Che 5 Compton of he Aeon ef Sere prise ta] peer {Fi | ou | ora | (Sars seengz moan omes ‘CHAPTER 6 ACCOUNTING FOR A MERCHANDISING BUSINESS cercuapramea ormRATIONS Merchandising is the business acviy of baying and ling products ‘ater thas ers" Tee pods hata merhanding company tbs toe ‘inmers ae calad inventny fr merase, repos 0 the tye of ‘radia tht the campy a Th, the every ef an lomo deer Ete of enmcben fred fr ewherenn helen a rey re Sons of wide ity od Merchanding companies chen have luge amounts of money ives in ‘herent Infact entry inane oe moat co asset ppg the talus thet of ost terchandaing companies Inventory is aloo = ‘aie “Ui assettat usual wl be Sold within t few week oF ‘eae hereby gent crouse an ath ‘THR OPERATING CYCLE OF A MERCHANDISING COMPANY The operating eye of busines is dierent fom the acounting ote Suess tis eure of rantartions repeated cntnupaly. Ke this le is comrleted sth repet to the sale of spect products, same of the cash ‘Seced Gea the costmer Is used to purchase more merchandise, and new Sek begae ‘BostNEss DOCUMENTS Business documents provide the deals of business wansctons Decitent inclie the elloninge “Inselon i 3 document, prepare by the ster of merchandise and st 0 “oe buyer, that cote the deals ofa me euch am the number of Teil, nk pie, total price ied, tense of de, apd manner of Supe ‘Purchase orders «document sent fom the putchasing department to 2 ‘Sppbe reusing tit merchandise or other tems be shipped to the parenater aJ aera amore tees Reoeeing report is x document prepared by te resi dena shoving the eerton and quan ote ceed a apee parce cpent (rei! mamarandu 1006 sud by the weer to he Lye inning Whe amount andthe reason fr ich fe cautery ert Ge reste ‘Det memarandam ste yh er wan eine ‘berchandae to the ser ineaing the anon he w deg he ‘er aceon et [RECORDING SALES tn les tanatctin, the seer transfers che legal omertio [i) foods wo the buyer. The ele wually eccompanee the sle by De phys Astvery of goods The sles are recorded based on busines document =e ‘a invoice (ually calle the sles invoice bythe sbe,and a purchase ioe bythe buyer) ach time a sale is made; revenue ie profuced for Ue company. Tis revenue inreases 4 revenue acount calle! Sales Remeaer,nat® ih ‘even is redted, 20 the Sales account is reited for he aust fhe wale lore 09 Ses 5000 Toreardsieof mertand fr cash A F500 eal onan ioe 8 floes nts Resale som scot Re os “To record sale of merchandise on acco. DETERMINING THE GROSS SELLING PRICE wpe, Trade se price isthe orignal pice quoted by the sel the baer. Ta cE Sede ten the tit pc pre by the sel to ene ae serene jay more Grose inoue price is Ist pice Tes a discounts is rc, 0 pie of aang ports F56DP7,200 esse count, 25% 00, Goes noo pr as ‘escrow of 75,400. Toe purchaser seoads «paras of 5400, other won eer the sero the parcaser des wot et nt rete ad ete dicot oa i baka Somstin's,the Lat price ofa produc is abject to sever trade act, ced chain acount. Chain acount exit, fr eacrpl,when a whee Teceved two tude dlcounte beaave of cra seve performed, ech £2 mecging snd esting, When » burineas gen mare than ene Smt, pple each isoount tothe decining balance scree. Wa product ha a Ist pie of P5,000 and is subject to tude dacouns of 20% and ICR, te ‘tual price paid Wy the utchaser wuld be: F900 P5000 (02 P3000) = 000 (01 x B40) = P3600) We can obtain the same rents by saulplyng “he iat pice by the complement of he trade counts alowed. ‘Tae complement of 20% i 80% (1005-204, and the complement of 10% is ‘9 (100% = 10), Te the grows nv prc i P2600 F000 x0.8x09 = P5600) RECOFDING DEDUCTIONS FROM GROSS BALES ‘Tas te common deductions fom gross sles are sles scounts and sles returns end alowens, These deductions are conta accounts to Sales scent, Contra ccenuntshave normal balances that ae oppo the bance ofthe ceount they reduce, For example since the sales eomant normaly bs ‘trait bane, the Sales Daeountsaoomnt and aes rears and allowances ‘econ wl have det balances. ‘Sans DISCOUNTS When goods are ood oa account, terms of payment must be specie on ‘he ‘noice This term of payment is ced enedit term. For example if the ated tera of payment is 30 daye alle the dat of sal, 30s weit cm theinvoice. I he terms read “nj 10/BOM"[EOM meas end of seth te wee 12 den ch te aya ie mat wing ae anh as ee smafey tem bday toaaeey at ‘payment of an acount A oath counts deuston fe he pos ct the bayer can take only he pars the ive whi» sp ee yi he pars ain pee ‘ne. "he sler cass cah scott salen dlecunt 0 he Eijereanitspurchom dent aa Cash dacnnts ee often sate a lors: 2/10, nf90-Iean tha the bayer may ake count of Meal he os Tec pc fhe ersbundae he pays wn 10 Cay {towing the voice cate. The poss mc pre dae 9 ove trom the invice te arc 278M, /60~ Hears tha the Bayer many deduct «2% sur fhe pay ihe wane pice Ute endo the manth. The os src am, Inde 0 ays Com the dae af the iva ‘2y10ymoM, ef60-ateans at the bayer ay deduct a scout ifhe F08 “he invoice by the IO day oe mort llewing the date oa ‘The roe ino amount x dae 6O days om the dt fhe Siac the cash dicount taken by the buyer reduces the mast of ch ees actualy calc the ale of ods, the seer must nao ts ‘Sceunrng records ofthe company. The fling station sors Sow do ie ‘Assume that on Jane 12, 4 business sok merchandise for 72000 o2 ce dee 1/10, n/90. The company reed a check pen seco be argu of P,960. The rere ural exits rth set nts Reeioabe 2000 ine At aoe “Treen sale on acount. Ferns, 2/10, 130. 21 Cash 1,960 ‘Sales Discounts a “Acounts Receivable 2009 “oreurd elecon on aczun tess sont _nrsieoerem ace gate gence es a ne eee coe Sone a re ntmemcnsommceo ‘orig enue, The pupae ofthe, act 9 ree ered ‘Cen mo tay in ome eho ot oe Vercanding companies vay sow 8 cuter ream gas that ue decane o str frase fra, a woe ee, Sort wea wenger on al, Yet feat enna ine te nrchabdne "A sla ure SScr"otescnr opened e's coma to Cone tee te = (Denied ts came the Some pe the wns ould in har ecard oth an ee a ae aloes ss dua be Ses aco enue ty cat pt lhe ered ling Pact owee the eowunt ose cto sod aden aowancs wat [Mcnaton ves Te snnto raror and alwances i ton to (ue sll ean bea Ener of te qual of te pnts phsearn ‘ecg, ow uly of pes eptatby ae petos Boe POSSE re Tow sera tnd allowance aera Sepia is Rerasend Alem count Sara Mearns wd Alwar SON Sitee reese scant flo Sle ane fed te ing eee hae came by bape edu sling pees pate ‘ebvig are wo expe usrating te ecting ol ae returns inthe Salen Retr pd Alowenes eu 1. Assume that cose ures «P00 of pots ton sunt the SSSpety ha ote ened parent be eae ay = Sales Retna ard Awe soo ‘ems Racevable soo “rec cele rtm fom actor 2 pasa hat these ls the pds for cab, and pes he easier & ‘Stuy he edt to aah rater han Asst Ses Rous ad Allowances sao ous ~ Ta ecard sles tur fom cosh stot.[REPORTING NET SALES “te iusraton below contin partial income statement showing be he sett nou report sles, sles scunt, a Sales returns and awance itty Ges, de income satementpublael in anual pore ell bs Nat Sas” because the Geis of Uae computation ae nt impee Ganca statementuers ota hr company MERCHANDISING COMEANY ‘come Sateen! ‘orth Year Be Bomber 31, 20K ‘Revenue fom Sales: ‘Gros Sales Pox (rae See Discounts Pe Soles Reus ond Allowances 32 ie See ‘cost oF Goons s0LD Coat of Goods Sold isthe cot to te seer ofthe gods al toca For 8 merchanding company, he cost of gods sold can Bevery lars, ct AEE teehee invent. Merchandioe tnmentory or enter seer Repo goods on hand ad aval forse a any gen tne, The sles eee es Be cont of goods sod by computing the cst of U1 eerie (eettory, 2 dhe et costo ganda purchased, nd [the ending sent. “The cos of gods sold section ofthe income statement i prevent flows ost of Gods Sl: ‘Nertande ventory, Janay 1 Paw Pucrases Pox ‘Ad: Transporation it 2 Pekeeredtetofmerctandse puviased Pam ese: Purtase dicots Px hase Reums and Miouonees 3 HE Conds avaiable sae [ese Merton veto December 31 Cost of goods sold Hale -ACCOUITING FOR BEVETORIES ‘a sccurte merchandise inventory ares ended Lo etre the cost cf gs The (wo tn thas a dete used determining he ‘Gebon st ecchantne tery ae the pepe venta yen and The Pern lventey sem ‘PERPETUAL DOMENTORY STSTEAL The perpetual Iesentory system provides accounting reins That contnactay tacos the amount of entry. copies tat seh ‘terhand wit igh individual uit ue, such av aston, ‘pees soul use perpetilvenay Read compares welling goods (Rahn these sea, mulnin reir ofthe cst of each nt fpatcaued ‘nevada, and in ir he cost each nite Companies using perpetual inveatay eyten design and enti loventery rnd te rode clove conte oer the actual pds hand. These tecnda show emcty whch gods are on hand ay parla pont in me nbandse tvestery acount dette forthe amaunte each purchase it treed foreach sl 90 at the crest lance i he invenary acount is ‘own tal times At the endo the acounting pro, apie inventory {hen Uy octal citing te musi ef ass on hand. Tis physical cunt tonered wh the recede showing the number of wits on hand PERIODIC INVENTORY SYSTEM ‘Under the perldte inventory system the ening inventory is deterined by malong « phyla measurement of te gods on hand atthe end of the edod Meschanning companies that ell merchandise with ow value per uni en Sn thatthe ext cote of ecord keping under perpetl sytem more han outweigh the beneta These merchandiling companies use the periodic inventor procedure Under the periic inventory system, the company docs not use the inventory acount to record each purchase and ale of merchandise abi Under the prpetal inventary system. Instead, adjustment othe Merchandioe Inventory despa is made oye the endo he accounting pero to Uringit to {is xoper balance. Ase, records that show the exact number of unis tht thould be on hand, ate not muntsined. Record keeping is reduced ‘onsderably, but sis he control over inventory items, io elves are made to the Merchanlselnventoy account during. the scerunting period. Thus, thee is 20 up-to-date account balance against wich fo check de physical count atthe end of the accounting period. Companics losing the perodie inventory pronture do na attempt to determine the cost of ‘he rods sol atthe time ofeach sale. Instead, they determine the cost fall the gods soldat te end of the period, Todo this equres the Imowiese of these three items1 Beganing venta otf pod on hand a the bering athe pe ee 2. Ret ow of purchases during the period 3. ang inventory cst of uneol ods on hand at thee of ne pen ‘The main emphasino his et wil be on pi net tn si 1s the most widely used ricthod., as PURCHASES OP MERCHANDISE Under the peri inventory system, a Purchases accounts used to era cost of goss or erchandine bought fr fesae ug the cure accor, period. The chaser aceount i nceased Uy debts and is Late wih he eam statesnent acsounts ia the chart of accounts, To iustrate entre acing the Purchases account, assume that he company made two purchases of refchindve. ‘The company purch ict 70 of merchandive cash on May 1, and on May 10 purchased 500 of ‘merchandise on account The required journal entries ar: May 1 Purchases 780 ash ano Ta record purchase of merchandise forcash 10 Purchases 1500 oo “aunts Payable sso Terme puroase of rerchardise on [DEDUCTIONS FROM FURCHASES and Atowances ae dst Purchase Discounts and Purchse Returns se he to ae at net purchases, The buyer feces thea its ie ‘ont acount to PUTAS. ‘PORCHLASE DISCOUNTS merchandise under cet terms that yer to a eat te discount if he paid the invoice within a pscied per oF to deduct ate terme forthe May 10 purchases ar 2/10, n/9P te ra a oid by May 20, a 2% discnnt n taken. Thus, cay 3/0 Ed for he P4S00 accounts papal. The entry tn eed the payne Invoice on May 2038: ‘The buyer ote 400 ay 20 ens Poe sao 0 ets Discount Pacha ment on cot itn be un pe, = ‘The bayer records the purchase dou nly then be payee iis win the cout pred and take he dct. Toe Purchase icone: ‘cant a conta secunt ty Purnwe hat este secede ‘rvs cost fhe pschaae othe oe atl pal ‘The pce ani aed on he ae put fhe def ca ars ad loaner fred he Ss le ne ‘iitng te pte drt. Foreplay ete ‘See pero pois puchaned ve Palo O00 oe pn ere ‘med’ the putas aca onl cate on he P30 a PURCHASE RETURN AND ALLOWANCES A purchase return occurs when the buyer ears merchandise er | purchase allowance oxare whens bijer recsies 1 alowanee fo eduction i he pce of ds shingdl. Both retus td lowancs seve to teduce the Myers debt tothe alae ang to reduce the cout the pode acta er me ea cert rep in contig the cata euced Ia rearing weary Terchande or oopoatng porches aaacee, For thi eae, the Dyer ‘eects th purchase ere 4 alowanen a a spurte Purcase Rea {ed lanes acount. the company retried 700 of merchandise re paving forth go, the fowingjoaral entry ade: oy 12 Accs Pye 00 “Ruse Reread Awancee 300 Tore rtm of defective merchandise tessppie te buyer had sed paid the acomnt, the debit wld bg to Cash insted of Acounts Payable se ew ese aretund of eas, The e's journal ety fr the ear wold: ay 2 Cash 200 TPurtase Reis ond Alwenes 300 ‘ore en of dfn merchandise ad cet ofeash. Purchase tum and Allmances ie x contra acount o Purchase ad is ‘show on he incite statment ae a deducon fom purchases Wan bth ‘purchase disuntsand puree rere abd aluwanors are deduted fom phases, he ene net purchases. ‘TRANSPORTATION COSTS: ‘ranepoation conte are an important part of cost of gues wld, To ‘understand how to aecoat fer tanspertation et, te meaning of te fedora terms is ened1 Fam spying potrt_The em POD shop panna ec mars Pikipp fore Tee buyer care a epaton o t e ‘Speen Thur, stay eapnae png te fe 2. Fon dereneon To eon FE Session ee een ‘Sean, tot the tee apy Ue gdh tee Zs aon ‘rout charge to Oe bayer Thus he seberrespana er eteeght cra. 23, Passage of te Passage of te ‘5, Preight collec. When the buyer pay he eght Bl yon the a he ponds te term eight cae! ued To austrate the uae of these terms, assume tha company ships ta goods POB stipe prt, reght cet Te pastes at sipping pa’ he iyer respon lr pang the Emp cots and des so There 8 tr fertreag charges onthe sles books The ety en the ye ia Transporation ‘Cash Th record payment of fright bl ex ods purchased ‘me transporeatlontn acount is used 2 record feight cont ch ed the neguntio’ of menandieeTranaperaon in isan adjunct wxount WAGE net purchases to ave at pet cont of puscnes AD eth cet ie add the balance of related acount aU nancial buen Ut the acer shige gpa FOB destination ight pep pays the ht tit ant inven for it Thre i no scparate fg ied wo he Fer. Fae ar deen ot reve enuy. on 3 books, The der takes sty srecdction the Gig cot in ating sing prea The slr request falowng ety on is books Dever Bape = ‘cash ead righ no ga sl Detnery expense sein expense receded Uy te wf i ot ache enae ee FOB desinaon The seer shove Be me Scent win ter sling Expenses 708 ten ae especialy imporact atthe end of an acourig 2s ocd that are in Want at the end ofa accounting period b lng to ens he ep ihe buyer and they must include i in endig ventory by on of he treemter 30, 208, Sometines these prepay the eight ae x cnn othe Buy! ever tough the ge i repo fr paying en auc case, he buyer merely inure the ele for the emount of eg pl ‘Te buyer ay oly ake he purchase discounts on the chase eo pod, Terre i ber owe he slr for fet charges, be anna Eat te eight charges owed, even i he makes payment win Sout pd eke eacunDIse OVENTORIES he sated caer, marchandla inventory isthe cox of gos 0 and alte for aie af soy pen Sine lovetryiformuon i oeeded (0 ‘iret cot ude ln any acountng pod. Te cox pods on find at the st of te peed (ening investor), tbe purchases mode (teeing prod the Bogasng ventory of he current pet, he com othe rguning vty x azeady koown. The purchases ae recorded throughout (he peut There, ely the cos f the ending amen atthe endo he pes tobe determined ‘TAKING A PATSICAL INVENTORY ‘tabi a psi inventory conan of counting psc unit of each p= of merchandise on hand. To calclate ventory cost, the numberof wits of heh Kind of erchandiee i mulled by ia wt cost. ‘Then the ttl cnt of the naruus nds of merchandise is determined to provide the ttl ening seventy eat to ting physical inventory, care must be exercised to ensure that all pod ownod,regarlene of the cation, ace inched i the inventory. Thus, trode sipped te «potential customer “on approval” are nat considered sl ‘foe seler ust incide them in bis aventoy. Silay, consigned goods ae [joce delved we another party wo wil attempt el the gods forthe omer etommlanon, Such goods ancld not be recoded as od ince the adsremain the property cf the aemer(consgns wt = Pale efor mpage ee ope a tg i tna mani ne nde df erat Suan ptt es prc and aut ee per hesceaure. tere ode TeunTa te pero mun bear the wanaperiin hare. ore DDETERAANING COST OF GOODS SOLD Woe te cman oe bing neg et pes tem anew ef purchases, the costo ous ca ‘To itustrate, assume the following acount balances for Heavens Coe store as of January 1.20%: i Merchandise inventor, Jaruant1, 20X17, 100 Purchases 291,000 Purchase discounts 1200 (Parchase returns and abowances ‘00 ‘ansporatone 7300 pany determines th the ‘After taking. a physical investor, the cong 9,600. The cost © ios merchandise inventory an December 31, 2081 8 Fa So is calculated as follows cost of Goods Sol é “ap tandie uedory an. 1 208] par.00 Parchases 291000 ess: Parhase discounts P1209 Pachase ame end ouonors — _ 900 BI at pecheses 7288.90 ransportation 7800 __296 700. ie 34920 oan se istry Ov 20 Catford ad sah tw, tng ines cn appends a ae co gpd we I ‘pals 5 ec ct eu etn # PHS SS sare nt aset in the end-of- period balancr shes ‘Merhandie etary 47,100 “Tone the boing entry Mercandige ventory 33,600 Thee 39,600 “Toreoind he ending ventoryewe sctemmiyfeaMecbigBanes ‘PNANCUAL StATmGHNTS YOR A MERCHARDIRNG COMPAR ogee wot tt ita pp ov tice i dre pas = ‘Song ora cy SaaS Ea) operating eens beween ‘ample of eaeaton og the nature of expense metho i xo HEAVENS Groce stoRE "Work Sheet Raveme ix Onerteme e Changes in erry x ‘Row natal and consumables used 2 rps benefis cats x Depretion and norton expense 2 Other expenses x ‘Tot expenses “ Prt x or the ve | | iy fs neease in the tment ding the prod representa a decease in he Jia cost of gua sl, hee fin & deduction fm the tal operating expense, | (ei be presetedimmedately flowing revenue. Howee, tbe prsetton ‘Shou ot imply tat ouch amount represents ince. ‘he wd rm of asi i he funtion of expt at of se method and donaes epentes scoring to the fancon «spar of cost ree on for eanple, the coat of xisbuton (ing ot aéministate Teichss’ Ara minian, amenity closest cost of ees unde this method SEG om ether expenses. Tis metod can pre more renat nl Jor a Merchandising Business ‘oad wens Sa se ie leInfomation to users dun the draetion of ements sSbctg oto Rece may reste whey Wi. a oe rte Jeger Annie oa soning of oh f i Bassas Entry, cng eens by fectan sal Secon ates ‘norton on he tre of pear, eng Speen sb ner ‘he choice between the function of expense nied and the natu of expense meted depends on historical and indus factory and he ate of the ent. Bronte cach methon of presets has ter for diferent tyes entities, thie Standard rogues saanagenent t belct the mes relevar at ‘lable preeentation, ‘Tae msjor heading in caused income saterent include: 1. Operating revenues ae rventn generated by the mar active of we ‘buninees “usually the aa fe product or caves or bth 2, Cost of goods soldi the jor expense in merchandising compan The Goat of goods sold section of te lasted income statment hs boro locussed ealee. In enmmon to highlight the gods ec ste top yu of the income statement. Gress margin or gros profit iste exons fe et sales over the cost of ods old. Operating expenses for » merchandising company are those expenses eee ee goods wold incured inthe normal course of BEE 8. Sppcing expenses are uly caseed ae tout sling xp, Seer or acninitratve expenses, Salling expenses ere ree and genera pe evling and marketing eats, Examples inca tars and aac ang for aalsopersons, expenses for sales pereo’s wave, dein Sect ent and ules on sales uding, ster supplzs ussy, end seerrenats om equipment used in sl, Administratie expoet See incred in the overall managenect of « bases Bass ‘bene er salaries, rent and ues on admiisraive bs Icode SS enee, ofr ruppiet wet, end deprecation on oct equipment 3 eaves oRocaRY sro Uhcone Sere orthe Yer Bade Deoober 31,2001 Ne Se (Shel) Paso biter some 1080 "al vee FH9SE0 ores inMerchanize Ruenory P7500 ‘Parhase (Side 2) 236700 Sale Expense Shel 9) 34800 Depreiaon Expense 2250 (ther Opring Expense (Sdadule 4) 10.260, ‘nares pense 180 ‘Teal Operating Bepenses 351550 Irena fom Operating Asties arm HEAVENS GROCERY STORE Schafules Acsempaning heme Sateen’ Porth Your Bred Deenber 31,2041 shel 1- Computation of et Sales ches Ss 4sn000 ie Sls Rens and ASourcs tS TaiFg decaf Mec es ° ‘Shade 2 Computation of Partases ocho eed | ‘Riche Retna Alene” "$002,100 | et Roches F880 | i napereon ee Tal Rother ze ‘Schedule 3~ Computation of Salaries Expos | Sales Saunas 9.20880, (Ofte sales © __13,920. Total Seana Eg “Schedule 4~ Computation of Other Operating Bxpenses ent Expense P3600 ‘Sipoies Expense 2700 lared 2100 ‘Advertising pense 11500 Insurance Expense ‘360 ‘Sieg apace jaa ‘Total Other Operating Expenses Pp gg. 2160, Sire Spy 620 | leet 1500, 724160 Ope ates. 13920 Depron. ‘This form ofan income statement is aio called u mutiplestep income statement vecause of ie numerove sections and subsections and intesueste summary gues.Balance Sheet - Te balance thet coaain the aust, abil, end ewer’ ‘equi itewe ten trot the work aheet Note tat the ening sent Shows ase curtentsnsct. The omners cpial account Blac comes fom ‘the suteroet of changes in owner et, ‘Hears oROceR STORE Bair fe Dezenber 31, 2081 dssee cumentensets Cash psso70 ecounts reise 6300 Ierchanis inoertory 23.300 eo ‘nswranee mt Total cured assis 103899 Property, Plant, and Bguipinent: Office equipment 18,000 Or ced deprecation __ 9,000 3000. Tela 3528 Easel, curen tastes neat 12000 poco 100890.‘eect thw ning ne show i ete Tate ek Aigang 38.00 Bae TRS) Cong TSE Ra A] Coa Actas Ducane case Rena nd Air cag Teo] Bias TRA Goan 900] Flows er Sak Str asics "7.800" Casg 7800 “Bases ae Cas PR ‘VALUE ADDED TAK OX ALE OF ODS AND SEANCES Sect 10 Nia nal sos Cae tes hae al ve eh ee eel oy te ee one pt ot opr vara ene ol te ewe ec Doe vee tn mroty oer ceo opera ml, ner techn ‘ahora bp ete aban “ree tem igo sang re ane te otal uo of neyo te eure ot the paras pea shed to pay tthe ee SSeodcaion of the tl, baer se exchange of the gods oF PoE ‘Seasing the veld ia” ae Sesion 167, Weise slates tt “tere sal be eve, asec, td cate, ovaubaded tax eben 2-12 of om respec FO, ‘healer cnhange fev ndang te ue eee Pope” ‘The teen gon sect mean he ota amoust of money neuen seprneting ere fe, renal oes, SE garter or th servos pore © tobe pero, eiding value-add ta ‘re acter, therefore, must rcosae the waded tax on ey se suade ane th taxon al epore aes othe Bares ointmal Reee, For cash sale the VAT ncude in the Irth ie hess tasacion. For ‘Shunt charged w the eater acount Far dey teteorded atte Une of te Io ade a2 sbow the fabwing, jour ety Cash or Aunts Reosval) 120 ‘VAT Payble iB “Toren ele of 1,00 subject VAT of 12% ‘his approach requires a seperate rit etry to the VAT Payable ax fcr ea se Ac nt nce, this may sem to require an escesoe amos SS deping, However, nda’ econ eat rete can be roamed te mre etal the ales ax Laity at the tive of wae AW ALTERNATIVE APPROACH TO VAT tnntead of eco VAT Laity atte tine of al, some Duss to cuit the Salen account with the ene amount wa to uae he adjust at theca ach pei aes ae ean se a thea sr le ft vA tte eed were 7596,000, Scr the Sees tzoxnt neuenWe Ihe used the general journal to record all ypes of buss transactions. However, asthe taneactons of «compant incete, eet nerd t change toa mcr efficent and Gmesving manne, Arowcants hove Aeveloped an Secountng sytem fran ordain eflectve procesing of ds “hey ave developed special Journals. Each special fouraal reer oe ‘rts typeof tansecon that genre feagurathy such emacs o8 ace ut elpt purchases on ewan, orca etree, ‘The folowing are the advantages of wing special journals 4. He saves time tn journaling Only one line is yied fr eich transaction; usually @ fll description in nt necessary. The amour’ ing is reduced because it tent eceasary fo repet the Aeon le prints tthe top ofthe special column cr atu 2. It saves time im posting Many amounts ars posted ex coinin tls rather than individual. 3. It eliminates the detail from the generat ledger. The calunn toals faze posted to the general ledger and Ue deals ae let i the specal journal. 4, Te promotes diviston of labor, Several persons can vor simitancously on the accounting records. This speialzauon and Avision of labor pinpeint responsiblity and alow fr mae rapid loenn 5, Ht aids tn management anciysts The joumals thescives care ‘usefal to management 2 analying classes of transactions, such a Credit sues, Because al simular transactions are in one place. ‘Te special jurals ae designe to systema the oval cris of sna rceng ype af enacons Tae nb td oat ote Jpatnls asualy Wot in a company depend piano Oe nate fe Scape bustess tansctane, The seca juas Dad 2 ‘apes aethe sles, cas ec, parchesr, cosh dbireement jas + The Ste Journais sed ei al es amend on ane (cet + SSS acetal i wel od ota ee of cabin be eae + eee seca s sed ead al uc ean ne and other items on account (on credit) «Toe an Dabo Sura set © rd a en ution ooh ye ses ‘gh we use al hse ou pein te General Jour it ele, The Gener ural tt rss ll Waneen at enta e ‘corded in anyone he opel tele Al eof tes ural ee ks ‘erga ony. ifs eaneacionw scold ine ura hs peed oe ‘edger and male pr fhe aeouning ren Terae Wf nace ‘owed seep our sh ot be ete he geal use ‘rouse da woul record the raat tee Since the journal exten are posted wo the Inger acount, the posing releence cn nthe edge shoul neat te ure of the owing, The Slowing sbtreaton re ed for the five josrani nal paseo ‘ints Sales sae Merandse nikon . Gi nope dounal Gach ml ee & ‘Becks! Manche rd ier tomapuchaseton ish sbrsements Cash pagmens fri pape o Creel seamen rs thas tice int 6 ‘posal mats ‘CONTROL ACCOUNTS AND SUBSIDIARY LEDGERS ‘A contol cocount aan acount nthe geal ledger that sows the total ‘abace fal he eubeldry accounts reted to i. An example of contol Scoot isthe general ledger Acounts Receivable account, whch summarizes ‘eth amount owed tothe company. ‘The aubsidlry ledger accounts show the deta, supporting te elated eeneallfger contol acrount balance. The company may use sbucary ‘count for rceable to send out costomerstntemert ‘They may ue the fbediary accounts for payables to deteraine the amount payable t cach fupplse These secounts are normaly arranged ipabetaly by the mae of ‘he exitomer or supplier. The sur of the ubsiary accounts in a absiiry Inger shoud zee with the Yalance im the relaed geeral ledger contol account when the company prepare the financial statements 1 aubilar dger, hen, po of rated scan shoving the deuce he bund elle col act The whine {Pepurted ome eer gen ede fo roe the eel ees Shun of deta and ely shone the gelled ta alae As ovng pu eas pres dvs eeme ainahip betwee a conte arvana he bry scot Sonica nthe ‘Goer gigaspaces bat "2000 Eee | Customer C Customer D | B00 ee Noe that he of bln in the weary ean 30+ FO) + 140 om hay cq the aac on een ss ‘account (P2,000). Dacre ‘Whenever a wansaction occurs affecting «can! acsount, some accounts Jn the subsidiary ledger wil also be altced. Since a transaction i ecoried ‘nto the journal before itis entered the ledger acount, the utr ery ‘eed to indicate the subsidiary ledger eccouns fected, ‘The posting is ie both to the control account and the subsidiary ledger acrount. Por exam ‘company made 4 PS0O sale on July 17 to Gina Tan on account, he journal entry would be: ly 17 Amun Reciable- Gina Ten ayy eo ‘Sale| a os Te record sleof machans on actu ‘The amount of the sal a pond se debit ty bot the Acounts Reo ie contr account (112) in the georal ledger and ina Tan's account i he Sibeidary ledger (/) and as a credit to the Sales account (312 the yen edger: ‘Te general ledger has backsp subsiiany ledgers fs other aco addon to te Aoogunts Receivable acount. Some examples of acount at ‘Eequently have backup subsidiary ledgers ee: ‘Accounts receivable scbsdiny ledger {account foreach custome Accounts payable subsidiary ledger {acerunt foreach creditor 3. Ofice Equipment, Equipment subsiiny eda Datvery Equipment, _(accauet for each item of paipment ‘Store Equipment, ee 1. Accounts Receivable 2, Accounts Payable ‘ene sooRmaL, POSTING THE SALES JOURNAL “The individual amoints are posted daly to each intvidual customers scout inthe eubaliry lege. Tae postings done daly t show the mova ‘orrenty due fom the customer, Av ea individual amotst is posted, a check ‘nak () i placed inthe Ponting Reference ecu to show thatthe item has ‘ees posted. Ar the end ofthe month, the total ofthe many extra is posted inthe genet ledge asa debit to Account Resale cota exount ad 08 (cedt fo the Sales accotnt, In the Posting Referens column of the general Tedge econnt, Sales Journal, page 1s entered, Acsrunt mumbere 112 (pesunte Recewable and 411 fo Sales ee writen in the Seles Journal unde fhe tla ofthe money ean to abow thatthe tol has been posted to those accountsose Feat] Aa Rese Bet | "Sies= $50.00 450000, 738000 S980 ‘oso.00 an] ‘The Accounts Receivable subsidy Teer i presented below. customary to uae a three cola journal to pla the creat balance ote seers seo Bomoeng Pe ee Jan.|_1| Balance 4200) maT sorts hae ones Company ra ue pone | | poe Fee 1 ao Z if Sta sans Copereon ate tone ot anes Z ae swans ee acer ese a eee ete cee meena eects ‘Sif tb he et me ser tg pales soni fee Ao 18 2 “ix | | baer asa en Sram — bate Si mal Le es a | es cal eete| [on (ie lai! si|__[aszoel__lauzos} ‘Abe completig the posting of the sczunt receie, the Acounts ‘ecivecouto ect equ tthe sum oe balanes in the Axounta Feceiable ebay lege sxount. The salary fog acount we not Susbered, ence tir eompodtien is constantly change, but a kept ‘pba eder. Some campanies do not wee «formal sales journal sles 0 asnunt. tasted, Wey ete the emount of each sles imoice dry i he ubaiiary {edge count ofthe cater. ‘They arene he eas innies ar mont ‘Succ oder and esen them oper, AL the ei of te month they ota ‘Marthe enles noice forthe month and make en entry deiting the A=ounts ecciwii comtrl acount aad crediting Sales for te tal amount This ‘occdureciainte he nec for eparte recording of each cet clei the ties our, ‘CASH RECEIPTS JOURIAL ‘the cash ep jouroal is wed fr al tansactins ang the receipt of cash by the busines. The mot equent types of cash receipt trensacns art Soa ie and colestiona em account reouvable. There, separate cei una pea for those em in theca receipts journal dows blow. msey | | com dcwts| sai | Rete ‘Gear | Gry | Ca 00 50) 2 7 seme roopomtsney So eee anSiS STE tat reo ate Sue eomecoeet Seotosn nese Scu peatn armen tees a A salar return ellowmnet i redaction isle coe ed ‘efetan nace esa Whe nie acre hed, etl of tee Scr a he a he pond wl ree wl ot Sos he aloe ena an abmancrs Bene of at en Many other pes of traneactions a result i the receipt of ath by the business, but theve waneactions invalve varus scenunts se the ered. Sac thie sundry accounts falseeUaneosn aczoun's) €0 net ocur with eR:oh ffequeney fo warrant special columne, Gey upper in Oe Sindy Aczov"is red column of the Carb Receipts Joural Huneve, aes sever! ma hs Gr peviods, e eevtain tnnaacton appears regulary in the Sundry Acount Cred colin, the format of the Cash Receipts Journal i eve to rec © ‘pce caluan for hat type of wansacton, For example, a company th 8 ‘Ercral renal properties may wish to prosdewcalurn Rent Revenue Crest {the Canh Recspts Journal. ‘POSTING THE CASH RECEIPTS JOURNAL ‘india amounts i, the Acont Rese ut eine Te inde) Spurn othe tba gr es ted iemedieely S enAt the en the oh he Wt She custome ae elas shown inthe usta ive The solu ae ad gi by Dag othe Get cae 8 ae ett Totals Crest Tosa sale dacourt #288 Suny mens POA he SATIS Ruts reasvabe _ 1S470 28 z the tous ofthe Cash Debt, Sales Discount Deity Seoants Ree ceed ad Salen Cet columns are posted athe ond of the DOR ST crete gener) Ig acount The aczodnt BUDA TeiPe the als toindzae that the posting has been om ‘fom slowness, the vanes pene {yucdh oc] ised wera cae ase meget 6 ‘he magne of sch tunmaeions Iris ere pclae to det an ‘ovat etted Sales Retro. and Algwseec The render et the ‘ean need to asus Beele cnet inh eer ee {othe sontnersatount the sua Rese bein evan that te Pen Vay Sore fase « cet mares 19 hoe Company te ety he peer ural sa blows: ae Genera Sema 1 oI peste | pee| ca 1a ster Ru nd Aawmess In cach tanacion invdag sales returns, both the contig ea nd the covomer account ae pote (0 the Genera Lege and othe Stbsiingy Leger. Hence, agin eo paved in the poting erence chon athe fe the ety i ecred in the General Journ When the (Coit posted fo the uname ecount, a check mark alae tothe bt (the dagaal ne, ‘The ber ofthe accounts eal count i entered the eater posting that acount in the gael ee. ‘Th ssi loge csounts andthe accounts edible contol acoak show the ptinge Som the sles, the cat rep joumal nd the rc Journal the Prenly Vary Store inthe ustration that lo, ite toe remeeees oe Spcan, ene See e e TS Tere eee —— mou very oe Sai Peace fii — Rasioeie Fame Sac, I ws er 4 7a ea smerorcuums Joma sis. ae A mercandsing business may purchase wide variety of asst. The eh oes meme ite eee tae He : eS ee ere oe ee aes eg eee a ere eed oben Ban sicistaamdinaa mecanerereeee al ok te sear eed coat oe meals Strat — 18 oetsermenennietnte aes RY 7035 ‘For each transaction recorded in the Purchases Journal, the credit is: oe es EL thats be cam a SS en teal Gee ope Bete SeE'Sts Dates nay poet The Sn fet De Coen ac tect pron ets dts ped at ee rtm Tr ste pete seat here Pen Sit ed as cose alert no ‘Column, Tae mumber ofthe sezount writen in he Posting Reference clan tthe tine of poring. ‘The Purchases Journal of Friendly Varty Store is ilusrated on the Avgct. No. 1. ‘following page. rostn rx rcs Jui : egal uly lye ne a At ee | 22 colt Ga Mach Yuga mt ede st| 21,708 a Posting Reference cofumn of the Purchases Joural. The posting to Boog car] (Team seh ce ence Pout ape sa iso at selserge iB Ba a ers Ref | Debit_| Credit | Balance | (al 2 n 20] e720) r zat ‘As each item ia postod tothe creditor's acount, he source of the en eon i boning relreoe oun of he acount by wong te ete" [Eitbe page murbero the Purcases Jour “av the end ofeach month, the Pazehases Jounal i ttle andre ine arueds The equaly ofthe debits and the credits is deer manner il ‘sma tothe Debit Tatas rai tats ruchase ML 16080 Accounts Payee 28,491 ‘Sore Supls 185 offee Suznies 36 Sindry Aecourts 12159 pe Total aa, Tout Tae posted tothe Ascounts “The total ofthe Accounts Payable Credit clara fend toe poting etree i nica‘cast DIUURSEMERTS JOURKAL A trmsactins invhing parents of aah fr various purses o> recorded i the Cash Disbursements of Cash Payments Jour transecios Ince purchaser af merchandie end ier teow for eh, pyc of expense, pant terete on sosont, cash mice by ‘omer et Al tee anaacegs ee ceded Goh hee nea’ Inve o Cas Cre catunn. Paynents to credtor en Seat ae Bs) frequent to requze. columns for AocountsPapble Debt and Pulse Diacounts Creat f payment fr onc or ste epee operating epee ate ‘licen numerous, ther spec eur ceded the To have an acorptble eel of conto one cath disbursements, most companies pay all ils by check. There, te Cash Dabireement 30 une lian wi ocr te nnber thee ch he nd he mh te Cas Daren Seal irene seo eh tney cas we tT op ef a od credits are determined as follows: sa had patie cy hoon P1214 puchase Doe 915 ‘feats Rahs 3h480 Gah 330 aa ie A check ma i plasol teow the tol of the Suny Aste Debit cam neath not ped. ‘a he le othe es ree amos Is posted wo General Leger ani, and te epee ting ‘eteoc rita low te loa al ‘RECORDING FURCHASE RETURNS AND ALLOWANCES 1 rcabing Purchase Returns, toh the credr’s eount ad the centring acount mut be deed, and the sccoust of the comm) ‘signal ‘must be ceed Thus, the etm rests Office ‘Euipenat, ta nut fhe redaction i credited to Oe Bln the reutton isin the cmt of mechundse purchase fr rele, Purchase (eeded. Imanageneat wishes to now ba the otal amount of merhandie pirchaed aod the total amount of ti mercuodie returmed «sepa ‘Sccounteuiled Purchase Rete end Alowanes ie ceed ‘Om January 5, the Feenly Variety Store sesved a ret memarandsm ‘rom Hong Bonga lr merchandive returned. The entry erected io tar alu journal as lows ba (or | 5 frau] ao ord al ‘owe [emt] acon oned rue] Anse | Poa | Se bent fg | Sas [ae] Tu [ewe malo! | [st sir ae Sa a a TS | Mom Co || a] (rc Tati a ce Fa [TIT as stn Pare TV ot Tis 96 Tg, ot 0, 1557 | Poche are a at [hee Gaal Epeae [791 — $0 Jb 22956 [ae ara ae [pie in [te See Ga —— To ama [foe se siete, ving [| 2 ra [Bot spe atest Torr 270 tee] EP ope Satie 01 STL | roupornens [5H 7 Ft Bf eel Ulta L I J ‘POSTING THE CASH DISBURSEMENTS JOURNAL, 10, the amourss entered in the ‘At frequent interals during the month, the amouns i accounts Fayabie Debit column are posted to tne eels aval) te ‘counts Peyuble Subsidiary edger. The sure ofthe ens s india) Meeting "CO" ead. the appropriate joumal page number in the posting ingeting “Suma of the accounts, A check mark is placed in the pesting CI Note that the debit tothe Acounts Payable acount is posted in the general ‘edges an lao tothe eit’ account inthe subsidy edges, The neesty far pong this teas to two eferet accounts is indicated by placing the laguna ite in the posting efeence column when the transaction is ecard. asome ‘he acount number 21) andthe check mask ae itn er he epee owns we posted ‘he Accounts Payable Ledge and the Aeon Ppable cot sro appear as foows aftr posing te puchese,cah Sesame, an! encore ‘Accounts Payle Subildary Ledger (ete 7 mamas ‘THE GENERAL JOURNAL ‘As mentioned eats inthe chap, the General Journal suse fr each ‘eansacon that doa not belong in special journal. or example, the general journal could be used to rou Sales Retuma and Alowance fhe srigial fale was made on account, Purchase Returns and Alowancen {the aga Purchase was made on account, the reodpt of a note from « eustamer (a Settesent cf an accounts resale, the purchase of equipment er some ther ‘asst by ging «note, and the payment of counts Payable by ging a ote, ‘adjusting end closing entries re also recorded in the general our.‘he grr journal of he Frindy Variety Se ae lhe anaes se jurul appre flows: Je rcs eluant mtn eri gS pte ei Sica orale ys, ec caabeond became we i fees Se = as tates | | gl Jan | 5 | Accounts Payable - Bong Bongeas_ aivs| 370. aera a SESE SH | meer ores [cr ea nro em an Races ae Company [T/T “i ra Menor Ne |ADJOSTING THE ACCOUNTS RECEIVABLE When 8 company sell merchandise td serdces on acm, & pain of the claims eganat csiomers orinary proes o be ware Te is ually he case regardens of care asd in granting cre an the efi the culection procedures employed. Uncollecible accounts expense ube accounts or baa debts expense it on cperaing 9200" ‘ured becaue of alive to ole receivable, ‘Tere are several reasons why an account or a note bros uocal le, bike enkoupery of the dice, disconinuance of the dekto-'s buses, Geappectange af the bie, failure of repeated avempts (0 calle ad the are calecon by the statute of werthlesnexe ofthe reese, ‘There are to generlly accepted metods of scxounting for rvovele though'to be uneabecnble: [l) the direct eritealf method, ex (2) Ae teen esr veseree method Both conform to aoxplable acoulting cere enen wedi appropi cocunatnces Hower, fr OSs of Pare, only ie dec writeoll method i peminale.Yichews Peet adopts sould be used consistently fom Yet Yat ie? a cr eehuntanes inate he desl of «change of tod snr ose renege ntti lt sca sts ent ieee ec ie ee aoe Epica mero Sears ak “Asn Receabe-, Bueno “oreo he snes om 0. Bueno. ‘Taee two eaies canbe cmbined into a singe exsy ding Cs end cclng UncietbleAeeuate pence. However i prelenbe to recor the reaner inte eatomers acount that the oration wl be vslale ‘er creat parpowe in ere. Wen the account hat has been writen in the mbaequnt yea i colected, it may be rated by an ety Ue that ited above An idkemate is credit vane oer ‘hed account, ech as “Reoory of Ucolostle femoris Write of” The cet tla in wich an ‘enue end ofthe year is reported on the income statement a8 a esucon fm UneoectbleAssounts Expense Such anoint ar iyo be ‘elite mine and ave ite fat on net ee. ALLOWANCE OR RESERVE MBTHOD While dhe det write metbod is single an convert, tha method dos ‘ot provide forthe matching of current revenues with raed pene end toes oot report receivables et their net reaible value, The allowance tnathod of rarding bad debts adres to these principles by mang provi Tre bad debs expense in advance ofthe time when the debs are identi = ng Uneolecte, The allowance for doubthlecomats alan reduors the vk recetabe to thet net redial vale. m0‘The estimated expene tom uncouectbie accounts it recoded a8 an scyting entry eter on a menthy bass Or atthe ead of ie fal yo Sow: oy the od Dowrpu Acts Bense 00 “itn Oat cams | “| re] ‘he Alowance for Doubful Accourts is car aset acm ta setuid fom the balance ofthe acoontsFecee tt ee end ‘his eduction cannot be alocted anoog the ivduat cutis tbe ‘MDbiday Inge ancy there, should nt Ne eae tthe conseling secount in the general iedge. ‘Wea the awa acount includes provision fr doubt a we accounts, tne lowance dedted fom the tll of Noes Renbie sad ‘Accounts Recrvabi WRITING.OFF UNCOLLECTIBLE ACCOUNT UNDER THE ALLOWANCE METHOD When positive evidence is avaiable cncering the pert ar compte wortlesenees ofan aceant, the account is writen of falls Alona Da cats | “homunts Recoable | x0 Te urteoffuncoctbe cco | Note that the debit ia tothe contra suse aczount rhe ant he expe aco othe rao fh thatthe expences recerdsd by the alsin 7 um Tgwanch waa eqablahed” ‘The expense was, ut, rece tae anc ae wes ade, nv nessaiy he psd hen he sen $Etiee uncolecube ax with the dec wrteoff metiog sean account tat as been charged the elvan toma: oe rently collected, the account should ee nse ty a ar sty colette ty gwen te cu et, PT" jut te vere of ts wr ration hat we nt i ean Se ita ing cts rol be made he So sates lea Ulowance for Doubtful Accounts a occur rien of entre ye cash 7 nuns Rebs al ESTIMATING UNCOLLECTILE ACCOUNTS BASED ON SALES ‘The estinaed uae anu may be are ler he peo te manu of reribisn susandng a Se ef pte Whee ‘Saperstein st fete ea Year ar camped he ttl tpt eprom ot eee ‘henisaeeSace dou ccuns ccc ely Wad ee os sxe Vol be ogal to detop pera Sub texnt o cefies ny. Hower, ance wuld gaze ra wot to spre cw Fork ‘Gels mien, tw une ale ata, he prong? eve fe ers ot (olsen nother cane te presage ape olny. ‘oda, bese that he tl lef the eid P0000, wd te cstnated uncesibe aint I olen te care dol asus ST Fo (5 orn tn, Te ancy ey © ad | owt Aun epee | 5 1 htowanae for DooblAesunts | ete that the exiting blnce io the Alowance for Dut Aunts remaing fm caren to doll scout inthe parte ot considered ‘Stapitig the curetedusanet “Toe aes pccentage mead freinaing dub acount i wie used su practice because ita sly [BSTILATING UNCOLLECTIBLE ACCOUNTS ‘DASED ON TRADE RECEIVABLES Instead of using salen data, any businesses tae the etimate on en nly fade rectal ctoants tthe end of the period. Tee pues of ‘hagaing the acoouta scaled aging the reetsbles ‘The individual ozo the subsidy ner in naiad to determine the graf the came. Post-e account are asad ia terms ofthe eng of the ‘Ero pat cue An analy ect used in aging aconunt rosa i shown feloweape 7— Spec rs eee ao Shel A Overdue accounts are crusted individual to estimate the coeciity «f ‘each ty ot siding sal f percentages fe wpped to oblain the exited “collectible acounia a each group, andthe group ceeates are ted. Te calnlaten of te alowance ia follows: = Disember 31 tt) Tainted cna | On brett — | at hare on SOs pst daa| —3000| Sx i days post de — F180 dave pt a sso] 206 TOSS gs ps du soo] sea 7 Eee we pata | 400] sD Fras st Ean ‘The sigure obtained (6.720 isthe dese balance ofthe Aowance scoot sere aqhusunent "Ifthe allowance account before adusment bas 8 crt Pelee ar P1650, subtract thin Balance from the desired amount (6,720 PISGD eo get the amount of he adjustment (P5070), The entry to record he adjustment isa follows: Doub Aczuis Expose js | teal te ser Siywenie account ‘Afer posting the adjusting ent, the balance of the alowunss sco ne TDD ahi in the Cented emu as shown in the fooring arount owas Dot Acts Beg bl LD ‘Ahi 5070 ate 7S ds te bale of the alamasce seat bere a cee of 1.350, ath an ate ened amount (F380 * P70 to gt Oe (Soeur ofthe etme (P70) The eee ofthe ae atwn ‘Eetaiag sous Alasnce Dbl ss Bey et iSite ‘fasten 07 ‘re apog eto pois the mot stitcoy approach 0 he ation cf reins ot thd oot renabe annus. Purtersere, ia doeloped hah tpg recvabes may be gute etl waneprnet fr pure of ‘cod analy and cntel ACCRUING DETEREST Innere accrue, of sommes, 0 an itrest-beasing note on a1 ay an, bot a wsoayserued ony atthe maturity date, ower, the SoS Statunding et he end ofthe sesounting pe, the me pra of he [Ets ovaps of ie endo he ecourting eto ad on aang ety Ss ‘RSSok. Boh pares, he maker and peje, must make te adj ey SEL ibe Reeucd neon tat the pope aes and eve he te ne groper Unhes depen forthe maker are repre. alse wo seca! ecru nterest would underatethe mers expenses and Fable by he net expense ineared bat ot et a retusa inet fe pe ie he a a ee geno mms, cokes tan Sh Cnty na" tn ms See — me ect |e Se seamen, nara a go| Mattie an |oes-atmiyniy (matteo, 2 |b tre 10 |"Eaeeathane —"” 200| in t-tewngnty \iiverPaple 20 | rrestene | 200 | Sartnse 209 |"ionttentie 30 | te so-teymeterte | nous Pole 10900 | Ca m0 Te. Sco | “Roca Raxinbe "10000 ce ‘a0 | metieme 300 ‘the Intarest Recetsable account shows the interest eared But nol 7% cole tis repo asa caret eset nthe lance sheet sinew cad n 30 dap. Interest Income repted in the income statenent