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2)1 0 0 )$ 400, Bal. of account. $1 1.2 1 6, Bal. of interest. Int. for 1m. $2.00) $1 1.2 16

Time in m. 5.6085m. 18d., which, reckoned back from Jan. 1, gives July 13 of the preceding year for the time of settlement, Ans.

EXPLANATION. By a process like that in Ex. 1, it is shown that if A and B each paid his debts, i. e. if A paid the balance of $400, at the focal date, Jan. 1, A would gain and B would lose $42.191 $30.975 $11.216; .., evidently, A should pay the $400 long enough before Jan. 1, so that its interest shall equal $11.216, the gain he would have by paying Jan. 1. time is found to be 5m. 18d., which, reckoned back from Jan. 1. gives July 13 of the preceding year for the equated time of settlement. Hence,

To equate accounts,

This

RULE. Compute the interest of each item of the account from the focal date to its maturity; find the sum of the interests on the debit items, also the sum on the credit items, and subtract the less sum from the greater; divide this difference by the interest

302. Explain Ex. 1. Explain Ex. 2. Rule for equating accounts which have both debit and credit items?

on the BALANCE OF THE ACCOUNT for one month, and the quotient will be the time in months between the focal date and the equated time of settlement, the time to be reckoned FORWARD when the greater interest arises on the greater side of the account, and BACKWARD when the greater interest arises on the smaller side.

NOTE 1. When the larger interest arises on the smaller side of the account, as in Ex. 2, the rule may require the settlement to be made before some of the transactions have occurred, a result which is obviously impracticable, and usually some other time of settlement is more convenient than the equated time. If the settlement is made before the equated time, a discount should be made; if after, the interest should be added.

Ex. 3. When ought A to pay the balance of the following account, and for what sum may he settle June 6, 1863 ?

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1st Ans. June 6, 1864; 2d Ans. $171.08. (See Art. 253, Note 2).

NOTE 2. In Ex. 3, Feb. 1 is the most convenient focal date, the carliest entry being made Feb. 6. The meaning of the account is, that A has, at three different times, bought merchandise of B to the amount of $356, $875, and $433, severally, the 1st and 3d bills on a credit of 6m., and the 2d on 4m.; also, that on the 6th of Feb. A sold B merchandise worth $530 on a credit of 4m., on the 27th of May merchandise worth $652 on 6m., and on the 15th of July he paid B $300 in cash.

4. Required the equated time of settling the following account, and the sum due Oct 4, 1862 ?

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NOTE 3. Not unfrequently a business man, in full or partial payment of a debt, gives his note, payable in a given time without interest. The holder of the note may indorse it and get it discounted (Art. 243, Note), thus obtaining money for his own use before the note matures; or he may pass it to his creditor in payment of his own debts. Such a note may be entered in an account, as in Ex. 4, and treated in the same way as merchandise bought or sold on credit.

5. When was the equated time of settling the following account, and what was due Nov. 13, 1862?

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1st Ans. Apr. 25, 1861; 2d Ans. $874.40.

6. When is the equated time of settling the following account, each item being due at date, and what shall A pay on the 27th of July, 1862?

Dr.

A in account with B.

Cr.

1861.

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1861. Om. June 20 To Mdse., July 4 5m. Nov. 16 66 "Mdse., Dec. 18

Int.

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986 3.287 1m.
152 4.205 6m.

By Mdse., 158 0.895
Note, 228 7.524

1862.

8m. Feb. 26 "Mdse., 110 4.877 9m.

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2.0 6 ) 1 6.6 7 5 ( 8.0 9 m. = 8m. 3d.

June 1, 1861 8m. 3d. = Sept. 27, 1860, 1st Ans.
$45.3 2 (Int. for 1yr. 10m.) $45 7.3 2, 2d Ans.

$412

7. What would be the equated time of settlement in Ex. 6, if each item were on a credit of 6 months?

302. What is Note 1? Note 2? Note 3?

NOTE 4. In many mercantile houses it is customary to average all accounts semi-annually, thus bringing a great amount of labor upon the accountant at the time of averaging. This accumulation of labor may be casily and conveniently avoided by having the ledger ruled with an additional column at the right of the money column, both Dr. and Cr., as in Ex. 6, page 235, in which to write the interest of the several items, enabling the book-keeper to carry out the interest as he makes the entries, or at his leisure, and thus prepare each account for adjustment in a moment.

PROFIT AND LOSS.

303. "PROFIT AND Loss," as a commercial term, signifies the gain or loss in business transactions. The rule may refer to the absolute gain or loss, or to the percentage of gain or loss, on the purchase price of the property considered.

304. PROBLEM 1. To find the absolute gain or loss on a quantity of goods sold at retail, the purchase price of the whole quantity being given :

RULE. Ascertain the whole sum received for the goods, and the difference between this and the purchase price will be the gain or loss.

Ex. 1. Bought 16 bbl. of flour for $100 and sold it at $7 per bbl.; did I gain or lose? How much, total and per bbl.?

Ans. Gained $12 total; 75c. per bbl. 2. Bought 24 bbl. of flour for $168 and sold of it at $6.75 and the remainder at $7.50 per bbl.; did I gain or lose? How much? Ans. Gained $6. sugar for $36.80 and sold it at How much total, and per lb.?

3. Bought 3cwt. 2qr. 18 lb. of 83c. per. lb.; did I gain or lose?

4. Bought 164yd. of broadcloth and 287yd. of cassimere for $1107; sold the broadcloth at $3 and the cassimere at $2.25 per yd.; did I gain or lose? How much?

305. PROBLEM 2. To find the per cent. of gain or loss when the cost and selling price are given.

302. What is Note 4? 303. What is Profit and Loss? To what may it refer? 304. Rule for finding absolute gain or loss.

Ex. 1. Bought 4 bbl. of flour for $32 and sold it at $9.50 per

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RULE. Having found the total gain or loss by Problem 1, make a common fraction by writing the gain or loss for the numerator and the cost of the article for the denominator, and then reduce this fraction to a decimal.

2. Bought 50lb. of wool for $20 and sold it at 34c. per lb.; did I gain or lose? How much per cent.?

Ans. Lost 15 per cent. 3. Bought a case of boots at $4 per pair and sold them at $5; what per cent. was gained?

4. Bought boots at $5 per pair and sold them at $4; what per cent. was lost?

5. Bought goods for $2000, and, in one year, sold the same for $2155, out of which paid $95 for storage, etc.; how much per cent. on the first cost was lost?

306. PROBLEM 3. To find the selling price, the cost and gain or loss per cent. being given.

Ex. 1. Bought goods for $400; how must the same be sold so as to gain 25 per cent.

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