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34 HASKINS & SELLS May Solution to Syndicate Problem THIS problem is very misleading with regard to the time required to work it out. In glancing over it casually, it appears to be easy and solvable in a short time. Once the work is started, the complications become apparent. In the solution which follows no attempt has been made to take into consideration the taxes on sales of stock, since no mention of such taxes was made in the problem. This point is one of detail which might be considered if the facts were presented, but which does not have any effect upon the principles involved in the problem. In a stock brokerage house where the volume of transactions is sufficient to warrant, there would appear on the books a controlling account for securities. In an instance like the present one where the securities are few in number, it is preferable to use individual accounts. The transactions stated in terms of journal entries, together with the closing entries, are as follows: 1918 Jan. 1. Cash $75,000.00 F. B. Arnold, Capital $25,000.00 A. S. Burke, Capital 25,000.00 G. M. Campbell, Capital 25,000.00 Jan. 17. Prairie Oil & Gas 45,012.50 Cash 45,012.50 100 shares @ 450 + 1/8 purchased Apr. 3. Seneca Petroleum 5,650.00 Cash 5,650.00 400 shares @ 14 + 1/8 purchased Hazeltine Copper 11,082.50 Cash 11,082.50 20 shares @ 554 + 1/8 purchased Ap. 10. Cash 11,057.50 Hazeltine Copper... 11,057.50 20 shares @ 553 + 1/8 sold May 28. Prairie Oil & Gas 49,212.50 Cash 100 shares @ 492 + 1/8 purchased Ju. 30. Cash Interest on Bank Balance 97.23 Sept. 30. Cash 2,000.00 Dividends on Stocks Oct. 18. Cash 6,350.00 Seneca Petroleum .. 400 shares @ 16 — 1/8 sold Oct. 19. Prairie Oil & Gas 11,575.00 G. M. Campbell, Capital Reserve for Appreciation of Securities Revaluation of Prairie Oil & Gas stock at time of Campbell's withdrawal Dividend Receivable . . . Dividends on Stocks Anticipated dividend on Prairie Oil & Gas Stock Interest on Loan Payable Interest Accrued on Loan Payable.. C L O S I N G E N T R I ES Profit and L o s s . . . . . . .. Hazeltine Copper . . . Interest on Loan Payable 1,000.00 625.00 650.00 Seneca Petroleum . . . . 700.00 Interest on Bank Balance 97.23 Dividends on Stocks... 3,000.00 Profit and Loss . . . . Profit and Loss 3,147.23 F. B. Arnold, Capital A. S. Burke, Capital G. M. Campbell, Capital 1918 Oct. 19. Cash 20,000.00 May 15. Cash Loan Payable 30,000.00 30,000.00 F. B. Arnold, Capital A. S. Burke, Capital G. M. Campbell, Capital 29,907.40 Cash Dec. 31. Cash (50 shares P. O. G. @. 540 — 1/8) ... 26,993.75 Prairie Oil and Gas (50 shares @ 529) Profit and Loss . . . . 49,212.50 97.23 2,000.00 6,350.00 3,858.33 7,716.67 1,000.00 625.00 25.00 625.00 3,797.23 1,049.08 1,049.08 1,049.07 10,000.00 10,000.00 29,907.40 26,450.00 543.75
Object Description
Title |
Solution to Syndicate Problem |
Author |
Anonymous |
Subject |
Securities -- United States -- Accounting |
Citation |
Haskins & Sells Bulletin, Vol. 02, no. 05 (1919 May 15), p. 34-36 |
Date-Issued | 1919 |
Source | Originally published by: Haskins & Sells |
Type | Text |
Collection | Deloitte Digital Collection |
Digital Publisher | University of Mississippi Libraries. Accounting Collection |
Date-Digitally Created | 2009 |
Identifier | HS Bulletin 2-p34 |