Cash $ 960.00 Accounts Receivable 1,570.00 Merchandise 720.00 ---------- Total $3,250.00 LIABILITIES Accounts Payable 460.00 Bills Payable 500.00 Hoadley 1,145.00 Stockton 1,145.00 ---------- Total 3,250.00 Make all necessary entries on the books of the partnership. Make open entries on the books of the new company. 24. The National Manufacturing Co. has an authorized capital of $100,000.00 of which $60,000.00 is paid up and $40,000.00, unsubscribed. It is decided to permit employes to subscribe for $10,000.00 of the stock by paying 10 per cent in cash, all dividends declared to be applied to the payment of subscriptions. What entries are made when this stock is subscribed for? A 10 per cent dividend being declared at the end of the first year, what entry is required? 25. The Atlas Novelty Co. has a capital stock of $50,000.00. All of the stock has been subscribed for, but only 40 per cent has been paid. A surplus of $10,000.00 has been accumulated. It is desired to reduce the stock to $25,000.00 full paid. What is the necessary proceeding, and what entries are required? 26. A company has a capital stock of $50,000.00 full paid, and a surplus of $11,172.00. A stockholder who owns $7,000.00 stock in the company wishes to dispose of his stock and, to secure cash, offers to sell it to the company at par. His offer is accepted and the stock purchased, but the company does not wish to reduce its capitalization. What is the entry? 27. What is a reserve? Give three examples showing purposes for which reserves are created. 28. What is a _reserve fund_? Why is a reserve fund treated as a liability? 29. What is a _sinking fund_, and what is its purpose? 30. What is a _bond_? Describe three classes of bonds. 31. When bonds are issued, by what account are they represented in the ledger? Does this account represent an asset, or a liability? 32. If bonds are sold at a premium, to what account is the premium credited? Would it be correct to credit this premium to profit and loss? Why? 33. To what account is the interest paid on bonds charged? When bonds are sold with accrued interest, which is paid by the purchaser, what disposition is made of the interest received? What disposition should be made of expense incurred in the sale of bonds? 34. What is the most important point to be kept in mind when devising a system of accounts for a manufacturing business? 35. From what items is the manufacturing account made up? What does the balance of manufacturing account represent?