, indorsed with guaranty by E.A.Speelberg, for 60 days, with interest at %6%, to
+
+80
+ESSENTIALS OF BOOKKEEPING
+
+the bank for such an amount that the proceeds will exactly pay the bill to the Ajax Manufacturing Co., to whom we send a check for the amount of the bill. Write the note and have it discounted.
+
+June 15. Paid office help for the week by check, $12. Paid out-
+side help in cash, $16. Sold to Hotel Elmwood on % 30 bunches
+asparagus @ 8c. Sold to the P. W. Northwood Co. on % 30 in-
+basket lettuce @ 90c. Sold to the Goodaire Commission Co. on % 30 baskets of wax beans @ 90c, 82
+bunches asparagus @ 8c. Sold for cash 5 doz. eggs @ 40c.
+
+June 18. Sold to Hotel Elmwood on % 10 doz. radishes @ 25c a
+doz., 1 basket of lettuce, $1. Sold to the Goodaire Commission Co.
+on % 30 bunches lettuce @ $1, 3 baskets wax beans @ 80c, 4 baskets green
+beans @ 80c.
+
+June 20. Purchased from the Fitch Bros. Co. 10 doz. glass fruit
+jars @ .55c a doz., 10 doz. jelly glasses @ .68a a doz., and 1 cherry stoner,
+$1; bill allowing terms of 30 days 2% off in 10 days, with the goods;
+paid the bill by check. Sold for cash 2 doz. eggs @ 40c.
+
+June 22. Paid office help for the week by check, $12. Paid out-
+side help for the week in cash, $16. Sold to Hotel Elmwood on %
+1/2 bu. sweet cherries @ $4; sold to laundry customers for cash 4 bu. sour
+cherries @ $4. Sold to the P. W. Northwood Co. on % 6 bu. sour
+cherries @ $4, 3 baskets lettuce @ $1, 6 baskets wax beans @ .75c.
+
+June 24. Sold to laundry customers for cash 5 bu. sour cherries
+@ $.4, 3 doz. eggs @ .40c, 20 qts. strawberries @ .15c. Paid note of
+June 3 for $50 due today.
+
+June 25. Sold to Hotel Elmwood on % 2 baskets green beans
+@ .75c, 2 baskets lettuce @ .90c, 1 bu. sour cherries, $5. Sold to the
+Goodaire Commission Co. on % 3 bu. sour cherries @ .4, 6 baskets
+wax bean @ .75c. Sold to the P. W. Northwood Co. on % 2 bu. sweet
+cherries @ .85.
+
+June 26. Received from P. W. Northwood Co., C. P. Elmwood's
+note dated May 11 for 60 days, with interest at %6%, for $114.50 in
+the Northwood Co.'s favor, with the request that we credit them on account
+for its present worth. Sold for cash 25 qta. strawberries @ .13c.
+
+June 27. Sold to laundry customers for cash 4 bu. sour cherries
+@ $.4, and 6 bu., sweet cherries @ .45, also 2 doz. eggs @ .40c.
+
+June 29. Paid office help by check for cash, $12; Paid out-
+side help for the week in cash, $16; Sold to Hotel Elmwood on %
+2 baskets wax beans @ .70c and 30 qts. strawberries @ .125c; Sold to the P.
+W. Northwood Co. on % .3 bu., strawberries @ .3, 4 bu., sour
+cherries @ $.35,0 and 4 bu., sweet cherries @ $.35.
+
+Total sales in the petty sales ledger for the month: vegetables, $32:10;
+small fruits, $12:50; tree fruits, $.41. Cash received from these cus-
+tomers, $70:30. Entries in the petty sales ledger must be made by the
+
+FARM ACCOUNTS 81
+
+driver while delivering; the student will therefore enter in the general books the totals reported by the driver of the wagon from which customers are served; these totals are for the entire month. After posting to the ledger, and proving cash, a trial balance should be prepared.
+
+STANDARD QUESTIONS
+
+Interest and discount
+
+1. What is interest?
+2. What is the usual rate of interest charged?
+3. When no rate is mentioned, what is understood?
+4. In how many ways is interest calculated? Explain each.
+5. If a contract is worded "with interest," which kind is understood?
+6. How is bank discount found?
+7. Explain the reason for trade discounts.
+8. What is meant by list price? How is the customer kept informed of the discount period?
+9. What is cash discount? When and why is it allowed?
+10. Which of these discounts appear on the books and which do not?
+
+PART THREE
+
+ACTUAL BOOKKEEPING
+
+Transactions of the Kemi Truck and Fruit Farm for July
+
+The student should enter these transactions in the proper books, making out also all forms called for by each transaction and opening new accounts in the ledger, when necessary.
+
+July 1. Bought from J. P. Austin, 8 young pigs @ $4.50, paying by check. Bought 2 Holstein cows from W. T. Frieman, paying by check $180 and giving our note at 60 days with interest for the balance of $200. Borrowed $300 from the National Elevator Co. for $30; terms 2/10, N/30; paid the bill by check. Paid 6 months interest on the mortgage by check, $30.
+
+July 2. Received a check from the Goodaire Commission Co. to balance their account. Sold to sundry customers for cash 3 bu. sour cherries @ $2; 2 bu. currants @ $3.50; 1 bu. strawberries @ $3; 2 bu. currants @ $3.50, 1 bu. raspberries, $4.
+
+July 3. Sold to sundry customers for cash, 32 lbs. wax beans @ 5c, 26 qts. strawberries @ 12½c, 3 doz. eggs @ 38c, 40 lbs. peas @ 10c, and 12 lbs. honey @ 22c.
+
+July 5. Sold to sundry customers for cash 2 lbs. butter at 37c, 10 qts. gooseberries at 10c, 20 lbs. chard @ 5c, 10 bunches parsley @ 2c,
+
+82
+
+**ESSENTIALS OF BOOKKEEPING**
+
+42 qta. strawberries at 12c, 1 bu. apples, $1.50. Paid insurance by check to Wolfe & Zimmerman, $36.50.
+
+July 6. Sold to the Goodaire Commission Co. on % 4 bu. straw-
+berries @ $3.50, 5 bu. raspberries @ $4, 3 bu. gooseberries @ $2.50.
+Sold to sundry customers for cash 2 bu. apples @ $1.50, 28 lbs. green
+beans @ 6c, 7 bu. early potatoes, $1.50, 25 bunches parsley @ 2c, 30
+kohlrabi @ 3c, 1 bu. Paid office help by check, $12. Paid outside
+help in cash, $19.50.
+
+July 9. Sold to the P. W. Northwood Co. on % 2 cot. peas @ 8c
+a lb., 6 baskets lettuce @ 60c, 10 baskets wax beans @ 55c. Sold to
+sundry customers for cash 2 bu. apples @ $1.50, 36 qte. gooseberries
+@10c, 25 qte. apples @ 18c, 3 bu. potatoes @ $1.50, 30 lbs.
+lettuce @ 6c, 30 lbs. green beans @ 5c, 15 qta. strawberries @ 12c,
+28 lbs. chard @ 5c.
+
+July 10. Received check on the Farmers' Bank for the note due today.
+Sold to sundry customers for cash 6 lbs. honey @ 22c, 84 kohl-
+rabi @ 3c a doz., 4 bu. early apples @ $1.25, 27 qta. raspberries @ 15c,
+8 lbs. butter @ .88c.
+
+July 11. To meet our note for $300 due today at the bank we gave
+our check for $150 and the interest due, and a new note for $150 for
+30 days, with interest at %6%, payable to the bank. To secure the
+payment of the note we have the endorsement for guaranty by E. B.
+Fisher.
+Write the new note and the check and take up the old note.
+Sold to sundry customers for cash 4 bu. early apples @ $1.20, 4 bu.
+5 baskets lettuce @ 60c, 5 bu. early apples @ $1, 20 dcs. bunches root
+parsley @ .25c a doz., 50 dcs. bunches curled parsley @ .15 a dc.
+Paid office help by check, $12. Paid outside help in cash, $20.
+
+July 16. Sold to the P. W. Northwood Co. on % 600 lbs. cabbage
+@ .40, 50 bu. potatoes @ $.10. Sold to sundry customers for cash
+10 lbs. honey @ .22c, 4 lbs. butter @ .49c, .49 cts eggs @ .37c.
+
+July 17-23 To meet our note for $300 due today by check to the bank.
+Paid taxes by check to the county treasurer, H.A. Frants, $46.
+July 20. Sold to Hotel Elmwood on % 5 bu. early apples @ $.1,
+2 bu. kohlrabi @ .82, 4 baskets lettuce @ .60c.
+Sold to sundry customers for cash 400 pickling cucumbers @ .75c a hundred, 10 dcs. bunches beets
+@ .50 a doz., 5 dcs. eggs @ .4dc, 8 lbs. honey @ .22c.
+Paid office help by check, $.72.
+Paid outside help in cash, $.12$.50 A.B.Mann withdrew try for private use, $150.
+
+
+
+
+ |
+ |
+
+
+
+
+| 42 qta. |
+strawberries at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+at |
+$\text{and}$ at
+$\\text{and}$ at
+$\\text{and}$ at
+$\\text{and}$ at
+$\\text{and}$ at
+$\\text{and}$ at
+$\\text{and}$ at
+$\\text{and}$ at
+$\\text{and}$ at
+$\\text{and}$ at
+$\\text{and}$ at
+$\\text{and}$ at
+$\\text{and}$ at
+$\\text{and}$ at
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+```html
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+```
+
+FARM ACCOUNTS 83
+
+July 23. Sold to the Goodaire Commission Co. on % 6 bu. kohl-
+rabi @ $0.5, 5 baskets lettuce @ 60c, 1,400 picking cucumbers @ 75c a
+hundred. Sold to Hotel Elmwood on % 4 bu. apples @ $1, 10 dos.
+bunches beets @ 50c a doz.
+
+July 25. Sold to sundry customers for cash 50 heads cabbage @ 5c,
+10 lbs. honey @ 22c, 4 dos. eggs @ 40c, 25 lbs. chard @ 5c, 33 bunches
+parsley @ 2c, 42 cucumbers @ 3c for 10c.
+
+July 27. Sold to the P. W. Northwood Co. on % 10 baskets wax
+beans @ $1, 10 lbs. cabbage @ $1, 10 cwt. cabbage @ $3.50 a cwt.
+Sold to sundry customers for cash 350 picking cucumbers @ 80c a
+hundred, 48 slicing cucumbers @ 3 for 10c, 18 lbs. chard @ 3 lbs. for 10c,
+2 bu. apples @ $1. Paid office help by check, $12. Paid outside help
+in cash, $15.
+
+July 29. Made a contract with the Cypress Building Co. to con-
+struct a green house 10'x10' at cost of $468. Paid half by 60-day
+note with interest, the balance to be paid by another similar note when
+the building is finished. Sold to sundry customers for cash: 60 lbs.
+green beans @ 5c, 63 slicing cucumbers @ 3 for 10c, 27 lbs. chard
+@ 3 lbs for 10c; 39 heads cabbage @ 5c, 16 bunches parsley @ 2e,
+2 bu. butter @ .25
+
+July 30. Made a payment by check of $200 on the mortgage we
+owe at the bank. Sold Hotel Elmwood on % 2 baskets lettuce @ 60c,
+2 bu. apples @ .90c, 50 lbs. cabbage @ .4c, 4 baskets wax beans @ .70c.
+
+July 31. Sold to sundry customers for cash: 12 lbs. honey @ .22e, .5
+dos. eggs @ .40c, .6 lbs. butter @ .40c.
+
+Total sales in the petty sales ledger for the month of July: vegetables,
+$468.18; small fruits, $237.72; tree fruits, $28.80. Cash received from
+these customers, $592.29.
+
+The student should prove cash, post, and make a trial balance.
+
+If the trial balance fails to balance. Should the trial bal-
+ance fail to balance, the error will probably be due to:
+a. posting to the wrong side of an account;
+b. omission of an item which should have been posted;
+c. posting the same item twice;
+d. an error in calculation;
+e. an error in copying.
+
+An inspection of the difference may determine the character
+of the error. If it is a single figure, it is likely to be the result of
+either "d" or "e." If the difference is exactly divisible by 9,
+there has probably been an error in copying in which two figures
+have been transposed.
+
+84
+ESSENTIALS OF BOOKKEEPING
+
+An error coming under "a," "b" or "c" will probably be located more quickly if some person other than the one who did the posting calls off the items from the accounts while the one who posted them checks the original entries, because the one who made the error is likely to go over the same ground repeatedly without discovering his mistake.
+
+Finding the error. If the trial balance has been made up of balances, another may be made up of totals (both sides of all accounts) or vice versa. When the trial balance is made up of totals, the original sources of the items may be footed, taking
+
+
+
+
+ | L F |
+ Account |
+ Old debit balance (1) |
+ Sources of debit values (2) |
+ New credit balance (3) |
+ Old credit balance (4) |
+ Sources of credit values (5) |
+ New debit balance (6) |
+
+
+
+
+ |
+ |
+ |
+ Sales Book
Cash Book
Bill Book
Journal
and so forth |
+ |
+ Purchase Book
Cash Book
Bill Book
Journal
and so forth |
+ |
+ |
+
+
+
+
+FORM 59: This is the form to be used in making a horizontal recapitulation of the ledger, in case the trial balance contains errors which the student is unable to trace by simpler means. How to use it is described in full detail on page 85.
+all the debits from books of original entry and footing them, then all the credits, not forgetting to deduct such entries as have been included in closed accounts.
+
+If these results show that one side of the trial balance is much larger than it should be, while the other is too small, the error is likely to come under "a." If one side is correct and the other is too great, the error is likely to come under "e." If one is correct and the other too small, the error may be found under "b."
+
+The last resort. When all other methods fail, it sometimes becomes necessary to resort to a summary of the ledger, or as it
+
+FARM ACCOUNTS 85
+
+is sometimes called, a horizontal recapitulation. For this purpose a sheet may be ruled with eight columns, like that shown in Form 59 on page 84. This sheet has debit and credit sides so that the first column on each side shows the balance at the beginning of the fiscal period, while the last column on each side becomes the balance at the close of that period. Between these two columns on each side are the summaries of the original entries as shown in each account, showing the original sources. In this summary column "1" should equal column "4" when footed; column "2" should equal column "5"; and column "3" should equal column "6."
+
+Here is the list of inventories of the Kemi Truck and Fruit Farm, as of July 31:
+
+
+
+ | Acreage |
+ $2,400 |
+
+
+ | House |
+ 4,500 |
+
+
+ | Barn and Outbuildings |
+ 1,283 |
+
+
+ | Tools and Implements |
+ 600 |
+
+
+ | Auto Truck |
+ 750 |
+
+
+ | Automobile |
+ 750 |
+
+
+ | Tractor |
+ 700 |
+
+
+ | General Motor Mfg. Co. Stock |
+ 525 |
+
+
+ | Poultry |
+ 35 |
+
+
+ | Dairy |
+ 55 |
+
+
+ | Hogs |
+ 386 |
+
+
+ | Feed. |
+ 50 |
+
+
+ |
+ 125 |
+
+
+
+From the trial balance and the inventories the student should now make a resource and liability statement, as follows:
+
+RESOURCE AND LIABILITY STATEMENT, JULY 31
+
+
+ | Resources |
|---|
| Inventories. | |
|---|
| Accounts Receivable. | |
|---|
| Petty Sales Ledger. | |
|---|
| Cash. | |
|---|
| Total Resources. | |
|---|
|
|---|
| Liabilities | |
|---|
| Mortgage Payable. | |
|---|
| Bills Payable. | |
|---|
| Accounts Payable. | |
|---|
| Total Liabilities. | |
|---|
| A. B. Mann's Ownership = Difference = $11,284.99 | |
|---|
+
+
+86
+ESSENTIALS OF BOOKKEEPING
+
+From the data now on hand, the loss and gain statement can be easily constructed in the following form:
+
+**LOSS AND GAIN STATEMENT, JULY 31**
+
+
+
+ | Losses |
+ |
+
+
+ | Tools and Implements |
+ |
+
+
+ | Auto Truck |
+ |
+
+
+ | Automobile |
+ |
+
+
+ | Tractor |
+ |
+
+
+ | Fertilizer |
+ |
+
+
+ | Expenses |
+ |
+
+
+ | Incurrent and Discount |
+ |
+
+
+ | Insurance and Taxes |
+ $930.30 |
+
+
+ | Total losses |
+ |
+
+
+ | Potatoes |
+ |
+
+
+ | Apiary |
+ |
+
+
+ | Poultry |
+ |
+
+
+ | Small Fruits |
+ |
+
+
+ | Corn Products |
+ |
+
+
+ | Feed |
+ |
+
+
+ | Merchandise Discount. |
+ |
+
+
+ | General Motor Mfg. Co. Stock |
+ |
+
+
+ | Vegetables |
+ |
+
+
+ | Dairy |
+ |
+
+
+ | Hogs |
+ |
+
+ | Total gains | $1,426.11 |
|---|
| A. B. Mann's credit. | |
|---|
| Plus his net gain. | $11,264.99 |
|---|
| Equal his present ownership | |
|---|
| The student should close the cash book and ledger, applying the instructions given in Section II, Part Three, pages 58 and 59. |
|---|
| STANDARD QUESTIONS |
|---|
| Transactions of the Kemi Truck and Fruit Farm for July |
|---|
| 1. What new accounts are opened on July 1? | | |
|---|
| 2. Who guaranteed payment of the note made on July 13? | | |
|---|
| 3. Who guaranteed the note paid on July 15? | | |
|---|
| 4. Why was the inventory of feed larger than that of the auto truck, the automobile, and the tractor less than they were on the first of May? | | |
|---|
| 5. Why is the inventory for feed so much larger than all we have bought? | | |
|---|
+
+![]() A page from a bookkeeping manual showing a table titled "Losses" and "Gains", with various items listed under each category.
+
+SECTION IV
+
+RETAIL AND PARTNERSHIP ACCOUNTS
+
+PART ONE
+
+GOODS purchased to be sold at a profit are called merchandise. A shoe dealer's stock of shoes—a grocer's supply of groceries—a hardware dealer's supply of tools, household equipment, and everything else that he sells—each of these is merchandise.
+
+The merchandise account. In a business where the number of transactions is not very large, it is frequently customary to enter both purchases and sales of goods in one ledger account, which is called Merchandise. In the merchandise account when kept in this way, are entered all purchases, sales, freight and drayage on purchases, rebates, allowances for shortage or damages on either purchase or sales, goods returned by us or to us, insurance received for losses by fire, and any other entries connected with merchandise.
+
+Goods on hand at the beginning or end of the fiscal period also appear in the merchandise account when it is opened or closed, in the form of the inventory.
+
+Ways of taking inventory. An inventory is a list of goods or property. One method of preparing the list is to count the number or weigh the items in question and then list them. This is done at a time when there is likely to be the least interruption both to the trade of the house and to those who are taking the inventory, often after the rush of the Christmas trading.
+
+Listing the entire stock of goods in a large concern is a tedious and laborious task. Many houses avoid this work by keeping track of all incoming goods through the purchasing department, adding all incoming items to the amount previously on hand. From these stocks nothing is allowed to go out except on requisition.
+
+87
+
+88
+ESSENTIALS OF BOOKKEEPING
+
+tions. At the end of each month the totals of purchases minus the totals of requisitions determine the new inventory. When this plan is followed, only some extraordinary disturbance of the stock, such as fire, makes it necessary to take a physical inventory.
+
+Form 60 on page 89 illustrates the merchandise account. The explanations shown in this illustration do not, of course, appear in the ordinary ledger account when posted from the journal, cash book, sales book, or purchase book.
+
+If the items shown in Form 60 had been posted from the sales book, cash book, purchase book, and journal, and the account closed in the usual way, the account would appear as in Form 61.
+
+Merchandise discount. It was stated in Section III, Part Two, that when goods are purchased or sold, a discount is usually allowed for cash. If the transactions connected with merchandise are entered in the merchandise account, it is also customary to enter cash discounts in an account called Merchandise Discount, in which all discounts given by us are debits, and those taken by us are credits.
+
+One objection to this method of recording merchandise transactions is that it violates two principles of good accountancy. In the first place, a merchandise account kept in this way is not truthful. The debit side purports to be a record of the cost of goods purchased, but in Form 60 the items of January 10 and January 15 are not goods purchased, but are deductions from sales already made. If the goods returned on the 15th are resold, as is altogether likely, they will be recorded as credit for them in our second sale. Thus it is easy to imagine the possibility of the merchandise account showing the sale of more goods than had ever been purchased.
+
+Again, the credit side of the account ostensibly sets forth the sales of goods, but on January 9 there is an item of credit for goods which were never received and hence could never be sold. Another inconsistency which contradicts the supposition—the debit side of the account shows cost prices and the credit side selling prices—there are two items on the debit side at selling prices and five on the credit side at cost prices.
+
+The second principle of good accountancy is that an account should contain only one kind of information—and this account contains half a dozen.
+
+
+
+ | MERCHANDISE |
+
+
+ | Jan |
+ Inventory |
+ 6840.00 |
+ Jan |
+ 4 |
+ Sold on o/c |
+ 83.74 |
+
+
+ | 5 |
+ Bought on o/o |
+ 364.00 |
+ |
+ 6 |
+ Cash sales for week |
+ 534.07 |
+
+
+ | 6 |
+ Paid freight |
+ 71.00 |
+ |
+ 9 |
+ Lunches |
+ 9.90 |
+
+
+ | 10 |
+ Airline bill |
+ 2.25 |
+ |
+ 12 |
+ Return goods |
+ 37.00 |
+
+
+ | 13 |
+ Drague bills |
+ 9.75 |
+ |
+ 14 |
+ Cash sales for week |
+ 496.51 |
+
+
+ | 15 |
+ Goods returned to us |
+ 12.64 |
+ |
+ 16 |
+ Goods donated |
+ 13.00 |
+
+
+ | 18 |
+ Bought for cash |
+ 187.92 |
+ |
+ 17 |
+ Cash taken for use |
+ 20.00 |
+
+
+ | 20 |
+ Paid freight |
+ 3.25 |
+ |
+ 21 |
+
<
+
+FORM 60: In this merchandise account some of the items represent cost prices and some selling prices. On the debit side, the goods bought on January 5 are entered at cost and the goods returned January 15 at selling price. Is this logical?
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+PURCHASES TABLE FOR FORMS 60 AND 61.92
+
+**ESSENTIALS OF BOOKKEEPING**
+
+count; when this is done, these accounts take the place of the merchandise discount account. The subdivision of accounts may be carried still further by opening two special accounts called
+
+
+
+ | 19- |
+ PURCHASES |
+ 19- |
+ |
+
+
+ | Jan. |
+ 5 |
+ 364 |
+ Jan. |
+ 9 |
+ 5 |
+ 50 |
+
+
+ |
+ 8 |
+ 10 |
+ |
+ 13 |
+ 37 |
+ 60 |
+
+
+ |
+ 13 |
+ 975 |
+ |
+ 16 |
+ 13 |
+ 60 |
+
+
+ |
+ 18 |
+ 187 |
+ |
+ 17 |
+ 32 |
+ 45 |
+
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+ |
+ 25 |
+ |
+ |
+ |
+ 3645 |
+ 50 |
+
+
+ |
+ 21 Trading account |
+
+
+ | FORM 62 |
|---|
+
+
+
+ | Sales | | Sales | | Sales | | Sales | |
|---|
+ | 19- | Jan. | 10 | 25 | Jan. | 4 | 85 | 74 |
|---|
+ |
+ | 19- | Jan. | 15 | 12 | 84 | 6 | 534 | 87 |
|---|
+ |
+ | 21 Trading account |
|---|
+ |
+ |
+
+
+ TRADING INVENTORY
|
|---|
+
+ | 19- |
+
+
+ Jan.: 31
0948
90
+
+ 31:: &
+
+ &:&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&
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+Google
+
+94
+
+**ESSENTIALS OF BOOKKEEPING**
+
+**Freight Out.** Freight Out (Form 72) is a selling expense and is sometimes kept with other similar items in the sales expense account in the ledger. If only one freight account is kept, it is the account with Freight Out. Drayage is simply a further division of Selling Expenses.
+
+Purchase Discounts may be closed into the loss and gain account directly, or, if it is regarded as a subsidiary account to the purchases account, into the trading account, as in Form 68.
+
+Sales Discounts, like Purchase Discounts, may also be closed into either the loss and gain account or the trading inventory account. Whichever plan is adopted in one case is, of course, followed in the other also.
+
+This process of subdividing accounts may be carried as far as is desirable. There is, however, a point beyond which it is inefficient and only causes useless work.
+
+**BOOKKEEPING PRACTICE**
+
+How to enter merchandise transactions
+
+The student should work out the following practice material in three ways:
+
+1. make the entries with explanations in Merchandise and Merchandise Discount Accounts;
+2. make the entries without explanations in Purchases; Sales; Merchandise Inventory; and Inventory, and close the accounts;
+3. make the entries in Purchases; Sales; Purchase Discounts; Sales Discounts; Purchase Rebates, Allowances, and Returned Goods; Sales Relates, Allowances, and Returned Goods; Freight Out; Drayage and Expressage Out; and Inventory. Then close the accounts.
+
+Making the entries should not be a merely mechanical routine. It is for this reason that lists of directions for debiting and crediting each kind of transaction have been included. The reasons given are by the fact that it increases resources, decreases liabilities, or decreases ownership, and a credit by the fact that it decreases resources, increases liabilities, or increases ownership.
+
+1. Goods on hand Jan. 31, $3,466.50. Feb. 1, bought goods from Landen & Schoenebeck, $566.74; sold to G. Kadi son on % bill of goods, $78.65. Feb. 2, paid freight on goods sold yesterday to G. Kadi son $67.13; paid freight on goods sold yesterday to G. Kadi son $1.63. Feb. 3, allowed rebate on bill to G. Kadi son for imperfect packing, $2.65. Feb. 4, paid freight on goods purchased from Landen & Schoenebeck, $17.27; cash sales for the week, $254.56. Feb. 6, paid drayage on goods purchased from
+
+![]() A page from a bookkeeping manual.
+
+**RETAIL ACCOUNTS** 95
+
+Lamden & Schoenbeck, $5.25. Feb. 7, paid for goods bought from Lamden & Schoenbeck, less 3½% discount. Feb. 8, received credit memorandum from Toca & Vana for a shortage of $12.63 on the bill of goods purchased by J. Gilmore for the balance of the bill sold him, less 2% discount for cash. Feb. 10, added on % goods, $134.22; paid drayage to the boat on this sale, $4.50; cash sales for the week, $329.82. Feb. 13, J. Gilmore returned to us goods damaged in transit, $16.82. Feb. 14, received check from J. Gilmore for the balance of the bill sold him, less 2% discount for cash. Feb. 15, took up $100 cash sales for the week, $414.96; Feb. 16, add on % to E. M. Foley goods, $94.69. Feb. 17, donated goods to the Red Cross Society at cost, $19.23. Feb. 18, cash sales for the week, $346.12.
+
+Feb. 20, paid Toca & Vana's bill of Feb. 2, less 2%. Feb. 21, allowed a claim of $71.05 on E. M. Foley's bill of Jan. 30 for omitted in packing; paid freight on this claim, less 2%. Feb. 22, paid drayage bills on outgoing goods, $1435. Feb. 23, bought goods from G. Moss & Co., $148.82. Feb. 24, returned unsalable goods to G. Moss & Co., $21.60. Feb. 25, cash sales for the week, $392.49; paid freight, $9.18; and drayage, $450; on goods bought from Moss & Co.; paid balance due Moss & Co., less 2%. Feb. 27, received a shipment of goods purchased in Paris paid duty, $4238.
+
+Feb. 28, $4182.10.
+
+B. Keesler on cost, $163.82; paid freight on these goods, $749; March 2, paid store rent on goods delivered March 3; March 4, cash sales from Lamden & Schoenbeck less %, $382.17; March 5, paid e.d., $1780; and expense, $215; on special order of goods from Kadiwan; cash sales for the week, $41262.
+
+March 6, received rebate on freight on goods sold to H. Keesler March 1, $124; March 7, shipped special order of goods to H.Keesler paying freight $738.
+
+March 8, credited H.Keesler for $452 overcharge on bill of March 1.
+
+March 9, received a check for the bill sold to H.Keesler March 1, less 3%.
+
+March 10, returned to Lamden & Schoenbeck goods damaged in transit, $1955; cash sales for the week, $40819.
+
+March 13, received credit memorandum from Toca & Vana for damages on goods received March 6; March 14, sent check to Lamden & Schoenbeck for bill of March 3, less 2%. March 15, bought goods from Toca & Vana, $68476.
+
+March 16, paid warehousemen's wages for the month, $120.
+
+March 17, received notice from Lamden & Schoenbeck that our check was lost and that they had no further discount or cash for the balance.
+
+March 18, notified Toca & Vana of damages to goods received March 15, $6730; cash sales for the week, $43760; paid purchasing agent's salary for the month, $150.
+
+March 20, received credit memorandum for damages from Toca & Vana.
+
+Warehousemen's wages: $8735; March 23 sent check to Toca & Vana to pay bill of March 3 less %; March 23, sewer building the cellar damaging goods stored there to the amount of $7783 of the cost prices.
+
+Google
+
+96
+ESSENTIALS OF BOOKKEEPING
+
+March 24, bought goods from G. Moss & Co., $964.82. March 25, noticed Gold & Co. & Co. an error in their bill undercharging $341 cash sale for the sale, $40.00; March 27, sold Gold & Co.'s bill by check, less 3%. March 28, sold Levenson & Ross on % $108.22; paid drayage on the sale, $4.80. March 29, sold the Gold & Goldman Co. goods, $96.44. March 30, received a check from Levenson & Ross for the bill sold them March 28, less 2%. Value of goods on hand March 31, $4,868.98.
+
+Other accounts which will be used in the books of the Busy Retail Store are Office Furniture and Equipment, and Store Supplies and Fixtures.
+
+Office furniture and equipment. In the office furniture and equipment account are entered those articles purchased for use in the work of the office as distinguished from those articles which are used in other departments of the business. This includes chairs, desks, filing cabinets, safes, partitions, typewriters, billing, listing, and calculating machines; but it does not include stationery, bookkeeping supplies, pencils, ink, and so forth.
+
+Store supplies and fixtures: Counters, showcases, shelves, bins, display tables, cabinets, stools and chairs for customers and salesmen, cash carriers,hanging-racks for goods, window-dummies, and so forth, constitute the store's fixtures. Some of these become the property of the owner of the building in which they are placed; the student should look up in his text on commercial law, or in a copy procured at the library, the conditions which determine when these supplies and fixtures become the landlord's property.
+
+How to handle depreciation. Articles used in the office and in the store necessarily depreciate in value. One method of showing this depreciation is to deduct a certain percentage from the cost at each succeeding inventory when the account is closed into the loss and gain account at the close of the successive fiscal periods. A better plan is to open an account entitled Reserve for Depreciation of Office Furniture and Equipment and a similar account for store supplies and fixtures. The method of procedure to be followed in those accounts will be explained in more detail later on in the text.
+
+**RETAIL ACCOUNTS**
+97
+
+**ACTUAL BOOKKEEPING**
+
+The Busy Retail Store
+
+The books to be used are the purchase book, sales book, cash book, check book, bank book, journal, ledgers, and registers.
+
+In entering purchases, receipts, sales and disbursements in the cash book, two methods are in use. One method has been in use longer than the other, and will be followed for the present, leaving the other to be explained later. In this method, the full amount of payments made by us for purchases are entered on the credit side of the cash book and the discount allowed on the debit side of the cash book less the difference actually paid. When payment for a sale is received, the account is credited for the full amount on the debit side of the cash book and the discount is entered on the credit side, thus again leaving as the difference what was actually received. The cash book will contain a special column for each item of Purchase. The Cash Book will show on the credit side for Expense, Sales Discounts, and Freight and Drayage.
+
+Mr. A. T. Bardeen decides to engage in a general hardware, store, and implement business. Preparatory to securing his stock he deposits $2315 in the National Bank of Commerce, $2315 in each, puts $25 in the safe, and rents a storeroom at 1020 Main Street at $100 a month, taking a lease on March 1st. Mr. Bardeen places counters, show- cases, shelves, bins, and so forth, in the store to the amount of $500, and office equipment to the extent of $480.
+
+The student in taking charge of the office work follows the following bills: March 1st, The Franklin Lamp Co., terms cash, lamps and lanterns, $500; March 2nd & 3rd Bins Co., N/20, N/30, cutlery, $765.31; novelties, $612.24; March 4th The Bonhamington Co., N/20, N/30; kitchen-ware, $408.16; Feb. 27th The Composite Roofing Co., 60-day note for $600 and cash for balance, roofing and spouting, $1800; March 1st The Sherwin-Williams Co., N/30 and cash for balance note, varnishes and brushes, $1350; March 1st The Acme Fence & Wire Co., 3/5/5, N/20 fencing, $839.02; March 1st The Keen Kutter Tool Co., 3/10, N/60 tools, $1746.39; March 1st H. Disa- ton & Sons Co., N/30 tools, $300; March 1st The Vulcan Manufacturing Co., 6-month note for $750; balance of $197.87; March 4th furnaces, $2261.81; February 27th The American Hardware Co., N/20. N/30 nails, screws, bolts, and so forth, $857.35 builders' hardware, $918.36; March 1st The Carmack Implement Co., N/30. N/45 farm implements and machinery, $2561.86; March 1st The Vitrotite Plumbing Supply Co., N/10; N/20 plumbing fixtures; February 27th The Henry Vehicle & Supply Co., N/15 buggies and wagons, $1650; poultry equipment, $575; March 1st The Dilworth Engine Co., N/20. N/30 engines, $1270.41.
+
+Payment for these goods has been made in all cases as indicated in the terms mentioned, except as follows: Balances
+
+98
+
+**ESSENTIALS OF BOOKKEEPING**
+
+are due The Keen Kutter Tool Co., $200; H. Dieton & Sons Co., $150;
+The Dilworth Engine Co., $250; The Carmack Implement Co., $500.
+
+After making the above entries in the proper books, the student should take a trial balance. He will find that there remains cash in the bank, $6,000. There is $25 in the safe, and Mr. Bardeen's ownership account shows that he has in the business, $23,240.
+
+The payroll each week of the store and office is as follows:
+
+Office,
+Bookkeeper (student's name) .................................................. $18.00
+Stenographer, Mildred Strong .................................................. 15.00
+
+Store,
+William Brennan, salesman ...................................................... $20.00
+Allen Mcclave, salesman ....................................................... 20.00
+Charles Schooley, salesman ..................................................... 18.00
+James H. Smith, salesman ....................................................... 16.00
+Arthur Hall, errand boy .......................................................... 7.00
+John Simpson, janitor ............................................................ 12.50
+
+Warehouse,
+William Harris, warehouseman ................................................. $15.00
+
+**STANDARD QUESTIONS**
+
+Merchandise
+
+1. What is merchandise?
+2. What items do you enter in the merchandise account?
+3. What account is usually kept as an auxiliary to the merchandise account?
+4. What items would you enter in this auxiliary account?
+5. What are the objections, if any, to the use of the merchandise account?
+6. What plan can you use to overcome these objections?
+7. Explain the use of the purchases account.
+8. What items would you enter on the debit side of the sales account? The credit side?
+9. When and how are entries made in the inventory account?
+10. When and how are the purchases, sales, and inventory accounts closed?
+11. What is an inventory? How is an inventory taken and when? What would you do to avoid the process of taking an inventory? What is this method called?
+12. What subdivision of purchases and sales accounts would you make? Why?
+13. How many freight accounts may you keep? What are they called?
+
+![]() A page from a book titled "ESSENTIALS OF BOOKKEEPING" with handwritten notes and questions.
+
+RETAIL ACCOUNTS 90
+
+14. If only one freight account is kept, which is it?
+15. Into which accounts may the merchandise discount account be divided?
+16. How may these accounts be closed? In closing the merchandise account what rule must be observed?
+17. State again the general law of debit and credit.
+18. What is the purpose of the office furniture and equipment account?
+19. What items would you enter in the store supplies and fixtures account?
+20. How may the depreciation of office furniture and store supplies be recorded?
+
+PART TWO
+
+ALL goods sold are billed out on our regular terms, 2% discount if paid within 10 days, or the full amount of the bill in 30 days. Wherever correspondence is indicated in the transaction, the student should write the item required. All our banking is done through the National Bank of Commerce.
+
+ACTUAL BOOKKEEPING
+
+Transactions of the Busy Retail Store from March 1 to March 18
+
+Enter these transactions in the proper books, making out also all forms called for by each transaction.
+
+March 1. Paid one month's rent by check. Sold to H. C. Bingley on $25 gal. barn paint @ $1.25, 2 gal. floor varnish @ $2.50. Sold to J. C. Cathcart on % 2 cylinder front door locks @ $6.50, 2 dos. reversible knob locks @ $3 per doz., 12 pairs glass knobs @ $1, 12 pairs white porcelain knobs @ 10c, 2 dos. window fasteners @ $3 per doz., 3 pairs bronze door bolts @ 50c, 2 dos. pairs steel butts @ $2, 4 sets spring balance balancers @ $1.25, 2 sets double door hangers @ $3.50.
+
+March 2. Sold to O. M. Jarvis for his note at 15 days, 5 gal. cans of house paint @ $7 a can, 2 gal. trimming paint @ $1.75, 2 gal. varnish @ $2, 2 wall brushes @ $1.25, 1 kalsomine brush, $1, 2 varnish brushes @ .25c, 2 round dusters @ .75c, 10 lbs glue @ .20c.
+
+March 3. Sold to E. F. Moore on % 1 incubator, $40, 2 brooders @ $15, 2 baby fountains @ $1.25, 1 feeding trough, $1.50, 1 chicken shipping coop, $4.
+
+March 4. Sold to W. J. North, % for 15-day note and the balance for 30-day note, 1 surry, $125, 1 farm wagon, $00, 1 set double harness,
+
+100
+ESSENTIALS OF BOOKKEEPING
+
+$50, 1 set buggy harness, $35. Paid office, store and warehouse help for the day, three $3/4 of weeks. (The warehouseman's salary is charged to Warehouse Expense and the others to Expense). Paid insurance on stock in store and warehouse by check to the International Insurance Company, $36. Deposit for the day, $1.250. Cash sales for the week are shown in Form 73. They are entered in the cash book, not in the sales book.
+
+March 6. Sold to E. G. Jowett on % 2 log chains @ $1.25, 1 cross-cut saw, $2.75, 3 broad axes @ $2, 6 axes @ 85c. Bought from the Aeme Fenno and Wire Co. on % bill of posts and fencing, $340, 10%, 5% and 5% off.
+
+March 7. Sold to T. P. McRae on % 1 blower and forge, $30, 1 vise, $4, 1 anvil, $12.75, 1 screw plate, $10, 1 hand hammer, 50c, 1 pein hammer, 75c, 1 farrier's hammer, 60c, 1 post drill, $8, 1 set drill bits, $2 a mulehoe, $1, 1 sledge, $1.50, 1 pair horseshoeing tongs, 25c, 1 hoof.
+
+
+
+
+| CASH SALES FOR THE WEEK ENDING MARCH 4 |
+
+
+ |
+Wed |
+Thu |
+Fri. |
+Sat. |
+Totals |
+
+
+
+
+| Lamps and lanterns |
+1.00 |
+2.00 |
+4.25 |
+4.75 |
+12.00 |
+
+
+| Kitchen ware |
+3.75 |
+5.63 |
+9.72 |
+ |
+18.16 |
+
+
+| Cutlery |
+6.00 |
+18.00 |
+11.40 |
+21.40 |
+36.85 |
+
+
+| Norailies |
+.67 |
+2.15 |
+3.10 |
+4.95 |
+10.62 |
+
+
+| Mowing and spouting |
+10.00 |
+39.00 |
+19.50 |
+41.75 |
+110.75 |
+
+
+| Paints, varnishes, and so forth |
+.83 |
+.83 |
+.83 |
+.83 |
+.83 |
+
+
+| Fencing |
+9.10 |
+34.50 |
+15.70 |
+26.25 |
+81.45 |
+
+
+| Toilets |
+5.00 |
+10.05 |
+3.05 |
+6.09 |
+26.19 |
+
+
+| Stoves and furnaces |
+-. |
+-. |
+-. | -. | -. |
+
+
+| Halls, screens,bolts,and so forth. | | | | | |
+
+
+| Fresh lumber. | | | | | |
+
+
+| Plumbing supplies. | | | | | |
+
+
+| Buggies and wagons. | | | | | |
+
+
+| Builders' hardware. | | | | | |
+
+
+| Egines. | | | | | |
+
+
+| Poultry equipment. | | | | | |
+
+
+| Total: | $99.42 |
+
+FORM 73 Totals - $99.42 $397.87 $244.$429 $274 S4
+
+trimmer, $1.25, 1 pair bolt clippers, $4, 1 farrier's knife, 35c, 2 home rams (6) @ .83 each; 2 pairs of shoes for horses @ .83 each; 40c; 1 pair gad tongs, 40c; 4 cold chisels, 50c; 1 cold cutter, 45c; 1 tire shrinker; $12, 1 pair straight-lipped tongs, 35c; 1 square flatter; 50c; 1 hot cutter; 50c; 1 measuring wheel; $.50 Received from H.C Bingley a check in full for bill of March 1 less %2%. Deposited in the bank, $68.60.
+
+![]() A table showing cash sales for the week ending March 4.
+| Item | Wed | Thu | Fri | Sat | Totals |
+|---|---|---|---|---|---|
+| Lamps and lanterns | 1.00 | 2.00 | 4.25 | 4.75 | 12.00 |
+| Kitchen ware | .67 | .83 | .83 | .83 | .83 |
+| Cutlery | .67 | .83 | .83 | .83 | .83 |
+| Norailies | .67 | .83 | .83 | .83 | .83 |
+| Mowing and spouting | .67 | .83 | .83 | .83 | .83 |
+| Paints, varnishes and so forth | .67 | .83 | .83 | .83 | .83 |
+| Fencing | .67 | .83 | .83 | .83 | .83 |
+| Toilets | .67 | .83 | .83 | .83 | .83 |
+| Stoves and furnaces | - | - | - | - | - |
+| Halls, screens,bolts,and so forth | - | - | - | - | - |
+| Fresh lumber | - | - | - | - | - |
+| Plumbing supplies | - | - | - | - | - |
+| Buggies and wagons | - | - | - | - | - |
+| Builders' hardware | - | - | - | - | - |
+| Engines & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry equipment & Poultry Equipment
+| Total: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals: Totals:Totals:
+| Wed Thu Fri Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat Sat
+| Wed Thu Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri Fri
+| Wed Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu Thu
+| Wed Thu Thu Thu Thu Thu Thu Thu ThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThu
+| Wed Thu Thu Thu Thu Thu Thu ThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThuThu
+| Wed Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday Thursday
+| Wed Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday Wednesday WednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayWednesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesdayTuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday Tuesday
+| Wed Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday Friday FridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFridayFriday
+| Wed Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday Saturday SaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturdaySaturday周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六周六六
+| Wed Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday Sunday SundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySundaySun日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日日
+| Wed Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Monday Mon月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月月
+| Wed February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February February FebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruaryFebruary
+| Wed March March March March March March March March March March March March March March March March March March March March March March March March March March March March March March March March March March March March March March March March March March March March MarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMarchMar三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三三
+Page number not provided in the document.
+
+**RETAIL ACCOUNTS**
+
+101
+
+March 6. Discount our 60-day note at the bank for such an amount that the proceeds will pay the bill of the Acme Fence & Wire Co. of March 6. Send our check to pay the bill. Sold to Allen & Jones on % 1 three-quarter cover $8.50, 1 three-bath belt 120 ft. long @ 25c per ft., 1 wagon cover @ 75 cents.
+
+March 9. J. C. Cathcart returns ½ doz. reversible knob locks sold to him March 1. Paid by check to the New York Central Lines freight on the bill of fencing purchased on March 6, $3.87. Sold to O. G. Brown on % 1 bathtub, $30, 1 semicircular lavatory, $12, 1 corner lavatory, $15, 1 kitchen sink and drain board, $40, 1 2-compartment compartment, $25, 1 reversible bath cover, $30, 4 nickle-plated bibs @ $1.25, 1 hose bibb, $1.20, 4 nickel bibs for laundry @ $85c, 1 closet and tank, $25, 100 ft. of %-inch galvanized pipe @ 8c per ft., 100 ft. %4-in. galvanized pipe @ 10c per ft. Donated to the Children's Training Home %2 doz. kitchen panning kairies, 17½c each; 3 double-socket lamps, %2 each; 1 doz. pudding pans, %2 doz.; kitchen spoons @ 87½c per doz.; %2 doz. quadrars @ 25c; doz. gray enameled bread pans, $1.72 (cost prices).
+
+March 10. Received notice from E. Moore that one poultry fountain was omitted from the goods sold to him March 3. We send one to complete the invoice, writing a letter of apology for the oversight.
+
+February 28. Received a check from Mr. Moore for $49.35 to notify them of a shortage of one corn sheller charged to us at $8.35. Received a rebate from the New York Central Lines of $1 overcharged us on the freight bill paid March 9. Sold to D. M. Swift on %1 cream separator, $60, 1 horse-power kerosene engine, $135, 1 20-gal. churn, $8.50, 1 bolt, $25. Received a check from J. C. Cathcart for $64.97 in payment of his bill of March 6 less %2%. If so enter it; if not, notify him by letter and take the proper steps to correct the error. Deposited in the bank, $84.97.
+
+March 11. Allen & Jones report that the tank which was sold to them on March 8 was found to be defective and they have had a leak in it repaired at a cost of $1.75; we notify them by letter that we are allowing them a discount on all items purchased from stock (at cost price) the following goods: 1 brace-and-bit outfit, $4; 1 chest of tools, $19.75. Sold to P. W. Crane on %1 kitchen range, $48.50; %25% stove pipe set @ %30c; %3 elbow, %35p pipe collar, %30c; silver-plated dinner cutlery set @ $14.50; 1 kitchen cutting set, %$1; Receiver's bill of sale dated February 28 for an amount of the bill sold to Mr. Moore March 3 less %2%. Paid drayage out bills to date by check to the City Cartage & Storage Co., $18.75.
+
+We return to the Dilworth Engine Co. a %2-horse-power gasoline engine, informing them by letter that it has failed to give satisfaction. It was billed to us at $53.50. Paid office, store and warehouse employees for the week. Mr Barden withdrew $50 for private use.
+
+Deposited in
+
+102
+
+**ESSENTIALS OF BOOKKEEPING**
+
+the bank (including the sight draft), $1,973.24. Cash sales for the week are shown in Form 74.
+
+March 13. Bought from the Carmack Implement Co. on % invoice farm implements listed at $50.00, 10% off, and 2-1/2% off, 2/10, N/30.
+Sold to A. W. White Co., on % list prices of paints and varnishes listed at $110.50, 5% off, and 5% off, 2/10, N/30.
+Sold to A. K. Schultz on % 1 12-horse-power gasoline engine, $250.
+
+
+
+
+| CASH SALES FOR THE WEEK ENDING MARCH 13 |
+
+
+| Mon. |
+Tues. |
+Wed. |
+Thurs. |
+Fri. |
+Sat. |
+Total |
+
+
+
+
+| Lamps and lanterns |
+.75 |
+2.00 |
+1.80 |
+.67 |
+3.55 |
+5.75 |
+
+
+| Kitchens ware |
+2.81 |
+5.12 |
+4.70 |
+3.96 |
+6.27 |
+12.80 |
+
+
+| Cutlery |
+3.12 |
+1.75 |
+8.40 |
+6.18 |
+3.26 |
+16.20 |
+
+
+| Mortars and pestles |
+2.10 |
+3.21 |
+2.40 |
+5.19 |
+4.70 |
+10.18 |
+
+
+| Bowling and sporting goods |
+18.12 |
+29.35 |
+23.23 |
+15.60 |
+88.76 |
+27.44 |
+
+
+| Paints, varnishes, and so forth |
+2.40 |
+3.99 |
+.18 |
+.18 |
+.64 |
+.66 |
+
+
+| Fencing tools and poles |
+.40 |
+.32 |
+.32 |
+.32 |
+.32 | .64 |
+
+
+| Toilets and stoves and furnaces |
+1.23 | 3.60 | .325 | .4775 | .4650 | .6260 |
+
+
+| Halls, screws, bolts, and so forth. | .812 | .410 | .4075 | .6765 | .3625 | .9425 |
+
+| Farm implements and tools. | .812 | .410 | .4075 | .6765 | .3625 | .9425 |
+
+| Pipe fittings and plumbing supplies. | .410 | .999999999999999999999999999999999999999999999999999999999999999999999999999999999... (likely a typo) |
+
+FORM 74
+
+Totals
+
+$25 ft. canvas belting @ 40c a ft., a 12-ft shaft 1/3 inches in diameter @ 37½c a ft., 3 ball-and-socket hangers @ $.2, 2 pulleys @ $.325.
+
+March 14. Received from T. P. McRae his check on the People's Bank for one-half the bill sold him on March 7, less 2%, and his draft on Allen & Jones at the payee sight for the remainder of the account due him from the sale of the equipment he purchased O.M.Jones note at McRae's bank for the remainder of time.
+Paid the Poahontas Coal Co. by check for coal, $42.50.
+Paid the City Illuminating Co.'s bill for electric light to the tenth of the month, $2.85 by check.
+Sold to T. P. Reilly on % 1 tool bag, $2.75, 1 plastering trowel, $1, 1 hammer, $3, 1 spalling hammer, $3, 1 maul, $3, 1 mauling tool, $5o, 1 spalling hammer, $3, 1 oil star hand drills @ .87½c,
+2 striking edgels @ .65c, 1 dos sledge handle, $1.75.
+Deposit (check and note), $86.76.
+
+![]() A scanned page from a book or document listing cash sales for the week ending March 13.
+
+RETAIL ACCOUNTS
+103
+
+March 15. Paid the Security Storage Co. by check for storage for ½ month on goods for which we do not have enough room in the store, $60. Sold to H.C. Bingley on % 1 hanging lamp, $7.50, 2 table lamps @ 75c, 1 lantern, $1, 1 Berlin kettle, 2 preserving kettles @ 75c, 1 set of earthenware dishes for $1.00.
+
+March 16. By a fire in the storage warehouse goods were damaged to the amount of $140 (cost price), the loss being on farm implements. We have received the insurance company's check for the amount of the damage. This check constitutes the deposit for today.
+
+
+
+
+| CASH SALES FOR THE WEEK ENDING MARCH 18 |
+
+
+ |
+Mon. |
+Tues. |
+Wed. |
+Thur. |
+Fri. |
+Sat. |
+Total |
+
+
+
+
+| Lamps and lanterns |
+1.00 |
+1.76 |
+1.45 |
+0.06 |
+2.12 |
+4.08 |
+ |
+
+
+| Kitchen ware |
+1.48 |
+6.16 |
+2.96 |
+0.75 |
+9.13 |
+15.87 |
+ |
+
+
+| Cutlery |
+2.74 |
+9.88 |
+4.94 |
+2.33 |
+6.39 |
+12.56 |
+ |
+
+
+| Horselice |
+1.05 |
+1.80 |
+7.40 |
+1.69 |
+2.87 |
+4.10 |
+ |
+
+
+| Roofing and spouting |
+22.21 |
+33.82 |
+23.11 |
+5.15 |
+15.16 |
+34.12 |
+ |
+
+
+| Paints, varnishes, and so forth |
+11.19 |
+34.12 |
+34.10 |
+25.08 |
+51.91 |
+72.32 |
+ |
+
+
+| Fencing |
+ |
+ |
+ |
+ |
+ |
+ |
+
+
+104
+
+**ESSENTIALS OF BOOKKEEPING**
+
+A change in ownership. Mr. Bardeen has arranged to admit Mr. J. H. Everett as an equal partner in the business. In order to ascertain how much Mr. Everett must invest to become an equal partner the present worth of the business must be determined, and in order to find the present worth the first step is to take an inventory.
+
+The rates of gain on different kinds of goods sold are:
+
+
+
+ | Lamps and lanterns |
+ 45% |
+ Stoves and furnaces |
+ 50% |
+
+
+ | Kitchenware |
+ 35% |
+ Nails, screws, bolts, etc. |
+ 30% |
+
+
+ | Cutlery |
+ 50% |
+ Farm implements |
+ 40% |
+
+
+ | Newelts |
+ 60% |
+ Wagon wheels |
+ 35% |
+
+
+ | Bowling and spouting |
+ 35% |
+ Buggies and wagons |
+ 40% |
+
+
+ | Paints, varnishes, etc. |
+ 30% |
+ Builders' hardware |
+ 35% |
+
+
+ | Fencing |
+ 45% |
+ Engines |
+ 40% |
+
+
+ | Tools |
+ 35% |
+ Poultry equipment |
+ 35% |
+
+
+
+How to find present inventory. First the total sales of each kind of goods is found. Then the gain is calculated and deducted from the total sales. The remainder is the cost price of the goods sold. Then the cost of the goods sold plus the cost of goods disposed of in any other manner is deducted from the total cost of that kind of goods when purchased, and the remainder will represent the cost of goods remaining on hand, or the present inventory. The following, for example, shows the way to find the present inventory of builders' hardware:
+
+
+ | Gross sales | $374.28 |
|---|
+ | Returns sales | 1.50 |
|---|
+ | Total sales | $375.78 |
|---|
+ | Profit 35% | 130.47 |
|---|
+ | Cost of sales | $242.31 |
|---|
+ | Cost of purchases | $918.36 |
|---|
+ | Cost of sales | $242.31 |
|---|
+ | Cost of goods on hand, or inventory | $676.05 |
|---|
+
+
+After making a trial balance and closing the books through a journal entry, the student should prepare a trading statement, a loss and gain statement, and a resource and liability statement.
+
+What the trading statement shows. Form 76 on page 105 shows the arrangement of the trading statement. The purpose of this statement is to show the income and outlay on goods bought and sold.
+
+FORM 76: This is the form of trading statement to be used in letting Mr. Bardeen know what profit he has made on goods bought and sold. The trading statement is described in detail on page 107. Which are the larger, gross sales or net sales?
+
+
+
+ | Gross sales |
+ INCOME |
+ ???? ?? |
+
+
+ | Deductions |
+ |
+ |
+
+
+ | Allowance and rebates we have made |
+ ??? |
+ |
+
+
+ | Goods returned |
+ ??? |
+ |
+
+
+ | Freight and drayage out |
+ ??? ?? |
+ |
+
+
+ | Sales discounts |
+ ??? |
+ |
+
+
+ | Net sales |
+ ???? ?? |
+ |
+
+
+ | Gross purchases |
+ OUTLAY |
+ ???? ?? |
+
+
+ | Deductions |
+ |
+ |
+
+
+ | Donations |
+ ??? |
+ |
+
+
+ | Taxes for private use |
+ ??? |
+ |
+
+
+ | Damaged by fire |
+ ??? |
+ |
+
+
+ | Goods destroyed by us |
+ ??? |
+ |
+
+
+ | Freight in rebate |
+ ??? |
+ |
+
+
+ | Purchase discounts |
+ ??? ?? |
+ |
+
+
+ | Additions |
+ ??? |
+ |
+
+
+ | Freight in |
+ ??? |
+ |
+
+
+ | Storage |
+ ??? |
+ |
+
+
+ | Harbour expense |
+ ??? ?? |
+ |
+
+
+ | Net purchases |
+ ??? ?? |
+ |
+
+ | Add the preceding Inventory: |
|---|
| ???? ?? |
|---|
| Subtract the present inventory: | ???? ?? |
|---|
| Net cost of goods sold | ???? ?? |
|---|
| Gross trading profit | ???? ?? |
|---|
+| GROSS TRADING PROFIT | | ???? ?? |
|---|
| EXPENSES | ??? | ?? |
|---|
| INSURANCE | ?? | ?? |
|---|
| INTEREST AND DISCOUNT | ?? | ?? |
|---|
| LOSSES AND GAIN ACCOUNT | ?? | ?? |
|---|
| HOLDING GAIN (OR LOSS) | ?? | ?? |
|---|
+
+FORM 77: And this is the form of loss and gain statement to be used. To find the net gain, the losses, in this case, Expense, Insurance, Interest and Discount, and the balance of Loss and Gain are subtracted from the gross trading profit.
+
+105
+
+
+
+ | RESOURCES |
+ ????? |
+ ?? |
+
+
+ | Cash |
+ ????? |
+ ?? |
+
+
+ | Office furniture and equipment (inventory) |
+ ???- |
+ - |
+
+
+ | Store supplies and fixtures (inventory) |
+ ???-- |
+ -- |
+
+
+ | Liquor (inventory) |
+ ???-?? |
+ ?? |
+
+
+ | Personal accounts receivable |
+ ????? |
+ ?? |
+
+
+ | H. C. Bingley |
+ ??-?? |
+ - |
+
+
+ | O. G. Brown |
+ ???-?? |
+ - |
+
+
+ | D. W. Swift |
+ ???-?? |
+ - |
+
+
+ | J. E. Crane |
+ ???-?? |
+ - |
+
+
+ | A. K. Schulte |
+ ???-?? |
+ - |
+
+
+ | T. P. Bailey |
+ ??-?? |
+ - |
+
+
+ | Trading inventory |
+ ????? |
+ ?? |
+
+
+ | LIABILITIES |
|---|
+
+ | Personal accounts payable: | | |
|---|
+
+ | The Keen Rutledge Co. | ???-?? | - |
|---|
+
+ | H. Diction and Sons Co. | ???-?? | - |
|---|
+
+ | The Dierich Engine Co. | ???-?? | - |
|---|
+
+ | The Dierich Equipment Co. | ???-?? | - |
|---|
+
+ | The Sherwin-Williams Paint Co. | ???-?? | - |
|---|
+
+ | Bills payable: | ????? | ?? |
|---|
+
+ | TOTAL RESOURCES: | ????? | ?? |
|---|
+
+ | TOTAL LIABILITIES: | ????? | ?? |
|---|
+
+ | A. T. Bardeen's present ownership: | ????? | ?? |
|---|
+
+
+
+FORM 78: Here is the resource and liability statement described on page 107.
+When total liabilities, which appear in the credit column of the trial balance, are subtracted from total resources, the remainder equals Mr. Bardeen's ownership.
+
+
+
+| Total resources (R. and L. statement) |
+????? |
+??? |
+????? |
+??? |
+????? |
+??? |
+????? |
+??? |
+
+
+| Total liabilities (R. and L. statement) |
+????? |
+??? |
+????? |
+??? |
+????? |
+??? |
+????? |
+??? |
+
+
+| Weig gain (L. and G. statement) |
+????? |
+??? |
+????? |
+??? |
+????? |
+??? |
+
+
+| A. T. Bardeen's net credit |
+28850 |
+122885012 |
+
+FORM 79: To prove the accuracy of the trading statement, the loss and gain statement, and the resource and liability statement, this form may be used. Total liabilities plus net gain plus Mr. Bardeen's net credit should equal total resources.
+
+106
+
+![]() A scanned document with a table detailing resources, liabilities, and calculations related to A.T. Bardeen's financial statements.
+
+**RETAIL ACCOUNTS** 107
+
+To facilitate procedure it is necessary to define some of the terms used in the trading statement.
+
+The term, gross sales, includes the total amount entered on the credit side of the sales account.
+
+After deducting sales discounts, amounts we have allowed customers for goods they have returned to us, reductions we have made in the way of rebates, the remainder is net sales.
+
+The sum of the debit side of the purchases account constitutes the gross purchases.
+
+How to find net purchases. After deducting from the gross purchases the value of goods we have returned to those from whom we purchased them, purchase discounts, and any deductions which have been made on goods sold to us in the way of rebates or allowances of any other kind, and adding any expenses we may have incurred on goods purchased before they were ready to be sold, such as freight and drayage in, warehouse expenses, and so forth, the result is net purchases.
+
+If to the net purchases is added the inventory at the beginning of the fiscal period under consideration, and from this sum is deducted the inventory at the close of that period, the result will be the total cost of the goods sold. Net sales minus the total cost of the goods sold equals the gross trading profit.
+
+The loss and gain statement. If now we add to the gross trading profit any other profits the business may have produced, and deduct from it any losses incurred through other accounts, we shall obtain the net gain or net loss. An easy way to show this is the loss and gain statement as illustrated in Form 77 on page 105.
+
+The resource and liability statement. The third statement we are to prepare is the resource and liability statement. This consist merely of a list of the resources (or assets) and the liabilities. The difference between the resources and liabilities is, of course, the present worth or ownership.
+
+The resource and liability statement is shown in Form 78 on page 106. Under Resources are listed the property, such as cash, property (inventories), notes and acceptances due us, and accounts due us. Under Liabilities are listed what we owe others. The difference is Mr. Bardeen's present ownership.
+
+108
+**ESSENTIALS OF BOOKKEEPING**
+
+The way in which these statements may be checked is shown in Form 79 on page 106.
+
+**STANDARD QUESTIONS**
+Transactions from March 1 to March 18
+
+1. Why are the goods donated on March 9 entered at cost prices?
+2. Why are the goods taken by Mr. Bardeen March 11 entered at cost?
+3. How is the inventory of stoves and furnaces found?
+4. How can you find gross sales? How are net sales found?
+5. What are gross purchases? How can you find net purchases?
+6. How would you go about finding the gross trading profit?
+7. What is the nature of the statement? What is the arrangement of items on the trading statement?
+8. Why is it necessary to make a loss and gain statement? What information does it contain?
+9. What information is shown on the resource and liability statement?
+10. What is the test of accuracy in these statements?
+
+**PART THREE**
+
+**PARTNERSHIPS** may be formed in a variety of ways. A partner may be admitted by paying the owner of the business a certain sum for the privilege of coming in and by investing in the business enough money to entitle him to a share in the ownership, usually an equal share with the other partner.
+
+In forming a partnership, however, it may be found that each of the proposed partners has some advantage over the other partner. One may have skill and experience and the other more money or property.
+
+The partnership agreement. In any case the relationship and duties of the partners should be clearly defined and understood at the time the partnership is formed. This can be done most satisfactorily in a written agreement called the "Articles of Partnership." The student should refer to his commercial law for more complete information on this subject and then write the "Articles of Partnership" for Mr. Bardeen and Mr. Everett, with the following stipulations:
+
+![]() Image of a page from a book.
+
+RETAIL ACCOUNTS 109
+
+1. the firm's total investment is to be $40,000;
+2. the partners are to have equal ownership;
+3. they are to share equally in gains and losses;
+4. Mr. Everett is to handle the cash, and sign the firm's name to all papers and documents;
+5. Mr. Everett is to charge of selling the goods, the employment of help, and the advertising;
+6. each partner is to give all his time to the business;
+7. each partner is to receive a salary of $200 a month, and interest on the investment for the time his money is actually in the business.
+
+In carrying out the agreement outlined, Mr. Everett, who has been conducting a flour, feed and grain business, brings to the new partnership the following property:
+
+
+
+ | 1,280 |
+ bushels of wheat @ |
+ $1.25 |
+
+
+ | 3,240 |
+ bushels of corn @ |
+ 80c |
+
+
+ | 524 |
+ barrels of flour @ |
+ $10.50 |
+
+
+ | 65 |
+ hundredweight of potatoes @ |
+ $1.60 |
+
+
+ | 475 |
+ bushels of rye @ |
+ 90c |
+
+
+ | 330 |
+ bushels of oats @ |
+ 75c |
+
+
+ | 12 |
+ tons of hay @ |
+ $35 |
+
+
+ | 26 |
+ tons of baled hay @ |
+ $18.50 |
+
+
+ | 5 |
+ tons of chicken feed @ |
+ $40 |
+
+
+
+He indorses to the firm the following bills receivable:
+
+Note of J. H. DeMore, dated Jan. 25, at 60 days, in favor of Mr. Everett, $436.50;
+
+Note of Mather and Bradford, dated Nov. 27, at 4 months, in favor of W. B. Dankmeyer, endorsed in full to Mr. Everett, $274.85;
+
+Draft at 15 days sight, on J. W. Freeman, dated Feb. 26, drawn by the Coleman Furnace Co., in favor of M. T. Hughes and accepted March 8, for $118.12, endorsed to Mr. Everett without recourse March 8;
+
+Draft at 60 days after date, drawn by G. W. Spellman on W. B. Hubbard and endorsed by Hubbard on Jan. 30, endorsed in full to F. C. Donberg on Feb. 8, for $77.20. This came to Mr. Everett by an indorsement in blank on Feb. 15.
+
+Note of E. M. Austin for $246.40, made Dec. 26 at 90 days, in favor of L. T. Wellstead, endorsed with guaranty by N. M. Cole with interest, on which there has been one partial payment of $50 on Jan. 25; The balance due was turned over to Mr. Everett Jan. 18, and is now turned in at its present worth with accrued interest.
+
+In addition to these items of property, Mr. Everett pays $2,000.10 in cash into the firm's treasury and pays Mr. Bardeen $5304.82 in cash to equalise the net capital of the two partners.
+
+![]() A page from a financial ledger or account book.
+
+110
+
+**ESSENTIALS OF BOOKKEEPING**
+
+The student should make the journal entry to close Mr. Bardeen's ledger March 20, then open the books by such journal, cash book, and bill book entries as will admit Mr. Everett to an equal partnership. The grain and feed brought in as listed above will now become a new department in the business, called the flour and feed department. In this department some of the goods will be sold on commission. This method of selling is described in the next paragraph.
+
+Selling goods on commission. Goods are sometimes sent by the owner to a dealer who is expected to sell them at the best price he can secure and to return to the owner the money received for the goods, less a small percentage of the selling price which he retains as his fee for handling both goods and money. Such a dealer is called a commission merchant and his fee is called his commission. The one who ships goods for sale in this way is the shipper or consignor, and the one who receives them is known as the consignee.
+
+Goods sent to a commission merchant are the property of the shipper until they are sold. Accompanying them is an invoice of shipment, like that shown just above in Form 80, which is merely a memorandum of the items, and does not usually give prices at all, since the marketing is left entirely in the hands and to the judgment of the consignee. If any of the goods are lost or damaged, either in transit or in the warehouse of the consignee, the loss falls on the shipper, who remains the owner
+
+
+
+ | INVOICE OF SHIPMENT |
+
+
+ | Invoice of |
+ Potatoes |
+ March 25-19-- |
+
+
+ | Consigned to |
+ Ranke & Nest |
+ Address 163 Broadway Chicago, Ill. |
+
+
+ | Shipped via |
+ The C. M. & S. F. |
+ To be sold for the account |
+
+
+ | and Ink of |
+ Hill & Davis Co. |
+ |
+
+
+ | 100 cwt. Rural New Yorker potatoes |
+
+
+
+FORM 80
+
+RETAIL ACCOUNTS 111
+
+until the sale has been made. As soon as the sale is complete, however, the commission merchant becomes liable to the shipper for the full amount of the money, less his commission. If the goods are sold on account or for a note, the commission merchant assumes all liability of loss and makes his reports to the shipper on a cash basis.
+
+How the shipper enters the goods. The shipper enters the goods shipped to a particular merchant as Shipment No. 1 to Harvey Nelson, and if other goods are sent later, they become Shipment No. 2 to Harvey Nelson, and so on. The goods of each shipment thus form a distinct account which is debited for the cost of the goods when they are shipped, for any items of expense they require in shipping, any advances made on account of the goods in that shipment, and is credited for whatever returns are sent back by the merchant who sold them.
+
+The account sales. As soon as the goods are sold, the commission merchant makes a report to the shipper of the results of the sale, showing all expenses incurred in handling the goods, his commission for selling them, and the balance due the shipper as the net result. This report is called the account sales and may be in the form of a letter, as Form 81 on page 113, or on a printed form like that shown in Form 82.
+
+If an open ledger account is kept between the shipper and the consignee, the account sales may state that the proceeds of the sales have been credited to the shipper on the merchant's books, but if no such account is kept, a check or bank draft to cover the proceeds should accompany the account sales.
+
+Closing the shipment account. The shipper closes the shipment account into the loss and gain account after receiving the account sales. If he has occasion to make fiscal statements before he has received reports on some of the shipments, the shipments would, of course, show as resources.
+
+The commission merchant who receives the goods for sale keeps track of those from the individual shippers, calling each one a consignment, and numbering them as the shipper does the shipments, thus: Consignment No. 1 from J. H. Edwards, and so on. A separate account is kept for each, and when the goods are sold the account sales is rendered as indicated above. A
+
+112
+ESSENTIALS OF BOOKKEEPING
+
+consignment account is debited for any outlay to which the merchant is put in housing, handling, preserving, or marketing the goods, and for any allowed claims or advances made on them. When the account sales is rendered, it is also debited for the merchant's charges for his services. It is credited for sales of goods from it and for any other returns it may produce.
+
+Care must be exercised to distinguish between an account with a person or firm and another account with a consignment from the same person or firm or a shipment to that person or firm, all of which may be on the books at the same time.
+
+Closing the consignment account. The consignment account is closed after the account sales has been rendered. The entry into the account of all charges, all returns, the commission merchant's fees, and the proceeds which are to be sent to the shipper makes the account balance so that all it needs thereafter is ruling and footing.
+
+As stated above, the merchant who sells the goods takes out of the money received for the sales a percentage of the selling price as his fee for handling and marketing the consignment. This percentage varies with the kind of goods, the season, and the locality. As a rule, perishable goods pay a higher commission than those which are not perishable, and the higher the selling price the lower the rate on the same article. The rate is usually not lower than 5% nor higher than 10% of the gross sales. The commission account is debited for commissions paid to others because it is then decreasing ownership, and it is credited for amounts received. Receipts because it is then increasing ownership. At the close of the fiscal period the commission account is closed into Loss and Gain.
+
+BOOKKEEPING PRACTICE
+
+Shipments and consignments
+
+M. C. Corfman, a dealer in fruits and vegetables, who is located at 185 Broadway, Cleveland, Ohio, handles some goods on a commission basis. C. F. Britton is one of his customers.
+
+On October 1, Mr. Britton shipped to Mr. Corfman 250 barrels of greening apples and 125 cwt. of potatoes, the barrels in which the apples were shipped costing 50c each and the bags for the potatoes
+
+The Fruit Auction Company
+1446 Washak Ave.
+Chicago
+
+Mr. J. C. Ashton,
+Belleville, Ill.
+
+Dear Sir:
+On the 24th of last month we received a consignment of potatoes from you
+concerning which we report the following sales:
+
+
+
+ | 25 cwt. |
+ @ $0.30 |
+ $7.50 |
+
+
+ | 38 |
+ @ $0.30 |
+ $11.40 |
+
+
+ | 32 |
+ @ $0.37 |
+ $11.84 |
+
+
+ | 25 |
+ @ $0.47 |
+ $11.75 |
+
+
+ | Total Sales: |
+ |
+ $146.46 |
+
+
+
+Charges on the consignment were
+Freight ................. $0.00
+Shipping .................. $0.00
+Sorting ................... $0.00
+Commission .................. $0.07
+
+Net proceeds ............ $33.27
+
+The sorting was made necessary by the poor condition of the potatoes had begun to rot. The prices obtained we consider very good under present market conditions.
+If you can ship us more early vegetables as they come on, we shall do our best for you. You will find our check for the net proceeds enclosed.
+Eincerely yours,
+The Fruit Auction Company
+W.M. Smith
+Secretary
+
+* P. S. Two owt. were lost by rotting
+
+FORM 81: Mr. Smith, the secretary of the Fruit Auction Company, the con-
+signee, sends Mr. Ashton, the consignor, this account sales. Total sales minus
+the expenses of handling the shipment and commission gives the net proceeds.
+
+
+
+
+ | ACCOUNT SALES |
+
+
+ |
+ |
+ April 5 |
+ 19 |
+ |
+
+
+
+
+ | Mr. J. C. Ashton |
+ Address |
+ Belleville, Ill. |
+ |
+ |
+
+
+ | Below please find account sales of potatoes Received Mar. 24 and sold for the account and risk of J. C. Ashton by THE FRUIT AUCTION COMPANY |
+ |
+ |
+ |
+
+
+
+
+
+
+
+ | Sales |
+ |
+ |
+ |
+ |
+
+
+
+
+ | 25 cwt., Potatoes |
+ $1.00 |
+ 37 |
+ 90 |
+ |
+
+
+ | 38 |
+ $1.40 |
+ 14 |
+ 66 |
+ |
+
+
+ | 32 |
+ $1.71 |
+ 44 |
+ 73 |
+ |
+
+
+ | 25 |
+ $1.47 |
+ 33 |
+ 81 |
+ 141 61 |
+
+ | 2 owt. lost by rotting Charges Freight Storage Insurance Commission Sorting Net proceeds by Check | $33 87
$29
$37
$64
$179
$64
$33 87
$29
$37
$64
$179
$64
$33 87
$29
$37
$64
$179
$64
$33 87
$29
$37
$64
$179
$64
$33 87
$29
$37
$64
$179
$64
$33 87
$29
$37
$64
$179
$64
$33 87
$29
$37
$64
$179
$64
$33 87
$29
$37
$64
$179
$64
$33 87
$29
$37
$64
$179
$64
|
|---|
+
+FORM 82: This form of account sales is perhaps a little simpler than the letter shown in Form 81. Instead of dictating a personal letter each time, all Mr. Smith has to do is to fill in the standard form. The results are the same in either case,
+
+113
+
+114
+ESSENTIALS OF BOOKKEEPING
+
+Holding 100 lbs. each), 7c each. He finds it necessary to hire some help to load these articles on the cars, at an expense of $26.50.
+
+The goods reached Cleveland on October 5. Mr. Corfman's teams and trucks transferred them to the warehouse on Broadway and to a rented room nearby because room was lacking in the warehouse for all of them. He estimated that the drayage amounted to $35. He paid $135 for an average haul of which had to do with these apples and potatoes. He paid $12.50 for rent of the storeroom in which part of them were kept.
+
+The goods were sold as follows: Oct. 7, 10 bbls. of apples @ $2.25, 5 cwt. of potatoes @ $1.25; Oct. 10, 25 bbls. of apples @ $2.20, 15 cwt. of potatoes @ $1.25; Oct. 13, 25 bbls. of apples @ $2.20, 18 cwt. of potatoes @ $1.375; Oct. 20, 60 bbls. of apples @ $2.20; Oct. 23, 18 cwt. of potatoes @ $1.40; Oct. 25, 14 bbls. of apples @ $2.25; Oct. 29, 25 bbls. of apples @ $2.30; 25 cwt. of potatoes @ $1.50; Nov. 3, 30 bbls. of apples @ $2.30; Nov. 3, 10 cwt. of potatoes @ $1.50; Nov. 5, 15 cwt. of potatoes @ $1.40; Nov. 7, 30 bbls. of apples @ $2.30; Nov. 15, 25 cwt. of potatoes @ $1.55; Nov. 19, 50 bbls. of apples @ $2.25.
+
+Mr. Corfman's rate of commission is 8% on the apples and 7½% on the potatoes.
+
+The student should make Mr. Britton's invoice of shipment and his ledger account with the goods shipped; also Mr. Corfman's account sales and his ledger account with the goods received.
+
+How Expense may be subdivided.
+In order to be able at any time to ascertain which items of expense are costing most and where economy might be possible, it is usually desirable to divide the expense account into parts, keeping an account with each part.
+One common method divides the expense account into Sales Expense and General Expense, and where there are factories, a third account, Operating Expense.
+Each of the accounts may be subdivided as the needs of the business require.
+
+Sales Expense.
+Sales expense begins when the goods are ready for the buyer and includes every expenditure necessary to carry out the selling process.
+For the subdivisions of this account, separate accounts may be kept with
+
+1. Salesmen, in which case entries are for salaries paid the salesman, commissions allowed them, traveling expenses paid for them, prizes awarded them for successful work, and the like;
+2. Advertising, whether in the nature of newspaper or magazine publicity, circulars, premiums, calendars or other novelties, electric signs, and so on;
+
+![]() A page from a bookkeeping manual.
+
+RETAIL ACCOUNTS 115
+
+3. Freight Out, which covers also drayage, expressage, and postage on outgoing goods;
+4. Delivery, which concerns itself with local selling in the way of repairs, supplies, and upkeep of trucks, wagons, and horses, wages of barn men, mechanics, and rental of buildings used for housing delivery equipment;
+5. Samples of goods carried by salesmen to secure trade;
+6. Storage room occupied in rented space for goods which are for sale;
+7. Sales Incidentials, for any items not covered in the other subdivisions of sales expense, such as bundle wrappers and cash boys' wages, wrapping paper, twine, traveling expenses of executives, and so forth.
+
+General Expense. General or Administrative Expense pertains to the whole conduct of the business as distinguished from items that are confined to some particular process. This account may be subdivided, if that seems desirable, into the following accounts:
+
+1. Office Help, for the wages paid bookkeepers, stenographers, messengers, filing clerks, operators of office appliances, telephone switchboard, or other workers;
+2. Salaries of members of the firm or executives of a corporation;
+3. Stationery and Supplies;
+4. Sundry Expenses, for all other general items, including postage, telephone rental, legal fees, cable or telegraph messages, rent of the store, and so forth.
+
+Delivery equipment. As indicated above, all charges for repairs, supplies, and the like used in delivery are entered under the delivery account, which is a subdivision of Sales Expense; but the original cost of delivery equipment should be kept in an account with Delivery Equipment. This account closely resembles an inventory account, being debited for the property on hand or purchased at any given time and credited at the cost price for any part of the property sold, lost, or destroyed. The balance of this account will, therefore, always be a debit; that is, a resource, and will represent the property of that kind on hand at its cost value.
+
+116
+
+**ESSENTIALS OF BOOKKEEPING**
+
+**BOOKKEEPING PRACTICE**
+
+**Expense accounts**
+
+The student should classify each of the following items and enter it on ledger ruled paper under either Sales Expense or General Expense, as the case may be.
+
+Nov. 1, $30; letterheads and envelopes, $17.50; Nov. 2, furnished J. C. Allen and H. L. Beer samples in cases for their work with the trade, $64; paid for an advertisement in a magazine, $50; Nov. 3, paid for 100 gallons of gasoline for the delivery truck, $19.50; bought postage stamps, $10; Nov. 4, paid for wrapping paper and twine, $43.27; paid for cable service, $3.00; Nov. 5, paid salesmen's salaries, expenses, $23.40; Nov. 6, paid telephone rent, $11.50; paid postage on parcels sent out, $3.44; Nov. 8, paid traveling expenses of the president of the firm to Pittsburgh and return, $20.50; Nov. 9, paid rent of the store for one month, $125; Nov. 10, paid the Electric Illuminating Company's bill for current for the electric sign on 32nd St., $8.85; paid lawyer's fees on account, $27.75; Nov. 11, paid salesmen's salaries, $77.75; Nov. 13, paid salesmen's salaries, $150; paid telephone rent, $6; Nov. 15, paid salaries to the president and secretary of the company, $300; paid rent for a room used for storage purposes, $25; Nov. 16, received $16.50 from The Pittsburgh Railroad Company for freight charges due from the freight depot; Nov. 17, paid for gasoline for the delivery trucks, $30; Nov. 18, paid freight on goods sold, $7.75; Nov. 19, paid for shoeing horses, $6.50; Nov. 20, received a rebate of $1.50 from the railroad company because of a mistake in the amount of the freight charge of Nov. 18.
+
+In such accounts as Office Furniture and Equipment, Store Supplies and Fixtures, Delivery Equipment, Insurance, and, in fact any account showing an outlay, the use of which reaches over an extensive period, it is unfair to charge the whole sum to the losses of one month or one year when the use or benefit of the article covers several months or years. For example, if an insurance policy is taken out for three years and the premium is paid when the policy is issued, to charge the whole cost of the premium to the loss and gain account of that year when the protection extends over three years would misrepresent the losses of the first year.
+
+**Depreciation accounts.** In order equitably to distribute an expense like this over the time covered by its use, separate accounts called "depreciation accounts" are opened under the proper titles, such as: Reserve for Depreciation of Office Furni-
+
+RETAIL ACCOUNTS 117
+
+ture and Equipment, Reserve for Depreciation of Delivery Equipment, and a similar title for each of the other reserves.
+In the case of insurance the depreciation account is usually called "Insurance Expense Current" instead of a reserve.
+
+How to enter depreciation. All accounts which are accompanied by complementary reserve accounts are treated in the manner described for Delivery Equipment on page 116.
+
+
+
+ | DELIVERY EQUIPMENT |
+ |
+
+
+ | Jan |
+ 1 horse "Pat" |
+ 200.00 |
+ Nov 4 |
+ 2 delivery wagons |
+ 120.00 |
+
+
+ | Mar |
+ 2 delivery wagons |
+ 180.00 |
+ Nov 8 |
+ 1 horse "Bill" |
+ 185.00 |
+
+
+ | Oct. |
+ 1 delivery truck |
+ 1525.00 |
+ |
+ |
+ |
+
+
+ | Nov. |
+ 8 delivery truck |
+ 1860.00 |
+ |
+ |
+ |
+
+
+
+FORM #3
+
+
+
+ | RESERVE FOR DEPRECIATION OF DELIVERY EQUIPMENT |
+ |
+
+
+ | Nov 4 |
+ 2 delivery wagons |
+ 40.00 |
+ Dec 31 |
+ 2 delivery wagons |
+ 36.00 |
+
+
+ |
+ |
+ |
+ |
+ 1 delivery truck |
+ 610.00 |
+
+
+ |
+ |
+ |
+ |
+ 1 delivery wagon |
+ 12.00 |
+
+
+ |
+ |
+ |
+ |
+ 1 delivery truck |
+ 497.50 |
+
+
+ |
+ |
+ |
+ |
+ 1 delivery truck |
+ 100.00 |
+
+
+ |
+ |
+ |
+ |
+ 1 horse "Pat" |
+
+ FORM #4
+
+ At the close of each fiscal period General Expense or Sales Expense, as the case may be, is debited and the reserve account is then credited for such part of the entry in the original account as the length of the fiscal period bears to the whole length of service the item will give. For instance, when an automobile truck is purchased, Delivery Equipment is debited and Cash is credited; it is estimated that the truck will last five years and that its depreciation for the first year is 50%; if it is purchased April 1, and our fiscal period ends on December 31, we debit Sales Expense and credit Reserve for Depreciation of Delivery
+
+118
+ESSENTIALS OF BOOKKEEPING
+
+Equipment for three-fourths of 50% of the cost of the truck, since one-fourth of the fiscal year has already passed.
+
+These accounts are illustrated in Forms 83 and 84 on page 117. Form 83 illustrates the delivery equipment account and Form 84 illustrates the reserve for depreciation account used in connection with delivery equipment.
+
+The history of these items may make the entries clearer.
+The two horses and the three delivery wagons were purchased on January 1, 1917. One delivery truck was purchased on March 1 of the same year. It is estimated that a wagon will last five years and depreciates about 20% each year, but that a truck depreciates much more rapidly during the first year; in fact, about 50%.
+
+At the end of 1917 it is estimated that the three wagons have depreciated $36 and the truck $610, or about 40%. On November 4, 1918, two delivery wagons were sold for $80, their cost having been $120; on November 6, one of the horses was sold for just what he cost. Another delivery truck was purchased on November 8.
+
+At the end of 1918 the same rate of depreciation is estimated on the remaining delivery wagon; the first delivery truck is considered as having depreciated 30% and the new one about 10%. The remaining horse, "Pa," was injured in an accident and, as a result, is considered to have depreciated about 25%. Accounts of the kinds represented by these two forms are not closed except at times when they need more room and when it is necessary, for this reason, to carry them to a new place in the general ledger.
+
+BOOKKEEPING PRACTICE
+Reserve for depreciation accounts
+
+From the following transactions the student should prepare accounts with Office Furniture and Equipment and Reserve for Depreciation of Office Furniture and Equipment, the estimated rate of depreciation being 12% each year.
+
+Jan. 1, inventory, $450; Feb. 15, bought a desk, $37.50; March 1, had a grill partition placed in the office, $82; sold a bookcase which cost $25 for $15; May 15, bought a sectional filing cabinet, $47.
+
+The accounts should appear as they would stand on Dec. 31.
+
+RETAIL ACCOUNTS 119
+
+The student is now sufficiently familiar with the transactions in the cash book to have noticed that in each case of payment in which a cash discount is involved, there is some inconvenience in making a part of the entry on one side of the book and the other part on the opposite side.
+
+Special columns for discounts. It has become an accepted practice to place a column for purchase discounts by the side of the purchases column on the credit side and a column for sales discounts on the debit side next to the sales entries. Of course, this brings both discounts columns on the wrong sides, so far as the page headings are concerned, but no serious difficulty presents itself, so this plan will be used during the rest of this chapter. The first five accounts on each side of the cash book; those on the debit side are headed, General, Net Cash Receipts, Sales Discount, Hardware Sales, and Flour and Feed Sales; those on the credit side are headed, General, Net Cash Payments, Purchase Discount, Sales Expense, and General Expense. The entry in the sales discount or purchase discount column is in every case the difference between the two entries for the same transaction in the general column and the net cash column. Cash sales will be entered daily, the sales of hardware being kept separate from those of flour and feed.
+
+The partners desire to know at the end of each fiscal period which kind of merchandise is producing the better results. To do this we shall have to keep the records of the two departments so separated that a comparison can be made without difficulty when the books are closed.
+
+ACTUAL BOOKKEEPING
+
+Transactions from March 20 to March 31
+
+The student should enter these transactions in the proper books, making out also all forms called for by each transaction. At the end of the month he should prove cash, post to the ledger, make a trial balance, a loss and gain statement, and a resource and liability statement.
+
+March 20. Bought delivery truck No. 1 of the Packard Motor Co., capacity 2 tons, for $2,450 by check. Bought of the General Motor Co., 3-ton truck No. 2 for $3,565 by check. Employed 2 drivers, Ed Boylan and Pat Masterson, for the trucks at $18 a week each. Bought a gasoline tank and pump for underground use by check, of Charles F.
+
+120
+**ESSENTIALS OF BOOKKEEPING**
+
+Horton, for $45.50. Rented a barn from C. Rogers for use for delivery equipment housing, at $10 a month, paying 1 month's rent in advance.
+Bought a horse, Dan, for $200 by check from the City Sales Stables, a set of harness from J. C. Snyder by check for $21.50, and a delivery wagon from the Wainwright Co., by check for $60. Transferred from stock to the barn for feed, 1 ton baled hay and 25 bu. of oats at cost.
+Bought 1 ton of hay from the Wainwright Co. by check on the line @19½c. Employed Dick Henry to drive the wagon and care for the horse at $12 a week. Received a check from J. W. Freeman for $118.12 in payment of his acceptance of March 5.
+
+Received checks from O. G. Brown and D. M. Swift to balance their accounts.
+
+Sold to H. C. Bingley on %: 1 die harrow, $19.50, 1 spring tooth harrow, $8.50, 1 corn planter, $35, 1 drill, $32.50.
+
+Sold to T. C. Cathcart on %: 1 tool cabinet with tools, $50, 10 cylinder front door locks @ $5.50, 20 sets steel door hangers @ $2.50, 100 pairs bronze mortise knobs @ $0.50, 20 door cheeks @ $3.50, 20 door holders @ 40c., 10 doz. mortise knob locks @ $3 per doz., 10 pairs bronze door butts @ $3 each, a pair, 10 doz pairs steel butts @ $4.50 a doz., 2 bale floor @ $12.
+
+Cash sales for the day: hardware, $314.35; flour and feed, $205.63.
+
+March 21. Received a check from P. W. Crane to balance his account.
+
+Sold to E. F. Moore on %: 1 bbl. flour, $12, 25 bu. oats @ 85c., 2 tons baled hay @ $30; ½ ton chicken feed @ $22.50.
+
+Shipped to R. J. Wonnell Co., Cleveland, for sale on commission, 1,000 bu. wheat and 2,000 bu. corn. The drayage to the railroad is figured at $135 for the shipment.
+
+Sold to O. M. Jarvis on %: 400 sq. ft. of plaster board @ 2½¢e., 100 gals paint @ $.38; 100 rolls wall paper @ .85c.
+
+Received from J. W. Immel, St. Clairsville, 25 cwt potatoes to be sold on commission; Freight on this consignment we pay by check to the Nickel Plate Railroad, $.45.; Drayage by our truck, $.25.
+
+Cash sales for the day: hardware, $201.41; flour and feed, $205.85.
+
+March 22. Sold to the Clark Grocery Co., 15 cwt potatoes from J. W. Immel's consignment @ $.175; for their sight draft on C.M. Ward.
+
+Sold to W.J. North for his note at 120 days, 20 bu. oats @ .90c., 1 ton chopped feed, $40; 12 gals barn paint @ $.1; 6 gals shingle stain @ .85c., 1 gal floor varnish, $.275.
+
+Cash sales for the day: hardware, $167.54; flour and feed, $254.75.
+
+March 23. Sold to Proctor & Willard Co. for cash, 20 cwt pota-
+
+RETAIL ACCOUNTS
+121
+
+toes, 10 cwt. from J. W. Immell's Consignment and 10 cwt. from stock, @ $1.78, receiving their check.
+
+Rendered an account sales to J. W. Immell, charging 7% commission.
+
+Received from A. K. Schultz his note in our favor for an amount sufficient to pay him $35.00 on his account plus discount for 30 days. We discount the note at the bank.
+
+Received from J. H. Egbert, Everett, 50 cwt. potatoes for sale on commission. We pay to the B. & O. R. R. by check, freight on the consignment, $.5. Drayage by our trucks, $.5.
+
+Sold to L. C. Evans on % 100 bbls. flour @ $11.50, 125 bu. rye @ $11.60, 200 bu. hay @ $20. Paid for bags for the shipment, $7.50. Paid for cleaning the rye before shipping, $2.
+
+Bought for cash from J. C. Whiteide, 836 bu. wheat @ $1.25, 786 bu. corn @ .80c, 16 tons baled hay @ $18.50, less 2% for cash.
+
+Bought from the Seaman Milling Company on % 200 bbls. flour @ $10.50.
+
+J. C. Cathcart returns 1 barrel of flour which was damaged by rain in delivering it.
+
+Paid for additional insurance on stock for a 1-year policy, $30 to the International Insurance Co., by check.
+
+Paid the balance due the Carmack Implement Co., receiving discount on the bill of March 13 only, and the Sherwin-Williams Paint Co., by checks.
+
+Cash sales for the day: hardware, $336.21; flour and feed, $228.13.
+
+March 24. Sold to J. T. McArthur on % 100 bbls. flour @ $11.90.
+Shipped to the Cornell Commission Co., New York, 100 bu. oats and 10 tons hay to be sold on commission.
+
+Paid for freight on the shipment of Daily News by check: $12.60,
+one-third of which is charged to Consignment No. 1 from J. H. Egbert.
+
+Paid for postage stamps in cash, $10.
+
+Sold to T. P. McRae on % assorted carriage bolts, $.5, tire bolts, $.25o, copper rivets, $2.8o, steel rivets, $.1, kitchen range, $.35.
+Accepted the H. Diston & Sons Co.'s draft on us in favor of A.J.
+Brewer at 30 days sight for the balance due them.
+
+Received a check from H.C. Bingley for the balance of his account,
+less 2%.
+
+Received a check from E.G.Jowett for the balance due on his account.
+
+A letter from E.F.Moore states that 4 bales of the hay sold him on
+the 21st were of inferior quality, containing weeds, briers and straw.
+We make him an allowance of $3 notifying him to that effect by letter.
+
+122
+ESSENTIALS OF BOOKKEEPING
+
+Sold to E. G. Jowett on % 10 dash lanterns @ $1.80, 120 rods woven wire fencing @ $5c, % ½ ton chicken feed, $11.25.
+Cash sales for the day: hardware, $310.19; flour and feed, $170.60.
+
+March 25. Received an account sales from the R. J. Wonnell Co. for the wheat and corn shipped them March 21. The wheat was sold @ $1.50 and the corn @ 92¼c. They paid $90 freight, $75 drayage, and their commission is %. We write them a letter, thanking them for the promptness of their action and acknowledging the receipt of their check for the proceeds.
+
+Paid for milling and sprouting the 55 cwt. of potatoes remaining in stock, $5.50. 2 cwt. of them are found worthless and are charged off @ $1.60 a cwt.
+
+Sold to Andrews & Marten on % 40 cwt. of potatoes, 20 cwt. from stock and 20 cwt. from Consignment No. 1 from J. H. Egbert @ $1.80.
+
+Paid office, store, barn, warehouse and delivery help for the week.
+On complaints of 2 customers who bought potatoes during the week, we pay $2.80 rebate in cash.
+
+Paid for 5,000 circular letters to the O. T. F. C. Printing Co., $12.75 by check.
+
+Received a check from J. H. DeMore in payment of his note of Jan.
+25.
+
+Accepted J. H. Egbert's draft at 10 days sight on account of his Consignment No. 1 for $30.
+
+Cash sales for the day: hardware, $633.56; flour and feed, $511.60.
+
+March 27. Received a notice from W. C. Carr, a notary public, that the note of E. M. Austin has been presented for payment and refused. Mr. Carr filed formal protest and requests payment of his fee of $23.25 by check and wrote a letter to Mr. Austin asking the reason for the refusal.
+
+Received checks from Mathew & Bradford, and W. B. Hubbard for notes and acceptances due today, also Mr. Jarvis' check covering the balance of his account, not including what he bought March 21.
+
+Sold to Marston Bros., terms cash less 2%, 30 cwt. of potatoes from Consignment No. 1 from J. H. Egbert @ $1.78 Shipping charges on the sales are charged to consignee.
+
+Paid postage, 5,000 circular letters, $50.
+
+Paid by check our bill for flour purchased from the Sesame Milling Co., March 23, less 2%.
+
+Cash sales for the day: hardware, $93.16; flour and feed, $106.63.
+
+March 28. Sold to Allen & Jones on % 1 gasoline engine, 7 h.p., $165, 1 ton chicken feed, $25.
+
+![]() A page from a bookkeeping ledger.
+
+CASH SALES FOR THE WEEK ENDING MARCH 25 HARDWARE
+
+
+
+
+ |
+Mon. |
+Tues. |
+Wed. |
+Thur. |
+Fri |
+Sat |
+Total |
+
+
+
+
+| Lamps and lanterns |
+1.00 |
+0.00 |
+2.10 |
+78 |
+ |
+ |
+3.18 |
+
+
+| Kitchen ware |
+25 |
+2.76 |
+1.11 |
+9.10 |
+2.14 |
+8.12 |
+ |
+
+
+| Cutlery |
+ |
+1.40 |
+4.15 |
+2.64 |
+3.10 |
+5.55 |
+ |
+
+
+| Novelties |
+2.12 |
+1.84 |
+76 |
+1.70 |
+2.43 |
+ |
+ |
+
+
+| Roofing and mouting |
+10.20 |
+8.40 |
+2.00 |
+28.75 |
+9.56 |
+14.90 |
+ |
+
+
+| Paints, varnishes and so forth |
+21.13 |
+16.60 |
+34.63 |
+11.19 |
+63.80 |
+ |
+ |
+
+
+| Fencing |
+6.75 |
+12.15 |
+4.95 |
+36.80 |
+76.40 |
+320.00 |
+ |
+
+
+| Toilets and baths and so forth. |
+41.83 |
+31.50 |
+10.10 |
+39.75 |
+79.50 |
+374.75 |
+ |
+
+| FORM 85 Totals: |
|---|
|
|---|
| Halls, screens, bolts and so forth. | 6.60 | 5.18 | 5.77 | 3.10 | .85 | 11.91 | |
|---|
| Farm implements. | 84.65 | 77.13 | 66.67 | 92.10 | 312.85 | 248.90 | |
|---|
| Plumbing supplies. | 10.00
$23.00
$20.07
$42.32
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26.17
$26. | |
|---|
| Buggies and wagons. | 95.00
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950
$39,950.
| | | | | | |
|---|
| Bullders hardware. | 10-90 $48 4-8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8 $4 8. |
|---|
+
+FLOUR AND FEED SALES FOR WEEK ENDING MARCH 25
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+| Chopped feed lb by bu |
+
+
+
+
+
+
+
+Dated Google
+
+124
+**ESSENTIALS OF BOOKKEEPING**
+
+Received from Allen & Jones their check for the note due today.
+Sold to D. M. Swift on % 2 tons chopped feed @ $40, 30 bu. oats @ 85c.
+Bought from the Calumet Shipping Co. for our check, 200 bu. oats @ 76c.
+Sold to A. K. Schultz on % 1 wagon, $70, 1 sreury, $175.
+Cash sales for the day: hardware, $124.45; flour and feed, $197.10.
+
+March 29. A letter from E. M. Austin states that he is unable to meet his note which was protested on the 27th. He offers to ship 5 tons of hay @ $18.50 and 50 bu. of wheat @ $1.25 and to make a new 60-day note for the amount of the old one if we will pay the freight on the goods. We accept his offer by letter.
+
+Shipped to McMinn & Wilton, Chicago, 1,000 bu. corn for sale on commission, paying the freight on the shipment, $30. Drayage by our trucks, $10.
+
+Sold to O. G. Brown on % plumbing supplies and bathroom outfit, $168.50.
+Cash sales for the day: hardware, $183.34; flour and feed, $193.13.
+
+March 30. Received an account sales of the oats and hay shipped to the Cornell Commission Co., New York, March 24. The oats were sold @ 97c a bu. and the hay @ $21 a ton. Drayage charges were $12, freight, $13.50, and commission, 9%. They send their check for the proceeds.
+
+Received Marston Bros.' check for the bill of the 27th.
+Sold to M. B. Sickels on % 1 kitchen cabinet @ $0, 1 oil cooking stove, $34.50; 1 disc harrow, $45.25; 1 gang plow, $150.
+
+Received from J. C. Catheart his check for the bill of good sold to him March 20, less 2%.
+
+Received a check from E. F. Moore to balance his account.
+
+Rendered an account sales to J. H. Egbert for his consignment of March 23, charging 7% commission, accompanied by a letter explaining market conditions by referring to the quantity of old potatoes received because of bad weather in the fall, and the arrival of several shipments of new potatoes from the south. We request him to send any tree fruits he may have for sale later.
+
+Cash sales for the day: hardware, $172.65; flour and feed, $160.75.
+
+March 31. Received from E. M. Austin the wheat and hay for which arrangements were made March 29, also his note for the amount not covered. We return to him his note with a letter acknowledging the arrival of the goods. Paid freight on the hay and wheat, $6.50.
+
+Sold to J. B. Atkins for his note at 90 days, 350 bu. corn @ 90c, 100 bbls. flour @ $12.
+
+![]() A page from a bookkeeping journal.
+
+CASH SALES FOR THE WEEK ENDING APRIL 1
+
+
+
+
+ |
+Mon. |
+Tues. |
+Wed. |
+Thurs. |
+Fri. |
+Sat. |
+Total |
+
+
+
+
+| Lamps and lanterns |
+5.20 |
+3.12 |
+ |
+84 |
+1.19 |
+ |
+4.69 |
+
+
+| Kitchen ware |
+ |
+1.93 |
+2.12 |
+10.60 |
+78 |
+ |
+4.10 |
+
+
+| Cutlery |
+12.26 |
+3.14 |
+1.21 |
+4.98 |
+ |
+ |
+11.94 |
+
+
+| Bowling balls |
+5.00 |
+3.00 |
+3.00 |
+3.00 |
+ |
+ |
+15.00 |
+
+
+| Bowling and putting greens |
+12.50 |
+2.48 |
+47.12 |
+9.10 |
+16.87 |
+ |
+23.80 |
+
+
+| Paints, varnishes and so forth |
+2.80 |
+1.10 |
+10.11 |
+4.65 |
+35.80 |
+ |
+10.75 |
+
+
+| Fencing tools |
+15.20 |
+22.11 |
+9.97 |
+12.14 |
+7.34 |
+ |
+36.40 |
+
+| FORM 87 Totals: |
|---|
+
+| Tools: |
|---|
+
+| Hinges and hinges: |
|---|
+
+| Mails, screws, bolts and so forth: |
|---|
+
+| Fare implements: |
|---|
+
+| Plumbing supplies: |
|---|
+
+| Ruglets and rugs: |
|---|
+
+| Building hardware: |
|---|
+
+| Engines: |
|---|
+
+| Poultry equipment: |
|---|
+
+| FORM 87 Totals: |
|---|
+
+
+
+ | Mon. | Tues. | Wed. | Thurs. | Fri. | Sat. | Total |
|---|
|
+
+| FLOOR AND FEED SALES FOR WEEK ENDING APRIL 1: |
|---|
+
+| Wheat: | $1.40 | 25 | 16 | 30 | 45 | 19 | 49 |
|---|
+
+| Corn: | 90¢
bu. | 4
cwt. | 7
bbl. | 3
bu. | 5
cwt. | 5
bbl. | 8
bu. |
|---|
+
+| Flour: | $15.00
bbl. |
|---|
+
+| Oats: | $55
bu. |
|---|
+
+| Chopped feed: | 36
bbl.
cwt. |
|---|
+
+| Beled hay: | $1.10
bbl.
bu. |
|---|
+
+| Chicken feed: | $4
bbl.
bu. |
|---|
+
+| Totals: |
|---|
+
+| 125 |
+
+![]() A scanned document page with handwritten notes and calculations related to cash sales for the week ending April 1, 1936, for various items such as lamps and lanterns, kitchenware, cutlery, bowling balls, bowling and putting greens, paints, varnishes and so forth, fencing tools, hinges and hinges, mail screws, bolts and so forth, fare implements, plumbing supplies, ruglets and rugs, building hardware, engines, poultry equipment, and floor and feed sales for the same week ending April 1, 1936.
+
+
+
+126
+ESSENTIALS OF BOOKKEEPING
+
+Cash sales for the day: hardware, $126.89; flour and feed, $129.00.
+April 1. Received a check from L. C. Evans in full for the bill sold to him on March 23, less 2%.
+Paid the Criterion Oil Co. for a drum of oil by check, 50 gals. @ 50c.
+Sold to W. F. Bolts on % 50 bu. wheat @ $1.40, 25 bu. oats @ 85c,
+1 ton hay, $20, 1 cream separator, $60, 1 steel churn, $10.
+Paid office, warehouse, store, barn and delivery help for the week by checks.
+
+Cash sales for the day: hardware, $326.92; flour and feed, $406.75.
+
+There is due each partner the interest on his investment for the time which has elapsed since the partnership was formed, and each partner must also be credited with the proportionate part of a month's salary which has been earned during the same time.
+
+How to figure depreciation. Entries into the reserve accounts will be made through the journal. The depreciation on the trucks should be figured at 25% for the first year, so that the entry to date from March 20, when they were purchased, can be conservatively calculated at %. The horse is not believed to have deteriorated in value, but depreciation on the wagon and harness will be figured at 4% or $0.04. Depreciation on office furniture and equipment and on store supplies and fixtures will also be figured at %. These reserve accounts form a separate class of quasi liabilities and may be placed on the resource and liability statement, as special liabilities, with that understanding kept clearly in mind.
+
+The insurance policy was taken out on March 23, and has therefore been in force 9 days; its depreciation will be the ratio of 9 to 365. The first insurance policy having been charged off against the loss and gain account on the 18th, it will not be considered under the depreciation account.
+
+The student should post, take a trial balance, and make a trading statement, after which the shipment accounts for which cash sales have been received should be closed into Loss and Gain through the journal. After all other accounts have been closed through the journal, into the trading account, a loss and gain statement and a resource and liability statement should be prepared by the student.
+
+**RETAIL ACCOUNTS**
+
+127
+
+In making the loss and gain and the resource and liability statements, the hay and oats transferred from stock to the barn for feed must not be forgotten. Of these there remain 18 cwt. of hay and 18 bushels of oats. This will also provide an inventory in closing the sales expense account.
+
+The final proof will show a net gain of between $2,100 and $2,200 to be divided between the two partners.
+
+**STANDARD QUESTIONS**
+
+**Forming a partnership**
+
+1. How may a partner be admitted to the business? Describe several methods.
+2. Why may the partnership terms be different in different cases?
+3. What is the most satisfactory method of determining each partner's duties?
+4. How many different kinds of indorsements are there on the papers brought into the partnership by Mr. Everett?
+5. What must be done to the books when a partner is admitted? Why is this?
+
+**STANDARD QUESTIONS**
+
+**Shipments and consignments**
+
+1. What is a commission merchant?
+2. What is the shipper of goods called?
+3. What is the receiver called?
+4. Who bears the loss if goods which are for sale on commission are lost or destroyed?
+5. When does the commission merchant become liable to the shipper?
+6. How are accounts with shipments headed and kept in the general ledger?
+7. How would you close a shipment account?
+8. How are accounts with consignments headed and kept in the general ledger?
+9. How would you close a consignment account?
+10. What is an invoice of shipment and what information does it contain?
+11. What goes on the debit side of the commission account? On the credit?
+12. How is confusion likely to arise in ledger accounts connected with selling on commission?
+13. What variations occur in calculating commission?
+
+128
+
+**ESSENTIALS OF BOOKKEEPING**
+
+14. How is the general law of debit and credit applied to commission?
+15. What is an account sales and what information does it contain?
+
+**STANDARD QUESTIONS**
+
+Expense and depreciation accounts
+
+1. Why is it sometimes advisable to divide the expense account into a number of accounts?
+2. How may the expense account be divided?
+3. What items are covered under Sales Expense?
+4. How may Sales Expense be divided?
+5. How may General Expense be divided?
+6. Why are reserve accounts necessary?
+7. How are entries made in reserves for depreciation?
+8. When and how are reserve accounts closed?
+9. What is the reserve account which is connected with Insurance called?
+10. How do you determine what entries should be made in the reserve account?
+
+SECTION V
+
+WHOLESALE AND CORPORATION ACCOUNTS
+
+PART ONE
+
+CAPITAL is defined by economists as money or property which is used for the production of more money or property. Many an individual has the business ability or experience to make him capable of carrying on an enterprise, but he may lack the necessary capital.
+
+How capital may be obtained. There are three ways in which he may obtain this capital:
+
+1. He may borrow from those who have it, thus obligating himself to pay interest and to return the principal at a stated time. To this plan there are grave objections. The lender has no direct interest in the success of the business; he is concerned only in the regularity with which he receives his interest.
+
+This drain of interest payments may seriously handicap the enterprise while it is in the early stages of its development. The need of additional capital for unexpected emergencies may be refused, either because lenders have lost faith in the ultimate success of the venture, or because they think that by withholding aid the originator of the idea can be forced out and they can gain control of something that promises greater returns than their loans to him.
+
+2. Another way by which the owner of a business may get capital is by taking in partners, thus pooling property and effort. A partnership being a matter of agreement is subject to all the changes which may arise through the individuals which compose it. The withdrawal or death of a partner dissolves the partnership, and an enterprise which requires time for development may be seriously hampered if its growth is dependent upon
+
+129
+
+130
+ESSENTIALS OF BOOKKEEPING
+
+the health, patience, and even the whims of each individual concerned in its progress.
+
+3. A third method of obtaining money is by forming a corporation. In this plan the objectionable features of the other two plans are avoided. Any number of persons can be interested to any extent without the price of one share upward. All who invest have a vital interest in the success of the project, because the better it does the more they profit. At a critical point they can help by putting in enough more money to tide it over. The corporation never dies; change of ownership of the stock does not in itself affect the corporation; its progress is not hindered by the necessity of obtaining the consent of all concerned to every variation of policy.
+
+Why corporations are economical. In addition to the convenience of securing funds for operation, the corporation provides opportunity for economy of administration. Ten businesses of the same kind, operated by 10 different firms, each with a total investment of less than $10,000, would require 10 offices equipped for the business, each with its sales force, its delivery system, and so on; would all be covering the same territory more or less, to secure business, with the accompanying waste of time and effort. The 10 organizations combined into one would save probably three-fourths of the office expense, a large part of the operating expense, and would be able to give much better service at a lower cost to customers, at the same time making larger profits. Hence the popularity and growth of the corporate plan of business organization.
+
+How to form a corporation. The law recognizes three ways in which a corporation may exist, but the only one of special interest to the accountant is that by which the persons who desire to form the corporation usually proceed. Different states have a variety of methods of procedure, but in general the legislature designates an officer or a board to whom application is made for a charter. Those who are organizing the corporation are required to pay certain fees, to be borne out of a certain portion of the proposed capitalization, and also that a certain portion of the subscription price has been paid in cash. The organizers of the corporation are then required to call a
+
+**WHOLESALE ACCOUNTS**
+
+131
+
+meeting of the stockholders, who proceed to elect a board of directors for the corporation.
+
+In voting at these meetings each stockholder usually has one vote for each share of stock owned by him. In case a stockholder is unable to attend a meeting he may appoint some other stock-holder to vote his shares for him; this is called his "proxy." Each stockholder receives a certificate of stock showing the number of shares in his name, signed by the officers.
+
+How a corporation is managed. These officers are chosen by the board of directors. They carry on the business and as they are elected both to the board of directors and to their respective offices by a majority of the shares of stock, and as they are usually the men who own the stock represented by that majority, there is little likelihood that any sudden change in the management will take place. A corporation is thus conducted by an individual or a few individuals who own control at least 51% of the stock. The remaining 49% remains in the hands of the concern, while the other 49% remains in the hands of holders who are willing to accept the results produced, or, if they become dissatisfied, sell the stock in the open market, or, in the case of poor management, sue the corporation.
+
+Two kinds of capital stock. Two kinds of stock may be issued—preferred and common. If the corporation earns enough to pay a profit, it is distributed to the stockholders in proportion to the amount of stock owned by each. This distribution of profit is called the dividend. Preferred stock is so called because dividends are paid first to the holders of that kind of stock. If it takes all the profit of the company to pay the dividend on the preferred stock, holders of common stock get nothing; if there is any profit left after the dividend is paid to the holders of preferred stock, it may be apportioned to the holders of common stock.
+
+If the business produces only a little profit, the preferred stock usually takes all of it, while if the profit is large, the common stock may receive far more than the preferred, because the dividend on preferred stock is usually at a fixed rate, from 5% to 8%, but the amount of the dividend paid on common stock is limited only by what remains after the preferred dividend require-ments have been met.
+
+132
+ESSENTIALS OF BOOKKEEPING
+
+What capital stock is worth. The par or face value of stock is the price set on shares as they are issued by the corporation, usually $100, but sometimes $10, and occasionally $1. This face value is no indication of the price at which the stock may be bought or sold. If the company is not doing well, so that dividends are small, or perhaps lacking altogether, stockholders may offer their shares for less than par value, sometimes at a very small part of it, but if the dividend payments increase with the company prosperous, the demand for the stock may make it rise in market value. The stock of some well-known, profit-producing corporations, when it can be bought at all, commands prices several times the par value.
+
+Sometimes the profits of the business are not all distributed in dividends. In that case the part remaining on hand is entered in a ledger account under the title of Undivided Profits. If, however, the intention is to leave this extra money in the business permanently, the amount so set apart may be entered under an account called Surplus. These terms are so nearly synonymous that they are often used interchangeably.
+
+Corporation accounting. The variation from the ledger as we have previously kept it will appear in the closing of the loss and gain account into accounts with Dividend, Undivided Profits, and Surplus since there is now no ownership or partners' accounts, but instead one with Capital Stock (or two with Preferred Stock and Common Stock) into which entries are made only when the stock is issued or retired. If some of the stock of the company is purchased in the open market by the corporation itself or is donated to the company by a stockholder, it is held until all time as additional capital may be needed, when it can be sold in the open market. Such stock is entered in an account called Treasury Stock.
+
+Thus far, ledger accounts have been kept with Purchases and with Sales, but these ledger accounts were kept in the same ledger with other accounts—that is, personal accounts were found along with property accounts. In the Union Grocery Company a separate ledger will be kept for purchases and another for sales. All personal accounts payable will be found in the purchase ledger and all personal accounts receivable in the sales ledger. All other accounts will be kept in the general ledger.
+
+WHOLESALE ACCOUNTS 133
+
+The subordinate ledgers. All ledgers other than the general ledger are called subordinate ledgers, and a summary of each subordinate ledger appears in the general ledger as an account with that special department. If, for example, transactions with customers go into the sales ledger, each customer's account is there and not in the general ledger. Entries in the sales book are posted to the sales ledger, as are also customers' credits from the cash book for cash they have received or discovered owed them, customers' credits from the journal for goods they have supplied, and customers' credits from the bills receivable book for notes or acceptances they have given. Entries from other books of original entry are treated in the same way.
+
+What controlling accounts are. At the same time there is an account in the general ledger under the title Sales Ledger or Accounts Receivable. In each of the books of original entry there is a special column for sales ledger entries and at the close of the fiscal period the footing of these columns are posted to the general ledger on the same side as in the sales ledger to which the separate items were posted. The sales ledger or accounts receivable account thus becomes not only a summary of the sales ledger, but also a check on the correctness of the sales ledger if there should be an error in the trial balance. The general ledger accounts like Accounts Receivable and Accounts Payable are called the controlling accounts.
+
+Some books of original entry might contain so few sales ledger entries that it would not be worth while to rule a special column for them; in that case each of those entries would have to be posted twice—once to the sales ledger and again to the general ledger on the same side of the sales ledger account.
+
+The private ledger. In some business offices a private ledger is kept by the president or his secretary. This book-keeper never uses. Whoever keeps the private ledger reports the amount of the balance to the general bookkeeper at stated times, and this is kept in the general ledger under a controlling account with Private Ledger.
+
+The ownership of stock is recorded in the stock ledger; each stockholder is credited with the number of shares at their par value and is debited for the shares he sells.
+
+134
+ESSENTIALS OF BOOKKEEPING
+
+Accounting for stock sold. When a stockholder sells any of his stock, the mere passing of his certificate to another does not transfer the ownership on the books of the company. If he sells all the stock, he may indorse the certificate to the new holder; if he sells a part of his stock, new certificates will be made out by the secretary of the company, one to the new holder for the number of shares he has purchased and another to the former holder for the number he has retained. In addition to this, the transfer must be recorded by the secretary of the corporation before the transaction is complete.
+
+Since dividends are paid to stockholders of record on a certain date, in the case of stocks which are constantly changing ownership it is necessary to close the transfer books for a number of days ahead.
+
+ACTUAL BOOKKEEPING
+The Union Grocery Company
+
+The student will now enter the service of the Union Grocery Company, a going concern with a net capital of $100,000 divided into 1,000 shares of $100 each. The stock of the company is owned by the following stockholders:
+
+
+
+ | W. H. Carmichael |
+ 50 shares |
+ Grace Dalton |
+ 25 shares |
+
+
+ | Helen H. Brown |
+ 50 shares |
+ Elinie Speisberg |
+ 5 shares |
+
+
+ | T. C. Barthold |
+ 50 shares |
+ Elizabeth Smith |
+ 5 shares |
+
+
+ | Mary J. Carson |
+ 10 shares |
+ Harriet Blackmair |
+ 7 shares |
+
+
+ | H. L. Friend |
+ 25 shares |
+ Glady McKeown |
+ 8 shares |
+
+
+ | T. P. Wilson |
+ 33 shares |
+ A. J. Haas |
+ 15 shares |
+
+
+ | James W. Johnson |
+ 25 shares |
+ L. M. Johnson |
+ 25 shares |
+
+
+ | Joshua Whitfield |
+ 12 shares |
+ L. N. Day |
+ 20 shares |
+
+
+ | Gertrude E. Groves |
+ 9 shares |
+ W. W. Goodnow |
+ 25 shares |
+
+
+ | John Belton |
+ 10 shares |
+ L. J. Brennan |
+ 30 shares |
+
+
+ | C. Y. Jackson |
+ 20 shares |
+ F. M. Pesicka. |
+ 15 shares |
+
+
+
+The student buys 5 shares at par upon coming into the business; the other 95 shares are held by the company as treasury stock. The student should keep accounts for these transactions showing ownership of these shares of stock, understanding, of course, that if he were to come as bookkeeper into the office of a going concern of this kind in actual business, these accounts would already have been placed in the stock ledger.
+
+The company's stock of goods on hand on April 1 is found to be as follows:
+
+
+
+| Stocks and Supplies on Hand April 1st. |
|---|
+
+| Description of Stock or Supply. | Purchase Price. | Sales Value. | Difference between Purchase Price and Sales Value. |
|---|
+
+| Total Cost. | $600. | $630. | $30. |
|---|
+
+| Total Value. | $630. | $630. | |
|---|
+
+| Total Difference. | | | $30. |
|---|
+
+| Total Cost and Value. | $630. | $630. | |
|---|
+
+| Total Difference. | | | $30. |
|---|
+
+| Total Cost and Value. | $630. | $630. | |
|---|
+
+| Total Difference. | | | $30. |
|---|
+
+| Total Cost and Value. | $630. | $630. | |
|---|
+
+| Total Difference. | | | $30. |
|---|
+
+| Total Cost and Value. | $630.$630. |
|---|
+
+Total Difference:
+
+|
$30.
+
+Total Cost and Value:
+
+|
$630.
+
+Total Difference:
+
+|
$30.
+
+Total Cost and Value:
+
+|
$630.
+
+Total Difference:
+
+|
$30.
+
+Total Cost and Value:
+
+|
$630.
+
+Total Difference:
+
+|
$30.
+
+Total Cost and Value:
+
+|
$630.
+
+Total Difference:
+
+|
$30.
+
+Total Cost and Value:
+
+|
$630.
+
+Total Difference:
+
+|
$30.
+
+Total Cost and Value:
+
+|
$630.
+
+Total Difference:
+
+|
$30.
+
+Total Cost and Value:
+
+|
$630.
+
+Total Difference:
+
+|
$30.
+
+**WHOLESALE ACCOUNTS**
+
+135
+
+
+
+ | Sugar |
+ $ 3,348.25 |
+ Tea, coffee, cocoa and chocolate |
+ $ 9,949.70 |
+
+
+ | Canned goods |
+ 22,648.35 |
+ Soaps, powders, starch, etc. |
+ 1,467.91 |
+
+
+ | Candy |
+ 324.87 |
+ Butter, cheese, lard and substitutes |
+ |
+
+
+ | Extracts, spices |
+ 529.72 |
+ tutes |
+ 14,375.86 |
+
+
+ | Sea foods |
+ 2,286.49 |
+ Nuts and dried fruits |
+ 4,084.12 |
+
+
+ | Flour, cereals, |
+ |
+ Miscellaneous Items. |
+ 6,874.22 |
+
+
+ | meat, |
+ 4,660.42 |
+ |
+ |
+
+
+
+The bills receivable book shows the following papers:
+
+Note of P. W. Jamison, dated March 7, at 30 days, for $465.50.
+
+Note of J. C. Amboy in favor of C. N. Flight, made Jan. 18, at 90 days for $800., endorsed by Mr. Flight in full to the Union Grocery Co.
+
+Draft drawn by A. McDonald on Wolf & Dean, in favor of Hammer and Imhof, at 30 days' sight, for $1,284.25, March 20, endorsed to the Union Grocery Co. in blank as a credit to the payee's account, accepted March 22.
+
+Draft drawn at 90 days after date, Feb. 4, by J. A. Dyer, on March 15, in exchange, accepted Feb. 11, indorsed without recourse to I. L. Othlof, and indorsed in blank when coming into the possession of the Union Grocery Co., for $912.50.
+
+Note by the J. P. Sanders Co., made Jan. 18 at 90 days, for $350 with interest, endorsed to H. M. LeVere on Feb. 17 by an endorsement in full, endorsed to Charles Allen without recourse Feb. 25, endorsed in blank when coming into possession of the Union Grocery Co., with a partial payment of $100, March 1.
+
+According to the bills payable book the company owes the following:
+
+Note, made Jan. 25, at 90 days, in favor of the Scale Milling Co. for $750.
+
+Note in favor of the International Coffee Co., for $623.80 made Feb. 15, at 60 days.
+
+Draft drawn on us by the Stannum Canning Co., in favor of C. M. Wilde, at 30 days' sight, March 17 for $635.75, accepted March 20.
+
+Draft on us, drawn March 7; at 30 days after date; accepted March 18 by the Forbes Chocolate Co., in favor of the Kingline Co., for $844.50.
+
+The sales ledger follows the following balances of accounts receivable:
+T. B. Arthur; $247.10; J. Y. Bayne; $187.64; Geo. H. Brown & Co.; $348.12; Mach & Osborne; $83.91; The Clarke Grocery Co.; $144.60; Bush & Kennedy; $45.76; Hammer & Imhof; $287.48; Hart & Martin; $487.19; The Hays Bros.; $399; The Kingline Co.; $399; The Downman Tea & Coffee Co.; $67.83; The Sweet Shoppe; $22.17; The Fletcher Bros. Co.; $683.27; Allen & Young; $97.34; E.J.Barnes; $108.17; M.C.Weston;$955; J.W.Meyer;$718.62; E.P.Gessler;$85.50; The Square Grocery;$7243; Fortescue & Thier;$863.19;
+
+![]() A page from a vintage ledger showing wholesale accounts and notes.
+
+136
+ESSENTIALS OF BOOKKEEPING
+
+J. E. Charvat, $1,274.83; Otton & Fredeker, $1,682.12; Murphy & Kilbane, $1,413.09; McIvor & Bradly, $916.38; M. B. Trotter & Co., $895.34.
+
+According to the purchase ledger there are balances in the accounts payable as follows: The American Sugar Co., $457.12; The Stannum Canning Company, $277.19; The Seale Milling Co., $644.10; The Triticum Baking Co., $163.29; The Forbes Chocolate Co., $247.58; The Irwin Candy Co., $246.46; The Nippon Tea Co., $243.52; The American Fruit Importing Company, $38.50.
+
+The books used in this set are: The general ledger, sales ledger, purchase ledger, and stock ledger; the bill books; the cash journal, which is a combination of cash book and journal and is described more fully on page 137; the sales book, which is composed of the loose-leaf order sheets of the store and that part of the journal in the purchase book.
+
+The delivery equipment of the Union Grocery Company consists of 3 trucks valued at $2,850, $3,175, and $2,900. The office furniture and equipment inventory is $2,450; store supplies and fixtures, $4,275.
+There is a debit to the insurance account for $150. On Jan. 1 of the current year, the reserve for depreciation of delivery equipment was figured at 10% of its cost for 1 month's wear and 9 months' wear.
+On truck No. 1, which had been used 1 month, and 10% on No. 3, which had only 8 months of wear. Entries were also made at that time for 10% in the reserves for depreciation of both office furniture and equipment and store supplies and fixtures. The balance of cash in the bank at this time is $7,567.68.
+
+From information given, the student should make the trial balance as his initial step in taking charge of the books.
+
+The ruling in the purchase ledger and sales ledger are just like those we used in the work of the Busy Retail Store in Section IV.
+The general ledger is ruled as hereofore, but has capital and dividend accounts instead of those for proprietor or partners, and has controlling accounts for the purchase ledger and the sales ledger.
+The ruling of the stock ledger differs from the other ledgers, however, because it must contain information not necessary in other accounts. Form 89 on page 137 shows one form of stock ledger. All entries in it are for the par value of the stock.
+
+How the cash journal saves time. The bookkeeper's time is often saved by reducing the number of necessary records. One way is to combine the cash book and the journal into a book called the cash journal. One part of the book is called the receiving cash journal; there are seven columns for money entries
+
+WHOLESALE ACCOUNTS 137
+
+besides the Date, Explanation, and Account Credited columns.
+Net cash is entered in the first money column, and sales discount in the second; the third and fourth columns are the posting columns to the general ledger or the sales ledger; the folio column follows them. The special columns for returned sales and for sales rebates and allowances are also the posting columns for the credits indicated in the Account Credited column; the totals are
+
+
+
+ | T. P. Wilson |
+ Purchasing |
+
+
+ | Date |
+ Transferred to |
+ Certified date No. |
+ No. of Shares |
+ Par Value |
+ Date |
+ Transferred from |
+ Certified date No. |
+ No. of Shares |
+ Par Value |
+
+
+ | 10- |
+ |
+ |
+ |
+ |
+ 10- |
+ |
+ |
+ |
+ |
+
+
+ | April |
+ M. M. Baker Balance |
+ 34 |
+ S |
+ 900.00 |
+ April 1 |
+ Stock Certificate |
+ 6 |
+ 25 |
+ $300.00 |
+
+
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+
+
+ |
+ |
+ |
+ |
+ 3300.00 |
+ April 17 |
+ Certificate |
+ 28 |
+ 2800.00 |
+
+ | FORM No. Stock Ledger Account |
|---|
+
+
+entered on the debit side of those accounts at the end of the fiscal period. The column for Bank Deposits is not to be posted, but takes the place of the additions on the stub of the check book. This is all there is to the receiving cash journal.
+
+The other part of the book is the disbursing cash journal. In this there are nine money columns. The non-posting column for net cash paid out comes first, Purchase Discount second, then the General Ledger and Purchases Ledger debits, and then the folio column. Following this are Returned Purchases and Purchase Rebates and Allowances as credits, from which are posted the individual debits and the total credits at the close of the fiscal period. General Expense and Sales Expense columns are not posted until the end of the period. The column for bank checks completes the record with the bank and, with the deposits column of the receiving cash journal described above, renders the keeping of a stub in the check book unnecessary.
+
+Handling small cash payments. It is often more convenient to pay small amounts in currency than by check. To make
+
+138
+**ESSENTIALS OF BOOKKEEPING**
+
+this possible some currency is kept in the cash drawer. A check is cashed at the bank for a specified sum, as $50, and this cash is used for small expenditures. A careful record of such expendi-
+tures is made in a memorandum book called the petty cash book.
+When the imprest fund, as it is sometimes called, gets low, all the items in the petty cash book are classified and transferred to the cash journal, and the petty cash book is balanced. A new check is then drawn for the part of the fund which has been used in order to bring it back to the original sum. If financial state-
+ments are made at any time while this imprest fund is in use, no recognition is made of the expenditure of any part of it; it is included at its face as part of the cash resources.
+
+Power of attorney. The bookkeeper is often expected to draw checks and to sign other vouchers for the firm for which he works. To do this legally he should have a power of attorney from the officers of the company. A power of attorney is simply the written authority of one person authorizing another to transact business for him. Unwisely used a power of attorney is very dangerous, and the powers authorized should be very carefully described and provision made for revoking the authority.
+
+Inspecting order sheets. Each sale of goods for the Union Grocery Company is made on an order sheet like that shown in Form 90 on page 139. These order sheets are made out by the salesman. The student will act as salesman to the extent of filling out these orders. In the regular course of business these order sheets would be inspected by the cashier, who then go to the credit department to determine the standing of the customers. Then they sent to the copying department, where as many copies of the order are made as there are depart-
+ments in which the goods are to be assembled. A copy then goes to each department, and the goods are sent to the shipping room accompanied by the copy. Here the shipping department checks from the original order sheet received from the copying depart-
+ment. Next the order sheet is handed to the extending clerk, who makes the entries in the columns under the heading, "Salesmen must not use these columns," and then to the billing department.
+
+The student should make these extensions on the order sheets and also make bills for the goods. After bills are made out, they
+
+THE UNION GROCERY COMPANY
+
+Date Sold
+Ordered by
+Paid
+Sold to
+Approved
+Town and State
+Delivery
+Inspected by
+Ship by
+Date shipped
+
+Fate
+Cans Billed
+Billed by
+
+Depart-
+ment
+Ship-
+mer
+Check
+Order No.
+Each Weight
+Price
+
+Salesmen must not use these columns
+
+FORM 90: This is the sales order which the salesmen employed by the Union Grocery Company fill out when they receive orders. The information on this form is given to them after they have filled out the order. Whenever information is wanted about the order, all that has to be done is to consult the copy in the file, which contains all the necessary information.
+
+139
+
+![]() A blank sales order form.
+Google
+
+140
+ESSENTIALS OF BOOKKEEPING
+
+and the original order sheets go to the checking clerk or "o. k. clerk" and finally, after the bills are sent to the customers, the order sheets go to the files in the bookkeeping department. Postings to the sales ledger are made from these original orders, giving the order number at the top of the middle column instead of a page number in the folio column of the ledger. The original order sheets are then filed in a binder provided for the purpose. This binder thus becomes the sales book.
+
+What happens to incoming invoices. Incoming invoices go to the receiving department for checking, after which they go to the o. k. clerk to determine the accuracy of the calculations. They come finally to the bookkeeper, who posts from the invoices to the purchase ledger and then files them in a compartment for that purpose. The invoices cannot be conveniently bound, because they are usually of different sizes and shapes, but this file becomes the purchase book. Each invoice is numbered by the bookkeeper, and this number is entered in the folio column of the ledger. These numbers will begin with 097 in the books of the Union Grocery Company.
+
+STANDARD QUESTIONS
+
+Corporations
+
+1. What is capital?
+2. How may you secure capital for a business enterprise?
+3. Which is the best proof of securing capital?
+4. Why do corporations join other plans?
+5. What advantages has a corporation in its administration?
+6. In how many ways may a corporation come into existence?
+7. What is the usual method of procedure in your state?
+8. How many votes does each stockholder have?
+9. If a stockholder cannot attend a meeting does he lose his vote? Why or why not?
+10. What evidence has a stockholder of his own ownership?
+11. How are the officers of a corporation chosen?
+12. Why are the officers usually permanent?
+13. What kinds of stock are issued by a corporation? Explain each kind.
+14. What is a dividend?
+15. How does stock change ownership?
+16. What is meant by par, or par value?
+17. What determines the market value of stock?
+
+**WHOLESALE ACCOUNTS**
+141
+
+18. What information does the stock ledger contain?
+19. What is meant by undivided profits? What is a surplus?
+20. What accounts are found on the books of a corporation which would not appear in other organizations?
+
+**STANDARD QUESTIONS**
+
+The books of the Union Grocery Company
+
+1. What is the purpose of the purchase ledger? Of the sales ledger?
+2. What are controlling accounts? Where are they kept? How is the posting done when controlling accounts are kept?
+3. What books are used in this chapter?
+4. How is the posting done from the receiving cash journal?
+5. Name the columns in the disbursing cash journal.
+6. How are these items and columns posted?
+7. What is the imprest fund, and how is it kept?
+8. What is meant by power of attorney?
+9. Describe the course of an order. What is the final disposal of the order?
+10. How is the purchase book formed in this chapter? Do you approve of this method?
+
+**PART TWO**
+
+**ACTUAL BOOKKEEPING**
+
+Transactions of the Union Grocery Company from April 3 to April 15
+
+The student should enter these transactions in the proper books, making out also all forms called for by each transaction. On April 15 he should prove cash, post to the ledger, and make a trial balance.
+
+April 3: Sold Allen & Young, on % 10 days: 2 bbls. sugar, 400 lbs.
+@ $3/4c bbl. Rice @ $11/75; 10 lbs. O. G. Java coffee @ 31/2c;
+400 lbs. evaporated California prune @ 11/50; 100 lbs. Macadamia nuts @ 10/5c.
+
+Sold to Bush & Kennedy, on % 15 days: 50 lbs. anchovies @ 13c;
+100 lbs. boneless cod @ 23c; 20 sacks (24/4 lbs. each) rye flour @ 3/4c;
+6 broomcorns @ 63c; 25 lbs. bonito @ 75c; 100 lbs. starch, $4.
+Sold to Maud Osborne, on % 20 days: 25 lbs. corn meal @ 24/4c; 200 lbs. yellow corn meal @ 24/4c; 50 lbs. pastry flour @ 5/3c; 1 bbl.
+sugar, 200 lbs., @ 8/4c.
+
+Sold E. P. Geisler, on % 15 days: 2 cases catup @ $5; 25 gala cane syrup @ 96c; 100 lbs. oleomargarine @ 32/5c; 100 lbs. evaporated peaches @ 11c; 50 lbs. O. G. Java Coffee @ 31/2c.
+
+Dated Google
+
+142
+ESSENTIALS OF BOOKKEEPING
+
+Sold to the Dowman Tea & Coffee Company, 2% 10 days: 100 lbs Java and Mocha coffee @ $38; 200 lbs. Mocha coffee @ $30; 100 lbs. Rio coffee @ $14.50; 50 lbs. Oolong tea @ $1.10; 50 lbs. Young Hyson tea @ $7.50; 50 lbs. Japan tea @ $4.50.
+
+Sold to T. B. Arthur, 2/10, N/30: 10 pails peanut butter @ $.25; 100 lbs. mixed nuts @ 21c; 100 cases canned fruit @ $.65 each.
+
+Sold to the Kipton Grocery Co., on % 15 days: 100 lbs. Swiss cheese @ $7.50; 20 lbs. ham @ $.92; 10 pails of lard @ $.35.00; 20 lbs. Limburger cheese @ $.31c; 100 lbs. Cotoenat @ .28c.
+
+Received checks as follows: T. B. Arthur, $20.00; Mach & Osborne, $83.91; Hammer & Imhof, $10.00; Hart & Martin, $20.00; The Fletcher Bros. Co., $65.01; Mach & Osborne, $36.01; Fortescue & Thierer (2% dis- count), $67.88.
+
+Paid by check: The American Sugar Co., $250; The Seaco Milling Co., $454.10; The International Coffee Co., $139.46; The Nippon Tea Co., $10.00.
+
+Received incoming goods with invoices as follows: 50 bbls. (10,000 lbs.) sugar @ 75c, from the American Sugar Co.; 12 cwt. dried fruits from the American Fruit Importing Co., @ $.8 per cwt.
+
+The Fletcher Bros. Co. return 1 case of canned peaches sold to them last month for inspection.
+
+April 4. Sold to J. Y. Bayne, 2/10, N/30: 5 cases canned plums @ $.477; 10 cases canned blackberries @ $.38; 30 cases canned pears @ $.612; 25 cases canned raspberries @ $.35.
+
+Sold to Geo. H. Brown & Co., for cash less %: 5 bbls. sugar (1,000 lbs.), @ $.84c; 500 lbs. O.G Java coffee @ .29;c; 50 cases canned cherries @ $.75.
+
+Sold to Hammer & Imhof, on % 15 days: 100 cases canned pine- apple @ $.65;c; 50 cases canned cherries @ $.75;c; 50 cases canned peaches @ $.45;c.
+
+Sold to the Kipton Grocery Co., 2/10, N/30: 75 cases canned asparagus @ $.688; 50 cases canned beans @ $.65;c; 50 cases canned peas @ $.395; 25 cases canned tomatoes @ $.26.
+
+Received checks as follows: Geo. H. Brown & Co., $614.95; M.B. Trotter & Co., $399; Murphy & Kilbane (2% discount), $1,384.83; Otten & Co., $679.
+
+Received a sight draft on Ingram & Houk, drawn by J.E Charvat in favor of the Union Grocery Co., for $899, allowing 2% discount on the payment. The draft is presented and paid.
+
+Bush & Kennedy return 50 lbs. of the boneless cod sold them yesterday @ .23c.
+
+Drew a draft at 10 days' sight on MaIvor & Brady in favor of The American Sugar Co., for the bill purchased yesterday, less 2%.
+
+
+
+
+ |
+ |
+
+
+
+
+ |
+ |
+
+
+
+
+**WHOLESALE ACCOUNTS** 143
+
+Drew a check for $50 for the impost fund.
+Received a letter from E. J. Barnes stating that a case of soap powder, sold to him in March, is unsatisfactory, having apparently deteriorated in strength. Write him a letter stating that we have allowed him credit for $3.50, and asking him to sell the powder at a special price.
+
+April 5. Sold to Hart & Martin, on %: 10 bbls. (2,000 lbs.) sugar @ 84c; 16 boxes (400 lbs.) raisins @ 11c; 50 pails salmon @ $2.62; 50 pails smoked cod @ $7.75; 190 lbs. washing powder @ $2.50.
+Sold to M. C. Weston, 2/10, N/30; 70 lbs. tina canned meat @ $1.98; 100 pails lard @ $3.50; 500 lbs. cheese @ 17c; 10 tub butter @ $27.50; 100 lbs Camembert cheese @ 33c.
+Sold to the Sweet Shoppe for cash: 50 lbs. peanut brittle @ 21c; 75 lbs. bitter sweet chocolate @ 26c; 50 lbs. candy stick @ 17c; 25 lbs. caramel @ 185c; 50 lbs. marshmallows @ 23c.
+Sold to Allen & Young, 2/10, N/30; 100 lbs. canned fruit at 46c; 60 boxes cherry pie filling @ 66c; 4,000 lbs., @ .83c.
+Received checks as follows: McIvor & Brady, $258.88; the Square Grocery, $74.43; E. P. Geisler, $85.56; the Sweet Shoppe, $78.60; Allen & Young, $97.34; March & Ramage (for their acceptance), $912.50.
+Paid for repairs on truck No. 1, $12.50.
+Paid for advertisement in the "Press," $16.80.
+Paid freight bills by check to the L. S. & M. S. R. R., $67.12.
+The Kipton Grocery returns 5 cases of canned tomatoes @ $2.65.
+Paid rent of the store for the month of April, $30.
+Notified the American Fruit Importing Co., New York, by letter that the dried fruit which arrived April 8 was damaged to the extent of $7 in transit.
+
+Write a letter to the Square Grocery telling them that they overpaid their account $2, which has been credited to their account.
+
+April 6. Sold to the Fletcher Bros., Co., 2/10, N/30; 50 cartons Rising Sun stove polish @ .84c; 300 brooms @ .62;c; 12 dos. polishing mops @ $.1075 c doz.; 12 dos. qt. canola oil @ $.85 c doz.
+Sold to E.J. Barnes on %: 15 days: 100 Edam cheeses @ $.37; 100 tina Camembert cheese @ .75 lbs.; brick cheese @ .27c; 30 lbs. Limburger cheese @ .28c; 10 lbs. butter @ .48c.
+Sold to M.C. Weston for his note at 30 days: 12 bbls. sugar (2,400 lbs.), @ .84c; 90 cases assorted soups @ $.228; 50 cases #4 bottles of extracts @ $.48.
+
+Sold to J.W.Meyer, 2/10, N/30: 50 bbls flour @ $.1038; 100 eighth sacks graham flour @ $.117; 100 eighth sacks entire wheat flour @ $.18%; 100 #2b sacks yellow corn meal @ $.21.
+
+
+
+
+| Description |
+Quantity |
+Unit Price |
+Total Price |
+
+
+
+
+| Sold to Hart & Martin |
+On %: |
+16 boxes (400 lbs.) raisins |
+@ .11c |
+$1.76 |
+
+
+ |
+ |
+50 pails salmon |
+@ $2.62 |
+$13. |
+
+
+ |
+ |
+50 pails smoked cod |
+@ $7.75 |
+$387. |
+
+
+ |
+ |
+190 lbs washing powder |
+@ $2.5 |
+$475. |
+
+
+ |
+ |
+75 lbs bitter sweet chocolate |
+@ .26 |
+$19. |
+
+
+ |
+ |
+50 lbs candy stick |
+@ .17 |
+$8. |
+
+
+ |
+ |
+25 lbs caramel |
+@ .185 |
+$4.\n\nSold to Allen & Young, | on %: | 50 lbs marshmallows | @ .23 | $1.\n\nSold to Allen & Young, | on %: | 66c cherry pie filling | @ .83c | $\n\nSold to Allen & Young, | on %: | 66c cherry pie filling | @ .83c | $\n\nSold to Allen & Young, | on %: | .83c cherry pie filling | @ .83c | $\n\nSold to Allen & Young, | on %: | .83c cherry pie filling | @ .83c | $\n\nSold to Allen & Young, | on %: | .83c cherry pie filling | @ .83c | $\n\nSold to Allen & Young, | on %: | .83c cherry pie filling | @ .83c | $\n\nSold to Allen & Young, | on %: | .83c cherry pie filling | @ .83c
+
+
+| Description |
+Quantity |
+Unit Price |
+Total Price |
+
+
+ |
+
+| Sold to M.C.Weston for his note at 30 days: | 12 bbls sugar (2,400 lbs.)@ .84c; | 90 cases assorted soups@$.228; | 50 cases #4 bottles of extracts@$.48. | |
+
+144
+ESSENTIALS OF BOOKKEEPING
+
+Received checks as follows: T. B. Arthur, $47.10; J. Y. Bayne, $186.74; Geo. H. Brown & Co., $348.12; the Clark Grocery Co., $144.60; Buah & Kennedy, $48.76; P. W. Jamison (for his note), $465.50.
+Paid our acceptance for $844.50.
+Paid for gasoline for trucks, $10.50.
+Petty cash book entry; telegram, 76c.
+Paid telephone bill, $16.
+
+April 7. Sold to Allen & Young, 2/10, N/30: 50 boxes laundry soap @ $.10; 50 boxes toilet soap @ $.75; 26 tins butter @ $.27.50; 127 lbs. cheese @ 17c.
+
+Sold to Bush & Kennedy on %: 10 bbls (2,000 lbs.), sugar @ $.84; 20 cans lard @ $.17.94; 4 bags (150 lbs.) each green Rio coffee @ .0097½ a pound; 4 bales (150 lbs. each) green Mocha coffee @ 28c; 4 half chests (77 lbs.) each green coffee @ 33c.
+
+Sold to Mach & Osborne, 2/10, N/30: 5 cases cannedparagus @ $.68; 10 cases canned cherries @ $.41; 10 cases canned peaches @ $.73.5; 10 cases canned strawberries @ $.73.5; 10 cases canned raspberries @ $.612½; 10 cases canned blackberries @ $.51; 10 cases canned peas @ $.73.5.
+
+Sold to Lumber Company on %: 10 tube butter @ $.27.50; 417 lbs. cheese @ 17c; 60 lbs. Limburger cheese @ .9c; 60 pails salt mackerel @$.27; 50 pails lake herring @ .9c.
+
+Received the following goods with invoices: syrups, extracts and spices from the Tonquin Mfg. Co., Savannah, Ga., $256.85; soap, soap powders, and starch from the National Soap Works, Omaha, Neb., $748.12; comic kits, waxed papers, paper napkins and decorating paper from the Niagara Paper Novelty Co., Buffalo, N. Y., $158.90; brushes, mops, brooms and buckets from the Andrews Woodware Co., Detroit, Mich., $296.45.
+
+Received a letter from the Square Grocery thanking us for the information reported to them April 5.
+
+Received checks as follows: Otten & Fredricks, $482.12; J. W. Moyer for balance and bill of April 6, less 2%, $1,088.61; E. P. Goslar, bill of April less %$, $91.14; E. A. Barnes, balance to April 1, $104.67; M. C. Weston balance, $.93; The Fletcher Bros. Co., balance to April 1, $327.40.
+
+Paid balance due the American Sugar Co., $237.12.
+Paid balance, less %$, to the Forbes Chocolate Co., $242.43.
+Petty cash book entries: postage due, 13c; messenger service, 65c; long-distance telephone bill, 35c; carfare, 50c.
+Paid for cleaning windows, $3.
+Paid the Sign Writer Co., for advertisements on billboards, $167.50
+
+**WHOLESALE ACCOUNTS**
+
+145
+
+Paid expressage on goods from Niagara Paper Novelty Co., $5.60.
+Write a letter to the Niagara Paper Novelty Co., calling their attention to the fact that the expressage on the package received from them was not prepaid, and enclosing a check for the amount of their bill, less 2% and less the amount paid for expressage.
+
+April 8. Sold to the Clark Grocery Co., 2/10, N/30: 25 bbla sugar (5,000 lbs.), @ 84c; 50 bbla flour @ $11.75; 500 lbs. buckwheat flour @ 64c; 800 lbs. oatmeal @ 64c; 25 half chests (75 lbs. each) green Japan tea @ 57c.
+
+Sold to Hammer & Imhof, 2/10, N/30: 10 bags (125 lbs. each) Rio coffee @ 13c; 8 bales (150 lbs. each) Mocha coffee @ 31½c; 10 half chests (50 lbs. each) Oolong tea @ 57c; 10 half chests (60 lbs. each) English Breakfast tea @ 55c; 500 lbs. cocoa @ 30c.
+
+Received checks as follows: J. Y. Bayne for bill of April 4, less 2%; Hammer & Imhof, balance to April 1; Hart & Martin, balance to April 1; The Kipton Grocery Co., balance to April 1; the Downman Tea & Coffee Company to April 1.
+
+We receive a letter from the American Fruit Importing Co., allowing our claim of $7 for damaged goods received April 3.
+
+The Downman Tea & Coffee Co. return 50 lbs. of Mocha coffee @ 30c, sold to them April 3.
+
+The Kipton Grocery Co. return 10 cases of canned asparagus sold to them April 4 @ $6.88.
+
+We receive from the National Soap Works 2 boxes laundry soap purchased April 7 for $8.50.
+
+Paid the Stannum Canning Co. by check the balance of our account.
+Paid the Secale Milling Co. by check the balance of our account.
+Paid the Triticum Baking Co. by check balance of account.
+Paid the American Fruit Importing Co. by check balance to April 1, and bill of April 3 less 2%.
+
+Made out a check to payroll, to be distributed as follows: office force, $125; sales force, $186.50; delivery men, $75; warehousemen, $36.
+
+April 10. Sold to T. B. Arthur, 2/10, N/30: 10 bbla flour @ $11.75; 5 bags Rio coffee (125 lbs. each) @ 16c; 4 bales Mocha coffee (125 lbs. each) @ 64c; English Breakfast tea @ 52c; half chests (60 lbs. each) English Breakfast tea @ .52c.
+
+Sold to T. Y. Bayne, 2/10, N/30: 4 boxes (50 lbs. each) evaporated peaches @ 14½c; 100 cartons dates @ .23c; 4 boxes (25 lbs. each) raisins @ .11c; 10 boxes (25 lbs. each) prunes @ .12½c.
+
+Sold to Geo. H. Brown & Co., 2/10, N/30: .25 tube butter @ $27.50; 100 lbs. brick cheese @ .31½c; 3 cans lard @ $17.60; paper novelties, $12.75.
+
+
+
+
+ |
+ |
+ |
+
+
+
+
+ |
+ |
+ |
+
+
+
+
+146
+
+**ESSENTIALS OF BOOKKEEPING**
+
+A letter from Mach & Osborn states that the labels were torn from many of the canned goods shipped them on the 7th, and they have paid $3 to have them replaced. Write them a letter allowing them a rebate of $3.
+
+Received from T. B. Arthur a check for $350 on account. Allow him 5% discount.
+
+Received from Bush & Kennedy the balance of the bill of April 3 in full.
+
+Received from Hammer & Imhof their check for the bill of April 4 in full.
+
+Received from Erner & McKean a check for the balance of their account to April 1.
+
+April 11. Sold to M. B. Trostler & Co., 2/10, N/30: 5 cases canned corn @ $3; 5 cases hominy @ $1.95; 10 cases lima beans @ $3.60; 10 cases sweetcorn @ $3.30; 10 cases stringless beans @ $4.72.
+
+Sold to McIvor & Brady, 2/10, N/30: 5 pails salmon @ $6.40; 5 pails mackerel @ $10.75; 10 pails Gaffelbitter herring @ $1.25; 20 pails lard (herring @ $1).
+
+Sold to Murphy & Kilbane for net cash: 1 bbl. sugar (200 lbs.) @ 84c; 2 bbls. flour @ $11.75; 1 mat (75 lbs.) Java coffee @ 45c; 1 half chest (70 lbs.) Young Hysen tea @ 27c.
+
+Sold to Otten & Frederke, 2/10, N/30: 20 gala. maple syrup @ $1.75; 5 pails. New Orleans molasses @ 57c; 5 gals. sorghum @ 83c; 2 cases hams @ $6.86.
+
+Received from Murphy & Kilbane their check for the bill sold them today.
+
+April 12. Sold to Hart & Martin, 2/10 on %: 20 cases hominy @ $1.90; 12 cases succotash @ $3.30; 15 cases corn @ $3; 50 gals. maple syrup @ $1.73.
+
+Sold to the Kipton Grocery Co., 2/10 on %: 25 bbls. flour @ $11.75; 10 bbls. sugar (2,000 lbs.) @ 84c; 200 lbs. cocoa @ 25c; 5 bales (150 lbs. each) Mocha coffee @ 30c.
+
+Sold to Erner & McKean, 2/10 on %: 50 bbls flour @ $11.75; 100 lbs. sugar (2,000 lbs.) cases lima beans @ $3.60; 26 cases stringless beans @ $4.72; 40 cases corn @ $3.
+
+Petty book entries: telegram, 40e; messenger, 35c; postage due, 18c; carfare, 50c.
+
+April 13. Sold to the Downward Tea & Coffee Co., 2/10 on %: 4 (125 lb.) bags Maracalbo coffee @ .21c; 4 (125 lb.) bags Rio coffee @ .16c; 4 (.150 lb.) bales Mocha coffee @ .30c; 4 (.75 lb.) mats Java coffee @ .49c; 4 half chests (.75 lbs. each) Japan tea @ .66c; .half chests (.70 lbs. each) Young Hysen tea @ .70c; .half chests (.60 lbs. each)
+
+**WHOLESALE ACCOUNTS** 147
+
+English Breakfast tea @ 63c; 6 half chests (50 lbs. each) Oolong tea @ $1.10.
+Sold to the Square Grocery Co., 2/10 on %: 200 lbs. California prunes @ 10jic; 200 lbs. evaporated peaches @ 14c; 500 lbs. Muscatel raisins @ 12c; 200 lbs. butter @ 55c; 200 lbs. lard @ 35c; 20 bbls. flour @ $11.75.
+
+Sold to Fortescue & Thier, 2/10 on %: 100 cases Lux soap flakes @ $1.30; 10 boxes starch @ $.41;c; 20 cans borax @ $.375; 10 cases soap powder @ $.75;c; 40 boxes laundry soap @ $.625.
+
+Received a check from T. B. Ardour for the balance of the bill of April 8, less discount.
+
+Received a check from the Downman Tea & Coffee Co. for the bill of April 3, less discount.
+
+Paid the International Coffee Co. the balance due them to April 1.
+Paid the Nippon Tea Co. the balance due them to April 1.
+The Clark Grocery Co. return 100 lbs. oatmeal sold them April 8 @ $17.50.
+
+@ $64c
+
+Bush & Kennedy return 5 cans lard sold them April 7 @ $17.50.
+April 14. Sold to J. E. Charvat, 2/10 on %: 12 bbls. flour @ $1.75; 1000 lbs. corn meal @ 2jic; 500 lbs. rye flour @ .3jic; 10 half chests Japan tea @ .75c each.) @ .6jc; 10 half chests Young Huson tea (70 lbs. each) @ .75c.
+
+Sold to J. W. Meyer, 2/10 on %: 10 cases apricots @ $.37jic; 25 cases yellow cling peaches @ $.57jic; 25 cases Hawaiian pineapple @ $.37c; 20 cases cherries @ $.6;c; 200 lbs. Java and Mocha coffee @ .38c; 4 half chests (30 lbs. each) Oolong tea @ $1.10.
+
+Sold to M. C. Weston, 2/10 on %: 500 lbs. olearmgarin @ .33c; .85c lbs.; .85c lbs.; .85c lbs.; starch @ .8jc; 25 packages borax @$.375;c; 200 lbs. nuta @ .15c.
+
+Received from the Kipton Grocery Co. their check for the balance of the bill sold them on April 4, less discount.
+
+Received from J. E. Charvat a check for the balance of his account to April 1.
+
+Petty cash book entries: paste and brush, .85c; carfare, .5jc; pens, .75c.
+April 15. Sold to Mach & Osborne, 2/10 on %: 10 pails herring @ $.63;c; 20 pails mackerel @ $.11;c; 40 pails salmon @ $.67;c; 28;c; Gaffitabell herring @ $.65.c.
+
+Sold to Hiram Smith, 2/10 on %: 10 cases ripe olives @ $.38;c; 10 cases tomatoes @ $.35;c; 10 cases peas @ $.27;c; 10 cases pumpkin @ $.25;c; 10 cases honey @ $.28;c; 29 cases corn @ $.3.
+
+Sold the Sweet Shoppe for net cash: 100 boxes chewing gum @ .73c; .5jc chocolate cherries @ .48c; .5jc caramels @ .37c; .6jc flour.
+
+
+
+
+| Description |
+Price |
+
+
+
+
+| English Breakfast tea |
+@ $1.10 |
+
+
+| Sold to the Square Grocery Co. |
+2/10 on %: $2.2 |
+
+
+| Sold to Fortescue & Thier |
+Soap flakes |
+@ $1.3 |
+
+
+| Sold to Bush & Kennedy |
+Cans lard sold them April |
+@ $17.5 |
+
+
+| Sold to J.W.Meyer |
+April |
+@ $64c |
+
+
+| Sold to Mach & Osborne |
+April |
+@ $63c |
+
+
+| Sold to Hiram Smith |
+April |
+@ $63c |
+
+
+| Sold to Sweet Shoppe |
+April |
+@ $63c |
+
+
+| Sold to Mach & Osborne |
+April |
+@ $63c |
+
+
+| Sold to Hiram Smith |
+April |
+@ $63c |
+
+
+| Sold to Mach & Osborne |
+April |
+@ $63c |
+
+
+| Sold to Hiram Smith |
+April |
+@ $63c |
+
+
+| Sold to Mach & Osborne |
+April |
+@ $63c |
+
+
+| Sold to Hiram Smith |
+April |
+@ $63c |
+
+
+| Sold to Mach & Osborne |
+April |
+@ $63c |
+
+
+| Sold to Hiram Smith |
+April |
+@ $63c |
+
+
+| Sold to Mach & Osborne |
+April |
+@ $63c |
+
+
+| Sold to Hiram Smith |
+April |
+@ $63c |
+ | Total: | $999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999. |
|---|
+
+148
+
+**ESSENTIALS OF BOOKKEEPING**
+
+marshmallows @ 23c; 300 lbs. stick candy @ 18c; 150 lbs. candied fruits @ 85c.
+
+Sold to Fletcher Bros. Co., 2/10 on %: 100 jars apple butter @ 49c; 100 jars currant jelly @ 89c; 25 cases Hawaiian pineapple @ $.75; 40 cases yellow plums @ $5.75; 60 cases cherries @ $.50 cases apricots @ $.90
+
+Goods have been received and checked to the following invoices:
+The Scalene Milling Co., flour, cereals, meal, etc., 2/10, N/30,
+$1,875.50.
+The International Coffee Co., 2/10 on %, $1,685.80.
+The Tonquin Mfg. Co., 2/10/N/30, extracts, spices, syrups, etc.,
+$472.12.
+The National Soap Works, 2/10 on %, laundry soap and starch,
+$487.25.
+
+Received a check from Hart & Martin for the bill of April 5, in full.
+Received a check from Erner & McKean for the bill sold them April 5,
+less discount.
+
+Received a check from Otten & Frederke for balance to April 1.
+Sent a check to the Tonquin Mfg. Co. for the bill received April 7,
+less 2% discount.
+
+Received a check from the Fletcher Bros. Co., for bill sold April 6,
+less discount.
+
+Sent a check to the National Soap Works for the balance of the bill
+received April 7, less 2%.
+
+Made a check for the payroll to be distributed as follows: the office force, $127.50; the sales force, $191.50; delivery men, $75; warehousemen, $36.
+
+Sent a check to the International Coffee Co. for our note made February 15 at 60 days.
+
+Sent a check to the Andrews Woodeware Co. for the bill received on the 13th, less discount at 2%.
+
+The Score Grocery returns a 50-lb. can of lard sold to them on
+the 13th @ .35c.
+
+Write a letter to the Tonquin Mfg. Co., telling them that 1 case of
+extracts was so damaged in transit that 12 bottles were broken. Enclose
+with the letter a copy of the freight bill on which the railroad freight
+agent had signed his name and stating that he would not pay for the broken bottles
+in the case are practically unvaluable because the labels are stained by
+the contents of those which were broken. The damage was done to
+a case of 4-o-a bottles of lemon extract.
+
+Paid freight bills to the N. Y. C. & St. L. R. R. by check, $76.15.
+
+---
+
+WHOLESALE ACCOUNTS 149
+
+Paid $17.10 for gasoline.
+The student should make a trial balance at this point, but no statements.
+
+PART THREE
+
+ACTUAL BOOKKEEPING
+
+Transactions of the Union Grocery Company from April 17 to April 30
+
+April 17. Sold to the Clark Grocery Co., 2/10 on %: 15 bags (125 lbs. each) Maracaibo coffee @ 21c; 15 bags (125 lbs. each) Rio coffee @ 16c; 15 bags (125 lbs. each) and Java coffee @ 40c; 300 lbs. cocoa @ 30c; 30 lbs. chocolate @ 25c.
+Sold to Hammer & Imhof, 2/10 on %: 500 lbs. nuta @ 15c; 20 cases sapaguaru @ $.83; 50 cases pork and beans @ $.547; 30 cases corn @ $.3; 20 cases hominy @ $.2.
+Sold to Allen & Young, 2/10, N/30: 100 pails laking herron @ $.172; 100 pails Alaska salmon @ $.298; 100 pails mackerel @ $.443; 100 pails cod tongue and sounds @ $.23.
+Mr. T. P. B. Baker, a stockholder, has sold 8 shares of stock at 81% premium to B. N. Baker.
+
+April 18. Sold to E. J. Barnes, 2/10 on %: 25 cases Hawaiian pineapple @ $.32; 20 cases white cherries @ $.96; 10 cases prunes @ $.46; 25 cases peaches @ $.38; 10 cases apricots @ $.84; 12 cases apple butter @ $.467.
+
+Sold to E. P. Geseler, 2/10 on %: 20 cases cherries @ $.48; 20 cases Hawaiian pineapple @ $.32; 20 cans lard @ $.75; 20 boxes prunes @ $.28; 20 boxes raisins @ $.23; paper novelties @ $24.80.
+Sold to McIvor & Brady, 2/10 on %: 20 bbls. flour @ $1.75; 4 bbls meal at $1.69; 5 bbls corn meal at $1.69; 50 sacks oatmeal @ $1.66); 50 sacks buckwheat flour @ $1.00; 50 sacks barley flour @ $1.25.
+
+Sold to T. B. Arthur, 2/10 on %: 10 tubs butter @ $.275; 10 cans lard @ $.75; 500 lbs. cheese @ .17c; 10 cans shortening @ $.1375; 25 boxes oleomargarine @ $.60.
+
+Received a check from McIvor & Osborne for bill of April 7, less %.
+Write them a note asking their attention to the fact that this check did not arrive in time to come within the terms of discount and informing them that we have credited them with the face of the check.
+Received a check from the Clark Grocery Co. for the bill sold them April 3.
+
+Received a check from Hammer & Imhof for the bill of April 8, less discount.
+
+150
+**ESSENTIALS OF BOOKKEEPING**
+
+Received a check from the J. P. Sanders Co. for the balance of their note of January 18 with interest from March 4.
+
+Received a check from J. C. Amboy for his note of January 18.
+
+Discounted at the bank Wolf & Dean's acceptance of March 22.
+
+The following goods have been received and checked to the invoices:
+The Clover-Leaf Dairy Co., butter and cheese, $482.12.
+The Cape Cod Fineries, sea foods in wood, $1,683.76.
+
+April 19. Sold to T. B. Arthur, 2/10 on %: 250 lbs. cocoa @ 30c; 200 lbs. chocolate @ 25c; 25 cases extracts @ $4.80; 100 boxes laundry soap @ $.35; 10 cases soap powder @ $.75.
+
+Sold to J. Y. Hayne, 2/10 on %: 10 lbs. sugar (200 lbs. each) @ $1.84; 20 lbs. coffee (10 lbs. each) @ $1.84; 10 lbs. tea (6 lbs. each) @ .63c; 10 half chests English black tea (60 lbs. each) @ .63c.
+
+Sold to Geo. H. Brown & Co., 2/10 on %: 200 lbs. mixed nuts @ .18c; 500 lbs. peanuts @ .14c; 50 cans peanut butter @ $.315; 50 cans apple butter @ $.32; 50 cases peaches @ $.38.
+
+The following goods have been received and checked to the invoices:
+The National Soap Works, soap and soap powders, $2,873.50.
+The Lumber Milling Co., $2,590.40.
+The Nippon Tea Co., $3,486.52.
+The International Coffee Co., $2,624.48.
+The Forbes Chocolate Co., $1,034.48.
+
+Received a check from Geo. H. Brown & Co. for the bill sold April 10, less discount.
+
+Received a check from the Clark Grocery Co. for the balance of the bill sold to them April 8.
+
+Received a check for the bill sold April 7, from Bush & Kennedy.
+
+Paid our acceptance of March 20 by check.
+
+April 20. Sold to Hart & Martin, 2/10 on %: 20 bbls. flour @ $11.75; 400 lbs. corn meal @ .21c; 400 lbs. oatmeal @ .61c; 10 bbls. rye flour @ .92c; 10 bags (125 lbs. each) Rio coffee @ .66c; 500 lbs.
+
+Sold to the Kipton Grocery Co., 2/10 on %: 20 cases Hawaiian pineapples @ $.35; 5 cases (5 lbs.) oranges @ .82c; 40 cases peaches @ $.38; 20 cases apricots @ $.67; 25 cases pears @ $.72.
+
+Sold to Erner & McKean, 2/10 on %: 10 marts (75 lbs. each) Java coffee @ .40c; 5 bales (150 lbs. each) Mocha coffee @ .30c; 10 half chests (50 lbs. each) Oolong tea @ $.19c; 10 half chests (75 lbs. each) Young Hyson tea @ .7c.
+
+Received a check from T. B. Arthur for bill sold April 10, less discount.
+
+
+
+
+ |
+ |
+ |
+
+
+
+
+| Sold to T.B. |
+Arthur |
+April |
+19 |
+to |
+J.Y. |
+Hayne |
+April |
+2/10 |
+on |
+%: |
+25 |
+cases |
+extracts |
+@ |
+$4.8 |
+; |
+1 |
+box |
+laundry |
+soap |
+@ |
+$$.35; |
+case |
+soap |
+powder |
+@ |
+$$.75; |
+. |
+. |
+. |
+. |
+. |
+. |
+. |
+. |
+. |
+. |
+. |
+. |
+. |
+. |
+. |
+Sold to J.Y. |
+Hayne, |
+April |
+2/10 |
+on%: |
+10 |
+bags(2) |
+sugar(2) |
+(2) |
+bags(3) |
+cocoa(3) |
+(3) |
+bags(4) |
+chocolate(4) |
+(4) |
+bags(5) |
+coffee(5) |
+(5) |
+bags(6) |
+oatmeal(6) |
+(6) |
+bags(7) |
+peanuts(7) |
+(7) |
+bags(8) |
+peaches(8) |
+(8) |
+bags(9) |
+black tea(9) |
+(9) |
+bags(10) |
+tea(10) |
+(10) |
+bags(11) |
+sugar(11) |
+(11) |
+bags(12) |
+corn meal(12) |
+(12) |
+bags(13) |
+oatmeal(13) |
+(13) |
+bags(14) |
+rye flour(14) |
+(14) |
+bags(15) |
+Rio coffee(15) |
+(15) |
+
+
+
+
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+
+
+
+| ESSENTIALS OF BOOKKEEPING |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+ |
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+Received a check from J. Y. Bayne for bill sold April 10, less discount.
+Bush & Kennedy return 1 case of tomatoes sold them April 15 for $3.65.
+Mach & Osborne report that 2 pails of salmon sold them April 15 were leaking upon arrival and had to be sold at a sacrifice of $.4. We allow them that amount of credit and notify them of the fact by letter.
+
+April 20, 19--
+
+Mr. E. P. Geesler
+1029 North Front St.
+
+in account with
+
+THE UNION GROCERY COMPANY
+
+Terms: 8/30. M/30.
+
+
+
+
+19--
April |
+Balance |
+85 50 |
+
+
+
+
+| 3 |
+Bill No. 634 |
+93 -- |
+
+
+| 7 |
+Bill No. 645 |
+473 89 |
+
+
+| 18 |
+Bill No. 670 |
+671 20 |
+
+
+| 5 |
+Check |
+85 50 |
+
+
+| 7 |
+Check |
+93 -- |
+
+
+ |
+Balance |
+1145 09 |
+
+
+
+
+FORM #1: Statement of Account
+
+A letter is received from the Torquin Mfg. Co., allowing $2.40 on the bill of goods received April 15 and enclosing 12 new labels to be pasted on the bottles of lemon extract stained in transit by breakage.
+
+Statements of account. It is the custom of the Union Grocery Company to send statements of account to all customers whose accounts in the sales ledger do not balance. This statement is usually a copy of the debits and credits in the customer's ledger accounts, together with the dates, as shown in Form #1 just above. Sometimes, however, only the balance of the account is given. Since the Union Grocery Company prefers
+
+152
+**ESSENTIALS OF BOOKKEEPING**
+
+the first method, the student should prepare the statements of all customers whose accounts in the sales ledger do not balance.
+
+An account current is a record of the debit and credit items contained under the title with which these items are concerned. This is usually in the ledger or book of accounts. The statement of account is simply a transcript of the account current.
+
+April 21. Sold to the Fletcher Bros. Co. 2/10 on %: 20 cases beans @ $2.10; 40 cases pork and beans @ $5.23; 25 cases lima beans @ $.38; 30 cases sweet corn @ $2.95; 30 cases hominy @ $1.98; 20 cases succotash @ $3.
+
+Sold to M. C. Weston, 2/10 on %: 10 bags (125 lbs. each) Mars-calois coffee @ .21c; 10 bales (150 lbs. each) Mocha coffee @ .30c; 10 half chests (60 lbs. each) E. B. tea @ .63c; 10 half chests (75 lbs. each) Japan tea @ .63c.
+
+Sold to Otten & Frederke, 2/10 on %: 5 bbls. (200 lbs. each) sugar @ .84c; 15 bbls. flour @ $11.75; 500 lbs. corn meal @ 2½c; 200 lbs. cocoa @ .30c; 500 lbs. chocolate @ .25c.
+
+Received a check from M. B. Trottler & Co. for the balance due to April 1 and for the bill sold them April 11, less discount on the bill.
+
+Received a check from McIvor & Brady for bill sold April 11, less discount.
+
+Received a check from Otten & Frederke for the bill sold April 11, less discount.
+
+Received a check from E. P. Gosier for the bill sold April 7.
+
+Received a check from E. J. Barnes for the bill sold April 6.
+
+A letter from P. C. Carter informs us that he has appointed receiver for Otten & Young, and asks us to send a statement of their account to him, showing the equated date on which their account is due.
+
+The equated date and how to find it. It is sometimes desirable where the terms of payment are not carried out, or where an account is to be settled before all of it is due, to determine the date upon which the payment of all the items of an account would be just to the receiver or the creditor. This depends upon which such an adjustment is made in the value of $1 for one day. On this basis $5 for 60 days is equal in the value of its service to $15 for 20 days.
+
+If a customer buys a bill of goods amounting to $1,250, terms $250 in cash, and the remainder in two equal payments, half in 60 days and half in 90 days, what would be the date upon which
+
+WHOLESALE ACCOUNTS 153
+
+it would be just to both buyer and seller to pay the entire amount, in one sum, instead of according to the terms?
+
+$$250 \times 0 = 0$$
+$$500 \times 60 = 30,000$$
+$$500 \times 90 = 45,000$$
+$$0 + 30,000 + 45,000 = 75,000$$
+$$75,000 + 1250 = 60,$$ the equated time.
+
+The entire $1,250 should be paid 60 days from the date when the goods were purchased.
+
+If, in the above example, the buyer had made the first payment of $250 in cash, the equated time would then be 75 days.
+
+The rule for finding the equated time for the payment of several amounts may be stated as follows: Multiply each item by its time to run; the sum of the products thus obtained, divided by the entire amount of the debts, will equal the equated time.
+
+When there are several dates. If the dates of the debts are different so that there is no definite starting point from which to figure, it may be necessary to establish what is called a focal date. This may be the date upon which the calculation is made, provided all the due dates fall after that day. If all the due dates do not fall after that day, the due date of the first bill may be taken as a focal date. The time between this focal date and the due date of each bill is multiplied by the face of the bill; the sums of all the products thus obtained divided by the sum of all the bills gives us the equated time. This time added to the focal date will be the equated date of payment.
+
+If for any reason it seems more desirable, the due date of the last item may be used as the focal date, in which case the equated time found by dividing must be subtracted from the focal date to find the equated date of payment.
+
+From the above explanation the student should be able to comply with the request contained in Mr. Carter's letter.
+
+April 22. Sold to M. B. Trostler & Co., 2/10 on %: 25 cases cherries @ $6.82; 35 cases peaches @ $7.22; 30 cases pears @ $6.98; 25 cases oranges @ pineapple @ $5.18; 15 cases strawberries @ $6.18.
+
+Sold to Murphy & Kilbane, 2/10 on %: 500 lbs. cocoa @ 30¢; 250 lbs. chocolate @ 25¢; 25 dos. brooms @ $7.50; 10 dos. polishing mops @ $10.75; 15 dos. can oil polish @ $8.50.
+
+154
+ESSENTIALS OF BOOKKEEPING
+
+Sold to Fortesque & Thier 2/10 on %: 8 bags (125 lbs. each)
+Maracuja coffee @ $21; 300 lbs. Modica and Java coffee @ $35; 10 half chests (70 lbs. each) Y. H. tea @ $70; 10 half chests (50 lbs. each) Oolong tea @ $1.10.
+
+Received a check from Hart & Martin for the bill sold April 12, less the discount.
+
+Received a check from the Kipton Grocery Co. for the bill sold them on April 12, less discount.
+
+Received a check from Erner & McKean for the bill sold them on April 12, less discount.
+
+Received a check from the Downman Tea and Coffee Co. for the balance of their bill, less discount.
+
+Received a check from the Square Grocery for the balance of the bill sold them April 13, less discount.
+
+Received a check from Fortesque & Thier for the bill sold to them April 13, less discount.
+
+Paid the Secale Milling Co. for bill received April 15, less 2% discount, by check.
+
+Paid the International Coffee Co. for bill received April 15, less 2% discount, by check.
+
+Paid the Nippon Tea Co. for bill received April 15, less 2% discount, by check.
+
+Paid the Tonquin Mfg. Co. balance of bill received April 15, less 2% discount, by check.
+
+Paid the National Soap Works for bill received April 15, less 2% discount, by check.
+
+Made a check for the week's payroll, to be distributed as follows: office force, $127.50; sales force, $191.50; delivery men, $76; warehousemen, $36.
+
+Received a check from the N. Y. C. & St. L. R. R. for $8.85 as rebate on freight bills paid April 15.
+
+J. Y. Bayne returns 5 bbls. of flour sold to him April 19 @ $11.75.
+Received a check from Mach & Osborne for the balance of the bill of April 7.
+
+April 24. Sold to Mach & Osborne, 2/10 on %: 50 boxes laundry soap @ $6.25; 40 boxes toilet soap @ $3.75; 25 cases soap powder @ $7.50; 10 boxes starch @ $4.00.
+Sold to Mach & Osborne, 2/10 on %: 25 bbls. flour @ $11.75; 10 tubes butter @ $27.50; 10 cans lard @ $17.50; 12 boxes Muscatel raisins @ $2.33.
+
+Sold to the Downman Tea & Coffee Co. 2/10 on %: a duplicate of the order of April 13.
+---
+
+**WHOLESALE ACCOUNTS** 155
+
+Received a check from the Sweet Shoppe in full of account.
+Received a check from M. C. Weston for bill sold to him April 14, less 2% discount.
+Received a check from J. W. Meyer for bill sold to him April 14, less 2% discount.
+Received a check from J. E. Charvat for bill sold to him April 14, less 2% discount.
+
+Goods have been received and checked to the following invoices:
+The Forbes Chocolate Co., $2,148.60.
+The International Coffee Co., $3,490.10.
+The Nippon Tea Co., $1,666.48.
+The Secale Milling Co., $3,281.00.
+The Cape Cod Fisheries, $2,246.80.
+
+Petty cash book entries: carfare, 80c; rubber bands, 35c; messenger service, 90c; postage, 90c.
+
+April 25. Sold to the Clark Grocery Co. 2/10 on %: 40 cases pork and beans @ $.513; 50 cases lima beans @ $.3775; 25 cases stringless beans @ $.657; 50 cases sweet corn @ $.250; 50 cases hominy @ $.195.
+
+Sold to Hammer & Imhof, 2/10 on %: 50 pairs herring @ $.132; 100 pairs salmon @ $.238; 50 pairs mackerel @ $.428; 20 boxes laundry soap @ $.625.
+
+Sold to the Downman Tea & Coffee Co. 2/10 on %: 4 bags (125 lbs. each) Maracabo coffee @ .21c; 4 bags (150 lbs. each) Mocha coffee @ .30c; 8 bags (175 lbs. each) Oolong tea @ .10c; half chestie (75 lbs. each) Java tea @ .68c; half chestie (70 lbs. each) Yunnan Hiyen tea @ .70c; 4 half chestie (50 lbs. each) Oolong tea @ $.110.
+
+Received an order for candy from the Sweet Shoppe which we decline by letter, explaining that we have closed out our stock.
+Received a check from Mach & Osborne for bill sold to them April 15, less 2% discount.
+Received a check from Bush & Kennedy for the balance of bill sold to them April 15, less % discount.
+Received a check from the Fletcher Bros. Co. for the bill sold to them April 15, less % discount.
+
+Paid our note of Jan. 25 at the bank by check.
+
+April 26. Sold to the Square Grocery, 2/10 on %: 10 cases sweet corn @ $.30; 10 cases hominy @ $.198; 10 cases lima beans @ $.324; 10 cases succotash @ $.289; 10 cases stringless green beans @ $.553; 25 cases pork and beans @ $.527; 20 cases asparagus @ $.688; 15 cases red raspberries @ $.612; 20 cases pears @ $.732; 20 cases peaches @ $.847.
+
+158
+ESSENTIALS OF BOOKKEEPING
+
+Sold to J. E. Charvat, 2/10 on %: 6 bags (125 lbs. each) Maracaibo coffee @ 21c; 6 bags (125 lbs. each) Rio coffee @ 16c; 5 bales (150 lbs. each) Mocha coffee @ 30c; 8 masts (75 lbs. each) Java coffee @ 40c; 500 lbs. cocoa @ 30c; 408 lbs. chocolate @ 25c.
+
+Mach & Osborne return 2 cans of lard sold them April 24 @ $17.50.
+Petty cash book entries: ink, 90c; messenger service, 65c; postage due, 12c.
+
+Paid for an advertisement in the Daily News, $21.50.
+Sent a check to the Clover Leaf Dairy Co., for bill received April 18.
+Sent a check to the Cape Cod Fisheries for the bill received April 18, less 2% discount.
+
+April 27. Sold to T. B. Arthur, 2/10 on %: 10 dos. shoe brushes @ $1.56 a doz.; 100 cartons black ash-polish @ $22; 50 cartons tan shoe polish @ 78¢; 400 picnic lunch sets @ 8¢; 100 shoe-buffing outfits @ 89¢; 1,000 lbs. poultry feed @ $34;c; 500 lbs. chicken feed @ 33½c.
+
+Sold to Mach & Osborne, 2/10 on %: 20 cases tissue towels @ $.59; 200 brooms @ .75c; 10 cases stove polish @ $.775; 200 dustless mops @ .87¢; 50 quart cans oil polish @ .67¢.
+
+Sold to W. Meyer, 2/10 on %: 3 cartons tooth picks @ .73c; 25 boxes Sapolio @ $.29; 50 boxes starch @ $.313; 10 cases lye @ $.55; 25 boxes Ivory soap @ $.813; 12 dos. packages borax @ $.108 a doz.; 50 cartons scouring powder @ .47c.
+
+Sold to J. W. Meyer, 2/10 on %: 50 pails lake herring @ $.44; 50 pails salmon @ $.37; 50 pails mackerel @ $.54.
+
+Received a check from the Clark Grocery Co. for the bill sold them April 17, less 2% discount.
+
+Received a check from Hammer & Imhof for the bill sold them April 17, less 2% discount.
+
+Sent a check to the American Sugar Co. for the bill received April 19, less 2% discount.
+
+Sent a check to the Secale Milling Co. for the bill received April 19, less 2% discount.
+
+Sent a check to the Forbes Chocolate Co. for the bill received April 19, less 2% discount.
+
+Sent a check to the International Coffee Co. for the bill received April 19, less 2% discount.
+
+Drew a draft at 3 days' sight on Erner & McKean in favor of the Nippon Tea Co. for $1,000.
+
+Sent a check to the Nippon Tea Co. for the balance of the bill received April 19 less 2% discount on the entire bill.
+
+Sent a check to the National Soap Works for the bill received April 19, less 2% discount.
+
+**WHOLESALE ACCOUNTS**
+157
+
+A letter from the Fletcher Bros. Co. informs us that instead of sending them 40 cases of pork and beans and 25 cases of lima beans as billed, we reversed the numbers in shipping. Write them a letter allowing the difference.
+
+In an accident at a railroad crossing our truck No. 2 was completely destroyed. As we had only fire insurance, it is a total loss. We have sold the wreckage to a junk dealer for $83.
+
+Purchased a new truck, No. 4, from the General Motor Co., for $2,065.
+
+April 28. Sold to J. Y. Bayne, 2/10 on %: 30 cases pork and beans @ $.523; 25 cases lima beans @ $.872; 25 cases stringless green beans @ $.72; 20 cases wet beans @ $.312; 25 cases sweet corn @ $.267; 60 cases stringless peas @ $.98; 100 pails herring @ $.152; 100 pails salmon @ $.235; 50 pails mackerel @ $.434; 1,000 lbs. poultry feed @ $.343; 1,000 lbs. chick feed at 31c%.
+
+Sold to Geo. H. Brown & Co., 2/10 on %: 50 lbs. herring @ $.152; 100 pails salmon @ $.235; 50 pails mackerel @ $.434; 1,000 lbs. poultry feed @ $.343; 1,000 lbs. chick feed at 31c%.
+
+Sold to Hart & Martin, 2/10 on %: 50 shoe-polishing outfits @ .99c; 50 cartons black shoe-polish @ .78c; 10 cartons tan shoe-polish @ .78c; 250 brooms @ .75c; 100 pails mackerel @ $.434.
+
+Received checks from T. B. Arthur, E. J. Barnes, E. P. Geesler, and Mottor & Brady for bills sold them April 16, less % discount in each case.
+
+Petty cash book entries: messenger service, .45c; postage, .66c; car-fare, .50c.
+
+April 29. Sold to the Kipton Grocery Co., 2/10 on %: 10 boxes laundry soap @ $.625; 20 boxes toilet soap @ $.375; 10 boxes starch @ $.410; 20 cases Lux soap flakers @ $.130; 10 boxes oleomargarine @ $.66.
+
+Sold to Erner & McKean, 2/10 on %: 10 bbls sugar (2,000 lbs.), @ .83c; 20 pails herring @ $.218; 40 pails salmon @ $.637.
+
+Received checks from T. B. Arthur, J. Y. Bayne, Geo. H. Brown & Co., Hart & Martin for the Kipton Grocery Co., for bills sold them April 19 and 20, less % discount in each case.
+
+Received from Erner & McKean a check for the balance of the bill sold them April 20, less % discount on the entire bill.
+
+Made a check for the payroll, to be distributed as follows: office force, $127.90; sales force, $191.50; delivery men, $75; warehousemen, $35.
+
+Post entries, take a trial balance, and then make a trading statement, a loss and gain statement, and a resource and liability statement.
+
+To find the inventories at this point, use the following information, which is supplied to save the time required to classify the sales for the month.
+
+158
+ESSENTIALS OF BOOKKEEPING
+
+Sales for the month: sugar, $2,062.50; flour, cereals, meal, and so forth, $4,662.28; tea, coffee, cocoa, and chocolate, $17,922.08; canned goods, $13,263.77; candy, $145.23; nuts and dried fruits, $682.11; syrups, extracts, spices, condiments, and so forth, $355.25; soaps, powders, starch, and so forth, $3,078.06; foods in wood, $5,040.00; butter, cheese, eggs, milk, and so forth, $354.00; miscellaneous items, 29.
+
+The percentage of gain on the selling price in each case is: sugar, 15%; flour, cereals, meal, and so forth, 12.5%; tea, coffee, cocoa, and chocolate, 16%; canned goods, 14%; candy, 21.76%; nuts and dried fruits, 20%; syrups, extracts, spices, condiments, and so forth, 10%; soaps, powders, starch, and so forth, 12.5%; butter, cheese, lard and substitutes, 14%; miscellaneous items, 29%.
+
+As explained in the hardware business in Section IV., the present inventory may be figured by taking the inventory at the beginning of the period and adding to it the purchases less the purchases returned, and subtracting the cost of goods sold plus the cost of goods returned.
+Returns are charged against the cost of goods sold.
+
+In calculating the depreciation on the delivery equipment since January 1 allow an additional 10% on truck No. 1 and the same additional rate on truck No. 3. No. 4 is so nearly new that no depreciation will be figured on it. An allowance of 5% should be made on Office Furniture and Equipment. The loss sustained by fire or other cause shall be charged to Insurance Expense Current.
+
+At a meeting of the board of directors it was decided to declare a dividend of 25%, payable immediately. The rest of the net gain for the month is to be divided equally between the surplus fund and undivided profits accounts in the ledger.
+
+The student should write the checks for the dividend to each stockholder and make the necessary entries in the proper books.
+
+STANDARD QUESTIONS
+
+Transactions of the Union Grocery Company
+
+1. What is an account current?
+2. What is a statement of account? What does it show?
+3. What is meant by equation of payments?
+4. What is the basis of equation?
+5. What is the rule for finding the equated time?
+6. What is a focal date?
+7. How do you find a date found?
+8. How do you find present inventory?
+9. At the rate of dividend declared for April, what would be the rate of income on this stock per year?
+10. At this rate of dividend, what would be the probable market value of the stock of the Union Grocery Company?
+
+SECTION VI
+
+DEPARTMENT STORE ACCOUNTS
+
+PART ONE
+
+THE department store, which is a development of comparatively recent origin, first started when several small businesses occupied rooms in the same building. These rooms were arranged along a narrow street, covered by a roof and often called an arcade. Each store was under its own management and ownership; the arrangement was only a kind of business federation for economy and convenience.
+
+How departments were introduced. Later, stores began to rent space to owners of an entirely distinct kind of goods. A dry goods store, for instance, would rent space to the owners of a stock of jewelry; this became the jewelry department. Another space would be rented to a leather goods firm, and this would become the leather goods department.
+
+The results of this plan were often unsatisfactory since there was no uniformity in the methods by which the various depart-ments were conducted; it was difficult to locate responsibility, and to apportion common expense fairly.
+
+The growth of department stores. In the end it became necessary for the owners of the main store to buy the subsidiary departments or to demand the space and put in similar depart-ments of their own. From this time department stores grew rapidly until now it is possible to purchase in them almost anything which is produced to satisfy human needs.
+
+Each department is a unit in itself; it has a manager who is given authority over it and is held responsible for the success of his department; and it stands or falls to a great extent upon its own accomplishment. Each department is debited for the cost of goods purchased for it and credited with returns from goods
+
+189
+
+160
+ESSENTIALS OF BOOKKEEPING
+
+sold. To it is charged also its share of such general expenses as insurance, delivery, light, heat, interest on investment, advertising, rent, and the salaries of such employees as render service in all departments, including floormen, engineers, elevator operators, and so on.
+
+How the buying is done. While each department is a unit, all the departments are closely united under one general management. All purchases are made by the store's buyers. In some organizations these buyers are the heads of the departments. In some the buyers are subject to the purchasing agent, who determines the relative amount of merchandise which shall be added to the individual departments; in others the extent of the buying is almost without limit, the only requirement of the department being that it sell the goods after it has bought them.
+
+In certain peculiar departments, like a restaurant, the buying is usually left in the hands of the steward, who buys from day to day, securing invoices with the purchases; these are handed to the manager of the department for his o. k., after which they are reported to the purchasing department.
+
+Some stores prepare the purchase order form in triplicate. The original goes to the manufacturing house from which the purchase is made, one carbon copy remains in the hands of the buyer, and the other carbon copy goes to the receiving department. The manufacturer may be required to place certain labels on the goods and to show an order number on the invoice; the order number appears also on the package, boxes, cases, bales, or barrels constituting the shipment.
+
+Handling incoming goods. Incoming goods are listed on an invoice register which contains columns for date received, name, invoice number, date paid, amount, and department for which purchased. Upon arrival of the goods in the receiving department, they are checked with the invoice by checkers, managers or department heads or buyers. The price tags are placed on the articles in this department also, so that when they are released for distribution to the departments or to the stock room from which the departments are supplied.
+
+Incoming goods are debited to the department and credited to the proper account in the purchase ledger, while returned pur-
+
+DEPARTMENT STORE ACCOUNTS 161
+
+Chases are debited to the proper account in the purchase ledger and credited to the department returning them, both sides of these entries being summarized in controlling accounts which appear in the general ledger.
+
+Handling incoming invoices. In the bookkeeping work of the People's Department Store, however, the common practice of many stores will be observed: no purchase ledger will be kept, because there will be no account kept with those from whom goods are purchased. Incoming invoices will be filed in a tickler file like that shown on page 163 and paid within the time allowed for discount.
+
+A tickler file has 31 folders for the current month and usually 11 others for the remaining months of the year. All bills falling due on any day of the current month are found in alphabetical order in the folder of that day. Each morning the file clerk removes them from the folder.
+
+The stock and invoice analysis sheet. The accumulation of goods that are out of date or that cannot be sold for any reason, or that must be marked far below the usual selling price in order to push them out, may mean serious loss. It is therefore necessary to keep close watch of the stock in each department. This can be done by means of a stock and invoice analysis sheet such as shown in Form 92.
+
+This sheet is wide enough to include 31 days so that an entire month's record can be kept on it, but if the number of departments is large, more than one sheet is required to include all departments. Each day the amount of stock remaining in a department is entered on the line following Brought Forward. Under this is entered the value of goods brought into the department from the purchasing department on that date. From the sum of these are subtracted purchase deductions, including goods we return and all allowances and rebates made to us. From this difference again are subtracted the sales for the day, and to the difference thus obtained are added returned sales of goods by our customers, all these entries being made, of course, at cost prices. This final result is the net stock on hand at the close of the day and this is the amount which is to be forwarded to the following day's record.
+
+162
+ESSENTIALS OF BOOKKEEPING
+
+Verifying the stock on hand. In this manner the amount of stock on hand in any department is always known. Some stores verify this record once or twice a year by taking the general inventory; others take inventory of one department at a time, thus distributing the task throughout the year. This analysis sheet can be made still more effective by making the entries for the purchase deductions and for the sales in red.
+
+Each department has enough salesmen to take care of the trade. If one department is unusually crowded with customers, salesmen from other departments are sometimes shifted to it temporarily. The departments may be designated by letter if there are not more than 20; otherwise they are numbered. The salesman also are numbered, and a salesman's number frequently indicates the department in which he works. For example, 2703 would indicate salesman No. 3 in department No. 27.
+
+Different kinds of sales. Sales are designated as cash, charge, o. o. d., will call, or some combination of these, as part cash and part c. o. d., and so on. In each case the salesman must fill out a sales check upon his sales book, which is furnished by the store. A careful study of the forms of sales checks shown in the insert will enable the student to understand thoroughly the meaning and purpose of each.
+
+The slip of paper inside the front cover of the sales book, on which the amount of each sale is entered as it is made, is called a tally, a summary, or an index. It is ruled in double columns numbered from 1 to 50, to correspond to the sales check numbers which run also from 1 to 50. Salesmen are held rigidly to account for each check. If one is damaged so that it cannot be used, it is taken to the floorman who marks it "Void," and initials it, and it is turned in with the rest of the sales slips at night. The cash sales are entered on one side of the numbers on the tally card and all other sales on the other side; of course, each number can have only one sale, because there is only one check for each number.
+
+Some stores use two forms, or two colors, of sales checks, one for cash sales and the other for sales other than cash. This is done to make the sorting simpler, because all the cash sales checks go to the cashier's office in order to prove cash at the close of the day, and all the others go to the bookkeeping depart- ment for billing and entry.
+
+---
+
+![]() A manila folder with a stack of papers inside, labeled "March". The folder is open to reveal a page with a table titled "Days of the Month" and columns for 1, 2, 3, 4, 5, 6, 7.
+
+This is one commonly used tickler file, or follow-up, as it is usually called. A manila folder is placed behind each numbered guide. In each folder are placed the invoices due on that day. Every morning the invoices are removed from that day's folder.
+
+
+
+
+ |
+Days of the Month |
+
+
+ |
+1 |
+2 |
+3 |
+4 |
+5 |
+6 |
+7 |
+
+
+
+
+| A |
+Brought forward |
+ |
+ |
+ |
+ |
+ |
+ |
+
+
+ |
+Purchases |
+ |
+ |
+ |
+ |
+ |
+ |
+
+
+ |
+Purchase deductions |
+ |
+ |
+ |
+ |
+ |
+ |
+
+
+ |
+Sales |
+ |
+ |
+ |
+ |
+ |
+ |
+
+
+ |
+Returned sales |
+ |
+ |
+ |
+ |
+ |
+ |
+
+
+ |
+Net stock |
+ |
+ |
+ |
+ |
+ |
+ |
+
+
+| Brought forward |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+
+
+| A |
+Purchases |
+ |
+ |
+ |
+ |
+ |
+ |
+
+
+ | Purchase deductions | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
+
+
+ | A: Brought forward Purchases Purchase deductions Sales Returned sales Net stock C: Brought forward Purchases Purchase deductions Sales Returned sales Net stock D: Brought forward Purchases Purchase deductions Sales Returned sales Net stock
+ |
+
+164
+ESSENTIALS OF BOOKKEEPING
+
+What happens to the tallies. Several tallies may be used if the sales for the day are unusually numerous, but at the close of the day they are fastened together, and a complete report of all of them made on the back of the last one. The tally card is frequently made in the form of an envelop, as shown in the insert, and at the close of the day the tissue sheets for charge sales are placed in this envelop before it is turned in and sent to the bookkeeping department. This minimizes the danger of losing or confusing the sales sheets.
+
+How office machinery is used. For summarizing the cash sales, for finding the total of each salesman's sales, and for rapidity of calculation in many ways, many of the larger stores use labor-saving office machinery. One of the machines in most general use for these purposes is the adding machine. This is probably the most useful of all calculating machines. Bookkeepers who have used it regard it as almost indispensable in work requiring the quick calculation of many long columns of figures. Adding machines may be listing or non-listing according to the requirements of the work.
+
+After the charge checks have been separated from the cash checks and both kinds have been totaled by the adding machine operators, the charge checks are sorted according to the sales ledger accounts. In a large store there may be so many accounts with customers that those beginning with a single letter of the alphabet will require many ledgers.
+
+If the posting to these customers' ledgers is done in the ordinary way, by taking the debits from the sales record and the credits from the incoming cash book, it is necessary to make four distinct entries of each transaction, one by the salesman when the goods are sold, one by the entry clerk from the sales check to the sales record, one by the posting clerk from the sales record to the bound ledger, and one by the billing clerk in sending out the statement at the end of the month. A credit to the customer passes through a similar process.
+
+If the bookkeeping is done by the proper machines, however, and kept in the form of loose leaves, much labor may be saved. The ledger leaves fit into covers and are held in place by means of metal binding posts. The monthly statements to customers are punched to fit the same posta.
+
+Here are some of the various types of adding and calculating machines which help to speed up and guarantee the accuracy of the work of the accounting department.
+On several of them it is possible to add, subtract, divide, and multiply. Those which show the roll of paper at the top are listing machines, the others non-listing.
+
+163
+
+Most large concerns do practically all their bookkeeping by machinery. They find that bookkeeping machines save time and expense—and the work is likely to be much more accurate. Notice how the sheets lie flat on the bed of the machine.
+
+![]() A large, old-fashioned bookkeeping machine with a flat bed and several wheels and levers.
+
+This is another kind of bookkeeping machine, slightly different from the one shown above. All the necessary records are made at one operation, which saves of course considerable labor. How the machines work is explained more fully on page 167.
+
+166
+
+DEPARTMENT STORE ACCOUNTS 167
+
+How the bookkeeping machine works. The bookkeeping machine is so built that the sheets upon which writing is done lie flat on the bed of the machine. At the bottom is placed a sheet for the complete record of charge sales, or what would become the details of accounts receivable; a sheet of carbon paper covers this, face downward. Above this carbon sheet is placed the ledger page, with accompanying forms in the sale and on it another sheet of carbon, face downward. On top all these is placed the monthly statement of the charge account.
+
+All of the papers are then clamped in position. By writing on the top sheet (which is the statement) and carrying the figures to the proper columns, one operation will make the entries in three places—in the monthly statement showing the dates of purchases, items bought, amount of charges, credits for payments, and balance due; at the same time it will enter in the ledger the old balance, the date of the transaction, the items purchased, prices, amount of charges, credits for payments, and the balance, whether debit or credit; it will also enter on the charge sales record the date, items sold, prices, amount of sales, and the name of the account concerned in the sale.
+
+The “statistical” machine. Where statistical information is desired from the accounts or bills, the tabulating machine saves much time and labor. It consists of three parts. The first is the recording machine, called the key punch, operated by means of a keyboard which resembles that of a typewriter; a card placed under the punches can be perforated in an almost endless number of combinations.
+
+These cards are 34 x 74 inches in size. The figures on them are arranged in horizontal rows and vertical columns, different sections of the card being ruled off in “fields,” as shown in the illustration on page 169.
+
+In this card there are 17 fields, representing the day, month, year, ledger, bill number, sales office or territory, salesman, state, town, customer, commission, account, quantity of goods sold, unit of sale (whether sold by the bushel, dozen, quart, piece, pound or otherwise), freight or commission, amount of the sale, and the number of the operator who made the record on the card.
+
+The invoice from which the card was made is also shown in the illustration on page 169.
+
+![]() A scanned document page with various forms and tables.
+
+FORMS 93, 94, 95: Forms 93 and 94, the January statement, which goes to the customer, and the ledger account, are made in one operation by the bookkeeping machine. Form 95 is the charge sales record for January 23. The last three items are identical with the last three in the other two forms, and they are made in the same operation.
+
+108
+
+![]() A scanned document page with various forms and tables.
+![]() A scanned document page with various forms and tables.
+![]() A scanned document page with various forms and tables.
+![]() A scanned document page with various forms and tables.
+![]() A scanned document page with various forms and tables.
+![]() A scanned document page with various forms and tables.
+![]() A scanned document page with various forms and tables.
+![]() A scanned document page with various forms and tables.
+![]() A scanned document page with various forms and tables.
+![]() A scanned document page with various forms and tables.
+![]() A scanned document page with various forms and tables.
+![]() A scanned document page with various forms and tables.
+![]() A scanned document page with various forms and tables.
+![]() A scanned document page with various forms and tables.
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+![]() A scanned document page with various forms and tables.
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+![]() A scanned document page with various forms and tables.
+![]() A scanned document page with various forms and tables.
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+![]() A scanned document page with various forms and tables.
+
+WILLARD AND WILLARD
+BOSTON, MASS.
+
+32
+
+Date May 5th, 1802.
+Ledger 8
+Bill No. 34,367
+Sales office 6
+Salesman 14
+
+A. A. HARGST AND COMPANY,
+SAN FRANCISCO, CALIF.
+
+Shipped by Freight
+
+
+
+
+| Quantity |
+Description |
+ |
+ |
+
+
+
+
+| 10 |
+Dover quartered oak chairs No. 993 @ $36.00 dozen. |
+360.00 |
+ |
+
+
+ |
+Less freight 2000 @ .25 |
+5.00 |
+$355.00 |
+
+
+| F. B. Car 345-879 |
+
+
+| To James Reed and Co., |
+
+
+| Minnetonka, Mich. |
+
+
+| 21 43 |
+
+
+
+
+![]() A typewriter keyboard with some keys highlighted.
+
+
+
+
+| Oct. |
+1st |
+2nd |
+3rd |
+4th |
+5th |
+6th |
+7th |
+8th |
+9th |
+10th |
+11th |
+12th |
+13th |
+14th |
+15th |
+16th |
+17th |
+18th |
+19th |
+20th |
+21st |
+22nd |
+23rd |
+24th |
+25th |
+26th |
+27th |
+28th |
+29th |
+30th |
+31st |
+Total Pounds (lbs.) |
+Total Weight (lbs.)
Total Value (cents) |
+Total
Pounds (lbs.)
Total Weight (lbs.)
Total Value (cents) |
+Total
Pounds (lbs.)
Total Weight (lbs.)
Total Value (cents) |
+Total
Pounds (lbs.)
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Total Value (cents) |
+Total
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+Total
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Total Value (cents) |
+Total
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Total Value (cents) |
+Total
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Total Weight (lbs.)
Total Value (cents) |
+Total
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Total Weight (lbs.)
Total Value (cents) |
+Total
Pounds (lbs.)
Total Weight (lbs.)
Total Value (cents) |
+Total
Pounds (lbs.)
Total Weight (lbs.)
Total Value (cents) |
+Total
Pounds (lbs.)
Total Weight (lbs.)
Total Value (cents) |
+Total
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+Total
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+Total
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+Total
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+Total
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+ | The card at the bottom of the page has been punched by the key punch in the center. The perforations, shown by the black dots, represent the information contained in the invoice at the top of the page. The cards are then sorted by the sorter, and the statistics tabulated by the tabulating machine. Thus valuable information is gathered. | 170
+
+![]() A busy office with several people working at desks. One person is operating a large machine that appears to be a key punch. Another person is standing next to the machine, possibly instructing or assisting.
+![]() A group of people working at desks in an office. The desks are equipped with typewriters and other office equipment. The people appear to be engaged in various tasks, such as typing and organizing documents.
+![]() A room filled with filing cabinets and office equipment. Several people are seated at desks, working on various tasks. One person is operating a large machine that appears to be a key punch. Another person is standing next to the machine, possibly instructing or assisting.
+
+DEPARTMENT STORE ACCOUNTS 171
+
+Each item of information on the card is designated by a number, and code numbers are assigned to such items as states, towns, salesmen, and so on. When these are complete the cards are ready for use.
+
+The machine which separates these cards according to the data recorded is called the sorter. As the cards are fed into this machine small electric brushes make contacts through the holes previously punched and each different combination of contacts shunts the card into a corresponding pocket in the lower part of the machine. Suppose, for example, that we desired to know just how much had been sold by each salesman during the past six months. The sorting machine would separate into packs the cards representing the different salesmen, at the rate of about 250 cards a minute.
+
+When the cards of the salesmen are properly sorted, they are placed in the tabulator, where at one process there may be shown on the different counters (the illustration shows five) the salesman's commission for the entire time, the total amount of goods sold, the total freight on these goods, and the total amount of his sales for the given time. This is accomplished at the rate of about 150 cards a minute.
+
+Keeping tab on salesmen. Practically all stores keep records of their salesmen, showing the amount of sales, commission, salary paid, and other items of information, in order to determine how much each salesman sells, compared with what he costs. This record is in the hands of the superintendent, and is a factor in determining the salesman's prospects for promotion and increased compensation.
+
+Handling charge accounts. In opening a charge account, the new customer fills out an application giving his name, residence, billing address, occupation, business connection, ownership of property, bank references, the names of others who are to be allowed to buy on the account, telephone number, and other similar items of information. On this application are placed also the commercial agency rating of the applicant if one is to be found, or the rating given by a local merchants' association, and, in addition, the limit which has been placed by the credit man upon the account.
+
+172
+
+**ESSENTIALS OF BOOKKEEPING**
+
+To prevent confusion of accounts, stores frequently provide charge customers with a card or coin on which the number of the account is stamped. Those entitled to buy on the account must present this card or coin when making a purchase on account in order to get prompt delivery.
+
+**Out stations.** In addition to the delivery of goods from the store by trucks and special delivery wagons and automobiles, frequently there are stations established in conveniently located places in distant parts of the store's territory. These "out stations" as they are called are designated by number or by letter; each is in charge of a superintendent, and the expenses of each are cared for by an imprest fund similar to that for petty cash.
+
+**Caring for mail-order business.** The development of the mail-order business in exclusively mail-order houses has so demonstrated the practicability of this process that many department stores have added mail-order departments. Orders from mail customers are first recorded in an order book. The original order is then divided up into many parts for delivery and the parts sent to the departments from which they are to be filled. This is done by assembling all the shipped orders, checked to the order book, and shipped. No accounts with customers are necessary in the mail-order department, because cash is required with each order. Some stores place the buying of goods ordered by mail in the hands of store buyers who make the selections for the customers as they would if purchasing for themselves, but when the business done by the mail-order department becomes very extensive this is apt to be impracticable.
+
+A voucher check is one which shows the items of the account covered by the check. This makes it possible for the recipient to compare the check directly with his own account. The indorsement of the check is a sufficient acknowledgment of payment. There are various forms of voucher checks, two styles of which are shown in Forms 96 and 97 on page 173.
+
+**Employees' records.** A card is usually provided for each employee, giving his name, number, and department, and on this card is kept the record of his work for a week, a month, or sometimes three months. This record may be made by a time-clock, which records the exact hour and minute at which the employee
+
+INDORSEMENTS
+
+| Date | Invoice Amount | Defects | Net Amount |
+|---|---|---|---|
+| | | | |
+| Total Entered | Total Entered | | |
+
+Paid on this line. Do not detach. This acknowledgment is sufficient.
+
+THE PEOPLE'S DEPARTMENT STORE
+THE FIRST NATIONAL BANK NO. ____________ $ 19.00
+
+Pay to the order of ____________ DOLLARS ____________
+Treasurer ____________
+
+FORM 95: This voucher check is about double the usual size of checks and is to be folded lengthwise. It is frequently made in duplicate or triplicate; the original is sent to the creditor and the second and third copies kept on file for reference.
+
+
+
+ | Attached check is in payment of the following items: |
+ No. 43691 |
+ 19 ... |
+
+
+ | Bank Allowance Discount Amount Paid |
+ Pay Dollars |
+ |
+
+
+ | Your Bill Amount |
+ Dollars |
+ |
+
+
+
+To the order of ____________
+By ____________
+
+Statement No. 43692
+
+FORM 97: And here is another voucher check, somewhat different in form, perhaps more convenient in size. Before cashing the check the one to whom it is made out tears it off on the perforated line between the statement and the check proper.
+173
+
+
+
+ | No. |
+ Name |
+ Department |
+
+
+ | Monday |
+ Tuesday |
+ Wednesday |
+ Thursday |
+ Friday |
+ Saturday |
+
+
+ | A. M. |
+ IN |
+ |
+ |
+ |
+ |
+
+
+ | P. M. |
+ OUT |
+ |
+ |
+ |
+ |
+
+
+ | Overtime |
+ |
+ |
+ |
+ |
+ |
+
+
+ | Total time |
+ |
+ |
+ |
+ |
+ |
+
+
+ | Total time |
+ |
+ |
+ |
+ |
+ |
+
+
+ | Rate per hour |
+ |
+ |
+ |
+ |
+ |
+
+
+ | Amount due |
+ |
+ |
+ |
+ |
+
+ | Timekeeper |
|---|
| Name of employee | No. Dept. | Time | Over-Time | Rate per hr mission | Amount due | Signature of employee |
|---|
+
+FORM 98: This is the form of time card which one concern uses. It tells just when each employee begins and stops working. The total number of hours he puts in, multiplied by the rate he is paid per hour, gives the total amount due on Saturday.
+
+FORM 99: And this is the form which the same concern uses for making up the payroll. When payments are made by check it is unnecessary to sign the card, but it is advisable to have the signature on the check is sufficient receipt. The cards provide in addition some very useful information when considering employees for advancement.
+
+174
+
+DEPARTMENT STORE ACCOUNTS 175
+
+enters or leaves. The payroll, made up from these time cards, shows the number of hours each employee has served, the rate of pay by the hour, and the total amount due. Frequently there is provided a space in which the employee signs his name to indicate that he has received his pay for the period shown on the card.
+
+Form 98 on page 174 shows one form of time card, and Form 09 shows the payroll sheet used by the same concern.
+
+**STANDARD QUESTIONS**
+
+Department stores
+
+1. Trace briefly the history of the department store.
+2. How does the department store today differ from the old plan?
+3. Who does the buying for the departments?
+4. What forms are used in making purchases?
+5. How are goods handled upon arrival?
+6. How are incoming invoices cared for?
+7. Locate the purchase ledger of People's Department Store.
+8. What plan is used as a means of keeping track of stock?
+9. How may the record of stock be verified?
+10. How are the store's departments and salesmen designated?
+11. How many kinds of sales checks are there? Describe them.
+12. Why are sales checks necessary?
+13. What must you remember in filling out sales checks?
+14. Why are different colors of sales checks sometimes used?
+15. What is done with the tally at the close of the day?
+16. What saving is accomplished by the use of bookkeeping machines?
+
+How is this saving made possible?
+18. How are tabulating machines used in the department store?
+19. What machine perforates the cards?
+20. What machine sorts the cards?
+21. What is a cash register or tabulator?
+22. What records are kept of the salesmen?
+23. How would you open an account with a new customer?
+24. What information is required of one who desires to open an account?
+
+What use is made of a token coin or card?
+26. What is meant by delivery "out stations"?
+27. How mail-order business usually handled?
+28. Where are accounts kept with mail-order customers?
+29. Describe a voucher check.
+30. What data are provided by the employee's time card? What is made up from the time cards?
+
+176
+ESSENTIALS OF BOOKKEEPING
+
+PART TWO
+
+ACTUAL BOOKKEEPING
+The People's Department Store
+
+In the People's Department Store there are 10 departments:
+Dept. No.
+1. Dress goods, silks, velvets, linings, and patterns;
+2. Laces, embroideries, trimmings, muslin underwear, and lingerie;
+3. Wash goods, prints, domestics, knit goods, hosiery, woolen shawls, velvets, linings, and petticoats;
+4. Cloaks, suits, millinery, fancy work, linen, and flannels;
+5. Infants' wear, misses' wear, handkerchiefs, gloves, notions, toys, and bedding;
+6. Men's wear, umbrellas, trunks, leather goods, shoes, books, and stationery;
+7. Jewelry, silverware, confectionery, drugs, and toilet supplies;
+8. Furniture, rugs, carpets, shades, draperies, and art glass;
+9. Hardware, kitchenware, china, glassware, and tools;
+10. Restaurant.
+
+The inventories for these departments on Monday, July 1, at the opening of business are:
+
+
+
+| No. 1 |
+$20,492.05 |
+No. 6 |
+$141,177.25 |
+
+
+
+
+| No. 2 |
+$ 9,540.47 |
+No. 7 |
+$12599.47 |
+
+
+| No. 3 |
+$10783.40 |
+No. 8 |
+$17251.50 |
+
+
+| No. 4 |
+$ 9836.61 |
+No. 9 |
+$ 7107.54 |
+
+
+| No. 5 |
+$ 6368.70 |
+No. 10 |
+$ 123.35 |
+
+
+
+
+Invoices in the ticker file are as follows:
+The Pitcairn Silk Mills, Trenton N., J., dated June 22, at 2/10 days,
+$872.80; The Anna Knitting Mills Lockport N., Y., June 24, 3/5
+10 days $432.50; The Sherwin-Williams Co., Cleveland Ohio., June
+24, 2/10; N/30; $387.70; The Great Northern Fur Co., St. Paul Minn.,
+June 25; N/30; N/30; $267.80; The Haines Leather Mfg Co., Cleveland Ohio.,
+2/10; N/30; June 26; $127.75; The Haines Bros Co., Chicago Ill.,
+leather goods, June 26; 3/10; N/30; $250.
+
+The ledger shows the following accounts receivable:
+J. B. Allen; $36.82; Mrs. C.F. Ammermann; $187.65; Miss Ellen B.
+Apter; $46.80; M.W. Belden; $80.10; J.E. Brown; $2.67; C.P. Burton,
+$176.35; B.W.Conger; $527.83; L.T.Crowder; $257.91; Mrs.J.W.
+Dunn; $173.98; A.E.Dwyer; $436.; G.G.Burns;$164.46; M.A.K.
+Elliot; $58.86; Mrs.V.C.Enwright,$858.68; D.H.Farwell;$637.83;
+
+![]() A page from a bookkeeping ledger.
+
+DEPARTMENT STORE ACCOUNTS 177
+
+L. L. Grant, $03.67; Dr. U. B. Hancock, $182.48; E. L. Horton, $37.92;
+J. J. Hulbert, $351.58; F. K. Isaacs, $146.93; M. R. Jensen, $219.41;
+N. D. Jowett, $500.00; F. Y. Karvan, $116.42; C. T. Larson, $212.35;
+C. U. Leffler, $63.36; J. W. Martin, $316.72; L. D. Moore, $25.71;
+Mrs. Altona Norman, $95.41; L. E. Oatman, $136.83; F. R. Patrick, $61.30; Mrs. A.J.Rasch, $177.40; Mrs. H.
+Raymond, $315.63; G. H. Sartorius, $54.82; W. I. Selden, $50.04;
+E. Z. Swarts, $35.06; X. G. Thalianar, $315.90; K.B.Traun, $47.25;
+T.H.Warner, $152.80; Mrs.H.N.Wells,$71.88; Miss Ruth Williams,
+$65.86; Miss Dorothy Zimmerman,$417.39.
+
+Accounts in the general ledger show also reserves for depreciation of delivery equipment, $4855; of office furniture and equipment,
+$818.75; of store supplies and fixtures, $1,637.
+Insurance has been debited for $296.50.
+Reserve for bad debts has accumulated to
+$1,148.80.
+There is an item in the undivided profits account of
+$4,20144.
+
+![]() A diagram showing a ledger with two columns: Debit and Credit balances.
+FORM 100: The interesting point about this ledger ruling for the People's Department Store is the close relationship between the debit column on the left and the credit on the right makes it easy to strike balances.
+
+Fitch, 150 shares; Mrs.A., K.Elliott, 100 shares; Dr.U.B.Hancock,
+100 shares; Mrs.D.C.Rasch, 50 shares; T.H.Werner, 30 shares; Miss
+Dorothy Zimmerman, 50 shares.
+The capital is $150,000.
+
+Accounts in the general ledger show also reserves for depreciation of delivery equipment, $4855; of office furniture and equipment,
+$818.75; of store supplies and fixtures, $1,637.
+Insurance has been debited for $296.50.
+Reserve for bad debts has accumulated to
+$1,148.80.
+There is an item in the undivided profits account of
+$4,20144.
+
+
+
+
+ | Date |
+ F |
+ Debits |
+ Balance |
+ Credits |
+ F |
+ Date |
+
+
+
+
+ | (Debit balances in black ink; credit balances in red ink) |
+
+
+
+
+178
+
+**ESSENTIALS OF BOOKKEEPING**
+
+The style of ruling of the general ledger to be used in the work for the People's Department Store is shown in Form 100 on page 177.
+
+After these entries have been placed in the general ledger and the general cash book, the student should make the opening trial balance preparatory to beginning the entries of the first of July.
+
+The office force of the store consists of
+
+L. R. Marshall, president, $100 a week
+C. B. Dyer, cashier, $60 a week
+E. L. Fitch, superintendent, $60 a week
+The student, bookkeeper and secretary, $25 a week
+Miss Gertrude Grunau, stenographer, $18 a week
+Miss Helen Branyan, stenographer, $15 a week
+H. L. Johnson, billing clerk, $17.50 a week
+
+**THE SALES FORCE**
+
+In each group the first named is head of the department:
+
+Dept. No. 1
+101, Miss C. Busher
+Dept. No. 2
+102, Miss Myrtle White
+Dept. No. 3
+103, Miss Irene Van Wye
+Dept. No. 4
+201, Miss Maisie Gaviac
+Dept. No. 5
+202, Miss Celia Cohen
+Dept. No. 6
+301, Miss Agnes Samo
+Dept. No. 7
+302, Miss Mildred Moskovits
+Dept. No. 8
+401, Miss Helen Schultz
+Dept. No. 9
+402, Miss Bessie Lustig
+Dept. No. 10
+403, Miss Eleanor Murphy
+Dept. No. 11
+501, Miss Mildred Frank
+Dept. No. 12
+502, Miss Marguerite Eckert
+
+The schedule of salaries follows: heads of departments $15 a week and other salesmen $12. In addition to this fixed salary there is paid to all salesmen a special commission on sales in excess of a stated sum for the week according to the following table:
+
+
+
+
+ | Dept. No. |
+ Commission |
+ Sales in excess of |
+
+
+
+
+ | 1 |
+ 5% |
+ $300 |
+
+
+ | 2 |
+ 6% |
+ 200 |
+
+
+ | 3 |
+ 4% |
+ 200 |
+
+
+ | 4 |
+ 5% |
+ 300 |
+
+
+ | 5 |
+ 6% |
+ 200 |
+
+
+
+
+DEPARTMENT STORE ACCOUNTS 179
+
+
+
+
+ | Dept. No. |
+ Commission |
+ Sales in excess of |
+
+
+
+
+ | 6 |
+ 4% |
+ $300 |
+
+
+ | 7 |
+ 5% |
+ 250 |
+
+
+ | 8 |
+ 5% |
+ 250 |
+
+
+ | 9 |
+ 5% |
+ 250 |
+
+
+
+
+In department No. 10 Mr. Lee, the steward, receives $225 a week, from which he is required to employ and pay the necessary help for carrying on the restaurant, with the understanding that when additional employees are required an adjustment of this amount will be made.
+The inventory in this department cannot be found on the same basis as that used in the other departments, because of the variations in the stock invoice and analysis sheet, therefore, the amount entered for each day will be what Mr. Lee reports.
+
+Other employees are: a receiving clerk at $20 a week, a helper in the receiving room at $12 a week, a shipping and delivery clerk at $18, a driver at $18 a week, the superintendent of the delivery station at $18, a helper at the out door delivery at $12, 2unda wrappers at $9 each, 2 cashiers at $30 each, 2 floormen at $22.50 each, 2 porters at $12.50 each, 3 elevator operators at $10 each.
+
+The student should keep the following suggestions in mind in addition to general instructions which have been given in the previous work:
+
+**Charge sales.** Debit the customer in the sales ledger, and in the general ledger credit the department from which the goods are sold, for the total charge sales for that department for the day.
+
+**Cash sales.** At the close of the day foot the cash sales checks by departments, using the adding machine if one is available, debiting Cash in the sales ledger column for the total of all departments, and in the general ledger crediting each department for its total cash sales.
+
+In the stock and invoice analysis sheet, both charge sales and cash sales must be entered at cost prices, but on the salesman's weekly report card the amount of goods sold by the salesman must be entered at selling prices, so that at the end of the week the amount of special commission on him can be calculated.
+Form 101 on page 180 shows what the salesman's weekly report card looks like.
+
+**Incoming invoices.** File in the invoice file. No entries are made until the invoices are paid.
+
+180
+ESSENTIALS OF BOOKKEEPING
+
+Paid invoices. Debit each department for the goods distributed to it. Credit Accounts Payable in the general ledger.
+Enter in the accounts payable column on the credit side of the cash book and credit Purchase Discount in the proper column.
+
+**Goods returned.** When goods sold for cash are returned and the cash is refunded, enter the amount of the refund in the refund column on the credit side of the general cash book, entering the number of the salesman who sold the goods in the explanation column; this number indicates also the number of the depart-
+
+
+
+ | No. 1202 |
+ Name Florence Roberts |
+ Department 12 |
+
+
+ | Cash sales: |
+ 6623 |
+ Tues. |
+ Wed. |
+ Thurs. |
+ Fin. |
+ Sat. |
+ Total |
+
+
+ |
+ 6310 |
+ 9461 |
+ 5319 |
+ |
+ 766 |
+ 690 |
+ 3500 |
+
+
+ | Charge sales: |
+ 7421 |
+ |
+ 6420 |
+ 4530 |
+ |
+ 5372 |
+ 7188 |
+ 3500 |
+
+
+ | Returned goods: |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+
+
+ | Net sales: |
+ 15024 |
+ 86301 |
+ 81281 |
+ 8249 |
+ 111294 |
+ 10688 |
+ 67279 |
+
+
+ | Commission rate: 5% on $2500 or in excess of $2500. |
+
+
+ | Commission for week ending June 7, 19--: $13.35. |
+
+
+
+FORM 101: This is the salesman's weekly report card used by the People's Depart-
+ment Store. Florence Roberts' net sales for the week are $667.09. She receives 5%
+commission on everything over $400; 3% of $67.09 is $13.35, her commission.
+
+**Returned purchases.** Debit Accounts Payable and credit the department they are returned from in the general ledger.
+
+The general cash book of the People's Department Store con-
+tains money columns on the debit side for Deposits by customers on lay-away sales, Department Sales which are the regular cash sales, a general column for items not belonging anywhere else, and a sales ledger column for incoming cash from customers.
+
+DEPARTMENT STORE ACCOUNTS 181
+
+On the credit side of the cash book there are money columns for Invoices Payable, preceded by a credit discount column for discounts on the bills we pay, a column for General Expense, a general column for sundry items, one for Department Expense, and a refund column for cash which we refund on goods which are returned to us by cash customers. By writing in the explanation column the number of the salesman on whose sale the refund is made, entries in the refund column are identified as to department also.
+
+ACTUAL BOOKKEEPING
+Transactions of the People's Department Store for July
+
+Monday, July 1
+
+
+
+
+ | Customer |
+ Dept. Salesman |
+ Items |
+ Prices |
+
+
+
+
+ | Mm. A. K. Elliott |
+ 4 |
+ 401 H. S. fur coat |
+ $125.00 |
+
+
+ | Dr. U. B. Hancock |
+ 8 |
+ 803 3 porch chairs @ |
+ 3.75 |
+
+
+ |
+ |
+ 1 lawn swing |
+ 7.50 |
+
+
+ |
+ |
+ 1 set dining room furni- |
+ |
+
+
+ | J. E. Brown |
+ 9 |
+ 901 ture... |
+ 165.00 |
+
+
+ |
+ |
+ 1 pair of shoes @... ... |
+ 120.00 |
+
+
+ |
+ |
+ 1 kitchen cabinet |
+ 77.50 |
+
+
+ | Miss Ruth Williams |
+ 3 |
+ 302 6 pairs silk hose @... |
+ 2.75 |
+
+
+ |
+ |
+ 1 corset |
+ 6.50 |
+
+
+ |
+ |
+ 1 chiffon veil... |
+ 1.75 |
+
+
+
+
+
+
+| Cash sales | Salesman Amount | Salesman Dept. | Salesman Amount |
|---|
+| Dept. | Salesman Amount | Salesman Dept. | Salesman Amount |
|---|
| Cash sales |
|---|
| 1 | 101 $65.74 | 6 $72.54 | 601 $67.54 |
|---|
| Amount $72.54 |
|---|
201 $46.90 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.77 $66.80$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$893$
+All c.o.d.sales have been included with the charge sales, but the money collected on c.o.d.sales is included with the cash.
+
+
+| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
+| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
| Cash sales Amounts (in dollars) | Cash sales Amounts (in dollars) |
|---|
| Cash sales Amounts (in dollars) | <
+
+182
+ESSENTIALS OF BOOKKEEPING
+
+In making entries for returned goods the customer is credited for the selling price of the goods, but the return of the same goods to stock must be indicated at the cost price on the stock and invoice analysis sheet. To do this the student must know the "mark-up" on all goods.
+
+What mark-up is. By mark-up we mean simply the difference between the invoice cost price and the selling price of goods.
+If, for example, an invoice of goods purchased by the store comes to $100, and the store expects to sell those same goods for $150,
+we say that their mark-up is $50, and that the percentage mark-up is 33½%. This percentage is figured on the selling price.
+
+The percentage of mark-up will vary in different departments of the store, since some goods can be sold faster than others, allowing more sales at a lower profit on each sale, while other goods sell more slowly, for this reason requiring a higher profit on each sale.
+
+The average percentage of mark-up. The average percentage of mark-ups throughout the whole store should, however, remain the same, and in the People's Department Store, the average percentage of mark-up is 35%. To simplify the work, the mark-up on all the goods of the People's Department Store will be at this 35% rate.
+
+This mark-up must not be confused with the gain. In calculating the gain a number of items of expense, both general and departmental, must be deducted; these will reduce the percentage of gain considerably.
+
+Pay by check the amount of the invoice of the Pitcairn Silk Mills, less 2%. Pay rent for July by check to the General Savings and Trust Co., $350.
+
+Received checks from the following: C. P. Borton, $190; B. W. Conger, $490; Mrs. J. W. Dunn, $175; J. J. Hubert, $350; Mrs. D. C. Rand, $100.
+
+
+
+
+| Goods returned by cash customers |
+
+
+
+
+| Department |
+Salesman |
+Article |
+Selling price |
+
+
+| 3 |
+ |
+301 |
+Petticoat
$1.25 |
+
+
+| 6 |
+ |
+602 |
+Men's gloves
2.10 |
+
+
+| 9 |
+ |
+902 |
+Cut-glass fern
dish
4.90 |
+
+
+
+
+DEPARTMENT STORE ACCOUNTS
+183
+
+Tuesday, July 2
+
+
+
+
+ | Customer |
+ Dept. |
+ Salesman |
+ Charge sale |
+ Items |
+ Prices |
+
+
+
+
+ | Mrs. C. F. Ammermann |
+ 1 |
+ |
+ 101 |
+ 10 yards black chiffon velvet @... $4.50
6 yards Georgette crepe @... 1.75
6 infants' dresses @... 1.95
2 pairs infants' shoes @... 1.50
1 pair woollen socks @... 1.85
1 sterling silver tea set. 23.75
1 26-piece silver plated dinner set. 8.00
1 Wilton rug, 9 x 12 ... 76.00
4 yards Chantilly lace @... 8.00
1 yard oriental lace. 50.00
1 suit. 46.50
1 trunk. 20.00
1 leather portfolio ... 9.50 |
+
+
+ | J. E. Brown |
+ |
+ |
+ 5 |
+ 602 |
+
+
+ | W. I. Selden |
+ |
+ |
+ 7 |
+ 701 |
+
+
+ | K. B. Traun |
+ |
+ |
+ 8 |
+ 802 |
+
+
+ | J. J. Hulbert |
+ |
+ |
+ 2 |
+ 201 |
+
+
+ |
+ |
+ |
+ 6 |
+ 603 |
+
+
+ | Cash sales |
+
+
+ | Dept. |
+ Salesman |
+ |
+ Amount |
+ |
+ Dept. |
+ Salesman |
+ |
+
+
+ | 1 |
+ 101 |
+ $72.81 |
+ |
+ 6 |
+ 601 |
+ $96.52 |
+
+
+ |
+ 102 |
+ 41.10 |
+ |
+ 602 |
+ 58.99 |
+
+
+ |
+ 383.493 |
+ |
+ |
+ 603 |
+ 61.77 |
+
+
+ | 2 |
+ 201 |
+ 30.84 |
+ |
+ 7
\nMrs Ruth Williams returns the chiffon veil purchased July, I, from salesman No.302.\nPay by check the invoice of the Anzac Knitting Mills, of June, received checks from customers as follows: C. T. Larson, $100; N. D. Jowett, $500; J. W. Martin, $150; E. Z Swartz, $35.06.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C. T. Larson, $100; N. D. Jowett, $500; J. W. Martin, $150; E. Z Swartz, $35.06.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C. T.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in the coat she purchased yesterday were not sewed together, and that when she attempted to wear the coat in showing it to a friend, it ripped open\nReceived checks from customers as follows: C.\nMrs A. K Elliott reports that several sections of the fur in
+
+184
+ESSENTIALS OF BOOKKEEPING
+
+where there were only basting threads to hold it together. We have replaced the coat and shipped the imperfect one to the Great Northern Fur Co. by express insured.
+
+Paid taxes for the half-year, $1,036.73, by check to P. C. Reilly, county treasurer.
+
+Wednesday, July 3
+
+
+
+
+| Customer |
+Dept. |
+Salesman |
+Items |
+Prices |
+
+
+
+
+| J. B. Allen |
+9 |
+903 |
+1 set tools in cabinet $ 51.90
1 screen door, 2' 5" $ 2.50
6' 8" $ 2.50
125 sheets wallboard @ 1.03 |
+ |
+
+
+| A. E. Dwyer |
+3 |
+301 |
+3 sweaters @ 12.25
18 pairs boys' hose @ .32 |
+ |
+
+
+| P. Y. Karvan |
+8 |
+801 |
+1 oriental rug, 9' x 12' $ 175.00
1 Persian rug, 4' x 6' $ 82.50 |
+ |
+
+
+| F. R. Patrick |
+6 |
+602 |
+6 pairs moccasins shoes @ 7.75
2 pairs men's slacks @ .80
1 pair slippers, 28" @ 13.50
1 silk umbrella, 28" @ 19.85 |
+ |
+
+
+| G. H. Sartoris |
+1 |
+102 |
+20 yards black silk velvet @ 4.15
10 yards lining satin @ .25
1 diamond ring, 1/4k @ .355.00 |
+ |
+
+
+| L. D. Moore |
+7 |
+701 |
+7 gold watch bands @ .75
1 pair Bauch & Loom binoculars @ .51.50 |
+ |
+
+
+
+
+Cash sales
+
+
+
+
+| Dept. |
+Salesman |
+Amount |
+Dept. |
+Salesman |
+Amount |
+
+
+
+
+| 1 |
+101 |
+$ 67.31 |
+6 |
+601 |
+$ 91.02 |
+
+
+ |
+102 |
+.43 |
+ |
+602 |
+.39.22 |
+
+
+ |
+103 |
+26.72 |
+ |
+603 |
+.36.29 |
+
+
+| 2 |
+201 |
+25.34 |
+7 |
+701 |
+.56.97 |
+
+
+ |
+202 |
+.36.17 |
+ |
+702 |
+.50.89 |
+
+
+| 3 |
+301 |
+.36.75 |
+8 |
+801 |
+.85.40 |
+
+
+ |
+302 |
+.22.99 |
+ |
+802 |
+.71.99 |
+ 4
+ | | | | | |
|---|
| 401: | 64.30: | | | | |
|---|
| 402: | 84.32: | | | | |
|---|
| 403: | 71.22: | | | | |
|---|
| 5: | 501: | 41.48: | | | |
|---|
| 5: | 532: | 31.44: | | | |
|---|
|
|---|
| Cash sales @ .268.80: |
|---|
|
+
+
+
+
+
+
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+
+
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+
+
+
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+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+ Customer Name (Dept.)
(Salesman) | Items Price(s)
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
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+
+
+
+
+
+
+
+
+
+
+
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+
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+
+
+
+
+DEPARTMENT STORE ACCOUNTS 185
+
+
+
+ | Goods returned by cash customers |
+ Selling price |
+
+
+ | Department |
+ Salesman |
+ Article |
+ |
+
+
+ | 2 |
+ |
+ 202 |
+ muslin underwear |
+ $2.11 |
+
+
+ | 7 |
+ |
+ 702 |
+ manicure set. |
+ 3.75 |
+
+
+ | 5 |
+ |
+ 501 |
+ 1 pair gloves |
+ 2.50 |
+
+
+ | Goods returned from charge sales |
+ |
+
+
+ | Customer |
+ Dept. |
+ Salesman |
+ Article |
+ Price |
+
+
+ | J. E. Brown |
+ 5 |
+ |
+ 502 |
+ 1 pair infant's shoes. |
+ $1.50 |
+
+
+
+Received cash from customers as follows: Miss Ruth Williams, $50; W. I. Selden, $100; X. G. Thallman, $265.90; Mrs. Alice Naylor, $25; Dr. U. B. Hancock, $200.
+
+Paid by check the bill of the Sherwin-Williams Co., dated June 24.
+Paid for lighting in the Times, $40. Paid the Electric Illuminating Co.'s bill for light bulbs per day for the month, $76.85. Paid water rent for six months by check to A. T. Burns, superintendent of the water department, $21.62.
+
+An invoice of shoes has been received and checked by the receiving clerk, under date of June 29, for $312.89, from the Rexall Shoe Co., Boston, Mass., and the goods placed in department 6. Terms 2/10, N/30.
+Mr. Lee has paid bills amounting to $34.88, including bills for merchandise, and other bills amounting to $31.27, all of which are properly receipted.
+Make a check in Mr. Lee's favor for the amount of these bills.
+Received a New York draft from the Great Northern Fur Co. for the coat returned to them, $61.25.
+
+Friday, July 5
+
+
+
+
+ | Customer |
+ Dept. |
+ Salesman |
+ Items |
+ Prices |
+
+
+
+ | B. W. Conger | 9 | 901 | 1-10 piece aluminum cooking set... | $ 11.75 |
|---|
+ | | | 1 fireless cooker... | 18.60 |
|---|
+ | | | 1 kitchen table, ponceau... | |
|---|
+ | Mrs. J. W. Dunn | 8 | 802 | 2 pr. fringed tapestry portieres @... | 5.80 |
|---|
+ | | | 1 band rope portiere... | 12.25 |
|---|
+ | | | 1 Wilton rug, 11'x x... | 9.50 |
|---|
+ | Mrs. V. C. Enwright | 4 | 403 | 1 sealskin coat... | 78.50 |
|---|
+ | E. L. Horton | 6 | 601 | 1 trimmed hat... | $62.75$
|---|
+ | | | 1 suit... | $31.40$
+ | | | 1 overcoat... |
+ | | | 1 hat... |
+
+
+
+ ![]() A page from a department store account book showing charges and prices for various items.
+
+
+
+| Customer: |
+Dept. |
+Salesman: |
+Items: |
+Prices: |
+Total Amount:$634.94$
Less Discount:$-34$
Net Amount Due:$600$
Cash Received:$-34$
Balance Due:$600$
Total Items:$6$
Total Value Items:$634$
Total Value Cash Received:$-34$
Total Value Balance Due:$600$
Total Value Total Items:$634$
Total Value Total Cash Received:$-34$
Total Value Total Balance Due:$600$
Total Value Total Items:$634$
Total Value Total Cash Received:$-34$
Total Value Total Balance Due:$600$
Total Value Total Items:$634$
Total Value Total Cash Received:$-34$
Total Value Total Balance Due:$600$
Total Value Total Items:$634$
Total Value Total Cash Received:$-34$
Total Value Total Balance Due:$600$
Total Value Total Items:$634$
Total Value Total Cash Received:$-34$
Total Value Total Balance Due:$600$
Total Value Total Items:$634$
Total Value Total Cash Received:$-34$
Total Value Total Balance Due:$600$
Total Value Total Items:$634$
Total Value Total Cash Received:$-34$
Total Value Total Balance Due:$600$
Total Value Total Items:$634$
Total Value Total Cash Received:$-34$
Total Value Total Balance Due:$600$
+
+186
+
+**ESSENTIALS OF BOOKKEEPING**
+
+C. T. Larson 1 101 1 silk crepe de chine dress $34.85
+20 yards silk velvet @ 4.50
+5 502 12 pairs silk hose @ 3.00
+Mrs. C. H. Raymond 7 702 1 household drug cash net 1 box toilet soap 15.00
+
+
+
+
+| Dept. |
+Salesman |
+Amount |
+Dept. |
+Salesman |
+Amount |
+
+
+
+
+| 1 |
+101 |
+$ 50.51 |
+6 |
+601 |
+$ 69.37 |
+
+
+ |
+102 |
+32.25 |
+ |
+602 |
+44.81 |
+
+
+ |
+103 |
+30.97 |
+ |
+603 |
+27.22 |
+
+
+| 2 |
+201 |
+25.43 |
+7 |
+701 |
+42.79 |
+
+
+ |
+202 |
+19.43 |
+ |
+702 |
+38.39 |
+
+
+| 3 |
+301 |
+20.57 |
+8 |
+801 |
+64.04 |
+
+
+ |
+302 |
+17.19 |
+ |
+802 |
+54.19 |
+
+
+ |
+401 |
+49.03 |
+ |
+803 |
+16.81 |
+
+
+ | 402 | 63.23 | 9 | 901 | 58.02 |
+ | Goods returned by cash customers: |
|---|
| Department Salesman Article Selling price Customer Dept. | Salesman Article Prices F. R. Patrick 6 602 2 pairs moccasins shoes @ $ 7.75 E. A. Dwyer 3 301 1 sweater $ 12.25 P. M. Emden $ 8.75 Paid for repairs on shelving in department No. 9, by check to George Hand, carpenter, $8.65. |
|---|
| Goods returned from charge sales Customer Dept. | Salesman Article Prices F. R. Patrick 6 602 2 pairs moccasins shoes @ $ 7.75 E. A. Dwyer 3 301 1 sweater $ 12.25 P. M. Emden $ 8.75 Paid for painting in department No. 9, to P.M.Emden, by check, $8.75. |
|---|
| Returned to the Haines Bros Co., Chicago, the suitcases which was returned to us today. |
|---|
| Received cash from customers as follows: Miss Dorothy Zimmer- man, $300; K.B.Traun, $100; G.H.Sartoris, $400; F.K.Isaacs, $300. |
|---|
|
|---|
| Receipts: |
|---|
| Cash sales: |
|---|
| Cash sales: |
|---|
| Cash sales: |
|---|
| Cash sales: |
|---|
| Cash sales: |
|---|
| Cash sales: |
|---|
| Cash sales: |
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|---|
| Cash sales: |
|---|
| Cash sales: |
|---|
| Cash sales: |
|---|
| Cash sales: |
|---|
+
+![]() A page from a bookkeeping ledger with handwritten entries and calculations.
+
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+
+
+
+
+
+
+```json
+[
+ {
+ "line_item": {
+ "description": "C.T.Larson",
+ "quantity": "I",
+ "unit_price_gross": "$34.85"
+ }
+ },
+ {
+ "line_item": {
+ "description": "Mrs.C.H.Raymond",
+ "quantity": "I",
+ "unit_price_gross": "$35"
+ }
+ },
+ {
+ "line_item": {
+ "description": "Mrs.C.H.Raymond",
+ "quantity": "I",
+ "unit_price_gross": "$35"
+ }
+ },
+ {
+ "line_item": {
+ "description": "Mrs.C.H.Raymond",
+ "quantity": "I",
+ "unit_price_gross": "$35"
+ }
+ },
+ {
+ "line_item": {
+ "description": "Mrs.C.H.Raymond",
+ "quantity": "I",
+ "unit_price_gross": "$35"
+ }
+ },
+ {
+ "line_item": {
+ "description": "Mrs.C.H.Raymond",
+ "quantity": "I",
+ "unit_price_gross": "$35"
+ }
+ },
+ {
+ "line_item": {
+ "description": "Mrs.C.H.Raymond",
+ "quantity": "I",
+ "unit_price_gross": "$35"
+ }
+ },
+ {
+ "line_item": {
+ "description": "Mrs.C.H.Raymond",
+ "quantity": "I",
+ "unit_price_gross": "$35"
+ }
+ },
+ {
+ "line_item": {
+ "description": "Mrs.C.H.Raymond",
+ "quantity": "I",
+ "unit_price_gross": "$35"
+ }
+ },
+ {
+ "line_item": {
+ "description": "Mrs.C.H.Raymond",
+ "quantity": "I",
+ "unit_price_gross": "$35"
+ }
+ },
+ {
+ "line_item": {
+ "description": "Mrs.C.H.Raymond",
+ "quantity": "I",
+ "unit_price_gross": "$35"
+ }
+ },
+ {
+ "line_item": {
+ "description": "Mrs.C.H.Raymond",
+ "quantity": "I",
+ "unit_price_gross": "$35"
+ }
+ },
+ {
+ "line_item": {
+ "description": "Mrs.C.H.Raymond",
+ "quantity": "I",
+ "unit_price_gross": "$35"
+ }
+ },
+ {
+ line_item: {
+ description: "",
+ quantity: "",
+ unit_price_gross: ""
+ }
+ },
+ {
+ line_item: {
+ description: "",
+ quantity: "",
+ unit_price_gross: ""
+ }
+ },
+ {
+ line_item: {
+ description: "",
+ quantity: "",
+ unit_price_gross: ""
+ }
+ },
+ {
+ line_item: {
+ description: "",
+ quantity: "",
+ unit_price_gross: ""
+ }
+ },
+ {
+ line_item: {
+ description: "",
+ quantity: "",
+ unit_price_gross: ""
+ }
+ },
+ {
+ line_item: {
+ description: "",
+ quantity: "",
+ unit_price_gross: ""
+ }
+ },
+ {
+ line_item: {
+ description: "",
+ quantity: "",
+ unit_price_gross: ""
+ }
+ },
+ {
+ line_item: {
+ description: "",
+ quantity: "",
+ unit_price_gross: ""
+ }
+ },
+ {
+ line_item: {
+ description: "",
+ quantity: "",
+ unit_price_gross: ""
+ }
+ },
+ {
+ line_item: {
+```
+
+DEPARTMENT STORE ACCOUNTS
+187
+
+Paid for wrapping paper and twine to the National Paper and Twine Co., by check $185.90.
+
+Saturday, July 6
+
+
+
+
+ | Customer |
+ Dept. Salesman |
+ Items |
+ Prices |
+
+
+
+
+ | Miss Ellen B. Apter |
+ 3 |
+ 301
5 yards ribbon @... $1.25
10 yards silk net @... 4.75
5 yards gold embroidery @... 8.50 |
+ |
+
+
+ | C. P. Borton |
+ 3 |
+ 302
6 pairs opera silk hose @... 5.00
4 silk union suits @... 12.00
12 pairs men's silk hose @... 1.50 |
+ |
+
+
+ | M. W. Belden |
+ 6 |
+ 603
1 Encyclopedia Bri-tanica.... 136.00
1 Webster's Dictionary... 14.85 |
+ |
+
+
+ | B. W. Conger |
+ 9 |
+ 902
1100-piece set Havi-land china.... 42.80
17-piece set glass water set.... 21.50
1 dining table, 6 chairs, buffet, 1 china cabinet, set com-plete.... 267.75 |
+ |
+
+
+ | J. W. Martin |
+ 5 |
+ 501
1 toy motor............. 6.00
2 dolls @.............. 4.95
1 velocipede............ 12.50 |
+ |
+
+
+
+
+
+
+
+ | Cash sales |
+ Dept. |
+ Salesman Amount |
+ Dept. |
+ Salesman Amount |
+
+
+ | Dept. |
+ Salesman |
+ Amount |
+ |
+ |
+ |
+ |
+ |
+ |
+ |
+
+
+
+
+ | 1 |
+ 101 |
+ $75.77 |
+ 6 |
+ 693 |
+ $109.50 |
+ |
+ |
+ |
+ |
+
+
+ |
+ 102 |
+ 43.37 |
+ |
+ 602 |
+ 67.23 |
+ |
+ |
+ |
+ |
+
+
+ |
+ 103 |
+ 30.42 |
+ |
+ 603 |
+ 54.44 |
+ |
+ |
+ |
+ |
+
+
+ | 2 |
+ 201 |
+ 38.62 |
+ 7 |
+ 701 |
+ 64.35 |
+ |
+ |
+ |
+ |
+
+
+ |
+ 202 |
+ 23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21
23.21 ,
+
+
+192
+**ESSENTIALS OF BOOKKEEPING**
+
+Goods returned by cash customers
+
+| Department | Salesman | Article | Selling price |
+|---|---|---|---|
+| 4 | 402 | 6 linen napkins @ | $7.5 |
+| 7 | 702 | 1 garnet ring | 4.50 |
+| 5 | 501 | 1 pair gloves | 2.00 |
+
+Received cash from customers as follows: A. E. Dwyer, $30; Mrs. V. C. Ewing, $200; E. L. Horton, $25; Mrs. Alice Naylor, $25; F. R. Patrick, $100; A. K. Norman, $50.
+
+Sent check to the B. & W. Co., Trenton, N. J., for the amount of the invoice received July 6, less discount.
+
+Paid the Standard Oil Co. for gasoline, $32.50.
+
+Wednesday, July 10
+
+
+
+
+| Customer |
+Dept. |
+Salesman |
+Items |
+Prices |
+
+
+
+
+| C. C. Ebert |
+5 |
+501 |
+2 cotton felt mattresses @ |
+$18.75 |
+
+
+ |
+ |
+ |
+4 pairs wool blankets @ per pair |
+10.50 |
+
+
+ |
+ |
+ |
+3 pairs gloves @ per pair |
+7.50 |
+
+
+| D. H. Farwell |
+9 |
+903 |
+3 down comforters @ . . . . . . . . . . .$9.60
6 plain china vases @ . . . . . . . . . . 17.85
kitchen range @ . . . . . . . . . . . . 42.50
3 pairs gloves @ per pair .$9.75 |
+ |
+
+
+| L. S. Oatman |
+3 |
+301 |
+12 pairs silk hose @ .. .$3.35
2 boy's knitted suits & caps @.. .$8.60 |
+ |
+
+
+| Mrs. D. C. Rand |
+2 |
+202 |
+1 set of tablecloth consisting of table cover, 12 napkins, cloth, 3 table mats |
+$45.80 |
+
+
+ |
+ |
+ |
+5 yards fur trimming @ .. .$3.25 |
+ |
+
+
+| T. H. Warner |
+9 |
+901 |
+1 kitchen cabinet .. .$28.80
1 eight-piece porcelain cooking set .. .$3.88
2 casseroles @.. .$3.45 |
+ |
+
+
+
+
+Cash sales
+
+
+
+
+| Dept. |
+Salesman |
+Amount |
+Selling price Amount | Salesman Amount | Selling price Amount | Salesman Amount | Selling price Amount | Salesman Amount | Selling price Amount | Salesman Amount | Selling price Amount | Salesman Amount | Selling price Amount | Salesman Amount | Selling price Amount | Salesman Amount | Selling price Amount | Salesman Amount | Selling price Amount | Salesman Amount | Selling price Amount | Salesman Amount | Selling price Amount | Salesman Amount | Selling price Amount | Salesman Amount | Selling price Amount | Salesman Amount | Selling price Amount | Salesman Amount | Selling price Amount | Salesman AmountCash sales
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+DEPARTMENT STORE ACCOUNTS 193
+
+
+
+
+ | Dept. |
+ Salesman |
+ Cash sales, continued |
+ Amount |
+ Dept. |
+ Salesmen |
+ Amount |
+
+
+
+
+ | 2 |
+ 201 |
+ 35.94 |
+ 7 |
+ 701 |
+ |
+ 61.05 |
+
+
+ |
+ 202 |
+ 17.93 |
+ |
+ 702 |
+ |
+ 87.16 |
+
+
+ | 3 |
+ 301 |
+ 41.34 |
+ 8 |
+ 801 |
+ |
+ 64.01 |
+
+
+ |
+ 302 |
+ 40.63 |
+ |
+ 802 |
+ |
+ 90.08 |
+
+
+ | 4 |
+ 401 |
+ 56.82 |
+ |
+ 803 |
+ |
+ 93.82 |
+
+
+ |
+ 402 |
+ 91.07 |
+ 9 |
+ 901 |
+ |
+ 97.05 |
+
+
+ | 5 |
+ 501 |
+ 14.75 |
+ |
+ 902 |
+ |
+ 19.27 |
+
+
+ |
+ 502 |
+ 20.14 |
+ 10 |
+ 903 |
+ |
+ 79.46 |
+
+
+ | Goods returned from charge sales | 107.51 |
|---|
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+104
+ESSENTIALS OF BOOKKEEPING
+
+
+
+
+ | Dept. |
+ Salesman |
+ Cash sales |
+ Dept. |
+ Salesman |
+ Amount |
+
+
+ | Amount |
+ Dept. |
+ Salesman |
+ Amount |
+
+
+
+
+ | 1 |
+ 101 |
+ $ 80.64 |
+ 6 |
+ 601 |
+ $ 84.70 |
+
+
+ |
+ 102 |
+ 76.42 |
+ |
+ 602 |
+ 52.65 |
+
+
+ |
+ 103 |
+ 67.84 |
+ |
+ 603 |
+ 69.13 |
+
+
+ | 2 |
+ 301 |
+ 47.96 |
+ 7 |
+ 701 |
+ 61.34 |
+
+
+ |
+ 302 |
+ 39.72 |
+ |
+ 702 |
+ 39.58 |
+
+
+ | 3 |
+ 301 |
+ 41.73 |
+ 8 |
+ 801 |
+ 101.11 |
+
+
+ |
+ 302 |
+ 47.95 |
+ |
+ 802 |
+ 111.05 |
+
+
+ | 4 |
+ 401 |
+ 112.71 |
+ |
+ 803 |
+ 64.88 |
+
+
+ |
+ 402 |
+ 79.90 |
+ 9 |
+ 901 |
+ 81.50 |
+
+
+ |
+ 403 |
+ 62.72 |
+ |
+ 902 |
+ 71.04 |
+
+
+
+ Customer
+ T. H. Warner
+ C. C. Ebert
+ Goods returned from charge sales
+ Dept.
+ Salesman
+ Article
+ Price
+ 9
+ 901
+ 1 casserole
+ $3.45
+ 5
+ 501
+ 1 pair pillows
+ 7.50
+ Goods returned by cash customers
+ Department
+ Salesman
+ Article
+ Selling price
+ 4
+ 403
+ 1 suit
+ $49.50
+ 7
+ 702
+ 1 silver plated dresser set...
+ 15.00
+ 5
+ 502
+ 1 pair gloves...
+ 2.15
+
+
+Received cash from customers as follows: A. K. Norman, $50; Mrs. D. C. Rand, $100; C. T. Larson, $25; Dr. U. B. Hancock, $100; C. C. Ebert, $20.
+
+Friday, July 12
+
+By a fire which occurred last night a large part of the goods in departments 3, 4, and 5 were destroyed or badly damaged. The officers of the company and the insurance adjusters have investigated the matter and find that the loss is $4,000 in department 3, $6,000 in department 4, $1,500 in department 5, and $1,000 on fixtures. Our insurance policies cover $10,000 of this. The other $2,500 is a loss.
+The store will be closed until Saturday, July 15, to make arrangements for selling the damaged stock at a special sale.
+
+Saturday, July 13
+
+We have received the insurance companies' checks for the amount covered by their policies.
+Pay the employees' and officers' salaries in full for the entire week, as all are working in the damaged departments.
+Make a trial balance, a trading statement, a resource and liability statement, a loss and gain statement, and the final proof.
+Then close the books.
+![]() A page from a bookkeeping ledger with various financial entries and calculations.
+
+DEPARTMENT STORE ACCOUNTS 195
+
+There are times when the manager wants to watch sales of certain commodities over a period of time; or he may want to see whether sales are increasing or decreasing from time to time.
+
+How to study reports. One way to ascertain these facts is to study the figures given in the daily reports and compare them with the figures in previous reports. But it takes time to go over the same reports again and again, and besides it is not easy to remember the figures for several periods.
+
+There is a way, however, by which figures of any kind can be arranged so as to show at a glance what would take hours to puzzle out from columns of figures or multitudes of reports.
+
+This method is so simple that it can be used to show all sorts of facts about business, private ventures, cost increases in population, volume of sales, number of customers coming to the store on certain days, wages and number of employees, and so on.
+
+The graphic method of showing facts, as it is called, is probably more widely used today than any other method.
+
+Making pictures from figures. A graph is simply a “picture of figures.” Instead of arranging figures in columns, they are marked on a scale. Suppose, for instance, the sales of hats every day for a week were:
+
+
+
+ | Monday |
+ $300 |
+
+
+ | Tuesday |
+ 200 |
+
+
+ | Wednesday |
+ 150 |
+
+
+ | Thursday |
+ 150 |
+
+
+ | Friday |
+ 150 |
+
+
+ | Saturday |
+ 250 |
+
+
+
+For one week a graph might be unnecessary, but for 52 weeks, there would be 52 columns of 6 figures each, or 312 different figures to study.
+
+Form 103 on page 198 shows us the graph of these figures. On Monday the sales are large, Tuesday less, Wednesday still less, Thursday the same as Wednesday, Friday high, Saturday high.
+
+How to study the graph. What's the reason? Probably there was a special sale on Monday, advertised in the papers; this brought a crowd to the store. Tuesday some customers came who were unable to come Monday. Wednesday and
+
+196
+ESSENTIALS OF BOOKKEEPING
+
+Thursday were normal days. Friday was not only a special sale day, but also many customers were buying hats for use over the week-end; the same is true of Saturday.
+
+The manager looking over this chart would do two things: he would compare this chart with charts of other weeks to see if the tendencies to large sales on Monday, Friday and Saturday were the same for every week; and he would plan some way of increasing hat sales on the low days, Wednesday and Thursday.
+
+How to make graphs. For making graphs, paper can be ruled in squares specially for the purpose. The paper is often called "cross-section" paper, and sometimes "coordinate" paper, and is obtainable in different sizes at almost any stationary store.
+
+Such horizontal or vertical lines as are desired to stand out can be so ruled. For example, in Form 104 on page 108 every sixth vertical line is re-ruled so as to divide the weeks from each other and every tenth line is re-ruled to mark off the $1,000$ intervals horizontally.
+
+The vertical scale. The figures at the left of the squares form what is called the vertical scale, and are used to represent quantities or volumes, or whatever unit of measure is being used, whether it is prices, or quotations, or sales, or wages, or costs.
+
+The horizontal scale. The figures at the bottom are called the horizontal scale, and are used to indicate the lapse of time, such as the number of hours, days, weeks, months, years, or the number of tests made.
+
+In making the chart, vertical scales are placed first, then the horizontal scales; in doing this, each scale figure should be at the end of a line, not between two lines. The bottom horizontal line is also usually marked 0 in the vertical scale, and each horizontal line above the "zero line" represents a definite number of units. For instance, since the bottom horizontal line is marked 0, the next horizontal line above it would be marked 1, or 25; then 3, 4, 5, and so on; or 0, 10, 20, 30, 40, 50, 60 or 0, 100, 200, 300, 400 and so on; or 0, 2, 4, 6, 8, 10 and so on; or 0, 3, 6, 9, 12, 15, 18 and so on; but never 0, 2, 4, 6, 8, 11 and so on.
+
+The student should read the last paragraph over again until he is sure that he understands it thoroughly, for unless the scales are correct, the rest of the work on the graph will be wasted.
+
+![]()
+A line graph with a y-axis ranging from 0 to 400 in increments of 25 (375, 350, 325, 300, 275, 250, 225, 200, 175, 150, 125, 100, 75, 50, 25) and an x-axis with time labels starting at 8:30 and ending at 2:30 in increments of 30 minutes (8:30, 9:00, 9:30, 10:00, 10:30, 11:00, 11:30, 12:00, 12:30, 1:00, 1:30, 2:00, 2:30). The line starts at approximately (8:30, ~8) and rises steeply to reach (2:30, ~275).
+
+
+FORM #67
+
+1/7
+
+Google
+
+![]()
+A line graph with a vertical axis labeled "0" to "$400" and a horizontal axis labeled "Monday", "Tuesday", "Wednesday", "Thursday", "Friday", "Saturday". The y-axis values are 350, 300, 250, 200, 150, 100, 50.
+
+
+FORM 103: In making this graph from the figures given on page 195, we first rule the squares. Then we put in the vertical scale numbering the lowest line 0, the next 50, and so on. Next we put in the horizontal scale, and finally we plot the curve.
+
+![]()
+A line graph with a vertical axis labeled "100" to "$2000" and a horizontal axis labeled "1", "2", "3", "4", "5", "6", "7", "8", "9", "10", "11", "12", "13", "14", "15", "16", "17", "18", "19", "20", "21", "22", "23", "24", "25", "26", "27", "28", "29", "30", "31". The y-axis values are 1500, 1400, 1300, 1200, 1100, 1000, 900, 800, 700, 600, 500, 400, 300, 200, 100.
+
+
+FORM 104: This graph shows the cash sales of the People's Department Store from July 1 to July 11. Sales were fairly high Monday and Tuesday, higher Wednesday, lower Thursday. How can the 'ups and downs' in the curve be explained?
+
+198
+
+DEPARTMENT STORE ACCOUNTS 199
+
+Charting the information. After the squares and scales have been prepared, the student is ready to "plot" his figures. By plotting is meant finding a point on the chart which corresponds to the information desired to show in the graph.
+
+For example, in Form 103 on page 198, is a chart showing the sales of hats for every day for one week. The vertical scale shows the sales of hats from $0 to $400, increasing $50 at a time up to $400. The horizontal scale shows the days of the week.
+
+Sometimes the horizontal scale is placed at the top, but the best practice is to put it at the bottom.
+
+The sales of hats for the week were:
+
+
+
+ | Monday |
+ $300 |
+
+
+ | Tuesday |
+ 200 |
+
+
+ | Wednesday |
+ 150 |
+
+
+ | Thursday |
+ 150 |
+
+
+ | Friday |
+ 350 |
+
+
+ | Saturday |
+ 250 |
+
+
+
+By placing the left forefinger on the vertical scale at the figure 300, and holding it there, and running the right forefinger up the vertical line representing Monday, until it is opposite the left finger on 300, a heavy dot (.) at this point shows that on Monday there were $300 worth of hats sold.
+
+By placing similar dots on Tuesday, Wednesday, and the other days, the result will be a series of dots, each dot representing the sales of hats for a certain day.
+
+Drawing the curve. If now a straight line is drawn from Monday's dot to Tuesday's dot, another straight line from Tuesday's dot to Wednesday's dot, and so on, the crooked line from Monday to Saturday will show how sales of hats decreased or increased from day to day.
+
+This crooked line is called a "curve," strange as it may seem. And the reason it is called a curve is because if the sales of hats were plotted for every hour or every half-hour for a week instead of every day, and then the dots connected, the line would be more curved than straight. If the unit of time were small enough, the result would be a curved line. Form 102 on page 197 shows how the sales of hats for Friday might look. Since graphs are made for two purposes—to show what has taken place and what
+
+Dated Google
+
+200
+
+**ESSENTIALS OF BOOKKEEPING**
+
+is likely to take place—that is, to show the "trend" of events, any chart which does not serve one or both of these purposes is useless.
+
+A different color of ink should be used in drawing the curve, or else the lines may be made much heavier than the lines forming the squares so as to be easily and quickly distinguishable. If more than one item is to be represented on the same sheet, such as hats and shoes, the curves for each item should have a different color from the others in order to prevent confusion. Although colors are preferable, dotted or broken lines may be used.
+
+The curve in Form 104 on page 198 shows the cash sales of the People's Department Store from July 1 to July 11. On a similar sheet the student should prepare a graph of the charge sales of the store for the same period.
+
+**BOOKKEEPING PRACTICE**
+
+How to prepare a graph
+
+Graphs of the two items given below should be made in different colors on a sheet of cross-section paper, prepared in accordance with the instructions in this section.
+
+In a confectionery store the sales of candy for the year were as follows: January, $145; February, $137.50; March, $151.75; April, $142.40; May, $134.55; June, $155.90; July, $121.10; August, $101.45; September, $122.60; October, $133.90; November, $141.85; December, $212.20.
+
+The sales of ice cream in the same store for the same time were as follows: January, $12.40; February, $10.35; March, $18.25; April, $16.80; May, $31.10; June, $66.65; July, $110.50; August, $139.90; September, $161.10; October, $73.25; November, $24.00; December, $30.15.
+
+**STANDARD QUESTIONS**
+
+Transactions of the People's Department Store
+
+1. What do you think are the prospects of the store in the suit against the street company? Why?
+2. Why is the $139.90 due to Red Cross charged to loss and gain?
+3. Why do you think A. K. Norman purchased two pair of shoes on July 9 and returned one pair on July 10?
+4. Did the check sent to the B. & W. Co. on July 9 come within the terms of discount?
+5. Describe the process of making a graph.
+
+---
+
+SECTION VII
+
+MANUFACTURING AND COST ACCOUNTING
+
+PART ONE
+
+LIKE many other words, the word “manufacturing” has changed its meaning to such an extent that it now means practically the opposite to what it originally signified. The Latin meaning of the word is “hand-made,” but nowadays an article is distinguished as “hand-made” when the one who speaks of it desires to convey the impression that it is not manufactured! In the early days of craftsmanship the work was done in the home of the artisan, who produced the finished article, frequently with the help of his family, from beginning to end, and then became his own salesman by going out to find a buyer.
+
+Early manufacturing. The maker of clothing, for example, raised the sheep, sheared them, carded, spun, and wove the wool into cloth, which he then made up into more or less attractive garments. The invention of machinery, the use of machinery, and the improvement of transportation about 1700 to 1790, rendered this method of production too slow and therefore too expensive, and hence arose the factory system which has been developing very rapidly since then.
+
+The growth of factories. As this factory development proceeded it became evident that the same manufacturer could not continue to carry his product through all its stages. Speed and skill demanded a division of processes. The herdman henceforth devoted himself to raising the sheep; the wool became the finished product of his work. But to the owner of the spinning mill, wool was his raw material and yarn his finished product. This same yarn, in its turn, became the raw material for the weaver whose looms turned out cloth as the finished product. To complete the cycle, the tailor purchases the cloth as raw
+
+201
+
+202
+ESSENTIALS OF BOOKKEEPING
+
+material and turns out the garments as finished product. It thus becomes a little difficult to define exactly what raw material is. Even the dictionary leaves it with the statement that it is simply material “which has not been subjected to a (specified) process of manufacture.”
+
+What purchased parts are. By devoting themselves to certain parts of manufactured products men have developed special skill and have been able to make those parts better and cheaper than the factory owners can make them themselves. This has given rise to special factories for those parts, and the manufacturers of the larger products may find it to their advantage to buy certain parts from specialists rather than to make them in their own plants. Thus the manufacturer of wagons buys the springs all ready to be attached from the springmaker; the blacksmith who formerly hammered out horseshoes and nails from bar and rod iron now buys both ready-made; the toolmaker buys handles from the handle factory, and so on.
+
+This has been carried so far that in certain types of automobiles the makers purchase the wheels from a wheel factory, the body from a manufacturer of bodies, the axles from makers of axles, the engine from a motor manufacturing company, the top from a topmaker, other parts from other manufacturers, and by supplying these bolts and a few coats of paint, assume the name of manufacturers when they would be more appropriately designated as “assemblers.”
+
+Men and machinery. Having obtained the necessary materials, whether in the form of raw materials or purchased parts, the manufacturer must have them worked into the product he expects to sell. There are two factors necessary for this—men and machinery. However well the manufacturer may be supplied with machines, his ultimate success in manufacturing will depend in the last analysis, it is probable, more on the skill and character of the labor and the wisdom with which it is supervised than on anything else.
+
+Direct labor. In the different departments of the factory the processes through which the materials pass are performed by workmen who are skilled in the particular tasks they perform. One is a machinist, another a bench worker, and so on. These
+
+COST ACCOUNTING
+203
+
+men perform what is called direct labor, since they work directly on the job going through the factory.
+
+**Why there must be indirect labor.** There are many things which must be done in every department, however, in order to keep it running smoothly, which do not pertain to the immediate work on the article which is to become the finished product of the factory. Among these are repairs on the machines used in the machine shops, sharpening of tools used by the workmen, bringing materials from the storeroom to the shops, cleaning up the debris of previous working, unused articles from the storeroom and tools to their places, and so on. All this is called indirect labor, since it is not applied directly to the job.
+
+**What factory burden includes.** In addition to the in-direct labor, there are many other items of expense connected with the departments of a factory. In cold weather the building must be heated; if night work is done, and in the winter to some extent in the daytime, it must be lighted; machines must be supplied with oil; and all these expenses must be incurred for protection against fire; if the plant is owned by others than the manufacturing company, rent must be paid; or if the company owns the plant, interest on the value of the property must be considered; provision must be made for the pay of foremen and superintendents whose work is neither direct nor indirect; general and special taxes must be paid; in many places a fund must be maintained for the protection of the workmen, either by the company itself or by regular payments to a state official; machines and tools will wear out, and provision must be made for their replacement or renewal. These and similar expenses make up what is called factory burden.
+
+**Just what is overhead?** The salaries of the officers who manage the finances of the company, of the bookkeepers, stenographers, messengers, and others in office positions, together with other office expenses, constitute the overhead expense.
+
+Note—the student will find that writers on the subject of cost accounting do not always agree as to whether "overhead" or "indirect labor" and "overhead" practically synonymous; others discard one or the other and place all items under "direct labor." This classification is so confusing as to confuse the student almost beyond any hope of understanding. The above classification is simple, and is as nearly an accepted one as the author has found.
+
+204
+**ESSENTIALS OF BOOKKEEPING**
+
+The merchant who buys and sells commodities already completed, finds the gross cost of the goods by adding three items—the price paid to the jobber or manufacturer, the shipping charges, and the expense of carrying on his business. In order to determine the selling price, he adds to the gross cost the selling expense and the amount of profit he considers fair.
+
+How to find the selling price. The manufacturer of articles to be sold must add together the money paid out for raw materials, purchased parts, direct labor, indirect labor, burden, and overhead to find the total. This sum plus selling expense plus the profit will equal his selling price.
+
+The raw materials and purchased parts to be used on a job are obtained from the storeroom by requisition. When the job is finished, or when the process in a particular department is finished, the materials not used are returned to the storeroom; the quantity used, figured at the invoice price plus direct charges on those materials, is the cost of raw materials and purchased parts for that job.
+
+Wages. One of the most important items of expense is wages. Wages are paid on several different bases. First and oldest of these is the day rate plan.
+
+The day rate plan. The day rate plan is widely used, Modifications of it are the weekly or monthly rate, but what applies to one is true of all. It groups workers of a similar kind and pays them an arbitrary wage for their time, with slight variations which are made according to skill of the worker, the location of the business, and other conditions. Any advance in pay must be uniform throughout the group lest jealousy and discontent arise. The result is apt to be a dead level of effort in both quality and quantity, and it is more often than not a low level, because there can be no special reward to the ambitious worker, and no punishment for the one who lags.
+
+The piece rate plan. Under the piece rate plan the work is divided into units or pieces, and each worker is paid according to the number of units or pieces completed. Objections to this method on the part of workmen usually arise from setting the rate too high or too low at the start. When the piece rate is
+
+---
+
+COST ACCOUNTING 205
+
+reckoned on the basis of the number of units or pieces turned out under the time rate plan, the workers produce so much more that the wages seem absurdly high. The rate may then be reduced. The workers, of course, speed up to maintain the wages; other cuts in the rate follow, until the men are overworked or the quality of the articles produced deteriorates. The piece plan is a reasonable and satisfactory plan if the rate is properly set in the first place and is maintained, and if the work is inspected properly in order to keep it up to standard.
+
+The profit sharing plan. In some organizations an effort has been made to share with the workers a certain percentage of the profits at the close of each financial period. If the profits are large, the workers receive a large amount in addition to their regular wages; if they are small, they receive a smaller amount. Some say the scheme is manifestly unfair, because if the business shows a loss, the worker stands none of it, and that it is open to the same objection as the day rate plan because the indifferent and inefficient worker receives the same reward in the extra money paid as the one who is alert and efficient.
+
+The premium and bonus plans. The premium and bonus plans are so closely related that they may be considered as modifications of the same idea. In them the worker receives a minimum wage with the understanding that if he produces the average amount of work in less than the full day, he shall be paid extra for the work done during the remainder of the day.
+
+The differential rate plan. Under the differential rate plan a fair day's work is determined by careful tests, and for the number of units of perfect work thus produced the worker is paid a certain rate, as in piece work. In addition to this it is understood that if his work is unsatisfactory, the unit so spoiled is to be counted out. Furthermore, if his rate of production falls below the standard number, the unit rate is less, whether the lower number is caused by imperfect work or by sluggishness. On the other hand, if he produces a greater number of units than the standard, the unit rate is higher than the ordinary rate.
+
+For example, if the standard number of units is 20 and the rate is 18 cents a unit, a man's wages for ordinary production would be $3 a day. If he produces only 18 units because he spoils
+
+208
+
+**ESSENTIALS OF BOOKKEEPING**
+
+one or two or wastes some time, the rate is only 13 cents a unit, and his wages for the day would be $2.34. If he produces 23 units of perfect work, the rate is 16 cents a unit and his wages for the day would be $3.68.
+
+Which plan is best? Just which plan is best suited to a particular factory must be determined by the kind of work to be done and other circumstances. It will usually be found impracticable to try to use any but the day rate for some kinds of indirect labor, while production may be stimulated, burden reduced, and sales possibilities increased by adopting one of the other plans for some or all of the direct labor. This, however, is a problem for the manager to decide.
+
+What cost accounting really is. As indicated by the name, cost accounting is a method of finding out how much it costs to make a certain article, or to operate a particular department, or to use a specified process.
+
+For example, a manufacturer may desire a cost system by which he can determine exactly what it costs to make a certain type of desk when that type is made in large quantities; or he may desire a system which will show him just how much it costs to maintain an assembling department, so that he may intelligently decide whether to continue to assemble the desks himself or to sell the parts to another company which does nothing but assemble desks. Or he may desire to know what it costs to mill the lumber for the desks.
+
+The work of cost finding is separate from the entries made for ordinary bookkeeping. In fact, cost accounting may perhaps be called a method of analysis rather than a method of book-keeping. The information is conveniently gathered with the help of analytical forms, but the results are recorded in books for the sake of permanence. The books in a simple cost set are the cost journal and the cost ledger.
+
+The elements of cost. Costs, therefore, are made up of the raw materials or the purchased parts, the direct labor, the indirect labor, their burden, and the general overhead.
+
+By means of requisitions the quantity of raw materials or purchased parts used is determined. How much time each worker puts on a job can be decided by recording that time.
+
+COST ACCOUNTING 207
+
+How to distribute indirect costs. In figuring the indirect labor, however, as well as the factory burden and the general overhead, there are several methods used which accomplish their purpose to a more or less satisfactory degree. Since all work going through must bear its proper share of such items of expense as indirect labor, supplies, heat, waste, soap, towels, and so forth), irrespective of weight, lightness, size, and other items which go to make up the factory burden, there must be some method by which these charges may be distributed.
+
+Of course, an item which pertains only to a certain department should not be charged or distributed to other departments. For example, depreciation of a machine is a charge against the department in which the machine is used and is not an item to be distributed to the whole plant.
+
+The man-hour method. One method of distribution used is called the man-hour method. The number of men employed in direct labor, multiplied by the number of hours each man works in a day, multiplied by the number of working days in the month, will equal the total number of hours of direct work by the men for the month, or the whole number of man-hours; if, therefore, the sum of all items in the burden is divided by the number of man-hours, the result is the man-hour rate. The number of man-hours used on any job in the department multiplied by this rate will equal the amount of burden to be charged against that job.
+
+In distributing the burden to a department, the number of man-hours used in that department multiplied by the man-hour rate will equal the burden which is to be charged to that department.
+
+In a similar way the rate may be applied to a process. For example, if there are in a department 225 men employed on direct labor, each working 8 hours a day, allowing 26 working days for the month of April, the total number of man-hours would be $225 \times 8 \times 26 = 46,800$. If, in this department, the total burden for the month is found to be $5,850$, the man-hour rate would be $5,850$ divided by $46,800$, or $12\frac{1}{2}$ cents. If a certain job in this department required the time of two men for a day and a half, the amount of burden which would be charged to that job would be $2 \times 12 \times 12\frac{1}{2} \times 30$, or $83$.
+
+
+
+ | COST ACCOUNTING |
+ 207 |
+
+
+
+208
+ESSENTIALS OF BOOKKEEPING
+
+The principal objection to the man-hour rate lies in the fact that it takes no account of the difference in wages paid to the men whose hours are thus taken as a basis for the whole calculation, rendering the results possibly inaccurate and misleading.
+
+The machine-hour method. A rate called the machine-hour rate is obtained by dividing the total number of hours all the machines in a department are operated for the month by the total burden for the same time. The number of hours of machine work which is required on a job multiplied by this rate will be the amount of burden to be charged against that job. If the work done were machine work only, and if the machines were all the same, this would be sufficiently accurate, but when different sizes and types of machines are used it is really no more accurate than the man-hour rate.
+
+In addition to this, there is the objection that much of the work on almost all kinds of articles is not machine work, but bench work, which is omitted altogether in applying the machine-hour rate.
+
+The new machine-hour method. To overcome these objections the machine-hour method has been modified by dividing many of the items usually combined under burden into parts which are apportioned to the various types of direct work done in the department and charged directly to the job, thus reducing to the smallest possible sum the amount which has to be distributed through a rate. For example, the machines of a certain kind are grouped in one part of the floor and called a department, say Department M. Suppose that 1/63 of the floor space of these machines is measured; if that floor space is 1/63 of the floor space of the entire building, 1/63 of the rent is charged to Department M. In a similar way other charges are divided so that the items left to be distributed by any kind of rate will not amount to enough to make a great deal of difference if the rate should happen to be somewhat inaccurate. This plan is called the new machine-hour method.
+
+The production method. Another method used is called the production method. When the cost is being figured only on the number of units produced, the total amount of burden for a month, divided by the number of units produced will equal a
+
+COST ACCOUNTING 209
+
+rate on a unit for the department under consideration. For example, if the total number of pounds produced in the month was 65,750 and the total burden was $2,958.75, the production rate on a pound would be $2,958.75 divided by 65,750, or 4½ cents. On a job which weighs 125 pounds the amount of burden to be charged would be 125 × .045, or $.53.
+
+The labor and material method. In factories where the main item of expense in production is for materials and purchased parts it is sometimes customary to find the rate of burden distribution by dividing the combined cost of materials, purchased parts, and direct labor.
+
+For example, if the total cost of raw materials and purchased parts for the month was $16,456.80 and the total cost for direct labor was $5,485.60, while the total burden was $4,827.33, the rate would be found by dividing the burden, $4,827.33, by the sum of $16,456.80 and $5,485.60, or $21,942.40, which equals .22 or 22%. On a job which required $187.60 worth of materials and purchased parts and $62.53 worth of direct labor, the amount of burden to be charged would be .22% of the sum of these two amounts, or $55.03. This percentage plan may be pursued when using direct labor alone as a basis for distribution under the man-hour method.
+
+Apportioning costs to the departments. Such general expenses as pertain to the administration of the whole plant, including office expenses and salaries, can be distributed in the same way as burden after it has been properly apportioned to the departments. This apportionment may be made on the basis of floor space, time, labor, production, or, in some cases labor and materials combined.
+
+For example, if there are four departments, A, B, C and D, the plant might be arranged as shown in the floor plan of the factory shown on page 210.
+
+If the apportionment is to be made on the basis of floor space, the distribution will be:
+
+8.9% of the overhead to Department A, the drafting room
+27.5% of it to Department B, the finishing and shipping room
+38.1% of it to Department C, the machine shop
+25.5% of it to Department D, the foundry.
+
+210
+ESSENTIALS OF BOOKKEEPING
+
+
+
+ | 15° |
+ 35° |
+ 50° |
+
+
+ Drafting room
525 sq. ft.
8.9% |
+ Finishing and shipping room
1625 sq. ft. |
+ Machine shop
2250 sq. ft. |
+
+
+ |
+ 27.5% |
+ 38.1% |
+
+
+ | 15° |
+ 25° |
+ 75° |
+
+
+ | One factory is arranged according to this plan. In distributing rent, the foundry is charged with 25.5% of the entire rent, the machine shop with 27.5% of the finishing room with 27.5%, and the drafting room with 8.9%. The overheads are also charged on this basis. |
+
+
+ |
+ |
+ Foundry
1500 sq. ft. |
+
+
+ |
+ |
+ 25.5% |
+
+
+ |
+ |
+ 50° |
+
+
+
+If, however, the apportionment is to be made on the basis of direct labor, supposing the direct labor to have been 1,040 hours in Department A, 3,120 hours in Department B, 9,360 hours in Department C, and 4,160 hours in Department D, or 17,680 hours for the month in all, 8.9% of the overhead would be charged to Department A, 17.6% to Department B, 52.9% to Department C, and 25.6% to Department D.
+
+The percentage of apportionment would also vary from the above if the figuring were on the basis of the amount paid for direct labor instead of the number of hours, and still different results might be obtained if some basis other than floor space or labor were used. Which basis shall be taken must be determined by what is considered by the management fairest in the plant under consideration.
+
+How overhead is distributed. Having been apportioned to the departments, the overhead is then distributed to the units which are produced in the individual department, in the same way that burden is customarily distributed in that particular department.
+
+COST ACCOUNTING 211
+
+abor
+
+it has
+items
+thus
+h this
+most
+ly to
+owing
+on.
+
+INSERT II
+
+from
+neter,
+t the
+If it
+t, the
+multi-
+orse-
+ed by
+al the
+orse-
+ze for
+ed for
+hines.
+part-
+te for
+
+by
+our-
+thing.
+n the
+ween
+ming
+"life"
+
+![]() A page from a book with text and lines of poetry.
+
+210
+ESSENTIALS OF BOOKKEEPING
+
+![]() A small, stylized drawing of a person with a hat and a bow tie, facing right.
+
+dir
+in
+De
+hot
+to
+me
+
+abc
+dir
+res
+lab
+by
+un
+
+to
+un
+sar
+uls
+
+COST ACCOUNTING 211
+
+The following equations show how cost is made up:
+
+$$\text{Prime Cost} = \text{Raw Materials} + \text{Purchased Parts} + \text{Direct Labor}$$
+$$\text{Factory Cost} = \text{Prime Cost} + \text{Burden}$$
+$$\text{Gross Cost} = \text{Factory Cost} + \text{Overhead}$$
+$$\text{Selling Price} = \text{Gross Cost} + \text{Selling Expense} + \text{Profit}$$
+
+The diagram in the insert shows this in another way.
+
+Under the "new machine-hour method" of distribution it has been suggested that it is possible to divide up many of the items of burden and assign them directly to producing units, thus reducing the amount left for general distribution. Although this is not so simple as some other methods, it is probably the most nearly accurate in the final results and is therefore likely to appeal to accountants and factory managers. The following paragraphs describe some plans in use for direct distribution.
+
+How power is distributed. When power is purchased from outside and conducted directly to each machine through a meter, all that is necessary is the readings of the meter. But the method by which power is secured is not always so simple. If it is furnished by a power plant or by belting or shafing, the number of hours each machine is used during the month, multiplied by the horse-power of the machine, will equal the horse-power hours. The total cost of power for the month, divided by the sum of the horse-power hours of all machines, will equal the rate per horse-power.
+
+The number of hours any machine was used, times the horse-power of that machine, times the rate, will equal the charge for power against that machine. The same method may be used for distributing the cost of power to departments instead of machines.
+
+The ratio of the floor space of a machine, process, or department to the entire floor space of the plant will equal the rate for which it is to be charged with rent.
+
+Figuring depreciation. The cost of a machine divided by its life in running hours equals its depreciation per running hour—provided that at the end of its running time it is worth nothing. If it has a scrap value at the end of its period of usefulness in the factory, its rate of depreciation will equal the difference between its cost and this scrap value, divided by the number of running hours. For example, if a machine costs $1,000 and has a "life"
+
+212
+**ESSENTIALS OF BOOKKEEPING**
+
+of 30,000 hours, with a scrap value of $100 at the close of that time, its rate of depreciation will be $900 divided by 30,000 or 3 cents an hour. If this machine ran 208 hours during the month under consideration, its depreciation for that month is $6.24.
+
+Interest on investment. Interest on plant and equipment should be considered as well as that on outstanding obligations. This is called interest on investment and can easily be distributed according to the floor space occupied, like rent. Taxes and insurance can, of course, be distributed in the same way.
+
+Employers' liability insurance. Employers' liability insurance is fixed at a certain percentage of the payroll and so automatically determines the amount to be charged against a department, since it is obtained by multiplying the wages paid in the department by the given rate.
+
+Distributing indirect labor. So far as departments are concerned there is no difficulty in charging the indirect labor to the department in which it is done. If it is to be distributed to the machines, the simplest method is the one suggested under the "new machine-hour method" of grouping the different kinds of work into small departments in order to distribute the indirect labor accurately.
+
+Supervision. Supervision consiste of the services of the superintendent and the foremen. The salary of the superintendent should be apportioned according to the number of foremen. Then the sum of each foreman's salary and the part of the superintendent's salary apportioned to him will be chargeable to his department. If this is to be distributed to machines or units, it may be done by a time record kept by each foreman, or, if it is more desirable, it may be distributed with the rest of the burden.
+
+The light bill. If it is impossible to have a meter for each department, the total light bill for the month may be divided by the number of kilowatts represented by the number of outlets in the whole plant. This rate, multiplied by the total number of outlets of a department, will equal the amount chargeable to that department. For example, if the bill for the month is $70 and the lamps in the office are:
+
+![]() A page from a bookkeeping manual.
+
+COST ACCOUNTING
+213
+
+
+
+ | 4 of 100 watts each = 400 |
+ |
+
+
+ | 2 of 60 " " = 120 |
+ |
+
+
+ | 4 of 40 " " = 160 |
+ |
+
+
+ | Total in the office. |
+ 680 |
+
+
+ | Total in the foundry. |
+ 2,720 |
+
+
+ | Total in the machine shop. |
+ 4,050 |
+
+
+ | Total in the drafting room. |
+ 1,700 |
+
+
+ | Total in the finishing and shipping room. |
+ 3,570 |
+
+
+ | Total in all departments. |
+ 13,600 |
+
+
+
+$70 divided by $13,600 = .005147 +$, the price per watt outlet.
+Apportioning the office lights among the other departments, and then multiplying the price per watt outlet by the watt outlets of each department, the bill for the month will be distributed thus:
+
+| Department | Cost |
+|---|---|
+| Foundry | $14.74 |
+| Machine shop | 26.71 |
+| Drafting room | 9.21 |
+| Finishing and shipping room | 19.34 |
+| Total, as above | $70.00 |
+
+Fuel. Fuel used for heating the plant, if heat is supplied from a central furnace, should be apportioned to the departments according to their floor space.
+
+Repairs should be charged, of course, to the department in which they are made.
+
+STANDARD QUESTIONS
+
+Manufacturing
+
+1. What change has taken place in the meaning of the word "manufacture"?
+2. When and how was manufacturing done in the early days?
+3. What historical occurrences were the occasion for the rise of factories?
+4. What is the difficulty in defining "raw material"?
+5. What are purchased parts? Illustrate.
+6. What are the factors in making goods? Which do you think is the more important?
+7. What is "markdown"? Name ten of the items which compose it.
+8. What constitutes "overhead"?
+9. How does the merchant find the cost of the goods he sells?
+The selling price?
+10. How does the manufacturer find his cost? How does he find his selling price?
+
+214
+ESSENTIALS OF BOOKKEEPING
+
+STANDARD QUESTIONS
+Labor
+
+1. What are the different kinds of labor? Illustrate.
+2. What is meant by the day rate of paying wages? Is the day rate a satisfactory plan? How does it result?
+3. What is the substance of the piece rate?
+4. What objections are raised to the piece rate? Why? How does it work out?
+5. Can the objectionable features of the piece rate be eliminated? If so, how?
+6. What is the profit sharing plan? When is the profit shared?
+7. Do you approve of the profit sharing plan? Why or why not?
+8. What are the advantages and disadvantages of this plan.
+9. Explain the differential rate. Illustrate.
+10. Which of the wage-paying plans do you think a factory should use? State your reasons.
+
+STANDARD QUESTIONS
+Cost accounting
+
+1. How does cost accounting differ from bookkeeping?
+2. What is the object of cost accounting? Illustrate.
+3. What are the various costs to be considered?
+4. What are the books in a simple cost set?
+5. How is the cost of raw materials and of purchased parts determined?
+6. What is done with the burden in cost accounting?
+7. What should the accountant strive to do with as many of the items of cost as possible? Why?
+8. What is the machine-hour method of distribution? Illustrate.
+9. What is the chief objection to the man-hour rate?
+10. Describe the machine-hour method of distribution.
+11. What are the chief defects of the machine-hour method in your opinion?
+12. How has an effort been made to overcome the defects of the machine-hour method? Illustrate. What is this method called?
+13. What is the productive method? Illustrate.
+14. What is the process in the labor and material method? Illustrate.
+15. What is the first process in disposing of the overhead? On what basis is this done? What is the second step in handling the overhead?
+16. What does prime cost include?
+17. What does factory cost include?
+18. What does gross cost include? What does selling price include?
+
+![]() A page from a book titled "Essentials of Bookkeeping" with questions about labor and cost accounting.
+
+COST ACCOUNTING
+215
+
+19. Write the formula for costs on the blackboard.
+20. What is the process of direct distribution?
+21. How is power distributed?
+22. How is rent distributed?
+23. What other items are distributed like rent?
+24. How do you figure depreciation?
+25. Has the employee's liability insurance covered?
+26. What is the difference between indirect labor?
+27. How is supervision distributed?
+28. What method can be used for accurate distribution of the charge for light? Illustrate.
+
+29. If all the lamps in one of the departments from 60-watt to 100-watt bulbs, would it make any difference in figuring the distribution? Would it make a difference in the light bill for the month?
+
+30. How should repairs be charged?
+
+PART TWO
+
+ACTUAL BOOKKEEPING
+
+The General Motor Manufacturing Company
+
+The student will now take charge of the books of the General Motor Manufacturing Company, a corporation which manufactures motors only. Hereafter no effort has been made to determine the cost of making the company's product, but now they desire an analysis that will show them its production.
+
+The following is a list of the raw materials on hand, January 1:
+
+
+
+
+ |
+ In stockroom |
+ In process |
+
+
+
+
+ | Castings. |
+ $14,486.00 |
+ $ 6,514.00 |
+
+
+ | Steel bars. |
+ 13,853.00 |
+ 7,147.00 |
+
+
+ | Bolts, nuts, screws, etc. |
+ 2,982.00 |
+ 1,218.00 |
+
+
+ | Fig aluminum. |
+ 37,756.00 |
+ 11,493.00 |
+
+
+ | Fig brass. |
+ 22,297.00 |
+ 9,283.00 |
+
+
+
+
+The magneto and carburetors used in the motors are purchased from outside—the magneto from the Charleist Magneto Co., of Nashville, Tenn., at $55.40 each; the carburetors from the National Specialty Co., of Omaha, Neb., at $24.40 each. We have on hand in the stockroom 738 magneto and 696 carburetors, and in process 242 magneto and 94 carburetors.
+
+The plant site and buildings are owned by an estate which is in the hands of the People's Savings and Trust Co., to whom we pay a monthly rental of $1,000. The equipment of the factory is valued at $81,875 for machines and $7,360 for tools. Office furniture and appliances are
+
+216
+ESSENTIALS OF BOOKKEEPING
+
+charged at $2,500. The company has on deposit in the First National Bank, subject to check, $97,516.78, and in the safe, $405.12. Direct Labor in Process is debited for $10,633.70; Indirect Labor in Process for $4,123.10.
+
+Supplies for the plant, consisting of oil, waste, sand, soap, towels, and so on, are charged at $1,352.38. Insurance is debited for $1,621.80 and taxes for $1,742.80 for the year. The reserve for depreciation of equipment is $1,457.80; the reserve for bad debts is $16.70; tools, $650.50; office furniture and appliances, $520. The employment liability insurance balance is $12,437.28. There are now on hand in the shipping room 63 unsold motors, valued at an estimated cost price of $350 each.
+
+The company's capital stock is $675,000, all of it paid up. The surplus account shows a balance of $2,875.50, and the undivided profit $1,663.34.
+
+The factory consists of four departments—the foundry, employing 70 men in direct labor at an average wage of $.55 per day and 43 men in indirect labor at an average of $.35; the machine shop, with 178 men in direct labor, averaging $.42.5 each, and 76 men in indirect labor at $.33 each; the assembling room, with 39 men in direct labor, averaging $.40 each, and 27 men in indirect labor, averaging $.33 each; the testing and shipping rooms, with 29 men in direct labor and 8 men in indirect labor, averaging $.33 each, making a total of 485 men in the factory.
+
+The general arrangement and dimensions of the factory are indicated in the illustration on page 244.
+
+The bill books show that the following outstanding papers are in our favor:
+
+Note, dated Nov. 6, at 60 days, by Glenfield & Egan,
+Louisville, Ky.............$ 8,253.75
+" " " " " 25." " 45 " " The Mercury Auto Mfg.
+Co., Baltimore, Md...........$ 2,848.20
+" " Dec. 11," " 30 " " Eaton & Welch, Seattle,
+Washington.................$ 12,352.00
+" " " " " 18," " 30 " " The Viamotor Co.
+" " " " " 20," " 60 " " St. Louis
+The Bangor Autobat
+Co..............14,652.50
+6,025.55
+
+Bills payable are as follows:
+Note, dated Dec. 7, at 30 days, to the Machinists' Supply
+Co., Cty..............835.25
+" " " " " 15," " 60 " " Axline & Baldwin, Chica-
+go, Ill.................1,000.00
+" " Nov. 18," " 60 " " The Charleria Magneto
+Co..............845.25
+
+COST ACCOUNTING 217
+
+According to our sales ledger, the following are the accounts receiv-
+able: The Appleton Motor Car Co., New York, N. Y., $24,286.50; The Bluebell Motor Co., Butte, Mont., $16,482.61; The Automotive Co., San Francisco, Cal., $4,687.10; The Continental Autorac Co., Marella, France, $16,943.82; The Argentinian Motor Car Co., Buenos Aires, Argentina; The Bantam Motor Car Co., Inc., New York City, N. Y.; The Cars Co. Car Co., Hong Kong, China, $38,561.23; The Viamotor Co., St. Louis, Mo., $10,467.26; F. Mertillo & Co., Havana, Cuba, $3,268.12; Lopez & Gara-
+piata, Lima, Peru, $2,489.66; The Rotocar Co., New Orleans, La., $18,647.18; Austin & Ballantyne, London, England, $9,467.82; Feldman &
+Suss, New York City, N. Y., $10,000.00; The American Motor Car Co., Detroit, Mich., $8,422.75; Burma & Heming, Boston, Mass., $12,386; The Fuji no Yama Autorac Co., Tokio, Japan, $384.90; The Lincoln Motor Co., Chicago, Ill., $8,467.45; The Penn Motor Car Co., Phila-
+delphia, Pa., $11,346.23; The Wilson & Ginn Car Co., Atlanta, Ga., $4,287.95; The General Motors Corp., Oshkosh, Wis.
+
+Accounts payable are owing to us: The Charleier Magneto Co., Nash-
+ville, Tenn., $2,490.50; The National Specialty Co., Omaha, Neb.,
+$1,673.20; The Lehigh Iron and Steel Co., Pittsburgh, Pa., $2,165.83;
+The Corundum Castings Co., Denver, Colo., $873.56; The Machinista'
+Supply Co., City, $264.81.
+
+This student would make a trial balance from this information.
+He will find that the books are not exactly in balance. In order to
+clear this, an account should be opened in the general ledger headed
+"Discrepancy," entering this difference there.
+
+When to use the discrepancy account. This is an incident
+which should never be necessary in the keeping of books. There
+is only one condition which makes it excusable and that is the one
+arising here. A set of books is placed in the hands of an incoming
+accountant and when he goes through them he finds them out of
+balance; there is no one to whom he can go for information as
+to the possible source of the discrepancy; the only thing he can
+do is to open an account with it and head it as here suggested.
+Later in his connection with the business he may, with the full
+knowledge and consent of the officers of the company, transfer
+enough of the undivided profits to this account to make it balance.
+No error or oversight in his own work should ever be allowed to
+creep into this account, no matter what the temptation.
+
+A word about certain books. Some of the books used in a
+corporation have been illustrated in the wholesale grocery busi-
+ness. To avoid unnecessary protraction of the work in that
+
+
+
+ | Cost Accounting |
+ 217 |
+
+
+ | According to our sales ledger, the following are the accounts receiv-
+able: The Appleton Motor Car Co., New York, N.Y. |
+ $24,286.50; |
+
+
+ | The Bluebell Motor Co., Butte, Mont. |
+ $16,482.61; |
+
+
+ | The Automotive Co., San Francisco, |
+ Cal. |
+ $4,687.10; |
+
+
+ | The Continental Autorac Co. |
+ Marella, |
+ France, |
+ $16,943.82; |
+
+
+ | The Argentinian Motor Car Co. |
+ Buenos |
+ Aires, |
+ Argentina; |
+
+
+ | The Bantam Motor Car Co. |
+ Inc. |
+ New York |
+ City, |
+ N.Y. |
+
+
+ | The Cars Co. |
+ Car |
+ Co. |
+ Hong Kong, |
+ China, |
+ $38,561.23; |
+
+
+ | The Viamotor Co. |
+ St. |
+ Louis, |
+ Mo. |
+ $10,467.26; |
+
+
+ | F.Mertillo & Co. |
+ Havana, |
+ Cuba, |
+ $3,268.12; |
+
+
+ | Lopez & Gara- |
+ Pipta, |
<
+
+
+
+| Account payable are owing to us: |
+
+
+
+| The Charleier Magneto Co. |
+
+
+
+
+
+
+
+
+
+| The National Specialty |
+
+
+
+
+
+
+
+
+
+
+
+| The Lehigh Iron and Steel |
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+218
+**ESSENTIALS OF BOOKKEEPING**
+
+business some books were not even mentioned. As pointed out there, the business of a corporation is carried on by the manager, who receives his instructions from the board of directors. The record of the proceedings of the board is made by the secretary in the minute book, which thus becomes the official original authority. The student will not be required to write up a minute book, nor to use the stock certificate book and the stock ledger, since they have been shown previously. Another book which will be omitted is the dividend book in which are recorded the amount of dividends declared and the payments of dividends.
+
+Some books to be used. In cost accounting the permanent record of the cost analysis is made after the transactions have been recorded in the usual way. When it is possible to reduce the amount of extra work by distributing as much as possible of the analysis in the original entries, time and expense will, of course, be saved. The motor company uses a receiving each journal and a disbursing each journal very much like those used by the Union Grocery Co. In the disbursing each journal are added four special columns for "Labor," "Materials," "Labor," "Labor," and "Overhead." The direct labor and indirect labor columns will also be subdivided into the four departments represented in the factory of the General Motor Manufacturing Co. By this method a large part of the distribution is accomplished when the entry is made.
+
+Instead of the usual types of sales book and invoice or purchase book, these will be kept in the form of registers showing raw materials and purchased parts in separate columns, thus providing another aid in the analysis.
+
+The perpetual inventory. An analytical daily record of raw materials and purchased parts will be kept to show the value of each kind of raw material and purchased part on hand in the stockroom at the opening of each day's work, the amount of each in process of manufacture as indicated by the requisitions over the foremen's signatures, the amount added by incoming purchases and by returns from what had previously been taken from the stockroom. From these items the balance for the day is found, and this carried forward to the opening of the next day as the amount in stock,
+
+![]() A page from a book titled "Essentials of Bookkeeping" with text discussing various aspects of bookkeeping.
+
+COST ACCOUNTING 219
+
+The purchase ledger, sales ledger, general ledger, and bill books will be kept as usual.
+
+Instructions for billing. If billing machines are at the command of the student, he should make out all bills to customers in triplicate, each copy being on a page of different color. By placing a longer sheet of paper at the bottom, under the three, a complete record of the sales is made at the same time. All of this is accomplished by the use of carbon paper, so that the writing is done but once. This makes possible, it is obvious, a considerable saving in time and labor.
+
+In a large office the sales sheet and the third copy of the bill go to the statistical department, where summaries are made on listing machines. These summaries then go to the controlling bookkeeper who checks them against the second copies of the bills sent directly to him. The original or top copy of the bill is sent directly to the customer.
+
+From the statistical department the sales sheets, after being stamped with a rubber stamp to indicate their classification, pass to the operators of the card-punching machine. In no part of office work are these machines found of more service than in the finding of costs. The facility with which the sorting can be accomplished and the results tabulated make this the ideal way in which to find these results.
+
+In some offices the statements to customers are started early in the month. Items of account it stands when the statement is started being entered and a statement placed in the ledger with the account. Additional entries are made in the ledger sheet through the month on the bookkeeping machine, and by placing the statement on the ledger sheet, over a carbon, and the new bill on that, over another carbon, the item is entered on all three at once. Incoming cash and other entries are kept up to date in a similar way. At the close of the month many of the statements are already complete, and the task of completing the others is a short one. In this way the statements to customers go out promptly on the first of the month, an important item in getting payments in on time.
+
+Where the student does not have access to machines there will probably be no occasion to make more than one copy of the bill in each case.
+
+220
+
+**ESSENTIALS OF BOOKKEEPING**
+
+A word of caution. A word of caution regarding the check book. Occasionally there is a tendency to neglect the stub and either to fail to fill it out or, if an error has been made, to continue the work without correcting it. A habit of this kind is likely to persist, and is almost certain to cause serious trouble, and financial loss, eventually. Each check should be carefully made, and the stub should be filled out first without fail. If an error occurs, it should be found and corrected at once.
+
+**ACTUAL BOOKKEEPING**
+
+Transactions of the General Motor Manufacturing Company for January
+
+Jan. 2. Paid by check to the People's Savings and Trust Co. the rent for January; $60 of this amount is to be entered as office rent, the balance as applying to the rest of the plant.
+
+Received from the Appleton Motor Car Co. their check on account for $4,350, from the Tiptop Motor Car Co., $2,125; from the Rotocar Co., $4,873.23.
+
+Our incoming clerk reports the arrival yesterday from the Corundum Castings Co., Denver, Colo., invoice No. 892, our order No. 1,944, dated Dec. 16, of 17½ T. of castings @ $800 per T. Terms, on account.
+
+Placed on board for Austin & Ballantyne, London, England, on their order No. 2,964, dated Dec. 5, our bill No. 666, via N. Y. C. and the Anglo-American S. S. lines, 20 motors @ $500. Terms, 90 days.
+
+Stockroom report for the day
+
+
+
+
+| Raw materials |
+Requisitions |
+Returns |
+
+
+
+
+| Castings |
+$398.20 |
+$21.50 |
+
+
+| Steel bars |
+408.50 |
+27.40 |
+
+
+| Salt cells, nuts, screws, etc. |
+83.75 |
+8.35 |
+
+
+| Pig aluminum |
+987.20 |
+42.10 |
+
+
+| Pig iron |
+841.70 |
+94.60 |
+
+
+| Purchased parts |
+ |
+ |
+
+
+| Magnetos |
+21 |
+1 |
+
+
+| Carburetors |
+16 |
+4 |
+
+
+
+
+Jan. 3 Received from the Continental Autocar Co., Marseilles, France, bill of exchange for $5,790, from the Wilton & Ginn Co., Atlanta, Ga.; also received a New York draft for $4,067.30.
+
+Sent a draft on the First National Bank of Omaha, to the Corundum Castings Co. for $873.56.
+
+Paid the Ben Franklin Press, City, for stationery, by check, $100.
+
+![]() A page from a bookkeeping ledger with handwritten entries and totals.
+
+COST ACCOUNTING
+221
+
+Paid railroad fare by check to cash for the secretary, $183.80.
+Paid the Bridgen Advertising Agency by check, $500.
+Paid for local street car tickets for use of the office force in cash, $6.
+Placed on board for Lopez & Garapitas, Lima, Peru, on their order No. 588, dated Dec. 9, our bill No. 667, via N. Y. C. and the Nasa S. S. lines, 18 motors @ $500. Terms, 180 days.
+
+Stockroom report for the day
+
+
+
+
+| Raw materials |
+Requisitions |
+Returns |
+
+
+
+
+| Castings |
+$412.00 |
+$33.40 |
+
+
+| Steel bars |
+395.38 |
+18.10 |
+
+
+| Bolts, nuts, screws, etc. |
+86.25 |
+10.00 |
+
+
+| Pig aluminum |
+1,012.80 |
+66.30 |
+
+
+| Pig iron |
+823.90 |
+83.60 |
+
+
+| Purchased parts |
+ |
+ |
+
+
+| Magnetos |
+19 |
+0 |
+
+
+| Carburetors |
+20 |
+2 |
+
+
+
+
+Jan. 4. Paid for printing by check to the Ben Franklin Press, $48.75. Paid annual dues to the Chamber of Commerce $15 and to the National Manufacturers' Association $50.
+Received checks or drafts from customers as follows: The Bluebell Motor Co., $2,411.35; Graves' Autoparts Co., $1,000; The Appleton Motor Car Co., $5,550.50.
+
+Our receiving clerk reports the arrival yesterday of invoice No. 14,983, on our order No. 1,248, dated Dec. 15, 1 carload of T., of bar steel @ $10 per ton from the Pittsburgh Plate Iron Company, Pittsburgh, Pa.
+Placed on board for Burns & Hening, Boston, Mass., on their order No. 598, dated Dec. 23, our bill No. 668, via Nickel Plate & N.Y., N.H. & H., 10 motors @ $500. Terms, 60 days, 2% 10 days.
+
+Stockroom report for the day
+
+
+
+
+| Raw materials |
+Requisitions |
+Returns |
+
+
+
+
+| Castings |
+$418.30 |
+$41.70 |
+
+
+| Steel bars |
+409.20 |
+32.60 |
+
+
+| Bolts, nuts, screws, etc. |
+82.40 |
+6.25 |
+
+
+| Pig aluminum |
+987.50 |
+41.80 |
+
+
+| Pig iron |
+836.80 |
+83.70 |
+
+
+| Purchased parts |
+ |
+ |
+
+
+| Magnetos |
+20 |
+1 |
+
+
+| Carburetors |
+23 |
+4 |
+
+
+
+
+Jan. 5. Received a bank draft from Louisville, Ky., for the note due today, from the Produce Exchange Bank to whom we have sent it for collection, less % of 1% collection charges.
+
+![]() A page from a cost accounting document showing stockroom reports for raw materials and purchased parts.
+
+222
+**ESSENTIALS OF BOOKKEEPING**
+
+Received a bill of exchange from the Argentine Motor Car Co., Buenos Aires, S. A., for $12,629.75 on account.
+
+Paid the Electric Illuminating Co., by check, electric light bill for one month, $52, $3.80 of it being for the office.
+
+Our receiving clerk reports the arrival by local delivery today of invoice No. 370, on our order No. 1,348, dated Jan. 3, from the Machinists' Supply Co., of this city, 17½ cwt. of bolts, nuts, and screws, @ $12 per cwt.
+
+Placed on board for the Automobile Co., San Francisco, Cal., on their order No. 741, dated Dec. 18, our bill No. 609, via the A. T. & S. F., 10 motors @ $500. Terms, 30 days.
+
+Placed on board for Feldman & Sons, Cincinnati, Ohio, on their order No. 11,247, dated Dec. 22, our bill No. 670, via the N. Y. C. lines, 12 motors @ $500. Terms, 30 days.
+
+Stockroom report for the day
+
+
+
+
+ |
+Requisitions |
+Returns |
+
+
+
+
+| Raw materials |
+$409.90 |
+$30.60 |
+
+
+| Castings |
+385.70 |
+7.60 |
+
+
+| Steel bars |
+77.75 |
+2.25 |
+
+
+| Bolts, nuts, screws, etc. |
+1,169.90 |
+54.90 |
+
+
+| Pig iron |
+796.80 |
+48.80 |
+
+
+| Purchased parts |
+ |
+ |
+
+
+| Magnetos |
+21 |
+1 |
+
+
+| Carburetors |
+19 |
+0 |
+
+
+
+
+Jan. 6. Received from the Rotocar Co., New Orleans, a draft for $8,194.25 on account.
+
+Paid by check our note due today to the Machinists' Supply Co.
+Placed on board for F. Mertillo & Co., Havana, Cuba, on their order No. 388, dated Jan. 11, our bill No. 671, via the Pennsylvania R.R., and the Central S.S. lines, 8 motors @ $500. Terms, 60 days.
+Drew cash from the bank by check and paid wages for the week (5 days) as follows:
+Direct labor: foundry, $2,012.50; machine shop, $3,782.50; assembling room, $877.50; testing and shipping room, $880.
+Indirect labor: foundry, $698.75; machine shop, $1,140; assembling room, $405; testing and shipping room, $120.
+
+Stockroom report for the day
+
+
+
+
+ |
+Requisitions |
+Returns |
+
+
+
+
+| Raw materials |
+ |
+ |
+
+
+| Castings |
+$411.40 |
+$33.10 |
+
+
+| Steel bars |
+399.90 |
+22.00 |
+
+
+| Bolts, nuts, screws, etc. |
+85.40 |
+9.80 |
+
+
+
+
+COST ACCOUNTING 228
+
+Stockroom report for the day, continued
+
+
+
+
+ | Raw materials |
+ Requisitions |
+ Returns |
+
+
+
+
+ | Pig aluminum |
+ $350.40 |
+ $5.50 |
+
+
+ | Pig iron |
+ 748.10 |
+ |
+
+
+ | Purchased parts |
+ |
+ |
+
+
+ | Magnetos |
+ 19 |
+ 0 |
+
+
+ | Carburetors |
+ 18 |
+ 0 |
+
+
+
+
+Jan. 8. Paid for postage stamps in cash, $43.50.
+Paid the City Telephone Exchange, by check, for the office telephones for the month, $17.
+
+As a result of frozen steam and water pipes in the office, pay the E. B. Doty Plumbing Co., by check, for repairs $185.75.
+
+Paid sundry expense bills for the factory by check to cash, $263.54.
+Received a bill of exchange from the Argentine Motor Car Co., Buenos Aires, S. A., for $5,000 on account; check from the Appleton Motor Car Co., New York, N. Y., for $4,572.60 on account.
+
+Our workmen received on this day a shipment of pig containing 10 T. of pig aluminum from the Pittsburgh Reduction Co., Pittsburgh, Pa., on our order No. 1,245, dated Dec. 16, billed to us on invoice No. 16,329, @ 37c a lb.
+
+Placed on board for the Appleton Motor Car Co., New York, N. Y. on their order No. 12,348, dated Dec. 27, our bill No. 672, via the N. Y., C. lines, 25 motors @ $500. Terms, 1/10, N/30.
+
+Stockroom report for the day
+
+
+
+
+ | Raw materials |
+ Requisitions |
+ Returns |
+
+
+
+
+ | Castings |
+ $391.60 |
+ $15.80 |
+
+
+ | Steel bars |
+ 386.90 |
+ 11.80 |
+
+
+ | Nuts, bolts, screws, etc. |
+ 394.90 |
+ 8.40 |
+
+
+ | Pig aluminum |
+ 963.90 |
+ 21.70 |
+
+
+ | Pig iron |
+ 962.30 |
+ 20.10 |
+
+
+ | Purchased parts |
+ |
+ |
+
+
+ | Magnetos |
+ 18 |
+ 1 |
+
+
+ | Carburetors |
+ 17 |
+ 1 |
+
+
+
+
+Jan. 9. Drew check in favor of cash and paid sundry factory expense bills, $86.41.
+Received a check from the Third National Bank of Baltimore, for the note due today, less % of 1% for collection charges.
+Received a check from Burns & Heming, Boston, Mass., in full for the balance of their account to Jan. 1.
+Sent a check for $5,000 on account to the Pittsburgh Reduction Co.
+
+![]() A page from a cost accounting book showing stockroom reports and financial transactions.
+
+224
+
+**ESSENTIALS OF BOOKKEEPING**
+
+A letter from Burns & Heming informs us that one of the motors shipped to them on the 4th was damaged in transit; they state that they have had to pay a machinist $65 to have it restored to first-class running order. Write them a letter informing them that we have credited their account with an allowance of $65.
+
+Paid by check to J. P. Andrus, Agent, freight bills amounting to $112.60.
+
+Placed on board for the Viamotor Co., St. Louis, Mo., on their order No. 427, dated Jan. 2, our bill No. 673, via the Big Four Railroad, 18 motors @ $500. Terms, on account.
+
+Stockroom report for the day
+
+
+
+
+ | Raw materials |
+ Requisitions |
+ Returns |
+
+
+
+
+ | Castings |
+ $418.60 |
+ $48.20 |
+
+
+ | Steel bars |
+ 370.70 |
+ 2.10 |
+
+
+ | Bolts, nuts, screws, etc. |
+ 76.30 |
+ 4.80 |
+
+
+ | Pig aluminum |
+ 937.90 |
+ |
+
+
+ | Pig iron |
+ 757.00 |
+ 48.30 |
+
+
+ | Purchased parts |
+ |
+ |
+
+
+ | Magneto |
+ 19 |
+ 0 |
+
+
+ | Carburetors |
+ 19 |
+ 0 |
+
+
+ | Jan. 10. Received from the Sunset Savings and Trust Co., of Seattle, Wash., a bank draft in payment of the note of Action & Welch, due today, less % of % for collection. |
+
+
+ | Received from the Yuan Ting Foo Car Co., of Hong Kong, China, a bill of $150 for new cars. |
+
+
+ | Paid by check to the Alta Machine Manufacturing Co., of Chicago, Ill., $3,185 for three new machines to replace worn machines in the machine shop. The displaced machines cost, when they were purchased, $2,766; they are now sold to a junk dealer for $195, or $65 each. |
+
+
+ | Our receiving clerk reports the arrival on Monday of 246 T. I. O.S lbs. of pig iron, Invoice No. 12,875; on our order No. 246, dated Dec. 18, from the Pacific Coast Iron & Steel Co., at $38 per T. |
+
+
+ | Placed on board for the Tiptop Motor Car Co., Detroit, Mich., on their order No. 496, dated Jan. 2, our bill No. 674, via the C. R. I. & P. and the C. & D. S. S lines, 25 motors @ $500. Terms, 1/10, N/30. |
+
+| Raw Materials | Requisitions | Returns |
|---|
| Castings | $412.30 | $34.20 | | Steel bars | 409.60 | 31.80 | | Bolts, nuts, screws, etc. | 79.20 | 4.40 | | Pig aluminum | 1,010.70 | 64.90 | | Pig iron | 821.60 | 74.20 |
+
+Stockroom report for the day
+
+
+
+
+ | Raw Materials |
+ Requisitions |
+ Returns |
+
+
+
+
+
+
+| Castings
+
+ | $418.60$
Steel bars
Bolts, nuts, screws, etc.
Pig aluminum
Pig iron
+
+ | $48.20$
2.10
76.30
937.90
757.00
+
+ | $34.20$
31.80
4.40
64.90
74.20
+
+ | $34.20$
31.80
4.40
64.90
74.20
+
+ | $34.20$
31.80
4.40
64.90
74.20
+
+ | $34.20$
31.80
4.40
64.90
74.20
+
+ | $34.20$
31.80
4.40
64.90
74.20
+
+ | $34.20$
31.80
4.40
64.90
74.20
+
+ | $34.20$
31.80
4.40
64.90
74.20
+
+ | $34.20$
31.80
4.40
64.90
74.20
+
+ | $34.20$
31.80
4.40
64.90
74.20
+
+ | $34
+
+COST ACCOUNTING 225
+
+Stockroom report for the day, continued
+
+
+
+ | Purchased Parts |
+ Requisitions |
+ Returns |
+
+
+ | Magnets |
+ 20 |
+ 2 |
+
+
+ | Carburetors |
+ 19 |
+ 2 |
+
+
+
+Jan. 11. Received from the Viamotor Co., St. Louis, Mo., a check to balance their account to Jan. 1.
+
+Paid by check for printing done by the Benjamin Franklin Press, $34.25.
+
+Drew by check from the bank $200 for current office running expenses.
+
+Paid in currency $30 for postage stamps.
+
+Paid bill of the Black Diamond Coal Co. by check, $450; $50 of this is to be charged to the office, and the rest to the factory.
+
+Placed on board for the Fuji no Yama Autocar Co., Tokio, Japan, on their order No. 625, dated Dec. 2, our bill No. 678, via the Union Pacific R. R. and the Nippon Maru S. S. Lines, 60 motors @ $300. Terms, 1/10 days.
+
+Stockroom report for the day
+
+
+
+ | Raw Materials |
+ Requisitions |
+ Returns |
+
+
+ | Castings |
+ $415.60 |
+ $37.50 |
+
+
+ | Steel bars |
+ 396.80 |
+ 17.90 |
+
+
+ | Bolts, nuts, screws, etc. |
+ 91.50 |
+ 15.90 |
+
+
+ | Pig aluminum |
+ 1,012.70 |
+ 67.70 |
+
+
+ | Fig iron |
+ 709.40 |
+ 22.50 |
+
+
+ | Purchased Parts |
+ |
+ |
+
+
+ | Magnets |
+ 20 |
+ 0 |
+
+
+ | Carburetors |
+ 18 |
+ 1 |
+
+
+
+Jan. 12. Received from Burns & Heming check for the bill sold them Jan. 4, less discount; from the Continental Autocar Co., Marseille, France, $9,153.82; from the Bluebell Motor Co., Butte, Mont., $5,946.18.
+
+Paid the Ferro-Steel Co. for repairs in the machine shop, $365.75; in the foundry, $67.90.
+
+Paid J. P. Andrews, agent, freight bills, $126.80.
+
+Paid for street car tickets in cash, $7.
+
+Our receiving clerk reports the arrival yesterday of 250 carburetors from the National Specialty Co., of Omaha, Neb., on our order No. 1,247, dated Dec. 19, invoice No. 1,386. Terms, 1/10, N/60.
+
+Placed on board for the Rotocar Co., New Orleans, La., on their order No. 376, dated Jan. 2, our bill No. 676, via the L. & N. and Miss. S. S. lines, 30 motors @ $300. Terms, 1/10, N/60.
+
+226
+
+# ESSENTIALS OF BOOKKEEPING
+
+## Stockroom report for the day
+
+
+
+
+ | Raw materials |
+ Requisitions |
+ Returns |
+
+
+
+
+ | Castings |
+ $ 391.80 |
+ $ 13.20 |
+
+
+ | Steel bars |
+ 377.60 |
+ |
+
+
+ | Bolts, nuts, screws, etc. |
+ 86.70 |
+ 11.80 |
+
+
+ | Fig aluminum |
+ 1,044.50 |
+ 101.60 |
+
+
+ | Fig iron |
+ 823.00 |
+ 75.90 |
+
+
+ | Purchase parts |
+ |
+ |
+
+
+ | Magneto |
+ 21 |
+ 2 |
+
+
+ | Carburetors |
+ 24 |
+ 7 |
+
+
+
+
+Jan. 13. Received from the Fuji no Yama Autocar Co., Tokio, Japan, a bill for $150 for the balance of their account to Jan. 1.
+
+Paid to Ladislaw Kutno, in settlement of his claim for injuries received in the machine shop, Dec. 8, $1,275.50.
+
+Paid half the month's salaries of the office force, as follows: manager, $275; assistant manager, $141.50; secretary, $150; treasurer, $125; bookkeepers, $75+$50+$40; stenographers, $62.50+$50+3 @ $35; office messengers, 2 @ $19.50.
+
+Drew cash from the bank by check and paid the workmen in currency, as follows:
+
+Direct labor: foundry, $2,415; machine shop, $4,539; assembling room, $19,053; testing and shipping room, $1,056;
+
+Indirect labor: foundry, $838.50; machine shop, $1,368; assembling room, $486; testing and shipping room, $144.
+
+Received a report from Feldman & Sons, Cincinnati, that the 12 motors shipped to them on the 5th were damaged to the extent of $70 because of defective packing. We notify them by letter that we shall make them an allowance of that amount.
+
+Our order No. 1,321 was received today of 150 magnetoes from the Charles R. Magneto Co., Nashville, Tenn., on our order No. 1,346, dated Jan. 5, invoice No. 1,488. Terms, 30 days.
+
+Placed on board for the Wilton & Ginn Co., Atlanta, Ga., on their order No. 1,321, dated Jan. 6, our bill No. 677, via the G. C. & N. R. R., 10 motors @ $500. Terms, 30 days.
+
+## Stockroom report for the day
+
+
+
+
+ | Raw materials |
+ Requisitions |
+ Returns |
+
+
+
+
+ | Castings |
+ $ 411.00 |
+ $33.00 |
+
+
+ | Steel bars |
+ 401.60 |
+ 21.70 |
+
+
+ | Bolts, nuts, screws, etc. |
+ 82.40 |
+ 6.80 |
+
+
+ | Fig aluminum |
+ 1,003.70 |
+ 55.80 |
+
+
+ | Fig iron |
+ 811.20 |
+ 62.80 |
+
+
+
+
+COST ACCOUNTING 227
+
+Stockroom report for the day, continued
+
+
+
+ | Purchased parts |
+ Requisitions |
+ Returns |
+
+
+ | Magnetos |
+ 21 |
+ 2 |
+
+
+ | Carburetors |
+ 20 |
+ 2 |
+
+
+
+Before proceeding with the next week's work, the student should take a trial balance as a test of the correctness of his work to this point.
+
+STANDARD QUESTIONS
+
+Transactions of the General Motor Manufacturing Company
+
+1. What are the raw materials used in the manufacture of the motors?
+2. Of what kind of factories would these raw materials be "finished products"?
+3. What are the purchased parts? Explain the function of each.
+4. Do you consider the plant well arranged as to (a) light; (b) convenience; (c) shipping facilities? Why or why not?
+5. What is peculiar about the trial balance at the opening of this section?
+6. How can this peculiarity be remedied?
+7. How is the business of a corporation carried on?
+8. What is the final record of authority? Who makes it?
+9. What records are kept in the dividend book?
+10. How are the records of sales and purchases kept in this chapter?
+11. What information do we find in the daily record of raw materials and purchased parts?
+12. How is the billing done with a machine?
+13. What type of machine is especially valuable in cost accounting?
+14. What plan aids in sending statements out promptly? Why is this important?
+15. What bad habit in connection with the check book should be avoided?
+
+PART THREE
+
+Jan. 15. Sent our check to the National Specialty Co., Omaha, Nebraska, to cover their invoice No. 1,386, less discount.
+Received from Feldman & Sons, Cincinnati, Ohio, their note at 30 days worth $775 for $7,775.00.
+Received a check from the Appleton Motor Car Co., New York, for $7,250 on account.
+Placed on board for the Continental Autocar Co., Marseilles, France, on their order No. A1,342, our bill No. 678, via the N. Y. Central R. R. and the Franco-American S. S. lines, 25 motors @ $500. Order dated Jan. 2. Terms, 90 days.
+
+228
+
+**ESSENTIALS OF BOOKKEEPING**
+
+Stockroom report for the day
+
+
+
+
+ | Raw materials |
+ Requisitions |
+ Returns |
+
+
+
+
+ | Castings |
+ $ 412.60 |
+ $ 34.40 |
+
+
+ | Steel bars |
+ 398.80 |
+ 20.60 |
+
+
+ | Bolts, nuts, screws, etc. |
+ 41.50 |
+ 41.50 |
+
+
+ | Fig aluminum |
+ 1,110.90 |
+ 175.90 |
+
+
+ | Fig iron |
+ 824.70 |
+ 77.40 |
+
+
+
+
+Purchased parts
+
+
+
+
+ |
+ |
+ |
+
+
+
+
+ | Magneto |
+ 23 |
+ 1 |
+
+
+ | Carburetors |
+ 24 |
+ 0 |
+
+
+
+
+Jan. 16. Burns & Heming inform us by letter that 2 of the 10 motors shipped to them Jan. 4 when put into service overheated. When examined it was found that the bearings had been assembled without lubrication so that the bearings were scored so that the motors had to be torn down and properly rebuilt. They ask an allowance of $120 on the 2 motors. Write them a letter making the allowance for which they ask.
+
+Paid by check to the manager, S. R. Elson, expenses of a trip to South America and return, $409.95.
+Received from F. Mortillo & Co., Havana, Cuba, bill of exchange for $3,588.60 on account.
+
+Our receiving clerk reports the arrival this morning of 17½ T. of castings from the Columbian Castings Co., Denver, Colo., on their invoice No. 928, our order No. 1,350, dated Jan. 5, @ $300 per T. Terms, on account.
+
+Stockroom report for the day
+
+
+
+
+ | Raw materials |
+ Requisitions |
+ Returns |
+
+
+
+
+ | Castings |
+ $ 401.60 |
+ $23.70 |
+
+
+ | Steel bars |
+ 410.20 |
+ 31.80 |
+
+
+ | Bolts, nuts, screws, etc. |
+ 82.70 |
+ 7.10 |
+
+
+ | Fig aluminum |
+ 1,037.90 |
+ 92.60 |
+
+
+ | Fig iron |
+ 831.10 |
+ 82.10 |
+
+
+
+
+Purchased Parts
+
+
+
+
+ |
+ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ReturnsReturnsReturns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | Returns | $ Amounts (in dollars)
+
+Jan. 17. Paid by check to the Fourth National Bank our note of Nov. 18, to the Charletons Magneto Co., which they have sent to this bank for collection.
+
+Accepted the Lehigh Iron & Steel Co's draft on us at 15 days' sight,
+with interest at 6%, in favor of Dicksee & Leicester, for $8,423.50.
+
+Received a check from the Rotocar Co. for $10,000 on account.
+
+COST ACCOUNTING 229
+
+Received a check from the First National Bank for the amount of the Viamotor Co.'s note due today, less ¼ of 1% and 33c for revenue stamps used in making the collection.
+
+Placed on board for the Penn Motor Car Co., Philadelphia, Pa., on their order No. 2,142 dated Jan. 12, our bill No. 679, via the P. R. R., 20 motors @ $500. Terms, on %.
+
+Stockroom report for the day
+
+
+
+
+| Raw materials |
+Requisitions |
+Returns |
+
+
+
+
+| Castings |
+$ 395.30 |
+$ 17.50 |
+
+
+| Steel bars |
+401.60 |
+23.30 |
+
+
+| Bolts, nuts, screws, etc. |
+87.83 |
+7.70 |
+
+
+| Pig aluminum |
+1,046.10 |
+101.30 |
+
+
+| Pig iron |
+819.90 |
+72.70 |
+
+
+| Purchased parts |
+ |
+ |
+
+
+| Magnetos |
+23 |
+0 |
+
+
+| Carburetors |
+23 |
+1 |
+
+
+
+
+Jan. 18. Paid to the De Vinne Printing and Engraving Co., for printing, $25 by check.
+
+Drew a check in favor of "Cash" or "Bearer" for $42.18 to replace items used from the petty cash imprint fund.
+
+Bought for cash from the Standard Tool Co., paying them by check, invoices or money to take out of plant stock which have disappeared or been worn out in the machine shop, $562.50.
+
+Received from the Yuan Ting Foo Car Co., Hong Kong, China, bill of exchange for $14,500 on account.
+
+Our receiving clerk reports the arrival yesterday of invoice No. 15,134, on our order No. 1,251, dated Jan. 5, 2 carloads, 53 T., 1920.8 lbs., of bar steel @ $101 per T., from the Lehigh Iron & Steel Co., Pittsburgh, Pa.
+
+Stockroom report for the day
+
+
+
+
+| Raw materials |
+Requisitions |
+Returns |
+
+
+
+
+| Castings |
+$461.80 |
+$43.70 |
+
+
+| Steel bars |
+412.90 |
+34.80 |
+
+
+| Bolts, nuts, screws, etc. |
+85.60 |
+10.00 |
+
+
+| Pig aluminum |
+998.10 |
+53.00 |
+
+
+| Pig iron |
+832.50 |
+85.60 |
+
+
+| Purchased parts |
+ |
+ |
+
+
+| Magnetos |
+22 |
+0 |
+
+
+| Carburetors |
+24 |
+0 |
+
+
+
+
+Jan. 19. Received from the Fuji no Yama Autocar Co., Tokio, Japan, bill of exchange for $15,250 on account.
+
+230
+
+**ESSENTIALS OF BOOKKEEPING**
+
+Placed on board for Burns & Heming, Boston, Mass., on their order No. 624, dated Jan. 12, our bill No. 680, via the Nickel Plate and the New York, New Haven, and Hartford R.R., 25 motors @ $500. Terms, 30 days.
+
+Paid in cash for local street car tickets, $6.50.
+Paid freight bill to J. P. Andrus by check, $131.40.
+Paid by check to the Enterprise Advertising Agency, $300.
+
+Our receiving clerk reports the arrival yesterday of 127, 946 lbs. of pig aluminum from the Pittsburgh Aluminum Co., Pittsburgh, Pa., on their invoice No. 16,641, our order No. 1,252, dated Jan. 6, @ $740 per T. Terms, on %.
+
+Stockroom report for the day
+
+
+
+
+ |
+Raw materials |
+Requisitions |
+Returns |
+
+
+
+
+| Castings |
+$ 413.80 |
+$35.90 |
+ |
+
+
+| Steel bars |
+401.60 |
+23.70 |
+ |
+
+
+| Bolts, nuts, screws, etc. |
+80.90 |
+6.00 |
+ |
+
+
+| Pig aluminum |
+1,012.30 |
+67.40 |
+ |
+
+
+| Total cost |
+792.50 |
+45.90 |
+ |
+
+
+| Purchased parts |
+ |
+ |
+ |
+
+
+| Magnets |
+21 |
+0 |
+ |
+
+
+| Carburetors |
+30 |
+6 |
+ |
+
+
+
+
+Jan. 20. Returned to the Charlerie Magneto Co., 3 magnets received Jan. 13 on account of such defects in construction as we are unable to remedy.
+
+Paid by check to cash, sundry factory expense bills amounting to $85.75.
+
+Paid to Webster & Co. by check for repairs to the shipping platform, $410.50.
+
+Our receiving clerk reports the arrival yesterday from the Charlerie Magneto Co., Nashville, Tenn., on their invoice No. 1,801, our order No. 1,253 stated at $160; $150 August 28, $150 Sept., $98 paye.
+
+Received from Austen & Balantyne, London, England, bill of exchange for $12,460.
+
+Drew cash from the bank by check and paid the workmen in currency wages as follows:
+Direct labor: foundry, $2,304.89; machine shop, $4,428.75; assembling room, $1,043.90; testing and shipping room, $1,045.80.
+Indirect labor: foundry, $272.25; machine shop, $1,257.67; assembling room, $475.90; testing and shipping room, $133.33.
+
+Placed on board for the Yuas Ting Foo Car Co., Hong Kong, China, on their order No. 419, dated Dec. 29, our bill No. 681, via the Santa Fe
+
+COST ACCOUNTING
+231
+
+R. R. and the Taku Maru S. S. Lines, 20 motors @ $500. Terms, 90 days.
+
+Stockroom report for the day
+
+
+
+
+ |
+ Requisitions |
+ Returns |
+
+
+
+
+ | Raw materials |
+ |
+ |
+
+
+ | Castings |
+ $ 419.80 |
+ $41.90 |
+
+
+ | Steel bars |
+ 409.40 |
+ 31.90 |
+
+
+ | Bolts, nuts, screws, etc. |
+ 81.70 |
+ 5.10 |
+
+
+ | Pig aluminum |
+ 1,041.10 |
+ 96.20 |
+
+
+ | Pig iron |
+ 827.30 |
+ 80.60 |
+
+
+ | Purchased parts |
+ |
+ |
+
+
+ | Magnetos |
+ 24 |
+ 1 |
+
+
+ | Carburetors |
+ 25 |
+ 0 |
+
+
+
+
+Prove each at this point, and if so directed by the instructor, make a trial balance also. The cash on hand and in bank at the close of business on the 30th is $262,927.90.
+
+Jan. 22. Paid in cash for street car tickets, $6.50.
+Sent a check on account to the Charleiers Magneto Co., for $15,000.
+Paid to the City Electric Illuminating Co., for power for the month, by check $2,196.33.
+Received from the Penn Motor Car Co., Philadelphia, Pa., on account, a check for $11,246.23.
+
+Our receiving clerk reports the arrival on Saturday of 300 T. of pig iron from the Lehigh Iron & Steel Co., Pittsburgh, Pa., their invoice No. 15,238, our order No. 1,264, dated Jan. 8, @ $38 per T. Terms, on %.
+
+Placed on board for the Wilton & Ginn Car Co., Atlanta, Ga., on their order No. 1,342, our bill No. 682, via the Georgia Central & Northern R. R., 10 motors @ $500. Order dated Jan. 15. Terms, 30 days.
+
+Stockroom report for the day
+
+
+
+
+ |
+ Requisitions |
+ Returns |
+
+
+
+
+ | Raw materials |
+ |
+ |
+
+
+ | Castings |
+ $ 411.70 |
+ $33.70 |
+
+
+ | Steel bars |
+ 389.50 |
+ 11.60 |
+
+
+ | Bolts, nuts, screws, etc. |
+ 81.49 |
+ 6.80 |
+
+
+ | Pig aluminum |
+ 1,032.20 |
+ 87.10 |
+
+
+ | Pig iron |
+ 801.50 |
+ 54.40 |
+
+
+ | Purchased parts |
+ |
+ |
+
+
+ | Magnetos |
+ 22 |
+ 0 |
+
+
+ | Carburetors |
+ 24 |
+ 1 |
+
+
+
+
+Jan. 23. Made a check, payable to cash, for $45 to replace money spent from the petty cash imprest fund.
+
+232
+**ESSENTIALS OF BOOKKEEPING**
+
+Received a bill of exchange for $6,000 from the Yuan Ting Foo Car Co., of Hong Kong, China.
+
+Placed on board for the Lincoln Motor Co., Chicago, Ill., on their order No. 1,884, dated Jan. 15, our bill No. 683, via the Big Four R. R., 20 motors @ $500. Terms, 30 days.
+
+Our receiving clerk reports the arrival today of 30 T. of bar steel from the Lehigh Iron & Steel Co., Pittsburgh, Pa., on their invoice No. 15,246, our order No. 1,255, dated Jan. 10 @ $410 per T. Terms, on %.
+
+Stockroom report for the day
+
+
+
+
+| Raw materials |
+Requisitions |
+Returns |
+
+
+
+
+| Castings |
+$419.90 |
+$41.80 |
+
+
+| Steel bars |
+362.30 |
+20.10 |
+
+
+| Bolts, nuts, screws, etc. |
+85.10 |
+9.50 |
+
+
+| Pig aluminum |
+998.80 |
+53.70 |
+
+
+| Pig iron |
+789.70 |
+42.60 |
+
+
+| Purchased parts |
+ |
+ |
+
+
+| Magnets |
+22 |
+0 |
+
+
+| Carburetors |
+24 |
+41 |
+
+
+
+
+Jan. 24. Sent a check to the Lehigh Iron & Steel Co., Pittsburgh, Pa., for $10,000 on account.
+
+Paid the De Vinne Printing & Engraving Co., by check, for printing, $25.
+
+Received from the Continental Autocar Co., Marseilles, France, a bill of exchange for $6,000.
+
+Received from the Appleton Motor Car Co., New York, their check for $5,063.40 on account.
+
+Received from Graves' Autoparts Co., Galveston, Texas, their check for $1,582.10 on account.
+
+Our receiving clerk reports the arrival today of 250 carburetors from the National Specialty Co., Omaha, Neb., on their invoice No. 1,399, our order No. 1,356, dated Jan. 10 @ $24.40. Terms 1/10, N/30.
+
+Placed on board for the Argentine Motor Car Co., Buenos Aires, Argentina, a bill of exchange for $565, dated Jan. 10, our bill No. 684, via the New York Central and Nasa S. B. lines, 20 motors @ $500. Terms, 60 days.
+
+Stockroom report for the day
+
+
+
+
+| Raw materials |
+Requisitions |
+Returns |
+
+
+
+
+| Castings |
+$379.00 |
+ |
+
+
+| Steel bars |
+396.70 |
+$18.80 |
+
+
+| Bolts, nuts, screws, etc. |
+86.10 |
+10.50 |
+
+
+| Pig aluminum |
+999.20 |
+$4.30 |
+
+| Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | | | Stockroom report for the day: | |
+
+COST ACCOUNTING 233
+
+Stockroom report for the week, continued
+
+
+
+ | Raw materials |
+ Requisitions |
+ Returns |
+
+
+ | Pig iron |
+ 801.50 |
+ 83.00 |
+
+
+ | Purchased parts |
+ |
+ |
+
+
+ | Magnets |
+ 25 |
+ 2 |
+
+
+ | Carburetors |
+ 24 |
+ 0 |
+
+
+
+Jan. 25. Paid salaries and expenses of the salesmen for the month as follows: C. J. Thomas, sales manager, $816.70; W. B. Hall, $387.50; C. J. Jones, $362.85; A. J. Martin, $416.90; P. C. Doty, $398.50; L. M. Vincent, $101.75; J. M. Knight, $486.00; C. L. Garcia, $326.80; J. S. Wasilko, $312.80; B. F. Kominski, $177.55.
+Sent a check to the Corundum Casting Co., Denver, Colo., for $10,500 on account.
+Received a check from the Lincoln Motor Car Co., of Chicago, Ill., on account, $5,467.45.
+Placed on board for the Bluebird Motor Co., Butte, Montana, on their order No. 487, dated Jan. 15, our bill No. 685, via the Northern Pacific R. R., 10 motors @ $500. Terms, 30 days.
+
+Stockroom report for the day
+
+
+
+ | Raw materials |
+ Requisitions |
+ Returns |
+
+
+ | Casting |
+ $ 409.60 |
+ $31.50 |
+
+
+ | Steel bars |
+ 402.10 |
+ 24.20 |
+
+
+ | Bolts, nuts, screws, etc. |
+ 83.70 |
+ 8.10 |
+
+
+ | Pig aluminum |
+ 1,012.80 |
+ 67.90 |
+
+
+ | Pig iron |
+ 816.30 |
+ 69.40 |
+
+
+ | Purchased parts |
+ |
+ |
+
+
+ | Magnets |
+ 24 |
+ 0 |
+
+
+ | Carburetors |
+ 25 |
+ 2 |
+
+
+
+Jan. 26. Sent a check to the Pittsburgh Reduction Co., on account, for $12,000.
+Paid in cash for postage stamps, $39.
+Paid by check to Webster & Co., for repairs in the assembling room, $276.95.
+Received from Lopez & Garapitas, Lima, Peru, a bill of exchange for $5,000 on account.
+Received from the Tiptop Motor Car Co., Detroit, Mich., their check for $6,842 on account.
+Placed on board for F. Merillo & Co., Havana, Cuba, on their order No. 546, dated Dec. 31, our bill No. 686, via the Pennsylvania R.R.
+and the Coastal Steamship lines, 15 motors @ $500. Terms, 60 days.
+
+Jan. 27.
+Received from the American Motor Car Co., Chicago, Ill., a bill of exchange for $12,999 on account.
+Placed on board for F.W.Baker & Co., Chicago, Ill., on their order No. 497, dated Jan. 15, our bill No. 686.
+Terms, 30 days.
+
+Received from the American Motor Car Co., Chicago, Ill., a bill of exchange for $12,999 on account.
+Placed on board for F.W.Baker & Co., Chicago, Ill., on their order No. 497, dated Jan. 15, our bill No. 686.
+Terms, 30 days.
+
+Received from the American Motor Car Co., Chicago, Ill., a bill of exchange for $12,999 on account.
+Placed on board for F.W.Baker & Co., Chicago, Ill., on their order No. 497, dated Jan. 15, our bill No. 686.
+Terms, 30 days.
+
+Received from the American Motor Car Co., Chicago, Ill., a bill of exchange for $12,999 on account.
+Placed on board for F.W.Baker & Co., Chicago, Ill., on their order No. 497, dated Jan. 15, our bill No. 686.
+Terms, 30 days.
+
+Received from the American Motor Car Co., Chicago, Ill., a bill of exchange for $12,999 on account.
+Placed on board for F.W.Baker & Co., Chicago, Ill., on their order No. 497, dated Jan. 15, our bill No. 686.
+Terms, 30 days.
+
+Received from the American Motor Car Co., Chicago, Ill., a bill of exchange for $12,999 on account.
+Placed on board for F.W.Baker & Co., Chicago, Ill., on their order No. 497, dated Jan. 15,
+our bill No. 686,
+terms,
+30 days.
+
+Received from the American Motor Car Co., Chicago,
+Ill.,
+a bill of exchange
+for
+$12,
+999
+on
+account,
+placed
+on
+board
+for
+F.W.Baker &
+Co.,
+Chicago,
+Ill.,
+on
+their
+order
+No.
+497,
+dated
+Jan.
+15,
+our
+bill
+No.
+686,
+terms,
+30
+days.
+
+Received from the American Motor Car Co.,
+Chicago,
+Ill.,
+a
+bill
+of
+exchange
+for
+$12,
+999
+on
+account,
+placed
+on
+board
+for
+F.W.Baker &
+Co.,
+Chicago,
+Ill.,
+on
+their
+order
+No.
+497,
+dated
+Jan.
+15,
+our
+bill
+No.
+686,
+terms,
+30
+days.
+
+Received from the American Motor Car Co.,
+Chicago,
+Ill.,
+a
+bill
+of
+exchange
+for
+$12,
+999
+on
+account,
+placed
+on
+board
+for
+F.W.Baker &
+Co.,
+Chicago,
+Ill.,
+on
+their
+order
+No.
+497,
+dated
+Jan.
+15,
+our
+bill
+
+234
+ESSENTIALS OF BOOKKEEPING
+
+Stockroom report for the day
+
+
+
+
+ |
+ Raw materials |
+ Requisitions |
+ Returns |
+
+
+
+
+ | Castings |
+ $ 388.30 |
+ $10.10 |
+ |
+
+
+ | Steel bars |
+ 396.30 |
+ 18.20 |
+ |
+
+
+ | Bolts, nuts, screws, etc. |
+ 89.50 |
+ 24.80 |
+ |
+
+
+ | Pig aluminum |
+ 1,008.40 |
+ 63.30 |
+ |
+
+
+ | Pig iron |
+ 811.70 |
+ 64.00 |
+ |
+
+
+ | Purchased parts |
+ |
+ |
+ |
+
+
+ | Magnetos |
+ 23 |
+ 1 |
+ |
+
+
+ | Carburetors |
+ 22 |
+ 0 |
+ |
+
+
+
+
+Jan. 27. Paid freight bills to J. P. Andrus by check, $101.41.
+Paid by check, salaries for the month as follows: Supt. L. L. Jones, $234; foreman of the foundry, C. L. Carson, $175; foreman of the machine shop, E. B. Upton, $150; foreman of the assembling room, J. C. Mitchell, $175; foreman of the testing and shipping room, W. B. Smith, $175.
+
+Drew from the bank by check to cash, and paid the workmen in current wages as follows:
+Direct labor: foundry, $2,525.11; machine shop, $4,640.25; assembling room, $1,063.50; testing and shipping room, $1,068.20.
+Indirect labor: foundry, $949.75; machine shop, $1,478.23; assembling room, $496.10; testing and shipping room, $154.67.
+Paid office salaries for the second half of the month, $1,113.
+Received from Burns & Heming their check for $0.850.
+
+Our receiving clerk reports the arrival yesterday of 11 T 1,999.95 lbs. of pig aluminum from the Pittsburgh Reduction Co., Pittsburgh, Pa., on their invoice No. 16,856; our order No. 1,237; dated Jan. 12,
+@ 37¢ per lb., 95%.
+Placed on board for the Lincoln Motor Car Co., Chicago, Ill., on their order No. 1,692; dated Jan. 19, our bill No. 687; via the Big Four R.R., 25 motors @ $500 Terms, 30 days.
+
+Stockroom report for the day
+
+
+
+
+ |
+ Raw materials |
+ Requisitions |
+ Returns |
+
+
+
+
+ | Castings |
+ $ 420.00 |
+ $42.00 |
+ |
+
+
+ | Steel bars |
+ 417.60 |
+ 39.60 |
+ |
+
+
+ | Bolts, nuts, screws, etc. |
+ 83.30 |
+ 7.70 |
+ |
+
+
+ | Pig aluminum |
+ 1,027.80 |
+ 82.80 |
+ |
+
+
+ | Pig iron |
+ 876.10 |
+ 68.10 |
+ |
+
+
+ | Purchased parts |
+ |
+ |
+ |
+
+
+ | Magnetos |
+ 20 |
+ 0 |
+ |
+
+
+ | Carburetors |
+ 22 |
+ 1 |
+ |
+
+
+
+
+COST ACCOUNTING 235
+
+Prove cash. The amount on hand and in bank at the close of business on the 27th is $244,287.29.
+
+Jan. 29. Drew a check, payable to cash or bearer, and paid sundry expense bills for the factory, $72.51.
+
+Received from F. Martillo & Co., Havana, Cuba, a bill of exchange for $1,600 on account.
+
+With the consent of the board of directors, an entry is made in the books debiting the undivided profits account and crediting Discrepancy for the error which was found in the books at the opening of the month.
+
+Sent a check to the Lehigh Iron & Steel Co., Pittsburgh, Pa., on account for $12,432.80.
+
+Our receiving clerk reports the arrival today of 200 magnetoes from the Chattanooga Magneto Co., Nashville, Tenn., on our order No. 1,258, dated Jan. 15, their invoice No. 1,556, @ $55.40. Terms, 30 days.
+
+Placed on board for Feldman & Sons, Cincinnati, Ohio, on their order No. 11,301, dated Jan. 20, our bill No. 688, via the New York Central lines, 25 motors @ $500. Terms, 30 days.
+
+Stockroom report for the day
+
+
+
+
+| Raw materials |
+Requisitions |
+Returns |
+
+
+
+
+| Castings |
+$ 608.50 |
+$ 4.19 |
+
+
+| Steel bars |
+451.40 |
+11.20 |
+
+
+| Screw nuts, screws, etc. |
+33.45 |
+3.30 |
+
+
+| Fig aluminum |
+1,015.30 |
+10.30 |
+
+
+| Fig iron |
+678.50 |
+22.20 |
+
+
+| Purchased parts |
+ |
+ |
+
+
+| Magneto |
+8 |
+0 |
+
+
+| Carburetors |
+11 |
+0 |
+
+
+
+
+Our receiving clerk reports the arrival by local delivery of 7 T. 1,750 lbs. of brass bolts, screws, etc., from the Machinists' Supply Co., City, on their invoice No. 428, our order No. 1,262, dated Jan. 25, @ 12c a lb. Terms on %.
+
+Jan. 30. Received from the Fuji no Yama Autocar Co., Tokio, Japan, a bill of exchange for $5,750 on account.
+
+Placed on board for the Bluebell Motor Co., Butte, Montana, on their order No. 519, dated Jan. 18, our bill No. 689, via the Northern Pacific Railroad, 25 motors @ $500. Terms, 30 days.
+
+Sent a check to the National Specialty Co., Omaha, Nebr., for invoice No. 3,399 received Jan. 24, less discount.
+
+Sent a check to the Machinists' Supply Co., City, for $2,364.81.
+
+Paid for supplies for the factory by check to the Sanitary Supply Co., $212.19.
+
+![]() A page from a cost accounting book showing raw materials requisitions and returns.
+
+236
+
+**ESSENTIALS OF BOOKKEEPING**
+
+Stockroom report for the day
+
+| Raw materials | Requisitions | Returns |
+|---|---|---|
+| Castings | $ 612.80 | $ 8.50 |
+| Steel bars | 447.60 | 7.40 |
+| Bolts, nuts, screws, etc. | 78.25 | 17.10 |
+| Pig aluminum | 1,021.20 | 16.10 |
+| Fig iron | 691.80 | 35.80 |
+
+Purchased parts
+
+| Magnetos | 8 | 0 |
+| Carburetors | 11 | 0 |
+
+Jan 31. The Viamotor Co., St. Louis, Mo., have just discontinued the manufacturing department of their business, and have returned to us by prepaid freight 5 of the motors sold to them Jan. 9.
+
+Received from the Automotive Co., San Francisco, Cal., their check for $4,687.10 on account.
+
+Sent our check to the Pittsburgh Reduction Co., Pittsburgh, Pa., for $5,000 on account.
+
+Placed on board the Gravre Autoparts Co., Galveston, Texas, on their order No. 699 dated Jan. 22, our bill No. 699, via the "Katy" line, 30 motors @ $500. Terms: 2/10, N/30.
+
+Stockroom report for the day
+
+| Raw materials | Requisitions | Returns |
+|---|---|---|
+| Castings | $ 605.30 | $ 49.20 |
+| Steel bars | 449.40 | $20.40 |
+| Bolts, nuts, screws, etc. | 81.35 | 13.40 |
+| Pig aluminum | 1,018.40 | 56.20 |
+| Fig iron | 712.60 | |
+
+Purchased parts
+
+| Magnetos | 10 | 0 |
+| Carburetors | 12 | 0 |
+
+When all these transactions have been entered and posted, the student should prove cash; the amount on hand and in the bank is $233,083.55.
+
+Posting from books of original entry. All the columns of the receiving cash journal and the disbursing cash journal should be footed; the footings of the special columns, not already posted, should be carried to the accounts indicated in the headings of those columns. Care should be exercised to make sure that all footings which should be posted are carried to the proper accounts.
+
+COST ACCOUNTING 237
+
+The purchase ledger and the sales ledger accounts should be footed and the footings should prove the controlling accounts of these ledgers in the general ledger. A controlling account which does not control is worse than none at all.
+
+The student should now make the first trial balance for January 31. This will still show that several of the accounts have the same balances as at the beginning of the month.
+
+Analyzing the costs. By the use of special columns in the cash journals, the amount of distribution has been reduced so that the cost journal will be quite simple and the posting can be done to the same ledger. Items for the cost journal are as follows:
+
+From the analytical daily record, the student should find the total value of raw materials placed in process during the month, charging the amount to Raw Materials in Process and crediting Raw Materials in Stock. The adding machine or the comptometer will be found very serviceable for this purpose. The same process should be carried out for Purchased Parts.
+
+From the analytical daily record, record the total amount of raw materials returned to the stockroom should also be calculated, charging them to Raw Materials in Stock, and crediting Raw Materials in Process. Purchased parts returned to the stockroom should be treated in the same way.
+
+The student should calculate 6% interest on the value of the capital invested and on the value of the machinery and tools. Depreciation of machinery should be calculated for the month at 1% and that on tools at 5/6 of 1%. Calculate the reserve for industrial insurance at 14% of the total cost of labor for January, including that which is accrued but unpaid. Burden should be debited and credits made to Interest, Reserve for Depreciation of Machines, Reserve for Depreciation of Tools, and Industrial Liability Insurance Reserve for these items.
+
+The next step. Debiting Overhead is the next step, and crediting General Expense, Reserve for Depreciation of Office Furniture and Appliances (calculated at 2% of 1%), and Collections. This will close those accounts.
+
+During the month 500 motors were completed. The amount paid for direct labor, as shown by the direct labor account in the general ledger, plus the amount of direct labor accrued for the
+
+
+
+| The purchase ledger and the sales ledger accounts should be footed and the footings should prove the controlling accounts of these ledgers in the general ledger. A controlling account which does not control is worse than none at all. |
+
+
+| The student should now make the first trial balance for January 31. This will still show that several of the accounts have the same balances as at the beginning of the month. |
+
+
+| Analyzing the costs. By the use of special columns in the cash journals, the amount of distribution has been reduced so that the cost journal will be quite simple and the posting can be done to the same ledger. Items for the cost journal are as follows: |
+
+
+| From the analytical daily record, the student should find the total value of raw materials placed in process during the month, charging the amount to Raw Materials in Process and crediting Raw Materials in Stock. The adding machine or the comptometer will be found very serviceable for this purpose. The same process should be carried out for Purchased Parts. |
+
+
+| From the analytical daily record, record the total amount of raw materials returned to the stockroom should also be calculated, charging them to Raw Materials in Stock, and crediting Raw Materials in Process. Purchased parts returned to the stockroom should be treated in the same way. |
+
+
+| The student should calculate 6% interest on the value of the capital invested and on the value of the machinery and tools. Depreciation of machinery should be calculated for the month at 1% and that on tools at 5/6 of 1%. Calculate the reserve for industrial insurance at 14% of the total cost of labor for January, including that which is accrued but unpaid. Burden should be debited and credits made to Interest, Reserve for Depreciation of Machines, Reserve for Depreciation of Tools, and Industrial Liability Insurance Reserve for these items. |
+
+
+| The next step. Debiting Overhead is the next step, and crediting General Expense, Reserve for Depreciation of Office Furniture and Appliances (calculated at 2% of 1%), and Collections. This will close those accounts. |
+
+
+| During the month 500 motors were completed. The amount paid for direct labor, as shown by the direct labor account in the general ledger, plus the amount of direct labor accrued for |
+
+
+
+238
+ESSENTIALS OF BOOKKEEPING
+
+last three days of the month, $4,531.50, plus the balance of the direct labor in process account, minus the inventory of direct labor now in process, $10,683.70, will equal the amount of direct labor used in the manufacture of the 500 motors.
+
+In this way we can find the amount of indirect labor used can be found, the amount accrued being $1,418.25, and the inventory of indirect labor now in process, $4,123.10.
+
+Finding the value of raw materials. Raw materials in process on January 1, plus the raw materials placed in process during the month minus the raw materials returned to the stockroom, and the inventory of raw materials now in process, $40,273.06, equals the value of raw materials used in the manufacture of the 500 motors. All these items will be found in the analytical daily record except the inventory.
+
+In a similar way the value of purchased parts used can be found, the value of purchased parts now in process being $20,964.
+
+As the cost of the finished goods is composed of direct labor, indirect labor, raw materials, purchased parts, burden, and overhead, the student is now prepared to make the next entry by crediting these six accounts and debiting Finished Goods for the amounts found above or for the debit balances as they stand in the general ledger.
+
+The sales account should now be debited and credits made to Returned Sales, Sales Discount, Sales Expense, and Sales Rebates and Allowances, to close these accounts into Sales.
+
+Sales next should be debited for the balance of the finished goods account so that this account is credited for the amount which that account shows to be the cost of the total sales of the month. It should be noted that the inventory of this account remains exactly the same as that which is shown for the previous month.
+
+Closing the balance of the direct labor account into Direct Labor in Process, and the indirect labor account into Indirect Labor in Process, will complete the entries to be made at this time in the cost journal.
+
+The student should post all these entries to the ledger and then take the second trial balance for the 31st of January. Many of the accounts in the general ledger will now balance; they should be footed and closed.
+
+COST ACCOUNTING 239
+
+The four statements. In making the report of the business at the close of a fiscal period in a manufacturing business, four statements are made:
+
+1. The manufacturing statement, showing in two parts
+ a. the prime cost
+ b. the factory cost
+
+2. The trading statement, showing in two parts
+ a. the gross trading profit
+ b. the net trading profit
+
+3. The loss and gain statement, showing the net gain
+
+4. The resource and liability statement
+
+The manufacturing statement. In Part One of this section, under "Formula of Costs," it was stated that the prime cost consists of raw materials, purchased parts, and direct labor. These, therefore, are the items to be considered in making the first part of the manufacturing statement.
+
+The statements which have been made for the other businesses were arranged on a single page. It is a common practice in America to arrange statements, especially those of a manufacturing business, on two pages placed opposite each other like those of the ordinary cash books. And in order to make this form familiar to the student, it will be used in closing the books of the General Motor Manufacturing Company. The manufacturing statement will appear as in Form 104.
+
+The trading statement. The trading statement, showing the gross trading profit in the first part and the net trading profit in the second part, will appear as in Form 106.
+
+The loss and gain statement will appear as in Form 107.
+
+The resource and liability statement, showing also the final distribution of the net gain, will appear as in Form 108.
+
+Analyzing and distributing the costs. After closing the books, there remains only the final step—the analysis of costs and their distribution to the different departments, to complete the work of this chapter. In order to make the student familiar with more than one of the bases of distribution, different items of the operating cost will be distributed in different ways. Direct labor, indirect labor, supervision, and repairs will be distributed directly,
+
+1
+
+MANUFACTURING
+
+
+
+ | Raw materials |
+ |
+ |
+
+
+ | Inventory, January 1 |
+ ?????? |
+ |
+
+
+ | In stock |
+ ?????? |
+ |
+
+
+ | In process |
+ ?????? |
+ |
+
+
+ | Purchased during the month |
+ ?????? |
+ |
+
+
+ | Purchased parts |
+ ?????? |
+ |
+
+
+ | Inventory, January 1 |
+ ?????? |
+ |
+
+
+ | In stock |
+ ?????? |
+ |
+
+
+ | In process |
+ ?????? |
+ |
+
+
+ | Purchased during the month |
+ ?????? |
+ |
+
+
+ | Direct materials |
+ ?????? |
+ |
+
+
+ | In process, January 1 |
+ 1005370 |
+ |
+
+
+ | Paid for during the month |
+ ??????? |
+ |
+
+
+ | Acquired |
+ ??????? |
+ |
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+
+FORM 105-A
+
+
+| TRADING |
|---|
| Finished goods on hand, January 1 | ??????? |
|---|
| Factory cost of goods manufactured in January | ???????? |
|---|
| Gross trading profit | ??????? |
|---|
| Sales expenses | ??????? |
|---|
| Advertising | ??????? |
|---|
| Salesmen's salaries and expenses | ??????? |
|---|
| Sales commissions and allowances | ??????? |
|---|
| Fat trading profit | ??????? |
|---|
+
+FORM 106-A
+
+240
+
+STATEMENT, JANUARY 31
+
+
+
+ | Raw materials |
+ |
+ |
+
+
+ | Inventory January 31 |
+ ?????? |
+ ?? |
+
+
+ | In stock |
+ ?????? |
+ ??? |
+
+
+ | In process |
+ ?????? |
+ ??? |
+
+
+ | Purchased parts |
+ ?????? |
+ ??? |
+
+
+ | Inventory January 31 |
+ ?????? |
+ ??? |
+
+
+ | In stock |
+ ?????? |
+ ??? |
+
+
+ | In process |
+ ?????? |
+ ??? |
+
+
+ | Direct labor in process, January 31 |
+ ?????? |
+ ??? |
+
+
+ | Prime cost for January |
+ ?????? |
+ ??? |
+
+
+ |
+ |
+ |
+
+
+ |
+ |
+ |
+
+
+ |
+ |
+ |
+
+
+ |
+ |
+ |
+
+
+ |
+ |
+ |
+
+
+FORM 105-B
+
+STATEMENT, JANUARY 31
+
+
+| Finished goods on hand, January 31 | ?????? | ??? |
|---|
| Cross sales | ?????? | ??? |
|---|
| Returns sales | ???? | ?????? |
|---|
| Hot sales | ?????? | ??? |
|---|
| Gross trading profit | ?????? | ?? |
|---|
| FORM 106-B |
|---|
| 241 |
|---|
+
+![]() A scanned document page with two tables titled "STATEMENT, JANUARY 31" and "FORM 105-B". The first table lists raw materials inventory and prime cost for January. The second table lists finished goods on hand, cross sales, returns sales, hot sales, and gross trading profit.
+
+![]() A scanned document page with a single table titled "STATEMENT, JANUARY 31". The table lists finished goods on hand, cross sales, returns sales, hot sales, and gross trading profit. The bottom of the page has "FORM 106-B" and a page number "241".
+
+LOOS AND GAIN
+
+
+
+ | Overhead |
+ |
+ |
+
+
+ | General expenses |
+ |
+ |
+
+
+ | Rent |
+ TF |
+ = |
+
+
+ | Stationery |
+ TF |
+ TF |
+
+
+ | Maharajah fare |
+ TF |
+ TF |
+
+
+ | Street car fare |
+ TF |
+ TF |
+
+
+ | Printing |
+ TF |
+ TF |
+
+
+ | Dues to organizations |
+ TF |
+ TF |
+
+
+ | Light |
+ TF |
+ TF |
+
+
+ | Furniture |
+ TF |
+ TF |
+
+
+ | Telephone |
+ TF |
+ TF |
+
+
+ | Repairs |
+ TF |
+ TF |
+
+
+ | Fuel. |
+ TF |
+ TF |
+
+
+ | Salaries |
+ TF |
+ TFFTTT TF |
+
+
+ | Rampage fund |
+ |
+ |
+
+
+ | Reserve for depreciation of office furniture and appliances |
+ |
+ |
+
+
+ | Cash (inventory) |
+ | ![]() A table showing various financial categories and their corresponding values. The table has two main columns: "Cash" and "In stock (daily record)". The "Cash" column shows values such as "Accounts receivable (sales ledger)" with "TFFTTT TF", "Taxes (10 months unexpired)" with "TFFTTT TF", etc. The "In stock (daily record)" column shows values such as "Finished goods (inventory)" with "25000", "Direct labor in process" with "1564 DF", etc. The total value at the bottom right corner is "B1311 DF". The table is labeled "FORM 107-A". A watermark indicating "Google" is present at the bottom right corner."
+
+**STATEMENT JANUARY 31**
+
+| | |
+|---|---|
+| Net trading profit | $ |
+| Purchase discount | $ |
+| Interest | $ |
+
+FORM 107-B
+
+**STATEMENT. JANUARY 31**
+
+| Liabilities | |
+|---|---|
+| Bills payable | $ |
+| Accounts payable (purchase ledger) | $ |
+| Direct labor (accrued) | $ |
+| Indirect labor (accrued) | $ |
+| Burplus, January 1 | $ |
+| Dividends profits January 1 | $ |
+| Reserve for depreciation of machines | $ |
+| Reserve for depreciation of tools | $ |
+| Reserve for depreciation of office furniture | $ |
+| Reserve for industrial liability insurance | $ |
+| Operating surplus | $ |
+| Net gain for January | $ |
+| Dividends (%) | % |
+| Surplus after the remainder | % |
+| Undivided profits (1/8 of the remainder) | % |
+
+FORM 108-B
+
+243
+
+244
+ESSENTIALS OF BOOKKEEPING
+
+since these items were entered in the disbursing cash journal in such a manner as to render this possible. This will dispose of the greater part of the operating cost in the most just manner.
+
+Rent, fuel, interest, light, and sundries will be distributed on the basis of floor space. The dimensions of the departments are shown on the floor plan of the factory shown below. From this the percentage rate each department bears to the whole factory,
+
+![]() A diagram showing the layout of a factory with various departments labeled. The main line of railroad runs horizontally across the top. Below it, from left to right, are "Machine shop," "Assembling room," "Teeting and Shipping room," "Office," and "Foundry." Each department has its own dimensions marked in feet and inches. For example, "Machine shop" is 138' 4", "Assembling room" is 75', "Teeting and Shipping room" is 88' 10", "Office" is 50', and "Foundry" is 113' 8".
+
+The factory of the General Motor Manufacturing Company is arranged according to the plan shown here. If we wish to distribute any portion of the expenses on the basis of floor space, we find the percentage which each department bears to the whole.
+
+excluding the office, can readily be found. The sum of the items mentioned above can then be distributed by using the same percentage rates, which should be carried to the fourth decimal place.
+
+One item of the burden, Freight In, will be distributed on the man-hour basis. The number of direct labor hours used during the month in the factory is as follows: foundry, 14,560; machine
+
+Dated Google
+
+DISTRIBUTION OF OPERATING COSTS FOR JANUARY
+
+| Frequency | Machine Shop assembling Y. and Z |
+|---|---|
+| **Floor-space basis of distribution** | **Total** |
+| Direct labor | 7777.00 |
+| Paid | 7777.00 |
+| Appraisal | 7777.00 |
+| Insurance (insurer) | 7777.00 |
+| Paid | 7777.00 |
+| Stocked | 7777.00 |
+| Supervision | 7777.00 |
+| Freight (imported to Formed) | 7777.00 |
+| Receipts (imported to Formed) | 7777.00 |
+| Machine space basis of distribution | 2222.00 |
+| Rent | 2222.00 |
+| Fuel | 2222.00 |
+| Interest | 2222.00 |
+| Guardian | 2222.00 |
+| Light | 2222.00 |
+
+**Man-hour basis of distribution**
+
+| Frequency | Machine Shop assembling Y. and Z |
+|---|---|
+| **Direct labor** | **Total** |
+| Direct labor | 3333.00 |
+| Paid | 3333.00 |
+| Appraisal | 3333.00 |
+| Insurance (insurer) | 3333.00 |
+| Paid | 3333.00 |
+| Stocked | 3333.00 |
+| Supervision | 3333.00 |
+| Freight (imported to Formed) | 3333.00 |
+| Receipts (imported to Formed) | 3333.00 |
+| Machine space basis of distribution | 6666.00 |
+| Rent | 6666.00 |
+| Fuel | 6666.00 |
+| Interest | 6666.00 |
+| Guardian | 6666.00 |
+| Light | 6666.00 |
+
+**Machine-hour basis of distribution**
+
+| Frequency | Machine Shop assembling Y. and Z |
+|---|---|
+| **Direct labor** | **Total** |
+| Direct labor | 1111.00 |
+| Paid | 1111.00 |
+| Appraisal | 1111.00 |
+| Insurance (insurer) | 1111.00 |
+| Paid | 1111.00 |
+| Stocked | 1111.00 |
+| Supervision | 1111.00 |
+| Freight (imported to Formed) | 1111.00 |
+| Receipts (imported to Formed) | 1111.00 |
+
+**Man-hour basis of distribution**
+
+**Bureau**
+
+- Power
+- New for day of
+- Maintenance
+- New for day of
+- Light
+
+**Labor cost basis of distribution**
+
+- Bureau
+- Reserve for industrial insurance
+- Overhead
+- General expenses
+- Rent
+- Stationary (installed)
+- S.S.Tax
+- St.car fare
+- Frictional (installing)
+- Own (is month)
+- Light
+- Freight
+- Telephone
+- Magazines
+- Fuel (estimated)
+- Shippers
+- Import fund
+- Reserve for depreciation
+- Office furniture and equipment
+- Utilities
+- Collection
+- Taxes (month)
+- Insurance (5 months)
+
+**Total operating cost by department**
+
+FORM IOP
+
+245
+
+246
+ESSENTIALS OF BOOKKEEPING
+
+shop, 37,024; assembling room, 8,112; testing and shipping room, 9,152. These figures determine the percentage rates for Freight In.
+
+Three items of the burden, viz., power, reserve for depreciation of machines, and reserve for depreciation of tools, will be distributed on the machine-hour basis. In the foundry 25 units of production have been operated a total of 5,050 hours; in the machine shop 75 units have been in operation a total of 13,485 hours; in the assembling room 13 units have been in operation 2,884 hours; in the testing and shipping room 22 units have been in operation 4,481 hours.
+
+The remaining item of burden, the reserve for industrial insurance, and all of the overhead, will be distributed on the total labor-cost basis, the data of which have already been found. A few of the items of overhead which have more than one month's duration must be considered. The following items and modifications of the data already found must be considered: Stationery for the month is estimated at $20; printing at $75; fuel at $25. The dues paid in organizations, taxes, and insurance are to be figured at 1/12 of the ledger charges, which are for the entire year.
+
+The cost analysis sheet, showing the final distribution of operating costs by departments is illustrated in Form 109, and when completed the horizontal footings should check with the vertical footings and agree with the figures in the last column.
+
+STANDARD QUESTIONS
+
+The transactions of the General Motor Manufacturing Company
+
+1. What is a controlling account and why is it kept?
+2. What controlling accounts do you use in this section?
+3. Why are two trial balances required for January 31?
+4. What is the purpose of the cost journal? Where is the cost ledger in this chapter?
+5. What would be the rate of depreciation on machinery and tools for the end-of-year on the same basis as that charged off for January?
+6. What are the elements entering into the prime cost?
+7. What is added to prime cost to make the factory cost?
+8. How can you find gross trading profit?
+9. What must be taken out of gross trading profit to find the net trading profit?
+10. Why are some of the items on the credit side of the resource and liability statement called "quasi" liabilities?
+
+SECTION VIII
+
+BANK ACCOUNTING
+
+PART ONE
+
+THE exchange of one kind of goods for another was probably the first form of business transaction. The man who had been injured in some way so that he was no longer able to obtain food for his family in the chase became skilful in the making of weapons. The hunter had little patience for that work, but he secured more game in the forest than he needed. The weapon maker therefore traded the results of his skill for the excess of the hunter's prowess, and both were satisfied.
+
+Early forms of exchange. This process has continued in greater or less degree even to the present day. Western mariners used to leave a pile of merchandise on the shore of an eastern continent for the inspection of the natives, who then placed the pile of their products near by and retired to the jungle, each side coming and going, adding and subtracting from its own pile until the silent bargain was concluded. Today the farmer brings his butter and eggs to the village store, where they are exchanged for sugar, coffee, and so forth.
+
+It often happened, however, that when a man wanted a certain commodity, he didn't have the kind of goods the other man wanted. It therefore became desirable to have something which could be easily exchanged with anyone who had something needing. Hence animals were domesticated, and cattle and sheep became common mediums of exchange. The value of commodities was given in terms of cattle and sheep. When anyone desired to buy property, he offered a certain number of cattle or sheep for it. If a young man wished to secure a wife, he proposed to present her father with so many cattle, sheep, or goats. And worshippers presented cattle or sheep as sacrifices.
+
+247
+
+248
+ESSENTIALS OF BOOKKEEPING
+
+**Mediums of exchange.** As time progressed, many different articles were used as mediums of exchange in different countries. Among these were cowry shells, pells, olive oil, different kinds of grain, and salt. The American Indians and the early colonists used carved pieces of shell called wampum. The settlers of Virginia used tobacco. A deed executed by a Mohican Indian in 1678, transferred an island in the Hudson River to one of the Dutch settlers for “a piece of cloth, a cutlass, a kettle, two pairs of stockings, four axes, a coat, a shirt, and two jugs of rum.” But the most favored of all mediums of exchange came to be the gold and silver ornaments made from the metals which were considered most beautiful and precious because they were rare and because they did not tarnish nearly so readily as did those metals which were more plentiful.
+
+Guessing at the value of gold and silver ornaments gradually gave place to the practice of weighing the metal and considering it worth so much an ounce or other unit of weight. In time it became the practice to scratch the weight on the piece of metal in order to save the time and trouble of weighing it each time it was passed.
+
+Still later, governments began to stamp the value. After the value had been so stamped, dishonest persons frequently clipped off parts of the metal until by and by it was worth only a fraction of the stamped value. To prevent this practice, machines were invented which made the coins round, stamped the piece of metal on both sides, and milled the edge.
+
+**The standard.** Since gold was the most precious of the metals used, it has become the standard, and in America the double eagle, the eagle, and the dollar have become the standard medium. The gold coin smaller than the dollar is too easily lost to be practical, although there are some $2.50 gold coins. Hence silver is used for the dollar, half-dollar, quarter-dollar, and dime. Again, a silver coin of less value than the dime is too small for convenience, and the half-dime is made of nickel alloy. For a similar reason the one-cent piece is made of copper alloy.
+
+What is meant by “sweating.” If a canvas bag is partly filled with gold coins and then shaken for some time, there will be
+
+BANK ACCOUNTING 249
+
+found an appreciable quantity of gold dust in the bag, which has been rubbed from the coins; the process is called "sweating." Practically the same process goes on in passing coins from hand to hand, so that after a double eagle has been in circulation for 20 years it has lost about 10 cents' worth of gold.
+
+Gold is heavy; if a person lived a mile from the bank and were offered $100,000 in gold if he would carry it home at one load, he would find the task impossible. Even $1,000 would be extremely inconvenient in the pockets.
+
+Paper currency. To avoid these difficulties governments issue what is called paper currency. Paper currency consists of printed paper promises in which the government agrees to pay the amount promised in coin to the one who presents the paper. It was the intention at first to hold in the government treasury the exact amount of coin for which paper was issued, but it was soon evident that people preferred to handle and carry the paper and seldom brought it in for redemption. It is therefore, obviously enough, necessary to provide for only a comparatively small percentage of the outstanding currency with redemption funds of gold or silver in the treasury.
+
+Paper currency consists of:
+
+1. Government notes, sometimes called "greenbacks" (because the back is printed in green ink), which are promises of the government to pay to the bearer the amount specified on the note. They are issued in denominations of $10, $20, $50, $100, $500, and $1,000;
+
+2. Gold certificates, sometimes called "yellowbacks" (because the back is printed in yellow), which are issued in denominations from $10 to $10,000. Each of these represents the actual gold, either in coin or bullion, in the national treasury, and anyone who presents one of them there can secure the gold. Under normal conditions he can secure it as readily at a national or federal reserve bank;
+
+3. Silver certificates, which form the bulk of the nation's paper currency denomination, for 90% of them must be kept at and below the denomination of $10. They are secured by silver just as the gold certificates are secured by gold and are redeemable in the same way;
+
+250
+ESSENTIALS OF BOOKKEEPING
+
+4. National bank notes, which are issued by national banks and which are the banks' promises to pay the amount specified to the bearer. In addition to the security of the banks' promises, these national bank notes are secured by bonds deposited with the treasurer of the United States so that if the bank should fail to meet them for any reason, the holder would not lose their value. Their denominations range from $5 to $100;
+5. Federal reserve bank notes, which are issued in denominations from $1 to $50 and are secured in a manner similar to that of national bank notes.
+
+How paper currency is printed. All of this currency is printed in the offices of the government department of printing at Washington on paper manufactured especially for that purpose so that it will stand much handling and cannot be easily imitated. It is printed from intricately engraved plates to prevent counterfeiting and is distributed to the banks in sheets which are cut or torn up into the individual "bills."
+
+The use of the different kinds of paper currency has added several times the total value of the metal coins to the mercantile circulation of the country, but not nearly enough to care for the volume of transactions carried on daily. Just as this currency is the promise of the bank or the nation to pay its face value to the holder, so there is the promise of the private corporation or business firm to pay to the holder the face value of the paper. A promise of this kind may be a check, a note, a draft, or an acceptance; thus, in each case, what is promised is the sum of the resources and business integrity of the organization which makes the promise. By far the greater part of business transactions are carried on through these promises or, as they are called, credits.
+
+The cause of panics. So long as business organizations are satisfied that these promises will be redeemed in currency or other equally good credits at maturity, business remains stable and prosperous; when these organizations lose confidence in each other, the system of credits breaks down, and the country is swept by so-called panics or money stringencies, which are really not stringencies of money at all, but stringencies of credits. When this loss of confidence extends to the government of a coun-
+
+BANK ACCOUNTING 251
+
+try, as it is likely to do during a losing war, the actual value of its paper currency deteriorates sometimes to a small fraction of its face value.
+
+If each business house had to provide for the safety and protection of its money and credits, the expense of watchmen, safety vaults, and locking devices would be excessive. If everyone who had money to lend found it necessary to search for someone who desired to borrow, and if everyone who wished to borrow had to find the one who was willing to lend, there would be a great multiplication of effort and expense in getting together. If those who possessed small sums of money had to hoard them, and others of business ability could not start until each had accumulated enough capital of his own, vast amounts of money would lie idle while much of the nation's skill and wisdom would enter the field of production very late in life, if at all. If travelers could carry with them the money needed for their expenses, trusting to accident to have it changed into the currency of each successive country which they visited, they might lose a large percentage of it. Many pieces of notes and receipts had to hold out their paper until maturity, the circulation of cash would be seriously hindered by this fact which would be a brake on the wheels of the whole commercial machine. If a person who purchased goods in a distant city had to send the cash in order to pay his debt, or if a creditor had to see personally to the collection of the amount due him in some other place, much time would be lost, many obligations would remain unpaid, and therefore there would be far fewer of such obligations assumed.
+
+What the bank does. These are some of the reasons for the establishment of banks, whose business it is to provide safety and facility in the exchange of money and credits.
+
+A bank provides a safe place for the deposit of money and valuables, lends money at a reasonable rate of interest on approved security, discounts commercial paper, collects obligations in distant cities through its correspondents, exchanges the money of foreign countries for domestic currency, supplies travelers with letters of credit or other forms of easily negotiable credits, provides an easy and safe method of paying debts due in other places, acts through its trust department as executor or administrator of estates, guardian of minors or lunatics, agent for
+
+252
+ESSENTIALS OF BOOKKEEPING
+
+the renting or sale of property, trustee for the settlement of business difficulties, and so forth; and provides storage and insurance for valuable papers, furs, trunks, and so forth, in its safe deposit vaults.
+
+**Private banks.** Private banks are conducted by individuals or business organizations on about the same basis as other business ventures. They are no longer plentiful, although some foreign communities still prefer to deposit with private banks conducted by men of their own nationality.
+
+**State banks and trust companies.** State banks are organized under state laws. They are subject to different requirements in different states and were formerly considered to have some advantages over national banks because the inspection of the state banks was less stringent. It is probably generally true that state banks are inspected thoroughly by national banks, many times by the same inspectors. Trust companies are practically state banks, since they are organized under state laws, and they perform all the functions of a bank except that of issuing bank notes as currency. They are prevented from doing this only because there is a federal tax of 10% on the currency issued by any other than national or federal reserve banks.
+
+**National banks.** National banks are organized under the national banking act passed by Congress in 1864. At first they were required to confine their loans within narrow limits: real estate could not be accepted as security; while they had the privilege of issuing their own currency, they could perform no functions outside of a strictly banking business. By amendments to the law as originally passed, national banks can now lend money on real estate and can establish trust departments.
+
+**Federal reserve banks.** In 1913, Congress passed a law creating the federal reserve banks, which are outgrowths of the national banks, being organized by the national banks of the district in which each federal reserve bank is located. They are depositories of funds from the treasury of the United States and advance money to the national banks in case of need.
+
+The first bank. The lending of money on security has been practised in all nations so long "that the memory of man runneth
+
+---
+
+BANK ACCOUNTING 253
+
+not to the contrary." But banking, like bookkeeping, seems to have originated in Italy. The bank of Venice was established in 1171 (there were private banks before this), and the bank of Genoa 85 years before Columbus sailed on his voyage of discovery. The bank of Amsterdam was established in the same year in which Jamestown, Virginia, was settled. Some of these banks were destroyed by French armies in the time of Napoleon.
+
+The bank of England was established in 1694; the first great bank in the United States was founded in Philadelphia four years after the Declaration of Independence, although it did not open for business until January 2, 1782, with a perpetual charter under the name of The Bank of North America. The bank of Massachusetts opened in 1784, and the bank of New York was founded seven years later.
+
+Early banks. For over 70 years after this the laws of the different states were so varied and so lax that numerous "wild-cat" banks were opened by unscrupulous persons without capital. The failure of these "wild-cat" banks led to the losses sustained by people who had deposited money with them caused a widespread distrust of banking and banking, which has not even yet entirely disappeared. In 1864 Congress passed the national banking act, and one year later the law taxing the bank-note circulation of all other banks 10%.
+
+How the federal reserve banks are organized. The establishment of the federal reserve banks took place in December, 1913. The provisions of this act divided the country into districts; in each district a city is designated by the federal reserve board as the location of the reserve bank at that district. All national banks in the district are required to take stock in the reserve bank to an amount equal to 6% of their capital, under penalty of forfeiting their charters. Each reserve bank must have a capital of at least $4,000,000. If the subscriptions of the national banks do not provide this sum, the public is given the opportunity of purchasing the stock, and if this does not supply the required amount, the balance is assigned to the United States government and paid out of the national treasury. The stock of federal reserve banks is not taxed and pays 6% dividends. After providing a surplus fund of 40% of the capital
+
+254
+ESSENTIALS OF BOOKKEEPING
+
+stock out of the earnings above the dividends, the rest of the profits go to the treasury of the United States.
+
+An act giving authority for national banks to act in the capacity of trust companies after securing permission of the federal reserve board, was passed by Congress in September, 1918.
+
+Exchange and the "balance of trade." Exchange between cities varies as the amount of trade between the merchants of those cities varies. For example, if Chicago merchants are shipping more goods to New York than they are buying from New York, there is not much money going from Chicago, and more is coming back. In this case the "balance of trade" is said to be in favor of Chicago, and New York exchange, that is, the sale of dollars for sending goods to New York, is low because few persons want things. At such times the cost of a New York draft will be lower than when the "balance of trade" is in favor of New York and when, in consequence, New York exchange is high. This is the reason for fluctuation in the cost of New York exchange, and the same reason explains the fluctuation of exchange with foreign countries.
+
+The cost of exchange. At all times, however, the cost of exchange is governed by the rate at which actual money can be shipped by express from one place to another. If, for example, $1,000 in cash can be shipped by express from Chicago to New York for 75c, business houses are not likely to pay $1.25 for a New York draft to transfer the same amount in that way. The reverse is equally true.
+
+Correspondent banks. In order to make the exchange of funds available between cities, banks have agreements by which they draw on each other for their patrona. The theory is that a New York bank may draw on its correspondent as freely as the bank in some other city draws on the New York correspondent, but so nearly universal is the custom of paying anywhere and everywhere by New York exchange, that is, drafts on New York banks, that a large part of the correspondence is on the one side. To maintain the balance in the New York correspondent bank's hands, the outside banks keep constantly forwarding cash or commercial paper for collection to the New York bank. A similar form of exchange is maintained between small country
+
+BANK ACCOUNTING 255
+
+banks and a correspondent in the nearest large city. For the convenience of making collections, correspondent relationships are frequently established with banks in conveniently located cities in other parts of the country or in foreign countries, but so far as domestic exchange is concerned, little drawing is done.
+
+Letters of credit. Exchange is also carried on with banks in foreign countries under the name of letters of credit. A letter of credit is a kind of international draft drawn by a bank in favor of the traveler who is going abroad. The amount for which the letter is drawn is indicated in the currency unit of different countries, as dollars, pounds, francs, rubles, pesos, and so forth.
+As the traveler draws amounts from the banks of the different countries to which he has sent the letter of credit until the face of the letter has been exhausted. To prevent a thief or finder from drawing on the letter, a description of the purchaser, his photograph, and his signature are frequently placed on its face. Forms 110 and 112 show a letter of credit.
+
+Travelers' checks. Another convenience provided by banks is the traveler's check. This may be purchased at banks in denominations of $10, $20, or $50 and signed on the face of the check in the presence of the bank's officer. When the owner desires to cash it, he signs again on another line in the presence of the one who is to cash it; identification depends upon the agreement of the signatures. Form 111 on page 256 shows a traveler's check.
+
+The available funds of a bank come from three sources; there is, first, the cash paid for stock by the stockholders; second, currency to the amount of the bonds deposited with the United States treasury as security; third, and by far the largest, item of funds, the deposits of the bank's customers.
+
+How deposits are received. Deposits are received in three ways. The depositor may place the money in the bank and be given a certificate showing how much he deposited, whether interest is to be paid on it by the bank, and when he will be permitted to withdraw any or all of it. This paper is the depositor's receipt for the money and is called a certificate of deposit, as shown in Form 113. It is used when the depositor does not have a regular account in the bank.
+
+![]() A page from a book titled "BANK ACCOUNTING" with text discussing letters of credit and travelers' checks.
+
+CIRCULAR LETTER OF CREDIT No. 4675
+to the correspondents of
+THE NATIONAL BANK OF EDUCATION
+
+Cleveland, Ohio
+April 13, 19...
+
+Gentlemen:
+This will introduce and commend to your kind attention Mr. Allen, who is authorized to receive from you drafts to whom you will please furnish funds in amounts as requested to the aggregate amount of $000.00. Funds Sterling
+will be sent by telegraphic transfer to London,
+London, each draft to be plainly marked as drawn under The National Bank of Education's letter of credit, No. 6483.
+
+We request you to buy such drafts at the rate at which you purchase similar drafts, and that all drafts drawn on us shall meet with due honor in London if negotiated not later than September 15th, 19...
+The amount of each draft must be so marked on the face of the draft that it cannot be altered without breaking the seal of this letter. The letter itself must be attached to the draft which exhausts the credit.
+
+Please be careful to have each draft drawn on your bank signed by yourself and to compare the signature with that forwarded in connection with this letter under another cover.
+
+Your obedient servant,
+The National Bank of Education
+W. W. Thompson
+Cuban.
+
+FORM 110: If you were to go abroad, this would be the kind of letter of credit you would purchase. It is safer than carrying money with you and more convenient, because it can be cashed in the currency of any country in which you are traveling.
+
+
+
+
+| When manufactured with this form |
+When used for this purpose |
+
+
+| Before date |
+After date |
+
+
+
+
+| AMERICAN EXPRESS COMPANY |
+
+
+| Pay this cheque from our office to the order of: |
+
+
+| $10.00 |
+ |
+ |
+ |
+
+
+| In United States and Canada: |
+Foreign |
+United Kingdom |
+Germany |
+Italy |
+Sweden Denmark |
+
+
+| Ten Dollars |
+1 2 3 4 5 6 7 8 9 10 |
+From City |
+From City |
+From City |
+From City |
+
+
+ |
+ |
+New York |
+New York |
+New York |
+New York |
+
+
+ |
+ |
+Los Angeles |
+Los Angeles |
+Los Angeles |
+Los Angeles |
+
+
+ |
+ |
+Boston |
+Boston |
+Boston |
+Boston |
+
+
+ |
+ |
+Chicago |
+Chicago |
+Chicago |
+Chicago |
+
+
+Countersigned in the presence of person cashing:
+
+| From City | From City | From City | From City | From City | From City | From City | From City |
|---|
| New York | New York | New York | New York | New York | New York | New York | New York | | Los Angeles | Los Angeles | Los Angeles | Los Angeles | Los Angeles | Los Angeles | Los Angeles | Los Angeles | | Boston | Boston | Boston | Boston | Boston | Boston | Boston | Boston | Chicago
Cuban. |
+
+Counterparty's signature noted in Europe will be returned only at the company's offices and branches in Europe.
+
+FORM 111: The traveler's check serves the same purpose as the letter of credit; it is safer and more convenient than carrying actual money. The person having it cashed signs it under the words, "Countersigned in the presence of person cashing."
+
+204
+
+![]() A scanned page from a vintage American Express Company letterhead.
+
+PAYMENTS MADE
+
+
+
+ | Date of payment |
+ By whom paid |
+ Name of town |
+ Amount expressed in words |
+ Expressed in figures |
+
+
+ |
+ |
+ |
+ |
+ |
+
+
+
+FROM 113: On the reverse of the letter of credit are entered the amounts which the traveler draws from banks in the different countries he travels through. The letter of credit is discussed more fully on page 255. Form 110 shows the other side.
+
+THE NATIONAL BANK OF EDUCATION
+No. CLEVELAND, OHIO ____________ ha deposited in this bank Dollars
+Payable to ____________ or order, in current funds on or after the day of ____________ 19___ on the return of this certificate properly indorsed. Interest at ____________ % payable to maturity but not after that date.
+NOT SUBJECT TO CHECK Cashier
+
+FORM 113: Even if a person has no account at a bank, he may deposit money with the bank and receive in return a receipt like the one shown here. It is called a certificate of deposit. When the money is withdrawn, it is returned to the bank.
+257
+
+258
+
+**ESSENTIALS OF BOOKKEEPING**
+
+The checking account. The second method of deposit is in what is called a commercial or checking account. Under this plan the customer's receipt is the entry in his bank pass book. Banks formerly required the depositor to bring this book into the bank once a month, when the bank clerks entered all the checks which had been returned and balanced the book before returning it to the depositor. This is no longer the custom in most banks. Instead of this, a sheet in loose-leaf form is kept for each account. In one method the left margin of this sheet shows the old balance daily or weekly according to the amount of business with that account, the incoming checks are entered in the body of the sheet in detail, and at the right margin is shown the new balance. Between the margins and the body the sheet is perforated.
+
+The statement of account. At the close of the month the margins are torn off and the main part is sent to the depositor as a statement of his account. Form 114 shows a statement of account. If he wishes the checks entered in the pass book, he makes those entries and balances it himself. If the balance as shown by the statement does not agree with that shown by the depositor's check book, he adds to the check book balance the amount of the checks still outstanding. If this does not make the balance agree and he can find no error in the stubs of his check book, he reports the disagreement to the bank at once.
+
+Checks. The depositor's money is of course his own property while it remains in his hands. Placing it in the bank does not change its ownership; it is still the depositor's money, and he can order the bank to pay it to anyone whom he may select. When he gives this order on the bank it is called a check, as explained in Section II, and once he has made a check only authority the bank will recognize as countermanding that order is another written order. Payment of a check cannot be legally stopped orally or by telephone. But a drawer cannot draw a check against the account of any depositor or drawer, until it is presented, so that if the drawer is careless or dishonest, he might draw several checks against a small deposit and only such as were presented before the money was exhausted would be paid.
+
+How to have a check "certified." To prevent this, the payee sometimes requires the drawer to have the check "certified"
+
+![]() Image of page 258 of Essentials of Bookkeeping.
+Google
+
+Balance of
+THE NATIONAL BANK
+OF EDUCATION
+Cleveland, Ohio
+
+In amount with
+
+Please examine and report at once. If no error is reported within ten days, the account will be considered correct.
+
+
+
+
+ | OLD BALANCE |
+ DUE DATE |
+ CHECKS |
+ DUE DATE DEPOSITS |
+ DUE DATE NEW BALANCE |
+
+
+
+
+ |
+ |
+ BALANCE FORWARD |
+ |
+ |
+
+
+
+
+FORM 114: The statements of account sent out by most banks are like the stubs on one, which is kept by the National Bank of Education. The depositor compares the information it contains with the stubs in his check book and in case there are errors, he reports them to the bank at once.
+
+No Cleveland, Ohio 10---
+THE NATIONAL BANK OF EDUCATION
+Pay to the order of ____________ DOLLARS
+$ ____________
+
+FORM 115
+
+No 09 Cleveland, Ohio January 30, 10---
+THE NATIONAL BANK OF EDUCATION
+Pay to the order of Elsie A. Trinkner One Hundred Twenty-Four $124.00 DOLLARS
+The General Motor Manufacturing Co.
+FORM 116
+
+250
+
+260
+ESSENTIALS OF BOOKKEEPING
+
+before accepting it. This is accomplished by having an officer of the bank write across the face of the check, "Good when properly indorsed," and sign his name. Form 116 shows what a certified check looks like. When this is done, the face of the check is deducted from the account of the depositor then and there and credited to the certified checks account, where it remains until it returns for payment. Certified Checks is then debited.
+
+**Savings accounts.** The third method of depositing is in savings accounts. As its name implies, the savings account should be an account of money saved. It should not be merely a means by which the bank is compelled to become the depositor's bookkeeper without pay, as when the contents of the account are withdrawn as regularly as they are deposited and almost as completely. The savings pass book differs from the commercial pass book as shown in Forms 117 and 118.
+
+How loans are classified. One of the important sources of a bank's income is its loans. These may be classified as follows:
+
+1. **Time loans,** which may be
+ a. loans on real estate with mortgage security
+ b. loans on collateral security
+
+2. **Demand loans,** which may be
+ a. loans on collateral security
+ b. loans on notes with guaranteed security
+ c. loans on business statements without security
+
+**Loans on real estate.** The federal reserve banking law prohibits the amount of a loan made on real estate as security from being more than 50% of the value of the property. The borrower gives the bank a note for the amount borrowed, a mortgage on the property for the amount of the note, the deed which transferred the property to the borrower, the abstract of title, and any insurance policies covering the property.
+
+The note is usually made payable "one year after date," but it is understood that this does not mean that payment will be required at the end of a year; in fact, the bank is ordinarily in no haste to make a final collection of the face of the note if the interest is met regularly and promptly. All of the papers connected with the loan are kept in an envelop on the outside of
+
+Present this book at the bank
+in January and July
+
+THE NATIONAL BANK OF EDUCATION
+SAVINGS DEPARTMENT
+
+Subject to the rules and regulations of the bank
+
+for the purpose of having the
+interest entered
+
+In acct. with
+NO.
+
+
+
+
+ | Date |
+ Withdrawn |
+ Deposited |
+ Balance |
+ Date |
+ Withdrawn |
+ Deposited |
+ Balance |
+
+
+
+
+
+
+
+FORM 117: Savings Pass Book
+
+THE NATIONAL BANK OF EDUCATION
+CLEVELAND, OHIO
+
+Dr.
+In account with
+
+Cr.
+
+FORM 118: Commercial Pass Book
+
+261
+
+Cleveland, Ohio, **February 1, 19...**
+
+One year after date for value received. I promise to pay to the order of THE NATIONAL BANK OF EDUCATION of Cleveland, Ohio.
+
+**Thirty-five Hundred** $/100 DOLLARS
+
+Payable at the office of the bank and I hereby authorize any attorney-at-law to appear in any court of record in the United States after the above obligation becomes due and waive the suing and service of process and confess a judgment a guarantee in favor of the holder hereof, for the amount of this note together with the cost of suit and thereupon to release all cross-acts and waive all right of appeal.
+
+$ 3500.00
+
+Due February 1, 19...
+
+Address 1476 Russell Avenue
+
+FORM 119: This judgment note does not state, the student will notice, the nature of the security for the loan. It merely acknowledges the debt and promises to pay the sum borrowed on a certain day. Who are the original parties to the note?
+
+$ 10,000.00
+
+Ninety days after date for value received, the undersigned promise to pay to the order of THE NATIONAL BANK OF EDUCATION of Cleveland, Ohio.
+
+Ten Thousand $/100 DOLLARS
+
+at its office, with interest at the rate of % per cent, payable quarterly, on or before 15th of March, June, September and December.
+
+The undersigned has agreed with said bank as collateral security for the payment of this and any and every liability or liabilities of the undersigned to the said bank, direct or contingent, due or to become due, or which may hereafter be contracted or existing, the following property, viz:
+
+Eight General Improvement Bonds of the City of Chicago, dated 1915, due in 1930. No. 87, 946; 87, 947; 87, 948; 87, 949; 87, 950; 87, 951; 87, 952; and 87, 953; also certificate No. 563 for 60 shares of the capital stock of General Motor Manufacturing Company.
+
+Here follows the contract under which the borrower agrees to furnish additional security and under which the bank may sell collateral and apply the proceeds thereof towards the payment of the loan.
+
+No. 5,843
+
+Address: 6099 Detroit Avenue
+
+Holdman & Dunham
+
+FORM 120: This collateral note gives, in addition to the amount of the loan, the number, the interest, the due date, and the original parties, a full description of the collateral given as security. Is this note a time note or a demand note? Why?
+
+262
+
+![]() Google logo
+
+BANK ACCOUNTING 263
+
+which is shown the serial number of the loan, the name of the borrower, the amount of the note and mortgage, the contents of the envelop, and such other items as may be necessary or desirable. These envelopes are arranged in alphabetical or numerical order in the vault. Form 119 shows a judgment note.
+
+Collateral time loans. Collateral time loans run for a much shorter time than loans on real estate. The security on collateral loans is in the form of certificates of shares of stock or the bonds of a corporation, or some similar kind of property. Form 120 on page 262 shows a collateral time note. The bank usually allows a liberal margin between the market value of the collateral and the amount lent on it, in order to provide for market fluctuations. Of course, the description of the collateral in the note can be given only at its face value if it is worth less than its face value, if a certificate of stock, but it should include also the name of the corporation, the kind of stock or bonds, and the serial numbers if there are any. These items are kept in an envelop similar to that used for the real estate loans, unless there are more than the envelop will contain, when they are tied together in a package.
+
+There is little difference between collateral time loans and collateral demand or call loans, except that for one there is a fixed due date, while the other is not due until the bank "calls" for its payment. The demand note is payable, however, whenever the bank calls for it, which may be a week, or a month, or any time the bank wants the money.
+
+Loans without security. Persons wishing to borrow cannot always furnish real or collateral security, but may be able to secure the names of one or more indorsers who are willing to guarantee the payment of the note at maturity. If these indorsers own sufficient property, the bank may lend limited amounts without other security.
+
+Business firms of experience, integrity, and success are frequently allowed to file with the bank a statement of their business, showing its resources and liabilities, and if the showing is satisfactory, they are permitted to draw on the bank to a certain percentage of their net ownership without any further security. In all cases, of course, the borrower pays interest at the current rate for the use of the money lent him.
+
+264
+ESSENTIALS OF BOOKKEEPING
+
+The ownership of a corporation is divided into shares. To each shareholder is given a certificate showing the number of shares he owns, the par value, and so forth. For the form of a stock certificate see Section V, Part One.
+
+What bonds are. Bonds are the written or printed promises of a corporation, city, state, or nation, agreeing to pay the face value of the promise at a stated time. They are issued by the organization making them payable. What notes are to an individual, except that bonds are made underwritten. Coupon bonds (from the French coupon, to cut) are those to which are attached small sections each of which can be cut off with shears. When one of these coupons is presented at a bank the amount of interest on the bond due to the date of the coupon will be paid in cash. Coupons are usually payable to the bearer. Registered bonds are entered in a book under the name of the owner and are of no value to a finder or another holder until transferred by regular process on the books and by indorsement. Of all collateral securities the registered bond is probably the safest from theft.
+
+STANDARD QUESTIONS
+
+Money
+
+1. What was the first form of business transaction?
+2. Where is this early method of exchange still practised?
+3. Was this first method satisfactory? Why or why not?
+4. What is a medium of exchange?
+5. What substances have been used as mediums of exchange?
+
+Where?
+
+6. What material became the final choice for this purpose? Why?
+7. How was the value of metal ornaments determined at first?
+8. Why was this not sufficient?
+9. What laws were passed to prevent mutilation of coins?
+10. What metals are used in America for coinage?
+11. What is the denomination of the coins in each metal? Why?
+12. What is "sweating"?
+13. Is there any objection to the use of metals as money? If so, what?
+14. What substitute has been invented to take the place of the metals?
+
+15. How and by whom is this substitute issued?
+16. What is the redemption fund?
+17. What are "credits"?
+
+![]() Image of page 264 from Essentials of Bookkeeping.
+
+BANK ACCOUNTING
+265
+
+18. What gives value to credit?
+19. What is the cause of panic?
+20. How and when do panics affect nations?
+
+STANDARD QUESTIONS
+
+Banks, their functions, kinds, and history
+
+1. What are some of the things business houses would have to do if there were no banks?
+2. What functions does the business of a bank include?
+3. How are private banks conducted? Where are most of them found?
+4. What advantage were state banks formerly supposed to have?
+5. Was this really an advantage? Why?
+6. What is their present state in this respect?
+7. What is the most common form of state bank?
+8. What are state banks prevented from doing? How?
+9. When was the national banking act passed?
+10. What are the limitations on national banks at first? How have these been changed?
+11. Describe the method by which federal reserve banks are organized.
+12. Who introduced banking into Europe?
+13. When were the early European banks established?
+14. What was the first bank established in the United States? When?
+15. What was the condition of banking in the United States between the Revolution and the Civil War?
+
+STANDARD QUESTIONS
+
+Exchange
+
+1. What is exchange?
+2. What is the “balance of trade?”
+3. What governs the cost of exchange between cities and countries?
+4. What are correspondent banks?
+5. Describe the letter of credit and its use.
+6. What is the theory of correspondence? How does it work?
+7. How do outside banks maintain the balance of trade with New York?
+8. Do United States banks have correspondents in foreign countries?
+9. Describe the traveler’s check and its use.
+10. Is the traveler’s check or the letter of credit more convenient? Why?
+
+266
+
+# ESSENTIALS OF BOOKKEEPING
+
+## STANDARD QUESTIONS
+
+### Deposits
+
+1. Of what do a bank's funds consist?
+2. In what three ways are deposits received?
+3. Describe the certificate of deposit.
+4. How are deposits made in a commercial or checking account?
+5. What change has taken place in the bank's method of reporting to the depositor?
+6. Who enters checks in the bank pass book?
+7. What is done if the balance shown by the bank's statement does not agree with that found on the stub of the check book?
+8. What effect does depositing money in a bank have on its ownership?
+9. How does the depositor withdraw his money from a checking account?
+10. How can the payment of a check be prevented by the person who signed it?
+11. What can be done on a commercial account by a dishonest or careless depositor? How can the payee be protected from this possibility?
+12. What are the essential elements of a check?
+13. What may be true of the form of a check?
+14. What is a savings account?
+15. Describe the savings pass book. What is the form of the commercial pass book?
+
+## STANDARD QUESTIONS
+
+### Loans
+
+1. How do banks classify loans?
+2. How much can a bank lend on real estate security? Why is this true?
+3. What does the borrower on real estate place in the bank's hands?
+4. What is the usual time to run on a real estate loan?
+5. How are the papers connected with a real estate loan filed? What is the reason for this?
+6. What is the meaning of collateral? How does a collateral time loan differ from a personal call loan?
+7. What are the peculiarities of a collateral note?
+8. What security other than real or collateral may be given for a loan?
+9. How are loans made without security?
+10. What are stocks? What are bonds? Distinguish between coupon bonds and registered bonds.
+
+---
+
+BANK ACCOUNTING 267
+
+PART TWO
+
+THE bank is a corporation, which means that it is an "artificial person" created by law. In forming the organization the stockholders meet and elect a board of directors. These directors are required by the national banking act to subscribe and swear to the following oath:
+
+I, the undersigned, Director of the NATIONAL BANK OF EDUCATION, of the City of Cleveland, and State of Ohio, do solemnly swear that I am a citizen of the United States and a resident of the State of Ohio; that I will faithfully execute this instrument; diligently and honestly administer the affairs of said bank; and that I will not knowingly violate, nor willingly permit to be violated, any of the provisions of the revised statutes of the United States under which this bank has been organized; and that I am the bona fide owner, in my own right, of all shares of capital stock issued in my name or standing in my name on the books of the said bank, and required by said revised statutes; and that the same is not hypothecated nor in any way pledged as security for any loan or debt.
+
+The board of directors. There must not be fewer than five directors, and there may be as many more as seem desirable. Meetings of the directors are held at intervals, from monthly in a small bank to daily sessions in a large city bank. The minutes of these meetings are the official record of the bank's proceedings and are kept by the cashier or by a clerk appointed from among the directors. The main subject of consideration in meetings of directors is usually loans and their security. However, the board may appoint a finance committee and leave the matter of loans in the committee's hands. In banks where this is not done, they are sometimes left to the president or to the cashier between sessions of the board.
+
+The officers of the bank. Of the officers elected by the board of directors the president stands first as the head of the institution. He presides at the meetings of the board and is usually the guiding spirit of the bank. The vice-president takes the president's place in the president's absence. In large banks there are other officers who have special duties, such as having charge of some important department of the bank's affairs. One looks after the advertising, another secures new accounts, another interests himself in the welfare of the bank's employees, and so
+
+268
+ESSENTIALS OF BOOKKEEPING
+
+on. The cashier is the executive officer of the bank, acting in the capacity of general manager. In a small bank he sometimes keeps the loans in his own charge and may do some of the work at a window. In a large bank he delegates these functions to assistants. In any case he must be familiar with banking law as well as with banking practice, for he is responsible in a large measure for the bank's success. He is the final authority in the bank's correspondence, and his signature binds the bank.
+
+What the paying teller does. Next in rank to the cashier stands the paying teller. His responsibility is greater than that of the receiving teller, because if he makes a mistake, the money has been paid out and cannot be recovered unless the one who received it cares to return it. That which the receiving teller takes in is in the bank, and if there have been errors they can be rectified. The paying teller should be a person of good judgment, not easily confused, and must be able to decide important questions quickly. However, even the best paying teller is not infallible. Any errors in paying cash will in all probability be discovered at the close of the day. If the error is in the bank's favor, the customer will probably return for the shortage; if the error is in favor of the customer and he does not return the overpayment, he can be arrested and prosecuted for theft. The paying teller sees that all incoming paper is properly indorsed and should have a keen eye for the genuineness of signatures. The ability to remember faces and names will also play a large part in his success.
+
+The receiving teller. The receiving teller keeps himself posted on methods of detecting counterfeit of both coin and paper currency. He also watches for the indorsements on deposited papers and checks for accuracy of the deposit tickets. He keeps proof receipts for all incoming money, turns the cash over to the paying teller at the close of the day, and signs the paying teller's receipt for it. In keeping the books of the National Bank of Education, the teller's book will not be used.
+
+The discount clerk. The discount clerk has charge of the bank's main source of income, the discounting of short-time credits. These are first passed upon by the board of directors, the board's financial committee, or the president, according to
+
+BANK ACCOUNTING 269
+
+the bank's custom. When passed, the customer receives the proceeds or they are entered in his bank pass book, whichever he prefers. The discount clerk then enters them in his register and tickler. These may be either bound or in the form of loose cards.
+
+The collection clerk. Paper brought into the bank for collection comes to the collection clerk. In handling this the bank acts only as the agent of the last holder, for whom the collection is being made. The books used for the entry of collection paper are similar to those used for discounted bills. When the tickler is in the form of a card index, the cards are arranged in the order of the due dates of the paper, overdue items being placed in front of all others. When the paper is paid and entered, the card is destroyed.
+
+The individual bookkeeper. Accounts with depositors are known as individual accounts and are kept in the individual ledger, which is in charge of the individual bookkeeper. The early form of this ledger was practically the same as that used in other kinds of business. Later many banks adopted the so-called "Boston" type of individual ledger as shown in Form 121, which is divided vertically into sections for successive days, each section being subdivided to allow columns for deposits, checks, old balances and new balances. These sections are divided by horizontal lines into divisions providing a certain number of lines for each depositor or individual, the names being printed or written at the left of the sheet. As checks and deposits were entered separately, the allowance of lines was sometimes insufficient. Until a person became quite familiar with it the book was rather formidable complicated. Errors were frequent. But the chief objection to the Boston ledger lay in the amount of time it required.
+
+It is still used, but it is being replaced to some extent by a much simpler form which saves time, because the entries are made by the use of carbon paper under the monthly statement. The columns of the ledger page are ruled to fit those of the statement, and both are filled out in the bookkeeping machine at one writing. This necessarily requires the loose-leaf type of ledger.
+
+The general bookkeeper. The general bookkeeper has charge of the general cash book and the general ledger. In the general ledger are kept the accounts with Capital Stock, Expense,
+
+![]() A page from a book titled "BANK ACCOUNTING" showing Form 121.
+
+270
+**ESSENTIALS OF BOOKKEEPING**
+
+Dividends, and other general accounts, together with controlling accounts with Individual Ledger, Loans, Discounts, and so forth.
+Each of the duties here may be subdivided among as many assistants as the requirements of the bank make necessary. In a large bank there are operators of typewriters, adding machines, comptometers, bookkeeping machines, telephones, multigraphs, printing machines, and so on, to the extent as to require 800 to 1,000 employees. Some banks employ also pages, guards, ladies' maids, outdoor footmen, night watchmen, information guides, and so on.
+
+The clearing house. Every bank finds it necessary to cash paper drawn on other banks. The checks we have cashed which are drawn on other banks in the same city must be returned to those banks, and checks on us cashed by other banks must be returned to us. Before the establishment of the clearing house, as it is called, all this returning of checks had to be done by messengers. But now the banks of a city organize a clearing house which is centrally located and employ a manager to take charge of it. The counter is built in the shape of a horseshoe or three sides of a rectangle with windows placed at convenient intervals. Each window is numbered, the number of the window standing for the member bank which always "clears" at that particular window.
+
+The members of the clearing house to which the National Bank of Education belongs are as follows:
+1. The City National Bank
+2. The Fourth National Bank
+3. James Brothers, Bankers
+4. The National Bank of Education
+5. The New York City Savings and Trust Co.
+6. The Dollar National Bank
+7. The Eagle Banking and Trust Co.
+8. The National Bank of Industry
+9. The A. F. L. National Bank
+10. The Farmers and Traders' Bank
+
+How the checks are handled. All checks coming in over our counter on a certain day are sorted and those drawn on each bank bundled together. On the following morning these bundles of checks with a complete list of them are placed in the
+
+
+
+ | Depositors' names |
+ Monday, January 11, 19-- |
+ Tuned |
+
+
+ | Old balance |
+ Counter checks |
+ C.H. checks |
+ Total checks |
+ Deposite |
+ New balance |
+
+
+ |
+ |
+ |
+ |
+ |
+ Old balance |
+
+
+ |
+ Anderson.
+ B. E. & Co
+ |
+
+
+ |
+ Baker, Wise and Company
+ |
+
+
+ |
+ Farr Manufacturer-
+ ing Company
+ |
+
+
+ |
+ Hardware, C. E
+ |
+
+
+
+FORM 121; "Boston" Ledger
+
+271
+
+![]() A ledger page with columns for Old balance, Counter checks, C.H. checks, Total checks, Deposite, New balance, and Tunned. The top row lists depositors' names: Anderson, B. E. & Co, Baker, Wise and Company, Farr Manufacturer-ing Company, Hardware, C. E.
+
+Digitized by Google
+
+272
+ESSENTIALS OF BOOKKEEPING
+
+hands of the clearing house runner, who accompanies the settling clerk to the clearing house. Any tardiness in reaching the clearing house in time for the opening bell at 10 o'clock is punished by a fine against the bank whose representative is late.
+
+The process of "clearing." At the signal the settling clerks take their places inside of the windows, each one at the number of his bank, while the runners stand outside the windows in the same order. All the runners then move like a procession past the windows, each one leaving at each window as he passes it, the checks on that bank which he brought from his own bank. When the procession has made the complete circuit and the runners again stand before their own numbers, all the checks of each bank are in the hands of that bank's settling clerk. These are now listed again, and the totals of the new lists must check with the totals of the lists brought in at the beginning. If the total amount of paper brought into the clearing house by our bank is larger than the total amount of paper drawn on us and cashed by other banks, as shown by the second list, it shows that we have paid out more money for these other banks than we have paid out for us. The difference is therefore due us. But if the list of checks brought in shows a total which is less than the total of what the other banks have cashed for us, we owe the difference to the clearing house.
+
+When all balances due the clearing house have been paid in and all balances due the banks have been paid out, the clearing house accounts will balance, or "clear," as the process is usually called.
+
+ACTUAL BOOKKEEPING
+The National Bank of Education
+
+The information given below should be entered in the proper books and accounts opened in the general ledger for all the balances suggested. After entering the summaries in the general ledger, a trial balance should be taken preparatory to making the entries of the first day's business. This trial balance will show twelve debit balances and five credit balances.
+
+The capital stock of the National Bank of Education consists of 5,000 shares of a par value of $100 each, which are owned by the following persons:
+
+
+
+BANK ACCOUNTING
+273
+
+
+
+ | R. L. Long |
+ 400 shares |
+ $ 40,000 |
+
+
+ | L. Vinocur |
+ 800 |
+ 30,000 |
+
+
+ | L. M. Walsh |
+ 500 |
+ 50,000 |
+
+
+ | E. A. Trinkner |
+ 250 |
+ 25,000 |
+
+
+ | L. Kisselbach |
+ 200 |
+ 20,000 |
+
+
+ | M. Koosed |
+ 225 |
+ 22,500 |
+
+
+ | F. F. Farrow |
+ 250 |
+ 50,000 |
+
+
+ | The J. M. Cahoon Estate |
+ 525 |
+ 52,500 |
+
+
+ | C. F. Dutton, Jr. |
+ 250 |
+ 25,000 |
+
+
+ | S. Weimer |
+ 500 |
+ 50,000 |
+
+
+ | L. L. Jones |
+ 200 |
+ 20,000 |
+
+
+ | J. O. Gordon |
+ 875 |
+ 39,000 |
+
+
+ | J. P. Snyder |
+ 150 |
+ 15,000 |
+
+
+ | L. C. Remington |
+ 250 |
+ 25,000 |
+
+
+ | B. C. Smith |
+ 250 |
+ 25,000 |
+
+
+ | S. R. Hoover |
+ 666 |
+ 66,666 |
+
+
+ | Total: | | $5,666,666; | $5,666,666; | $5,666,666; | $5,666,666; | $5,666,666; | $5,666,666; | $5,666,666; | $5,666,666; | $5,666,666; | $5,666,666; | $5,666,666; | $5,666,666; | $5,666,666; | $5,666,666; | $5,666,667; | $5,713,333; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,271; | $114,273; |
(The officers of the bank are: president: R. L. Long; vice-president: J. P. Snyder; cashier: L. C. Remington.) The student will act in the capacity of assistant cashier; regular teller; paying clerk; discount clerk; loan clerk; collection clerk; individual bookkeeper; and general bookkeeper.
+The bank's correspondents are:
+The La Salle National Bank; W. Vesper; Cashier; Chicago; Ill.;
+The Seaboard National Bank; F. Van Dorn; Cashier; New York,
+N.Y.;
+The First-Second National Bank; J. T. Moore; Cashier; Atlanta; Ga.;
+The Produce Exchange National Bank; G. W. Brown; Cashier; St.
+Louis; Mo.;
+The Faneuil National Bank; S. Adams; Cashier; Boston; Mass.
+Paper payable in the New England states will be sent to the Faneuil National Bank of Boston; that payable west of the New England states east of the Mississippi river will be sent to the Ohio and Potomac rivers will be sent to the Seaboard National Bank of New York; that payable west of Indiana north of the Ohio and east of the Mississippi rivers will be sent to the La Salle National Bank of Chicago; that payable south of the Potomac and Ohio and east of the Mississippi rivers will be sent to the First-Second National Bank of Atlanta; all paper payable west of the Mississippi will be sent to the Produce Exchange National Bank of St. Louis.
+The names of depositors and the balances in their accounts are as follows:
+C. P. Antel & Co., 999 Euclid Ave., $478.35;
+Barton & Gaines; 73 Schofield Building; $388.33;
+
+![]() A scanned page from a financial document.
+
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+**ESSENTIALS OF BOOKKEEPING**
+
+B. W. Carpenter, 1412 East 80th St., $112.08;
+A. M. Dalton, 819 the Arcade, $2,563.84;
+The Erie Manufacturing Co., 1203 East 6th St., $6,378.10;
+The Goodman Building Co., 2408 West 4th St., $3,312.92;
+The Hale Part Co., 1441 Lake Ave., $4,168.39;
+The Hilton Furniture Co., 819 Superior Ave., $2,111.80;
+The Lake Erie Auto Co., 1015 East 6th St., $16,872.29;
+Koosed & Kiplinger, 119 Society for Savings Building, $7,346.09;
+Linden & Harms, 1681 Cuyahoga Building, $68.50;
+The Lake Erie Auto Co., 909 West 25th St., $4,879.26;
+C. W. Mitchell, 6499 Detroit Ave., $1,256.66;
+The National Bank of Education, 750 West 25th Ave., $29,864.44;
+J. L. Reed, 4103 Bridge Ave., $6,834.37;
+Trooper & Singer, 4032 Madison Avenue, $38,845.55;
+T. P. Van Vessem, 11798 Franklin Av., $19,821.37.
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+To facilitate the making of the entries in the individual ledger and to make it correspond to the report made each month to the depositor, the sheets are usually of the looseleaf type so that entries are made on the report sheet and transferred to the individual ledger by a bookkeeping machine. In the National Bank of Education a modification of this ledger will be used, the form of the page being retained although firmly bound in a cover. The name of one depositor should be entered at the top of each page and the balance of the account placed opposite the words, "Balance Brought Forward," as is shown in Form 122 on page 275.
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+The student should enter the following papers in the collection register, understanding that this is to place that book in the form it would have when he enters the bank, after the items have been transferred from a previous record: note received March 30, dated March 6, at 90 days, with interest at 6%, made by M. A. Altman whose number is 375; note received April 5, dated April 8, at 60 days sight accepted April 5 by T. V. Villwock New York; interest at 6%, drawn by and collected for Lindon & Harms; note received April 9, dated April 8, at 60 days sight, made by C. C. Copeland whose number is 265, for $389, payable in New Haven; and to be collected for B. W. Carpenter; draft received April 26, dated May 11, at 30 days sight drawn by T. V. Van Vessem R. L. Ambler New York; note received May 4 for $158 to be collected for the drawer; acceptance received May 4, dated April 1, at 60 days sight accepted April 5 by T. V. Villwock New York; interest at 6%, drawn by and collected for the Hilton Furniture Co.; whose number on the paper is $288 for $250; note received May 15, dated May 27 at day's notice paid by W. D. Patterson numbered $1,436 for $1,250 payable in Camden N.J., and collected for the Lake Erie Auto Co.; note received May 21, dated May 17 at 30 days made by R. E. Vinton numbered $288 for $500 payable in Philadelphia and collected for Koosed & Kiplinger.
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+Sheet No. 1
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+Name C. F. Antel and Company
+Address 1327 Euclid Avenue
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+| Old balance |
+Date |
+Checks in detail |
+Date |
+Deposits |
+Date New balance |
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+| Balance brought forward |
+June 1 |
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+470.25 |
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+FORM 122: Individual Ledger
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+| No. |
+Description of note and mortgage |
+Date |
+Rate of interest |
+Amount of mortgage |
+Value of land |
+Total value |
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+| 201 |
+Note for 3 year secured by mort- gage on property at 1248 W. 130th Street, a 150' 3 story frame house, 11 rooms, 2 baths, & 6k lot 36 of Elsie Maier's estate. |
+May 10
Jan. 8
July 18
Jan. 15 |
+0%
INTEREST paid to Amount Balance |
+4000 =
43.33
260 =
3800 = |
+8000 =
60 =
4000 =
127 =
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+7000 =9000 = |
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+| No. |
+Description of note and mortgage |
+Date |
+Rate of interest |
+Amount of mortgage |
+Value of land |
+Total value |
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+| Date Interest paid to Amount Balance Date Interest paid to Amount Balance |
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+| Date Interest paid to Amount Balance Date Interest paid to Amount Balance |
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+| Date Interest paid to Amount Balance Date Interest paid to Amount Balance |
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+| Date Interest paid to Amount Balance Date Interest paid to Amount Balance |
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+| Date Interest paid to Amount Balance Date Interest paid to Amount Balance |
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+| Date Interest paid to Amount Balance Date Interest paid to Amount Balance |
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