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62   BOOKKEEPING

  1. R. Williams paid the balance of his a/c in cash.

Settled our a/c with P. Mason & Co. with cheque.

  1. Gave D. Peterson on a/c, a draft at 10 days' sight on D. Simpson for $22. Sold office desk to F. Sinclair for $60 ; received $20 cash in part payment, balance on a,/e. 29. Paid April rent of store with cheque.

Paid M. Wilson his month's salary in goods from store.

 

INVENTORY taken April 30, 19—.

Asset Inventory

Merchandise.—1000#

Cheese   @

8c.

100 bbls. Flour   @ $5.50

 

800#

Hans   @

11 c.

95 bxs. 11-.P. Soap @ $2.00

 

I500#

Coffee   @

14c.

80 gals. G. Syrup @   15c.

 

2515# G. Sugar @

4c.

50 bxs. Raisins   @ $1.25

 

800# Y.H. Tea @ .25c.

500 # Currants   @   8 o.

Results.—Net Gain $175.40 ; Net Capital $5495.40.

  1. Interest and Discount (Loss and Gain Accounts).

Interest is the sum paid for the use of money or other value; discount is the sum allowed off a note, invoice, or account, for prepayment or for other reasons.

Interest and Discount on notes or loans are posted to Interest and Discount A/c, which is closed into Loss and Gain A/c. Always reckon the amount for the time concerned in the note or loan.

Cash discounts on purchases or sales of merchandise are posted to Merchandise Discount A'c which is closed into Merchandise A/c ; cash discounts might, indeed, be posted direct to Merchandise A/c. Never consider the time element when reckoning cash discounts.

Rule. Make Interest debtor when it is a cost (of use received), and creditor when it is proceeds (of use given). Treat Discount in the same manner.

  1. Interest and Discount—Transactions Journalized.

(1). May 1.—Paid my note $100 and the interest thereon $5, in

Bills Pay.

100

 

 

 

cash.

Interest   -

5

 

 

 

 

Cash

 

 

105

 

(2). May 2.—R. Smith paid his note far $200 and the interest thereon

Cash   -

208

 

 

 

$8, in cash.

Bills Rec.   -

 

 

200

 

 

Interest   -

 

 

8

 

(3). May 3.—Prepaid my note of $100 in   cash,   discount al-

Bills Pay.

100

 

 

 

lowed $6.

Cash

 

 

94

 

 

Discount

 

 

6

(4). May 4.—R. Smith prepaid his note of $200 in cash, discount

Cash

191

50

 

allowed $8.50.

Discount   -

8

50

 

 

 

Bills Rec.   -

 

 

200

 

(1) May 6.—Settled my account of $150 with D. Robb, in cash;

D. Robb   -

150

 

 

 

he allowed 5% discount.

Cash

 

 

142

50

 

Mdse. Discount -

 

 

7

50

(2) May 7.—Sold F. Somers Mdse. $300 for cash; allowed him

Cash   -   -

291

 

 

 

3% discount.

Mdse. Discount -

9

 

 

 

Mdse.   -

 

 

300

INVENTORIES taken May 31.

Asset Inventory: Interest accrued on Bills Rec., $2.50.

f,iability Inventory :   "   "   " Bills Pay., $3.25.   it


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