160 NATURE OF CAPITAL AND INCOME  [CHmar.IX

by an equal and opposite item on the outgo side. All
items thus paired are represented by the same letters, the
capitals being used for positive items and the small letters

for negative.

IncoME AND Ourco oF DrY Goops COMPANY, FOR
Yrar 1906

 

 

 

Capital Source Income Outgo
To goods
bought . $5,000¢
Stock of Goods | By goods sold. $10,000 4 | To work of
selling . 1,500h
To storage . 1,000 g

 

 

 

By cash taken out
for: —
rent . . . $1200B
purchases . . 5,000C | To cash re-Cash
 wages . . .1600D| ceived
interest pay- from sales $10,000 a
ment. . . S00E
profits . . .2,000F
Store Lease By storage service $1,000 G | To rent paid $1,200b

 

Rights to and | By clerk work . $1,500 H | To clerk hire $1,600d

obligations
from employees

 

 

Bonded debt To interest
paid . . $800e
Capital stock To profits
paid . . $2,000f

 

 

 

 

Let us consider the first item of capital, the stock of
goods. This yields to the company as its gross income
the money obtained from sales, amounting to $10,000 (4).
The payment of this money into the cash drawer becomes a
debit item (a) on the part of the stock of cash. Reversely,
when the rent is paid the lease of the store is debited with
$1200 (b), and the stock of cash which yields this value of