US1350854A - Business-record and income-tax book - Google Patents

Description

H. G. CARTER.

BUSINESS RECORD AND INCOME TAX BOOK.

APPLICATION FILED FEB. 7, i920. 1 3.5 O 8 54 Patented Aug. 24,- 1920.

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H. G. CARTER.

BUSINESS RECORD AND INCOME TAX BooK.

APPLICATION FILED FEB- 1920. .V 1,350,854. Patented Aug. 24, i920.

5 SHEETS-SHEET 2.

Patented Aug. 24, 1920. 5 SHEETS-sH/EET s. V

H. G. CARTER.

BUSINESS RECORD AND INCOME TAX BOOK.

APPLICATION msu FEB. 1920.

Hl. e. CARTER. BUSINESS RECORD A-ND INCOME TAX BOOK. V APPLICATION FILED FEB. 7. 1920. y Iy. Patentd Aug. 24, 1920.

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susmsss RECORD AND INCOME TAX BooK.

AFPUCATION FILED FEB. 7 1920.

Patented Aug. 249 192i?.

UNITED STATES PATENT OFFICE.

HARRY G. CARTER, OF NOR'IHFIELD, NEW HAMPSHIRE.

BUSINESS-RECORD AND INCOME-TAX BOOK.

.Application iled February 7, 1920. Serial No. 356,960.1..

To all whom 'it may concern.'

Iie it known that I, HARRY Gr. CARTER, a`

i citizen ofthe United States, residing at Northfield, inthe county of Merrimack and State of New` Hampshire, have invented certain. new and useful Improvements in Business-Record and Income-Tax Books, of which the following is a specification. i

The primary object of my invention is the provision of a book for keeping accounts of merchants by which the merchant isv provided with a simple and practical method ofassembling certain essential'statistics pertaining to the conductrand condition of his business, and in such manner as will enable him" to review at weekly intervals its progress and status from all essential aspects.

Another object whereby the weekly accounts can be assembled to provide an annual recapitulation of the years business. Y

A further object is the provision, of columns for the arrangement ofthe recapitulation data in such a way that the same may be conveniently transferred toa sheet having a form similar tot-he United States Government income tax return.

The sheets of my book are related to each other and each of the columns which does not contain original entries, has a reference to the column from which its data is taken.

A. brief description of the preferred embodiment of my invention and its use is as follows:

The account sheets of the book are of four different kinds. The first sheet contains the mechandise account in two sets of columns, one set for the merchandise received according to the invoices, and the other set for the invoices settled. In my 4preferred embodiment one of these merchandise account sheets is provided for each week of the year. Tith each merchandise account sheet is a second companion sheet containing the summary of the first sheet by columns, Accounts payable, Merchandise stock on hand, Record of sales, Accounts receivable, Cash account, Cash drawn by owners, Profit and loss count. The third sheet is a rccapitulation sheet for the year on which is entered the totals from the accounts on the respective second sheets, one line being provided for is the provision of means the summaries of each weeks accounts, there being fifty-two (52) such lines on the page and a footing line below giving a summary for the entire year. `The headings of the columns on this sheet are arranged in groups, the merchandise and cash accounts being in one group, the expenses deductible for income tax return in another group, and the expenses not deductible for income tax return in a ythird group. The fourth sheet contains the accounts which are made up at the end -of each year such as weekly prorata of overhead expense, summary of inventories, extract from income tax return, percentage statistics. In addition the table giving the rate of income tax on net income, is shown.

I c will now describe my invention inv detail.

Referring to the drawings `wherein the figures represent views of sheets or portions of sheets having accounts thereon.

Figure l represents the merchandise account. 9

Fig. 2 represents the account lfor net merchandise received. i

Fig. 3 is the accounts payable.

Fig. I is the merchandise stocks on hand.

Fig. 5 is the record of sales.

Fig. 6 is the accounts receivable.

Fig. 7 is the cash account.

Fig. 8 Vis the account of cash drawn by owners.

Fig. 9 is the profit and loss account.

Fig. l0 is the recapitulation of business for the year. c.

Fig. 11 is the weekly pro-rata overhead expense. Y

Fig. 12 is the summary of inventories.

Fig. 13 is the extract from United States income tax return form 1040.

Fig. 14 is the percentage statistics.

Fig. l5 shows the rate of income tax on net income. f

merchandise is received into stock and checked by invoice the Adate of invoice,

name of dealer, consecutive number, grosson the right portion of the page, the partial settlementsV or complete settlement being indicated by 1P/S or C/S respectively.

The gross amount of the invoice, or that portion settled, should be entered in column 3 and deductions made under columns 4, 5,

6 and 7 where allowances are made forYV freight and express, merchandise claims,

merchandise returned or cash discount, respectively. The actualcash paid is entered in column S under Net amount paid. Obviously the sum oi' the amounts of columns 1, 5, 6, 7 and 8 should equal the entry in column 3. lWhen the invoice is paid by check the check numberv is entered in the last column.

Then merchandise is received C O. D. or purchased for cash, entries are made on both sides of' the `merchandise accountl in order to assure accuracy of merchandise stock on hand, column12, Fig. 1, and merchandise received, column 9, Fig.

At the end of each week or whenever the account is closed for the particular sheet of Fig. 1, the total of` column 3 should balance with the sumfof the totals of columns 4, 5, G, 7 and 8. l Y I Referring to F ig. 2, Net merchandise received this week, the entry for column 9 in line 1, Merchandise received 1from dealers, is taken from the total at the bottom ot column 1, as indicated on that line. Line 2, Merchandise received on account from customers, is used-for the entry of the total amount of goods or produce which has been received for that week, on account from customers. In this laccount the market value of the commodity isV used and not necessarily at the credit price allowed to the customer. The merchandise delivered to `the customer in exchange for produce or other commodity should be includedin Charge sales, column 15, Fig. G, ln thisV manner the profit on the Vtransaction is included in the proiit and loss account and also appears in the annual recapitulation oitl business, F 10, and the income tax return, Fig. 13. Line 3, the total of column Q for freight express and hauling is added and the total extendedto column 10. Y

ln column 9 the items to be deducted as freight and expressv allowed, columnk 1; merchandise claims allowedf? columnr 5; merchandise returned to dealers,`column 6, and cash discounts, column 7, are added and the total extended to column 10. The

vdifference is the, net merchandise received this week. l

chandise vreceived tor the weektaken from column 1, as indicated. Froml thev total of theseutwoas, deducted the, merchandise bills settled from column 3, the diiiference being the net merchandise liability.

Referring to Fig. Li, the merchandise on hand is taken from column 12 of the previous week, the net merchandise received tiis week from column 10 and the merchandise returned by customers, at cost, from column 13, are totaled. From this total is deducted the merchandise sales for the week, at cost from column 13. The dijerence is 'the merchandise stock on hand at close of week. i

ln Fig. 5, the record of sales is kept, the cash and charge sales, being entered at the close of each days business for that day in columns 141 and 15 respectively. In column 17 is entered the cash received on account for the day. The total cash and charge sales are entered in column 16 and from this total deduct the markup percent. of profit. The result is the approximate cost of merchandise sold and should be entered in column 13, Cost of merchandise. At the end of the week the sales for the week aretotaled and to this total the grand total sales figure at the bottom of column 16 .of the previous week is added, which gives the grand total sales to date. y

Fig. 6 shows the accounts receivable. The amount due from customers last week is obtained from column 19 of the previous week. To this is added charge sales for this week from column 15. Deductions are made for cash received on account tor week from column 17, discounts and allowances to customers, merchandise returned by customers, worthless (canceled) accounts and the diierence is the net due from customers this week. Eelow this is placed the net duo from customers last week and the difference between these two shows the increasel or decrease over last week.

Fig. 7 shows the` cash account, On the debit side oi the account are added, vtne bank balance brought forward from column 22 of thev previfnis week, cash on hand from column 22 of previous week,

cash salesiior this week from column 14. cash received on account Athis week from column 17, miscellaneous cash receipts this week (itemized). 0n the credit side of the account are added net merchandise bills paid for week taken from column S, expense items not pro-rated, cash dirai-.vn by owners from column 24, pro-rated d (overhead) expense77 from column 23, better-ments, Fixtures and additional equip-y ment. The total is the disbursement for the week. To this total added the bank balance and cash onhand at end of week which gives the balance for column Fig.. 8 shows the cash drawn by owners giving name and amount drawn, the total to date of lastv week. is. entered under brought forward77 to show the amount drawn to date by that person. This account, column 2/1- is used in the cash account to which reference has already been made.

F ig. 9 shows the profit and loss account. In column 25 the cost oi' merchandise sold from column 13 is deducted from the total sales for wenn from column which gives the gross proi'it joi' the week. rlhis total is extended to column 25. From this is subtracted the total of merchandise returned by customers from column 18, discounts and allowances to customers from column 18, Worthless accounts (canceled this week) from column 18, expense items (not pro-rated) from column 21, weekly prorated expense from column 28, Fig. 11. This gives the net merchandise profit or loss for week, the profit being entered' in black and the loss in red. Below this in column 26 is entered the cash discounts for the week from column 7. This is added ii there is a net profit and subtracted from a not loss. `This total or difference gives the total net profit or loss for Week. From this is deducted the property losses by fire, Hood, theft, etc. rlhe total net prolit or loss from last week, tal-zen from the bottom ot' column 26 is added which gives the grand total net profit or loss to date.

Fig. 10 isthe` recapitulation of business for the year. This sheet contains one line for eachinterval of time covered by the accounts of Figs. 1 to 9. It the accounts oi Figs. 1 to A9 are closed each vveelnthere will be lines in the recapitulation sheet of Fig. 10. It the accounts of Figs. 1 to 9 are closed cach three days the recapitulation sheet will have 101ilines, and so on.

Referring `to the headings of Fig. 10 it` will be seen that the main bheadings fall in three large groups. The irst group contains the merchandise and cash accounts, the second group contains the selling eX-V penses, including all items Whichare deductible for income tax return. The third group contains the expenses which are not deductible Jfor income tax return. This groupingr of these itemshas special relation to the Unitedv States income tax return, a Vtorni similar to which is included in my book and which will be later described.

Itis to be noted at the outset Ythat the columns of this sheet like the other columns and lines in my book which do not contain original entries, have indicia giving Yinformation from where the amounts for the entr" are to be taken. At the end of each woei; or interval oit' time covered by Figs. .1-

the ending of the week or other interval of time covered by the accounts of Figs. 1 to 9.

ln column A is entered the net cost of merchandise received for sale which is taken from column 10, Fig. 2. Columns ll, C, l) and E cover the merchandise sales and entries are made from columns 16 and 18 for columns B, C and l) as indicated, the amount for entry in column E being found by deducting the total of columns C and D from column B. Column F carries the miscellaneous cash receipts which is taken from column 20 opposite the line bearing that title in Fig. 7.

Columns G to lV covering the selling expenses which are deductible Jfor income tax returns are so arranged that the totals under these columns may be transferred conveniently and in order to the income tax return, Fig. 13, to be later described in its relation to these columns. It is also to be noted that the arrangement of the items in Fig. 7 is such that the transfer of amounts from the cash account to Fig. 10 in columns G to T is facilitated. In column U isplaced the total for the line in columns to T. ColumnsV and lV carry the property losses from column 26 and the Worthless accounts from column 18, respectively. f

Columns X, Y and Z 'carry the amounts oritems which are'Y not deductible forincome tax return. rlhe 'amounts for these columns are obtained from column 2, Fig. 1, and column 22, Fig. 7, as indicated at the head oi' the column. The amounts'in column X are listed as non-deductible since they have already been deducted in colcharges during the year,` the totals of column 28'will remain unchanged for weekly' entry to proiit and loss account, column 25, Fig. '9.

In Fig. 12, summary of inventories shows the difference between the values in' merchandise on hand at beginning oi year` and end ot year as shown by the inventories.

Fig. 13 shows a form similar to form 1040, United States income tax return with the addition ot indicia to denote where the amounts to be entered will be found. Referring to these by line number 1, Gross sales `and income from businessV services,

Uil

year, are found Jfrom Summary of in-A ventories, column 29, Fig. 12. l/Vhen these allowances are made we have in line 12 the net cost oit' goods sold. Line 16, Salaries and wages, is taken from column Gr, Fig.

10; line 17, Rent,77 is taken from column H, Fig. 10. Line 18, Interest on business indebtednessf7 is taken from column J, Fig. 10. Line 19, Taxes on business and busiess property,77 is taken trom column l;

lline 20, Repairs (trom column L, Fig.

10); lVear and tear (from column 27, Fig. l1) and Property losses Jfrom column V, Fig. 10); line 21, Bad debts arising from sales (from column lll) line 22, Other expenses, are taken from columns M to T inclusive Fig. 10. rlhe total other business deduct-ions and net cost of goods sold taken from the gross sales and income from business services gives the net income from business. Fig. 14 shows the percentage statistics ot the business. Referring now to Fig. 15 the normal tax and surtax may be determined from the table.

Since mistakes are liable to occur during transcribing, the fewer times transcription takes place the fewer mistakes will arise from this cause. In order to bring about this result, I may print the form similar to form 1040 United States income tax return as shown in Fig. 13), the same sive and in the same proportions as the-regular Jform and provide a carbon sheet on the front or back of the sheet containing the form as shown in Fig. 13. By this means the form 1040 to be turned in to the internal Revenuev Bureau may be made at the same time as the same form which is a part ot my book. Since the original should be turned in to the Government, l prefer to have the carbon above that part ot the page containing the form as shown in Fig. 13. Attention is called to the fact that the carbon sheet, if used, may be folded back on itself oneor more times to have it out of the wayruntil needed and keep it from soiling the sheet.

It the carbon paper is not desired, the information contained in the 'form shown by Fig. 13 may be copied conveniently and directly to the corresponding part of the income tax return form 1040.

lt will thus be seen that have lprovided a book for the keeping ot accounts wherein sheets are arranged for the keeping of accounts to be closed at short intervals of time such as a week,other sheets to receive the totals of suchaccounts in a line across the page, and having a line Jfor each week or short interval oi time in the year, this latter sheet forming a recapitulation sheet and having its columnsarranged in groups so that the permitted deductions under the United States income tax return are made available for ready and easy transfer to the proper place in a toi-m similar to the income tax return form which also forms a part of the book.

lt is equally clear that I have provided such a system wherein the places ot entry which are not for original entries contain references to the places in the book where the amounts for the entries may be found.

lilhile describe and claim my invention as a book, l desire to have it understood that l do not limit myself to a permanently bound book, since a loose leaf book can as well be used in connection with my invention. v

l also desire to have it understood that while have described 'my invention as being;

applied to a condition where it is desirable to have the accounts ot' Figs. 1 to 9 closed each week, yet it is equally useful in conditions where it would be desirable to close these accounts at the end of a shorter or longer time. n this case, the number of lines on 10 couldrbe made greater or less than the 52 lines described. T his is tor the reason that one line oi2 Fig. V10 is devoted to each set ot accounts 1 to 9 and there are enough lines to carry the accounts for a year.

l desire also to have it understood that while only one sheet is described for Fig. 1 that it may be necessary to have many such sheets 'to provide space for the merchandise account. for the length of time it is to run such as a Weel. 1t is further to be understood that while Fig. 10 is described as a sheet, yet it may and probably will, extend over two pages and it may also be necessary to have other sheets to provide additional lines as in the case of the use of my book in a business vin which it was found to be de- Y sirable to balance the accounts, illustrated in Figs. 1 tot), each three days. Obviously since 104 lines would be too many for one sheet, more than one sheet could be used.

It is to be further understood that while my invention is particularly described with relation to the present 'form 1040 income tai;A return, yet should the Governmenty change the arrangement ofitems on the income tax return, it would only be necessary to replace the presentform with the new form and rearrange the columns of the recapitulation sheet and in turn the items in the cash account, Fig. 7, to make my book conform to any such new income tax return which might be adopted.

lVhile I have described the preferred form ot my invention in detail, I desire to have it understood that modications and Pil) one of the groups having appropriate head-,-

ings for the entry of data for a short period of time, another of the groups comprising a reczqiitulation of the accounts of the first l group, an income taX return form having indicia thereon denoting columns in the recapitulation from which the data for the income tax return are taken.

2. An` account book comprising correlated groups of accounts, the accounts of one of the groups having appropriately designated lines and columns for the entry of data fora short period of time, another of the groups comprising lines and columns for the recapitulation of the accounts of the first group, an income tax return form, the columns in the recapitulation which deal with expenses which are deducted under the income tai; return being segregated, to facilitate transfer to the income tax return form.

3. An account book comprising correlated groups of accounts,ithe accounts of one of the groups having appropriately designated lines and columns for the entryvof data for a short period of time, another of the groups Comprising a recapitulation of the accounts of the first group, the columns in the recapitulation which deal with expenses which are deducted under the income tax return, being segregated to facilitate transfer to the income taX return form, an income tax return form having indicia Vreferring to the columns in the recapitulation from which the amounts to be entered are taken.

4. An account book comprising a series of groups of correlated accounts, the accounts of each group having appropriately designated lines and columns for entry of data for a short period of time, a recapitulation sheet having columns appropriately designated to receive the totals of the accounts closed at the ends of the short periods of time, an income tax return form having indicia thereon opposite the several items to denote the columns in the recapitulation sheet from which the amounts for entry thereon are to be taken.

5. An account book comprising groups of 'correlated accounts, the accounts of one group having appropriately designated lines and columns for the entry of data for a short period of time, a yearly recapitulation sheet having another group of accounts in appropriately designated columns to indicate the place in the first group Where the amounts to be entered are to be found, there being lines on the recapitulation sheet for the entry of amounts under the appropriate column headings and having indicia denoting the place in the first group of accounts from Where the amounts of entry are to be taken, the group of accounts on the recapitulation sheet being arranged in sub-groups, one of the sub-groups having its 'accounts arranged in substantially the order of occurrence on the Government income tax return form. i

6. An account book comprising groups of correlated accounts, the accounts of one of the groups having appropriately designated lines and columns for the entry of data for a short period of time, a yearly recapitulation sheet having another group of accounts in appropriately designated columns to indicate the place in the first group Where the amounts to be entered are to be found, there being lines on the recapitulation sheet for the entry of amounts from the first group, under the appropriate column headings, there. being one such line for each such short period of time for the year, the columns of the recapitulation sheet dealing with eX- penses which are deductible under the income tax return being segregated to facilitate transfer to the Government income tax return.

y, 7. An account, book comprising appropriately designated lines and columns for accounts for a short period of time, recapitulation columns having indicia referring to the totals under the accounts for a short period of time, yearly accounts having columns designated by indicia referring to the totals under the recapitulation columns, the yearly accounts including a form, similar to that of the summary of business on the income tax return, each column or line not for an original entry having indicia thereon giving information as to Where the entry for that column or line Will be found.

8. An account book comprising appropriately designated lines and columns for accounts for a short period of time, reca-A pitulation columns having indicia referring to the totals under the accounts for a short period of time and having a line for the entry each said short period of time of the accounts for that period, a yearly account hai/ing indicia similar to that of the summary of business of the income tax return, each column or line not for an original entry having indicia thereon giving informationas to Where the entry for that column or line will be found, the columns on the recapitulation sheet showing those eXn penses which are deductible for income tax return in one group and those which are not deductible for income taX in another group.

9. An account book comprising columns for accounts for a short period of time, recapitulation columns having indicia referring to the totals under the accounts for a short period of time and having a line for the entry each said short period of time of the accounts for that period, a yearly account having indicia similar to that on the summary of business of the income tax return, each column or line not for an original entry having indicia thereon giving information as to where the entry for that line will be found.

10. An account bookliaving a set of leaves suitably ruled and appropriately designated for the reception of data relative to Inerchand-ise received and paid for, another set of leaves designated to receive respectively and in succession, data for successive periods of time, each leaf having appropriately designated spaces for the reception of amounts of net merchandise received for the relatively short period of time which this sheet is to be open, accounts payable covering the same period of time, merchandise stock on hand7 covering the same period oftime, record of sales having spaces for daily entry of cash and charge sales during the same period of time, .accounts receivable, cash account and profit and loss account each covering the time dur-ing which the accounts of the sheet are open, a recapitulation sheet having appropriately designated columns and having a line for the reception of data from each corresponding pair of sheets from the first two sets of sheets, the recapitulation sheet having a groupof columns for the reception of entries of expenses deductible under the income tax return, said columns being arranged vin order of appearance on a Government income tax return form and designated in such a manner as to facilitate transfer of the totals of such columns to said income tax return form.

l1. An account book comprising correlated groups of accounts, the accounts of one of the groups having appropriate headings for the entry of data for a short period of time, another of the groups comprising a recapitulation of the accounts of the first group, an income taX return form having indicia denoting columns -in the recapitulation from which the amounts of the entries for the income tax return are taken, a carbon sheet above the income tax return form whereby the Government form may be placed over the form in the book and the carbon copy of the original thereby retained in the book.

In testimony whereof I afiix my signature.

HARRY G. CARTER.

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