HOW TO COMPARE THE CHECK BOOK WITH THE MONTHLY BANK STATEMENT 1. Arrange the canceled checks in the order of their numbers. 2. Compare each canceled check with the corresponding stub; if they agree as to the number, the date, the amount, to whom given and for what purpose, place a large check mark on the stub. 3. If all the stubs are checked, the balance shown by the check book will agree with the balance shown by the monthly bank statement. 4. If the balances do not agree, find the total of the stubs not checked. This sum should equal the difference between the check book and the balance shown by the monthly bank statement. NOTE. If, at the time of making this comparison, any outstanding checks of a previous month have been returned, they must be checked with the stubs from which they were detached. 15. Place the canceled checks in the Paid Bills envelope. 16. Pass all books to the instructor for approval. EXERCISE 58 A WRITTEN REVIEW The following review exercises are suggested: 1. Journalize orally or in writing each transaction in the month of July. All amounts may be omitted, as the value of the exercises is in determining debits and credits. 2. Make the following opening entries, referring to pages 137 and 138 to determine the correct form of entry: Student begins business this day with the following resources and liabilities: a. Cash in drawer, $231.40 Deposit in First National Bank, $1674.50 Stock of merchandise valued at $9645.50 The following owe you on account: Henry A. Pell, $67.50 Morris & Co., $253.10 Amos T. Young, $76.45 You owe the following on account: Barber & Co., $56.75 Young & Brown, $100.50 Thos. L. Parr, $25.25 b. Cash in drawer, $325 Deposit in The Union Bank, $2365.10 Store and lot valued at $4200 Stock of merchandise valued at $11,457.20 The following owe you on account: Warren & Son, $176.25 John K. Lamb, $200 C. H. Hartman, $423.50 You owe the following on account: Marshall & Co., $235 Henry Marvel, $310 Chas. L. Burt, $65.70 You hold notes against the following: H. T. Inman, $125; interest accrued for 60 da. You have the following notes outstanding: R. N. Banks, $200; interest accrued for 45 da. 3. Make the usual statements from the following trial balances: NOTE. The liability inventory is treated in each statement in just the reverse way from the resource inventory, as a liability, in the resource and the liability statement. In the loss and gain statement it is subtracted from the resource inventory before finding the gain on merchandise. PARTNERSHIP The work for August is a continuation of the work in July. You are desirous of extending your business, and not having sufficient capital to do so, you have decided to enter into a partnership agreement with Harvey L. Manning. For the resources enumerated below you admit Harvey L. Manning as an equal partner in your business. Draw up articles of copartnership between yourself and Manning, embodying the following conditions. (See Form V, Appendix F.) 1. The firm name shall be Student & Co. 2. Student shall contribute the net resources shown by his July statement of resources and liabilities. 4. Each partner shall devote his entire time to the business. 5. Neither partner shall engage in any other business. 6. The gains and the losses shall be divided equally. 7. The partnership shall continue for two years unless sooner dissolved by mutual consent. Hand the articles of copartnership to the instructor for criticism. If they are correct, he will sign for Harvey L. Manning. Model for Briefing ARTICLES OF COPARTNERSHIP between Student and HARVEY L. MANNING AUG. 1, 19— Make a copy of the July statement of resources and liabilities, attach it to the articles of copartnership, fold the sheets together, and in the outer right-hand corner at the top brief as shown in the Model for Briefing on this page. NOTE. Some business men prefer to make the reference to investments in the articles of copartnership cover merely the net amounts invested in the business by each partner, and then transfer all rights and interests in goods and personal property by means of a bill of sale. However, if the articles of copartnership are drawn up in accordance with the above directions, the bill of sale is wholly unnecessary. Each partner should receive a copy of the articles of copartnership. Real property cannot be transferred by the ordinary bill of sale nor by articles of copartnership; a deed is necessary. In order not to multiply complicated forms at this point of the work, it is assumed that the student's real estate has been transferred by a warranty deed drawn this day by his attorney, Fred V. Smith, and placed on file in the office of the new firm. Ordinarily, a business man does not draw up his own warranty deeds, articles of copartnership, etc., but employs an attorney. When any change in the personnel of a business occurs, all who have had dealings with the house should be notified promptly, by means of circular letters or otherwise. In this case it is assumed that these letters have been written and mailed. INCOMING BUSINESS FORMS FOR AUGUST In this connection the student is referred to the instructions given for the business forms in the month of July, page 151. Remember that the business is now conducted under the firm name of Student & Co. Form 29. Check of Harvey L. Manning, dated City, Aug. 1, drawn on Traders National Bank, in favor of your firm, for $7000. Form 30. Invoice of J. K. Levy & Co., New York City, dated July 31. Terms: cash, less 2%. 15 #693 Antique Wardrobes Deduct the discount from the amount of the invoice; receipt it, per your initials. Form 31. New York draft, dated Olean, Aug. 1, drawn by The Union Bank of Olean, on Chemical National Bank of New York, in favor of M. L. Covey & Co., for $283.72, W. D. Byron, Cashier. Transferred to Student & Co. by full indorsement. Form 32. Draft on your firm by Stoddard & Co., in favor of Curry, Browning & Co., dated City, Aug. 3, payable at 10 days' sight for $1500. Form 33. Invoice of Cobb, Bates & Co., City, dated Aug. 3. Terms: 3/10, net 30 da. Items as follows: 25 #5932 Empire Toilet Tables 18 #1008 Oak Sideboards 25 #76 A Oak Chamber Sets Remember that all goods bought are now billed to your firm. |