Accountancy Problems

WITH SOLUTIONS

VOLUME II

By

LEO GREENDLINGER, M. C. S., C. P. A.

Assistant Professor of Accounting in New York University School
of Commerce, Accounts and Finance; Author of "Accounting
Theory and Practice," and Editor of the C. P. A. Question
Department of the Journal of Accountancy.

500

276

Legal Notes by

CHARLES W. GERSTENBERG, Ph.B., L.L.B.

Lecturer on Finance in New York University School of Commerce, Accounts
and Finance; Author of "Special Phases of Corporation Law,"

and Member of the New York Bar.

BUSINESS BOOK BUREAU

NEW YORK

PREFACE.

LIKE its predecessor, this volume is the result of contributions made by the author and a number of other accountants to the Journal of Accountancy; new matter, however, has been added. to make it more complete.

The book is divided into four parts:

Part I presents selected American C. P. A. problems, as well as some of the problems set by the English and Canadian Societies, with full solutions and exhaustive comments. These problems cover the period from 1905 to 1911, inclusive; most of the work, however, is from examination papers set in the last three years. The problems cover a much wider variety of topics than those in Volume I. Among these topics are: Estate Accounting; Partnerships; Corporate Affairs; Fire Insurance; Promoters' Affairs; Comparative Bal-ance Sheets; Brokers' Accounts; Amalgamations; Commission House Accounts; Realization Affairs; Club Accounts; Real Estate Companies; Manufacturing, Trading and Profit and Loss Statements; Bond Ledger Analyses; Closing Entries; Mine Accounts; Branch House Accounts; Preparation of Statements in Connection with Fire Losses; Cost Accounting; Determination of Bond Values and of Percentages of Turnover.

The author has endeavored to treat not only the principles, but the practical features of every problem either in the solution proper or in the comments.

Part II contains one hundred and eight selected questions and answers on theory of accounts, auditing and commercial law; the latter subject is the special feature of this part. It deals with matter relating exclusively to corporations, such as: Procedure in Organizing a Corporation; Conveyance of Corporate Property to Directors; Payment for Capital Stock; Rights and their Negotiability; Advantages of Corporate Form against

Partnership; Stockholders' Rights to Inspection of
Books; Proxies; Liability of Directors in connection
with Dividends; Filing of Reports; Formation of Joint
Stock Companies; and many others.

As these questions are taken from various states,
some of the answers are given both in accordance with
the law of the state where the question originated, and
also in accordance with the law of the State of New
York.

In Part III are presented papers containing questions (without solutions) set by various State Boards of Accountancy on practical accounting, theory of accounts, auditing and commercial law, with the author's comments, in some instances, on the makeup of these papers. As in the first volume, the author gives here an introductory essay comparing and contrasting the standards that prevail in the different states, in order to show the progress of the profession.

To prevent the book from being too bulky, some
questions that appear in Part I, with solutions, are not
repeated in Part III, and only the balance of the paper
is reproduced.

The selected problems, questions and complete ex-
amination papers are chosen from the following states:
New York, New Jersey, Pennsylvania, Rhode Island,
Massachusetts, Illinois, Michigan, Maryland, Ohio,
Virginia, Florida and Washington.

Part IV contains a summary of the Federal Cor-
poration Tax Law, dealing with the chief provisions of
the law. A synopsis of decisions on questions relating
to the special excise tax, issued by the Internal Revenue
Department, is given here in order to assist those who
make up the report required by the law.

For a clearer understanding of this law the full text of the act, as well as the latest rulings of the United States Supreme Court on the question of constitutionality, are reproduced in an appendix.

The author, as in his previous work, does not aim to present new theories, but has followed the prevailing standard of procedure and practice. Where differences of opinion are possible,

all arguments are brought forth either in the solution proper or in the comments. In some instances two solutions are given.

The author takes this opportunity to express his sincere appreciation to the following gentlemen for their valuable contributions to the Journal of Accountancy, of which he has availed himself: Mr. Arthur Wilmot, C. P. A., Mr. James F. Ruark, C. P. A., Mr. Gustave Jacobsson, M. A., Dr. J. J. Klein, C. P. A., Mr. Carl H. Nau, C. P. A., Mr. W. A. Vine, Mr. Norbert Newman, and Mr. A. H. Herschel; also to Mr. Max Meyer, C. P. A., and to Mr. Joseph Lichtenberg, B. C. S., who have assisted in the difficult task of proof-reading.

The author hopes that his readers will favor him with their frank criticisms and corrections. Whatever improvements over Volume I may be found in this volume are in a large measure due to their suggestions.

New York University, 32 Waverly Place, NEW YORK, N. Y.

September, 1911.

LEO GREENDLINGER.