The total amount of each invoice purchased will be given, and therefore no buying price list is required.

The Object of this set is to illustrate corporation bookkeeping, as applied to manufacturing interests, including the organization of a corporation, and the opening, the conducting, and the closing of a set of corporation books.

The Special Features of this set are the classification of the Merchandise and Expense accounts.

As the student has been given extensive work in business practice in the preceding sets and is now familiar with the various forms used in business, this set presents the theory of manufacturing bookkeeping.

The voucher system is sometimes used in general corporation bookkeeping. This set does not attempt to illustrate this system; however, it is explained and illustrated in the preceding pages. Both the instructor and the student should give careful attention to this explanatory

statement.

The Books used in this set are the journal, the cashbook, the petty cashbook, the invoice register, the sales book, the general ledger, the sales ledger, and the purchase ledger. With the exception of the cashbook, the petty cashbook, and the invoice register, the books are the same as those used in the preceding sets of this text.

Cashbook. The cashbook is provided with special columns for accounts receivable, accounts payable, and merchandise. These columns are similar to those of the cashbooks used in Sets VI and VII. In addition to columns for net cash and discount, a column is provided for accounts receivable and accounts payable. These columns record the amounts that are to be posted to the sales ledger and the purchase ledger respectively, and the totals of these columns indicate the amounts to be posted to the general ledger, when the books are closed. The special column for merchandise on the left side is for recording cash sales. Refer to the model cashbook, pages 314 and 315.

A Controlling Account is an account kept in the general ledger for the purpose of proving the accuracy of some subsidiary record.

Accounts Receivable and Accounts Payable are illustrations of controlling accounts, as they prove the correctness of the sales ledger and the purchase ledger.

Petty Cashbook. This book is used for recording small expenditures of cash. The ruling of an ordinary journal page is a form of a petty cashbook. All receipts are to be placed in the first money column and all payments in the second money column. Special columns may be used if desired. The form of the petty cashbook is illustrated on page 321. Invoice Register. The invoice register is not essentially different from the purchase book with which the student is already familiar. In a manufacturing business it is desirable that the cost of the various. manufacturing products be kept in separate accounts in the ledger. This necessitates the addition of a number of special columns in the invoice register for the proper distribution of all raw material bought. When an invoice is received it is audited and entered in the invoice register. The first part of the record is the same as that of the ordinary purchase book. After this part of the record is complete, the amount of the purchase is carried to the proper distributing column. In this set the purchasers are credited weekly for the amount of the invoice, and at the end of the month Accounts Payable is credited for the total of the amount column. Instead of debiting Merchandise, as is done when the ordinary purchase book is used, each of the articles used in manufacturing should have a separate account under the names appearing at the heads of the several columns. Care should be taken to check properly all items posted. (See model on pages 314 and 315.)

MEMORANDA OF TRANSACTIONS

FEBRUARY 1

J. W. Melton, E. M. Williams, Geo. Inman, A. P. Zaner, and L. H. Messler, of Springfield, Mass., have decided to form a corporation, under the title of the Union Whip Co., for the purpose of manufacturing whips. Certificates of incorporation have this day been filed with the proper state official. The capital stock is to be $25,000, divided into 250 shares of the par value of $100 each. Each of the incorporators has subscribed for 50 shares of stock.

This corporation has been formed under the laws of the Commonwealth of Massachusetts. The stockholders named above are to constitute the board of directors for one year. The following officers have been elected: Geo. Inman, President; L. H. Messler, Secretary; J. W. Melton, Treasurer.

TO THE STUDENT. The above memorandum is to be copied in the journal.

The student has been chosen to act as bookkeeper for the corporation, at a salary of $60 per month.

Each stockholder has paid the following: J. W. Melton, for 50 shares, $5000; E. M. Williams, for 50 shares, $5000; Geo. Inman, for 50 shares, $5000; A. P. Zaner, for 50 shares, $5000; L. H. Messler, for 50 shares, $5000.

Make the proper entry in the cashbook for the investment.

The Springfield Whip Co. has decided to go out of business and The Union Whip Co. has taken a lease of its factory for a term of three years, at a yearly rental of $1800, the rent to be paid monthly.

Copy the above memorandum in the journal.

Deposit in the First National Bank all the cash on hand except $50.

Use a sheet of journal paper for recording all deposits made and all checks drawn. Use the first money column for recording the deposits and the second money column for recording the checks.

The $50 kept on hand is to be entered as a balance in the petty cashbook. (See the first entry in the model petty cashbook, page 321.)

FEBRUARY 3

The following purchases are made of the Springfield Whip Co.: Machinery and equipment, $9500; raw material on hand, $2000; finished goods ready for market, $1500.